Filed Pursuant to Rule 424(b)(5)
Registration No. 333-86682
Registration No. 333-100767
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 8, 2002)
[LOGO] NEW YORK COMMUNITY
BANCORP, INC.
4,800,000 Bifurcated Option Note Unit SecuritiES/SM/
(BONUSES/SM/) Units
New York Community Capital Trust V
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We are selling 4,800,000 BONUSES/SM/ units in this offering.
Each unit being offered will be a BONUSES unit consisting of:
.. a preferred security issued by New York Community Capital Trust V, having a
liquidation preference of $50 and a distribution rate of 6% on the stated
liquidation preference, representing an undivided beneficial interest in
the assets of the trust, which assets will consist solely of debentures
issued by New York Community Bancorp, Inc., also referred to as NYCB, each
of which has a principal amount at maturity of $50 and a stated maturity of
November 1, 2051; and
.. a warrant to purchase 1.4036 shares of common stock of NYCB at any time
prior to May 7, 2051. The warrant exercise price will initially be $50. In
connection with an exercise of the warrants in lieu of optional redemption,
the exercise price of the warrants will be the accreted value of the
preferred securities as of the day before the remarketing date.
At any time after the BONUSES units are issued, the preferred security and
warrant components of each BONUSES unit may be separated by the holder and
transferred separately. Thereafter, a separated preferred security and warrant
may be combined to form a BONUSES unit.
The warrants may not be redeemed prior to November 4, 2007, except upon the
occurrence of certain special events. If on any date on or after November 4,
2007 the closing price of our common stock exceeds 125% of the conversion price
for at least 20 trading days within the immediately preceding 30 consecutive
trading days and on the day on which we make such election, we may elect to
redeem the warrants, in whole but not in part. In connection with an optional
redemption, we will be obligated to remarket the preferred securities at a
price of no less than 100% of their accreted value.
In connection with an optional redemption, each unexercised warrant will be
redeemed at the warrant value, on the redemption date, which value will be a
cash price equal to $50 minus the accreted value of the preferred securities as
of the end of the day before the remarketing date.
Each warrant will be redeemed on the redemption date unless a warrantholder
affirmatively elects to exercise its warrants. If the warrantholder chooses to
exercise the warrant and is also a BONUSES unit holder, the proceeds from a
successful contemporaneous remarketing of the related preferred security will
be applied to pay the exercise price in full.
The preferred securities will be guaranteed to the extent described in this
prospectus supplement and the accompanying prospectus by NYCB.
We have granted the underwriters a 30-day option to purchase up to 700,000
additional BONUSES units to cover over-allotments, if any.
We intend to apply to list the BONUSES units on the Nasdaq National Market,
but we cannot assure you as to whether, or when, the BONUSES units will be
accepted for listing.
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Investing in the BONUSES units involves risks. See "Risk Factors" beginning
on page S-10.
These securities are not deposits or obligations of a bank or savings
association and are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency. Neither the SEC nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
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Per BONUSES unit Total
---------------- ------------
Public offering price........................ $50.00 $240,000,000
Underwriting discounts....................... $ 1.25 $ 6,000,000
Proceeds to us, before expenses.............. $48.75 $234,000,000
The underwriters expect to deliver the BONUSES units on or about November 4,
2002.
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Sole Book-Running Manager Joint-Lead Manager
Salomon Smith Barney Lehman Brothers
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Bear, Stearns & Co. Inc. Keefe, Bruyette & Woods, Inc. Sandler O'Neill & Partners, L.P.
October 28, 2002
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/SM /Service mark of Salomon Smith Barney Inc.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference is accurate only as of
their respective dates. Our business, financial condition, results of
operations and prospects may have changed since those dates.
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TABLE OF CONTENTS
Prospectus Supplement
Special Note Regarding Forward-Looking Statements................................................... S-1
About This Prospectus Supplement.................................................................... S-1
Summary............................................................................................. S-2
The Offering........................................................................................ S-3
Risk Factors........................................................................................ S-10
Use of Proceeds..................................................................................... S-19
Regulatory Capital Ratios........................................................................... S-19
Consolidated Ratios of Earnings to Fixed Charges.................................................... S-20
Price Range of Common Stock and Dividend Policy..................................................... S-20
Selected Consolidated Financial Data................................................................ S-21
Recent Developments................................................................................. S-23
Capitalization...................................................................................... S-25
Accounting Treatment................................................................................ S-26
Description of the BONUSES/SM/ Units................................................................ S-27
Description of the Preferred Securities............................................................. S-32
Description of the Debentures....................................................................... S-46
Description of the Preferred Securities Guarantee................................................... S-55
Relationship Among the Preferred Securities, the Debentures and the Preferred Securities Guarantee.. S-58
Description of the Warrants......................................................................... S-60
Book-Entry-Only Issuance............................................................................ S-70
Material United States Federal Income Tax Consequences.............................................. S-72
ERISA Considerations................................................................................ S-79
Underwriting........................................................................................ S-82
Legal Matters....................................................................................... S-84
Incorporation by Reference.......................................................................... S-84
Prospectus
Important Notice About Information Presented in this Prospectus and the Accompanying Prospectus
Supplement........................................................................................ 2
About This Prospectus............................................................................... 4
Where You Can Find More Information................................................................. 4
Forward-Looking Statements.......................................................................... 6
New York Community Bancorp, Inc..................................................................... 7
The Trust........................................................................................... 8
Consolidated Ratios of Earnings to Fixed Charges.................................................... 9
Use of Proceeds..................................................................................... 9
Regulation and Supervision.......................................................................... 9
Description of Units................................................................................ 10
Description of Warrants............................................................................. 11
Description of Common Stock......................................................................... 12
Description of the Preferred Securities............................................................. 14
Description of the Preferred Securities Guarantee................................................... 18
Description of the Junior Subordinated Debentures................................................... 20
Effect of Obligations Under the Junior Subordinated Debentures and the Preferred Securities
Guarantees........................................................................................ 25
Plan of Distribution................................................................................ 26
Legal Matters....................................................................................... 27
Experts............................................................................................. 27
i
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus, and the other
documents we incorporate by reference herein and therein, may include
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended.
Forward-looking statements, which are based on certain assumptions, and
describe our future plans, strategies, and expectations, are generally
identified by use of the words "believe," "expect," "intend," "plan,"
"anticipate," "estimate," "project," or other similar expressions. Although we
believe that our plans, intentions and expectations, as reflected in these
forward-looking statements are reasonable, we can give no assurance that these
plans, intentions or expectations will be achieved or realized. Our ability to
predict results or the actual effects of our plans and strategies are
inherently uncertain. Actual results, performance or achievements could differ
materially from those contemplated, expressed or implied by the forward-looking
statements contained in this prospectus supplement and the accompanying
prospectus. You should not place undue reliance on these forward-looking
statements, which reflect our expectations only as of the date made. We do not
assume any obligation to revise forward-looking statements except as may be
required by law; and any subsequent forward-looking public statements we do
make would supercede prior forward-looking statements pertaining to the same
matter. Important factors that could cause actual results to differ materially
from our forward-looking statements are set forth under the heading "Risk
Factors," beginning on page S-10 of this prospectus supplement, under the
heading "Forward-Looking Statements and Associated Risk Factors" in the section
captioned "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our most recent Quarterly Report on Form 10-Q, in our
most recent Annual Report on Form 10-K and in other reports filed with the
Securities and Exchange Commission, or SEC, as well as the information
contained in this document under the heading "Recent Developments." These
factors are not intended to represent a complete list of the general or
specific factors that may affect us. Other factors that could have a material
adverse effect on our operations and on our subsidiaries' operations include,
but are not limited to, changes in market interest rates, general economic
conditions, legislation, and regulation; changes in the monetary and fiscal
policies of the U.S. government, including policies of the U.S. Treasury and
the Federal Reserve Board; changes in the quality or composition of the loan or
investment portfolios; changes in deposit flows, competition, and demand for
financial services and loan products in our local markets; changes in local
real estate values; changes in accounting principles and guidelines; war or
terrorist activities; and other economic, competitive, governmental,
regulatory, geopolitical and technological factors affecting our operations,
pricing and services.
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is a supplement to the prospectus that is also
part of this document. The accompanying prospectus provides you with a general
description of the securities we are offering. BONUSES units are Equity
Redeemable Preferred Securities Units as described in the accompanying
prospectus. Unless otherwise indicated in this prospectus supplement, the terms
"NYCB," "we," "us," and "our" mean New York Community Bancorp, Inc. and its
consolidated subsidiaries, the term "the Bank" refers to New York Community
Bank, our wholly-owned subsidiary, and the term "trust" means New York
Community Capital Trust V. Unless otherwise specified, information in this
prospectus supplement assumes that no portion of the underwriters'
over-allotment option will be exercised.
S-1
SUMMARY
This summary highlights selected information from the prospectus documents,
including information about the BONUSES units (comprised of preferred
securities and warrants to purchase common stock) we are offering for sale.
Both this prospectus supplement and the accompanying prospectus include
important information about us and other information you should know before
investing. This prospectus supplement also adds to, updates and changes
information contained in the accompanying prospectus. You should carefully read
both this prospectus supplement and the accompanying prospectus, together with
the additional information described under "Incorporation by Reference" on S-84
of this prospectus supplement, before investing in our BONUSES units. You
should also pay particular attention to the information included under the
heading "Risk Factors" beginning on page S-10.
New York Community Bancorp, Inc.
We are a registered bank holding company whose principal business is
conducted by our wholly-owned subsidiary, New York Community Bank. We believe
the Bank is the second largest originator of multi-family mortgage loans in the
City of New York and the seventh largest thrift institution in the United
States, based on market capitalization at September 30, 2002. The Bank serves
its customers through six community divisions with a total of 109 banking
offices, including 54 in-store branches throughout New York City, Long Island,
Westchester County, and New Jersey and one customer convenience center in
Staten Island, New York. The Bank recently divested its in-store branches in
Connecticut and sold seven additional in-store branches (five in New Jersey and
two in Rockland County).
At September 30, 2002, we had total assets of approximately $10.0 billion,
total deposits of approximately $5.1 billion, and total consolidated
stockholders' equity of approximately $1.2 billion.
Our common stock trades on the Nasdaq National Market under the symbol
"NYCB."
Corporate Growth Strategy
Our primary strategy is to attract deposits from our customers in New York
City, Long Island, Westchester County, and New Jersey and to invest these
deposits, together with funds generated from operations, loan sales and
borrowings, primarily in multi-family mortgage loans secured by properties in
our market area and, to a lesser extent, in commercial real estate and
construction loans, and investment grade securities. We also seek to establish
new banking branches and pursue acquisitions of other institutions or their
branches in accordance with our disciplined acquisition strategy. We recently
opened three new branches in Staten Island. We acquired Haven Bancorp, Inc. in
November 2000 and we merged with Richmond County Financial Corp. in July 2001.
We more recently opened three new branches in Staten Island and one in Nassau
County. We do not have any specific plans for further acquisitions at this time.
S-2
THE OFFERING
Securities Offered.......... 4,800,000 BONUSES/SM/ Units consisting of:
. a preferred security issued by New York
Community Capital Trust V having a
liquidation preference of $50; and
. a warrant to purchase 1.4036 shares, subject
to antidilution adjustments (the "conversion
ratio"), of NYCB's common stock at any time
prior to May 7, 2051. The conversion price
(initially $35.62) equals the exercise price
of the warrants (initially $50) divided by
the conversion ratio.
We have granted the underwriters a 30-day option
to purchase up to 700,000 additional BONUSES
units to cover over-allotments, if any.
Warrants.................... To exercise the warrants, a holder must tender
the warrant together with its exercise price at
such date or, in connection with an exercise in
lieu of an optional redemption by us, at the
exercise price. See "--Exercise of Warrants" and
"--Warrant Exercise Price" below.
Preferred Securities........ The preferred securities represent an undivided
beneficial interest in the assets of New York
Community Capital Trust V.
The Trust................... New York Community Capital Trust V is a Delaware
statutory trust. The sole assets of the trust
will be the subordinated debentures issued by us.
The debentures will each have a principal amount
at maturity of $50 and a stated maturity of
November 1, 2051. The trust will issue the
preferred securities and the common securities.
We will own all of the common securities, which
will represent an aggregate liquidation amount of
at least 3% of the total capital of the trust.
Separation of Units......... At any time after the issuance of the BONUSES
units, the preferred security and the warrant
components of each BONUSES unit may be separated
by the holder and transferred separately.
Thereafter, a separated warrant and preferred
security may be combined to form a BONUSES unit.
Price....................... $50 per BONUSES unit.
Maturity of Debentures...... November 1, 2051.
Expiration of Warrants...... May 7, 2051.
Distribution Dates.......... February 1, May 1, August 1 and November 1 of
each year, beginning on February 1, 2003.
Distributions on the preferred securities will be
made to the extent we make corresponding interest
payments on the debentures.
Distribution Rate........... 6% per year on the liquidation preference of the
preferred securities, subject to reset upon a
remarketing following the occurrence of a reset
event. The distribution rate on the preferred
securities will correspond to the interest rate
on the debentures.
S-3
Deferral of Payments........ So long as we are not in default in the payment
of interest on the debentures and a failed
remarketing has not occurred, we will have the
right to defer payments of interest by extending
the interest payment period for a period, the
"extension period," at any time and from time to
time during the term of the debentures. During an
extension period, no interest will be due and
payable. Prior to the termination of any such
extension period, we may further extend such
extension period; provided that such extension
period, together with all such previous and
further extensions thereof, may not exceed 20
consecutive quarters or extend beyond the stated
maturity of the debentures. During any extension
period, we will covenant not to make certain
restricted payments. Upon the termination of any
extension period and the payment of all amounts
then due, NYCB may commence a new extension
period.
Ranking..................... Payment of distributions on, and the redemption
price of, the preferred securities, will
generally be made pro rata based on their
liquidation amounts. However, if on any payment
date, an indenture event of default has occurred
and is continuing, no payment on the common
securities will be made unless payment in full in
cash of all accumulated and unpaid distributions
on all of the outstanding preferred securities
for all current and prior distribution periods
(or in the case of payment of the redemption
price, the full amount of such redemption price
on all of the outstanding preferred securities
then called for redemption), has been made or
provided for. Our obligations under the
debentures will be equal in right of payment with
our obligations relating to other outstanding
preferred securities of our trust subsidiaries
and will be subordinate and junior in right of
payment to any "senior indebtedness" as defined
in the indenture.
Optional Redemption of
Warrants and Remarketing
of Preferred Securities... If on any date on or after November 4, 2007, the
closing price of our common stock exceeds and has
exceeded 125% of the conversion price, subject to
adjustment, for at least 20 trading days within
the immediately preceding 30 consecutive trading
days and on the day on which we make such
election, we may elect to redeem the warrants, in
whole but not in part. In connection with an
optional redemption, we will be obligated to
remarket the preferred securities at a price of
no less than 100% of their accreted value.
In connection with an optional redemption, each
unexercised warrant will be redeemed at the
warrant value on the redemption date, which value
will be a cash price equal to $50 minus the
accreted value of the preferred securities as of
the end of the day before the remarketing date.
Each warrant will be redeemed on the redemption
date unless a warrantholder affirmatively elects
to exercise its warrants. If the warrantholder
chooses to exercise the warrant and is also a
BONUSES unit holder, the proceeds from a
successful contemporaneous remarketing of the
related preferred security will be applied to
satisfy in full the exercise price of the warrant.
S-4
We are not required to give holders of the
warrants more than five business days notice of
our election to redeem the warrants. Because of
the abbreviated notification period, a
warrantholder who intends to exercise our warrant
upon an optional redemption of the warrants may
want to provide standing instructions for the
exercise of the warrants and the delivery of
shares. See "Risk Factors--You may be required to
elect whether to exercise your warrants within
four business days of notification of an election
by us to optionally redeem the warrants."
In connection with a successful remarketing
related to a redemption of the warrants:
. the adjusted maturity date of the debentures
(and, as a result, the redemption date of
the preferred securities) will become the
date which is 180 days following the
remarketing date;
. the amount due at the adjusted maturity date
of the debentures will be the accreted value
of the debentures as of the end of the day
before the remarketing date (and, as a
result, the amount due at the adjusted
redemption date of the preferred securities
will be the accreted value of the preferred
securities at that date); and
. beginning on the remarketing date, the
debentures will have an interest rate on
their accreted value (and, as a result, the
preferred securities will have a
distribution rate on their accreted value)
equal to the rate established in the
remarketing.
Redemption of Warrants Upon
Tax Event, Regulatory
Capital Event and
Investment Company Event.. Upon the occurrence of certain tax events, or if
there is a substantial risk that the trust will
be considered an investment company and certain
requirements are satisfied, or if the preferred
securities do not qualify as Tier 1 Capital, we
may, at our option, elect to redeem the warrants,
in whole but not in part, at their warrant value,
which will be a cash price equal to $50 minus the
accreted value of the preferred securities. In
connection with such an optional redemption, we
will also be obligated to seek a remarketing of
the preferred securities at a price of no less
than 100% of their accreted value.
Accreted Value.............. The "accreted value" of a preferred security is
equal to the accreted value of a debenture, which
is equal to the sum of the initial purchase price
of the preferred security component of each
BONUSES unit (i.e. $33.18) plus accretion of the
discount (i.e. the difference between the
principal amount of $50 and $33.18, the initial
purchase price of the preferred securities),
calculated using a per annum coupon of 6%,
payable quarterly, and an all-in-yield of 9.10%
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 the warrant
expiration date.
Exercise of Warrants........ A holder may exercise warrants at any time prior
to the close of business on May 7, 2051, the
"expiration date," unless redeemed earlier in
connection with an optional redemption or a
change of control.
S-5
The warrants will not be exercisable unless, at
the time of the exercise:
. we have a registration statement in effect
under the Securities Act covering the
issuance and sale of the shares of common
stock upon exercise of the warrants or the
sale of the shares upon exercise of the
warrants is exempt from the registration
requirements of the Securities Act and have
been registered, qualified or are deemed to
be exempt under applicable state securities
laws; and
. a then current prospectus is delivered to
exercising holders of the warrants.
Warrant Exercise Price...... The warrant exercise price will initially be $50.
In connection with an exercise of the warrants in
lieu of optional redemption, the exercise price
of the warrants will be the accreted value of the
preferred securities as of the day before the
remarketing date.
Holders must pay the exercise price of their
warrants in cash, including the automatic
application of a portion of the proceeds of any
remarketing of preferred securities. Accordingly,
holders of BONUSES units may not tender their
preferred securities directly toward payment of
the exercise price of the warrants.
Following an exercise of warrants by a BONUSES
unit holder other than in connection with a
redemption or change of control, the holder may
require the trust to exchange the holder's
related preferred securities for debentures and
require NYCB to repurchase such debentures at
their principal amount at maturity on a special
distribution date that is no less than 180 days
following the exercise of the warrants, and
thereby recoup the exercise price within
approximately 210 days of payment.
If a BONUSES unit holder exercises the warrant
that is part of the BONUSES unit in connection
with the expiration of the warrants or an
optional redemption of the warrants by us, the
holder will satisfy in full the exercise price by
applying the proceeds of the related remarketing
of the related preferred securities. See
"Description of the Preferred
Securities--Remarketing" in this prospectus
supplement.
Remarketing at Expiration of
Warrants.................. If not previously remarketed, the preferred
securities will be remarketed two business days
prior to the warrant expiration date. In
connection with such a remarketing, the warrants
will expire, unless exercised by the expiration
date.
S-6
In connection with a successful remarketing
relating to the expiration of the warrants:
. the maturity date of the debentures (and, as
a result, the redemption date of the
preferred securities) will continue to be
the scheduled maturity date of November 1,
2051, which will be 180 days following the
remarketing date; and
. beginning on the remarketing date, the
debentures will bear interest on their
accreted value, which at that time will
equal $50, at a rate equal to the rate
established in the remarketing.
If a remarketing of the preferred securities does
not occur on the second business day prior to the
warrant expiration date for any reason:
. beginning on such date, interest will accrue
on the accreted value of the debentures, and
distributions will accumulate on the
accreted value of the preferred securities;
. the interest rate on the accreted value of
the debentures will be 11.10% per annum,
and, as a result, the distribution rate on
the accreted value of the preferred
securities will increase correspondingly;
. the accreted value of the debentures (and,
as a result, the accreted value of the
preferred securities) will become due and
payable on the date which is 180 days after
the failed remarketing date; and
. we will no longer have the option to defer
interest payments on the debentures.
Failed Remarketing.......... If the remarketing agent is unable to remarket
all the preferred securities deemed tendered for
purchase, a "failed remarketing" will have
occurred. If a failed remarketing occurs:
. beginning on such date, interest will accrue
on the accreted value of the debentures, and
distributions will accumulate on the
accreted value of the preferred securities;
. the interest rate on the accreted value of
debentures will be 11.10% per annum and, as
a result, the distribution rate on the
accreted value of the preferred securities
will increase correspondingly;
. the accreted value of the debentures (and,
as a result, the accreted value of the
preferred securities) will become due and
payable on the date which is 180 days after
the failed remarketing; and
. we will no longer have the option to defer
interest payments on the debentures.
Notwithstanding a failed remarketing, the
warrants will be redeemed at the warrant value in
cash, which will equal $50 minus the accreted
value of the preferred securities, on the
redemption date and the warrantholder will have
the option to exercise its warrants in lieu of
such redemption by paying the exercise price in
cash.
S-7
Guarantee................... The following payments or distributions with
respect to the preferred securities, to the
extent not paid by or on behalf of the trust,
will be guaranteed by us:
. any accrued and unpaid distributions
required to be paid on the preferred
securities, to the extent that the trust has
sufficient funds available for distributions
at the time;
. the redemption price, plus all accrued and
unpaid distributions, to the extent that the
trust has sufficient funds available for
redemptions, relating to any preferred
securities called for redemption by the
trust; and
. upon a voluntary or involuntary dissolution,
winding up or termination of the trust
(other than in connection with the exchange
of all of the preferred securities for
debentures and the distribution of the
debentures to holders of the preferred
securities), the lesser of:
. the aggregate accreted value of the
preferred securities of the trust and all
accumulated and unpaid distributions
thereon to the date of payment; and
. the amount of assets of the trust
remaining available for distribution to
holders of preferred securities in
liquidation of the trust.
Our obligations under the guarantee will be equal
in right of payment with our obligations relating
to other preferred securities of our trust
subsidiaries and will be subordinate and junior
in right of payment to all of our "senior
indebtedness" as defined in the preferred
securities guarantee.
Form and Denomination....... The Depository Trust Company, or DTC, will act as
securities depositary for the BONUSES units,
debentures, preferred securities and warrants,
each of which will be issued only as fully
registered securities registered in the name of
DTC or its nominee for credit to an account of a
direct or indirect participant in DTC. One or
more fully registered certificates will be issued
for each of the debentures, the BONUSES units,
the preferred securities and the warrants, and
will be deposited with the property trustee as
custodian for DTC. The preferred securities will
be issued in denominations of $50 stated
liquidation amount and whole multiples of $50.
Use of Proceeds............. The trust will use the portion of the net
proceeds from the sale of the BONUSES units
relating to the preferred securities to acquire
the debentures from us. We intend to use the net
proceeds from the offering of the BONUSES units
(consisting of the portion of the net proceeds
from the sale of the BONUSES units relating to
the warrants, and the net proceeds from the
issuance of the debentures to the trust) to make
equity contributions to New York Community Bank;
to finance multi-family loan originations and
potential acquisitions of banking branches, other
financial institutions or other financial
services companies; and for general corporate
purposes, including possible stock repurchases
from time to time. We do not have any specific
plans for acquisitions at this time. See "Use of
Proceeds."
S-8
Material United States
Federal Income Tax
Consequences.............. Your acquisition of a BONUSES unit will be
treated for United States federal income tax
purposes as an acquisition by you of two separate
and distinct assets: (1) a preferred security
representing an undivided beneficial interest in
the trust, for a price of $33.18, and (2) a
warrant to purchase 1.4036 shares of our common
stock, for a price of $16.82. In the opinion of
Muldoon Murphy & Faucette LLP, our counsel, by
acquiring the preferred securities you will be
treated as owning an undivided beneficial
ownership interest in the debentures, and the
debentures will be treated as debt for United
States federal income tax purposes. The purchase
price of each BONUSES unit will be allocated
between the preferred security (representing your
interest in the underlying debentures) and the
warrant in proportion to their relative fair
market values at the time of purchase. Because
you will be treated as having purchased the
debentures for an amount less than their face
amount, the debentures will be treated as having
been issued with original issue discount, or OID,
and, if you are a United States taxpayer, you
will be required to include as ordinary income
amounts constituting OID as they accrue. The
amount of interest income, including OID, on
which you will be taxed will exceed your share of
the cash interest payments received by the trust
on the debentures. See "Material United States
Federal Income Tax Consequences" in this
prospectus supplement.
ERISA Considerations........ Each purchaser and subsequent transferee of the
BONUSES units (including the underlying
debentures, preferred securities and warrants,
and any shares of our common stock received upon
the exercise or redemption of the warrants) will
be deemed to have represented and warranted that
the acquisition and holding of such securities by
such purchaser or transferee will not constitute
a non-exempt prohibited transaction under Section
406 of ERISA or Section 4975 of the Code or
similar violation under any applicable Similar
Laws. See "ERISA Considerations" in this
prospectus supplement.
Absence of a Public Market
for the BONUSES Units..... Although we intend to apply to list the BONUSES
units for quotation on the Nasdaq National
Market, we cannot assure you as to whether, or
when, the BONUSES units will be accepted for
listing. The BONUSES units, the preferred
securities and the warrants constitute a new
issue of securities with no established trading
market and there can be no assurance that any
active or liquid trading market will develop for
these securities, even if the BONUSES units are
eventually listed on the Nasdaq National Market.
Neither the warrants nor the preferred securities
will initially be listed; however, if either of
these securities are separately traded to a
sufficient extent that they meet applicable
exchange listing requirements, we may attempt to
cause those securities to be listed on the
exchange on which the BONUSES units are then
listed.
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RISK FACTORS
You should carefully review the information contained elsewhere or
incorporated by reference in this prospectus supplement and the accompanying
prospectus and should particularly consider the following factors.
Risks Relating to NYCB
Our focus on multi-family, commercial real estate and construction lending may
hurt our earnings.
Our business strategy centers on continuing our emphasis on multi-family
real estate loans and, to a lesser extent, commercial real estate and
construction loans in order to expand our net interest margin. These types of
loans generally have higher risk-adjusted returns and shorter maturities than
one-to-four family residential mortgage loans. At June 30, 2002, multi-family,
commercial real estate and construction loans totaled $4.7 billion, which
represented 88% of total loans. If we continue to increase the level of our
multi-family, commercial real estate and construction loans, we will increase
our credit risk profile relative to traditional thrift institutions that have
higher concentrations of one-to-four family loans.
Loans secured by multi-family and commercial real estate properties are
generally for larger amounts and involve a greater degree of risk than
one-to-four family residential mortgage loans. Payments on loans secured by
multi-family and commercial real estate buildings generally depend on the
income produced by the underlying properties which, in turn, depends on the
successful operation or management of the properties. Accordingly, repayment of
these loans is subject to adverse conditions in the real estate market or the
local economy. The Bank seeks to minimize these risks through its underwriting
policies, which restrict new originations of such loans to the Bank's primary
lending area and require such loans to be qualified on the basis of the
property's net income and debt service ratio. However, there can be no
assurance that our underwriting policies will protect us from credit-related
losses.
Construction financing typically involves a higher degree of credit risk
than long-term financing on improved, owner-occupied real estate. Risk of loss
on a construction loan depends largely upon the accuracy of the initial
estimate of the property's value at completion of construction or development
compared to the estimated cost (including interest) of construction. If the
estimate of value proves to be inaccurate, the loan may be undersecured. We
seek to minimize these lending risks through our lending policies and
underwriting standards. A downturn in the local economy, however, could have a
material adverse effect on the quality of the commercial real estate and
construction loan portfolios, thereby resulting in material delinquencies and
losses to our operations.
Rising interest rates may reduce our net income and future cash flows.
Our income and cash flows are affected by changes in interest rates, over
which we have no control. Our primary source of income is our net interest
income, which is the difference between the interest income earned on our
interest-earning assets and the interest expense incurred on our
interest-bearing liabilities. At June 30, 2002, our one year interest rate
sensitivity gap (the difference between our interest rate sensitive assets
maturing or repricing within one year and our interest rate sensitive
liabilities maturing or repricing within one year, expressed as a percentage of
total assets) was negative 17.78%. In a rising interest rate environment, an
institution with a negative gap would generally be expected, absent the effects
of other factors, to experience a greater increase in its cost of liabilities
relative to its yield on assets, and thus a decrease in its net interest income.
We also monitor changes in the net present value of the expected future cash
flows of our assets and liabilities, which is referred to as net portfolio
value or "NPV." The NPV ratio is our NPV divided by the estimated market value
of total assets. The NPV ratio can be viewed as a corollary to our capital
ratios. To monitor our overall sensitivity to changes in interest rates, we
model the effect of instantaneous increases and decreases in interest rates of
200 basis points on our assets and liabilities. As of June 30, 2002, an
increase in
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interest rates of 200 basis points would have reduced our NPV by approximately
10.09%. A decrease in interest rates of 200 basis points would have increased
our NPV by approximately 5.10%. There can be no assurance that future changes
in our mix of assets and liabilities will not result in greater changes to our
NPV and NPV ratio.
The Bank's allowance for loan losses may be inadequate, which could hurt our
earnings.
Our Bank's reserve for possible credit losses may not be adequate to cover
actual loan losses and if we are required to increase our reserve, current
earnings may be reduced. When borrowers default and do not repay the loans that
we make to them, we may lose money. Our experience shows that some borrowers
either will not pay on time or will not pay at all, which will require us to
"charge off" the defaulted loan or loans. We provide for losses by reserving
what we believe to be an adequate amount to absorb any probable inherent
losses. A charge-off reduces our reserve for possible credit losses. If our
reserve is not sufficient, we would be required to record a larger provision
for credit losses, which would reduce current period earnings.
Changes in economic conditions could cause an increase in delinquencies and
non-performing assets, including loan charge-offs, and depress our income and
growth.
Our Bank's loan portfolio includes many real estate secured loans, demand
for which may decrease during economic downturns as a result of, among other
things, an increase in unemployment, a decrease in real estate values or
increases in interest rates. These factors could depress our earnings and
consequently our financial condition because:
. customers may not want or need our products and services;
. borrowers may not be able to repay their loans;
. the value of the collateral securing our loans to borrowers may decline;
and
. the quality of our loan portfolio may decline.
Any of the latter three scenarios could cause an increase in deliquencies
and non-performing assets or require us to charge-off a percentage of our loans
and/or increase our provisions for loan losses, which would reduce our income.
The geographic concentration of our loan portfolio and lending activities makes
us vulnerable to a downturn in the local economy.
Nearly all of our loans are made to borrowers who live and work in the New
York City metropolitan area. As a result of this concentration, a downturn in
the New York City economy would likely cause significant increases in
non-performing loans and assets, which could impair our profits either through
charge-offs or by recording additional provisions for loan losses.
Because we compete primarily on the basis of the interest rates we offer
depositors and the terms of loans we offer borrowers, our margins could
decrease if we were required to increase deposit rates or lower interest rates
on loans in response to competitive pressure.
We face intense competition both in making loans and attracting deposits. We
compete primarily on the basis of our deposit rates, the terms of the loans we
originate and the quality of our financial and depository services. This
competition has made it more difficult for us to make new loans and at times
has forced us to offer higher deposit rates in our market area. We expect
competition to increase in the future as a result of legislative, regulatory
and technological changes and the continuing trend of consolidation in the
financial services industry. Technological advances, for example, have lowered
barriers to market entry, enabled banks to expand their geographic reach by
providing services over the Internet and enabled non-depository institutions to
offer products and services that traditionally have been provided by banks.
Recent changes in federal banking law
S-11
permit affiliation among banks, securities firms and insurance companies, which
also will change the competitive environment in which we conduct business. Some
of the institutions with which we compete are significantly larger than us and,
therefore, have significantly greater resources.
Creditors of our subsidiaries have priority over you in the event of a
distribution of our subsidiaries' assets.
The creditors of the Bank and our other subsidiaries have priority over us
and you in any distribution of their assets in a liquidation or reorganization.
We are a holding company and our assets are primarily composed of our
investment in the stock of our subsidiaries and certain investment securities.
The creditors of our subsidiaries will have priority over us and you in any
distribution of the subsidiaries' assets in a liquidation, reorganization or
otherwise, except to the extent that we are recognized as a creditor of our
subsidiaries. At June 30, 2002, our subsidiaries had total liabilities,
including deposits, of $9.2 billion.
Various factors could hinder or prevent takeover attempts
Provisions of our Certificate of Incorporation and Bylaws, federal and state
regulations and various other factors may hinder or prevent companies or
persons from acquiring control of us without the consent of our board of
directors even in the event that a potential acquiror were offering a premium
over the then-prevailing price of our common stock. For further information
about these provisions, see "Description of Common Stock" in the accompanying
prospectus.
Banking laws and regulations could limit our access to funds from the Bank, our
primary source of liquidity, which is needed to make payments under the junior
subordinated debentures.
Historically, we have relied primarily on dividends from the Bank to pay our
corporate expenses, to pay cash dividends on our common stock and to engage in
repurchase programs for our common stock. Dividend payments from the Bank are
subject to statutory limitations, generally based on net profits and our level
of regulatory capital. Payment of dividends by the Bank is also subject to the
Bank's profitability, financial condition and capital expenditures and other
cash flow requirements. The Bank's regulatory agency has authority to prohibit
the Bank or us from engaging in an unsafe or unsound practice in conducting our
business. The payment of dividends, depending upon the financial condition of
the Bank or us, could be deemed to constitute an unsafe or unsound practice.
The Federal Reserve has stated that, as a matter of prudent banking, a bank or
bank holding company should not maintain its existing rate of cash dividends on
common stock unless: (1) the organization's net income available to common
shareholders over the past year has been sufficient to fully fund the
dividends; and (2) the prospective rate of earnings retention appears
consistent with the organization's capital needs, asset quality, and overall
financial condition.
We are a bank holding company regulated by the Federal Reserve System, and
almost all of our operating assets are owned by the Bank. New York State
Banking Law limits all capital distributions by the Bank, directly or
indirectly, to us, including dividend payments. However, if the total amount of
all capital distributions (including each proposed capital distribution) for
the applicable calendar year exceeds net profits to date for that year plus the
retained net profits for the preceding two years, or if the amount of the
proposed capital distribution would cause the Bank's capital not to satisfy
applicable capital standards under applicable laws and regulations, then the
Bank must file an application to receive the prior approval of the New York
Superintendent of Banks for the proposed capital distribution. As of September
30, 2002, approximately $338.8 million was available for the payment of
dividends from the Bank to us without prior approval from the New York
Superintendent of Banks.
Under the prompt corrective action provisions of the Federal Deposit
Insurance Act, the Bank is prohibited from making capital distributions,
including the payment of dividends, if, after making any capital distribution,
it would become undercapitalized as defined under the Federal Deposit Insurance
Act. Based on the Bank's current financial condition, we do not currently
expect that this provision will have any impact on its ability to pay dividends
to us. Payment of dividends by the Bank also may be restricted at any time at
the discretion of the appropriate regulator if it deems the payment to
constitute unsafe or unsound banking practice.
S-12
In addition to regulatory restrictions on the payment of dividends, the Bank
is subject to certain restrictions imposed by federal law on any extensions of
credit it makes to, and certain other transactions with, its affiliates and on
investments in stock or other securities of its affiliates. We are considered
an affiliate of the Bank. These restrictions prevent affiliates of the Bank,
including us, from borrowing from the Bank, unless various types of collateral
secure the loans. Federal law limits the aggregate amount of loans to and
investments in any single affiliate to 10% of the Bank's capital stock and
surplus and also limits the aggregate amount of loans to and investments in all
affiliates to 20% of the Bank's capital stock and surplus. As of September 30,
2002, approximately $134.4 million of credit was available to us under this
limitation.
We cannot assure you that the Bank will be able to pay dividends or extend
credit to us at past levels, or at all, in the future, which may prevent us
from satisfying our obligations under the debentures.
Possible future acquisitions could involve risks and challenges which could
adversely affect our ability to achieve our profitability goals for acquired
businesses or realize anticipated benefits of those acquisitions.
We have grown significantly in the past several years and our strategy
includes the possible acquisition of banking branches, other financial
institutions or other financial services companies. We cannot assure you that
we will be able to successfully identify suitable acquisition opportunities or
finance and complete any particular acquisition, combination or other
transaction on acceptable terms and prices. Furthermore, acquisitions involve a
number of risks and challenges, including:
. diversion of management's attention;
. the need to integrate acquired operations, internal controls and
regulatory functions;
. potential loss of key employees and customers of the acquired companies;
and
. an increase in our expenses and working capital requirements.
Any of these and other factors could adversely affect our ability to achieve
anticipated benefits of acquisitions.
Risks Related to Your Investments in the BONUSES Units
The market price for the BONUSES units may be highly volatile.
The market price for the BONUSES units may be highly volatile. There may be
a significant impact on the market price of the units or our common stock due
to, among other factors:
. the announcement of acquisitions by us or our competitors;
. variations in anticipated or actual operating results;
. market conditions; and
. general economic conditions.
The warrants may be redeemed by us, in which event the preferred securities may
be remarketed.
At any time on or after November 4, 2007, we may cause a remarketing of the
preferred securities and a redemption of the warrants if the price of our
common stock reaches specified levels.
S-13
In addition, if a tax event, a regulatory capital event or investment
company event (each as defined under "Description of the Warrants--Redemption
Upon Special Event") occurs, we may be required to:
. liquidate the trust and distribute the debentures to the beneficial
holders of preferred securities; or
. in certain circumstances, cause a remarketing of the preferred securities
and a redemption of the warrants. See "Description of the
Warrants--Redemption Upon Special Event."
A tax event which permits us to remarket the preferred securities
constitutes a taxable event to the beneficial holders of the preferred
securities. In connection with a remarketing of the preferred securities, the
maturity date of the debentures will change to the date that is 180 days from
the remarketing.
Because holders of preferred securities may receive debentures at any time,
upon the occurrence of specified events, prospective purchasers of BONUSES
units are also making an investment decision with regard to the debentures and
should carefully review all the information regarding the debentures.
In connection with a remarketing of the preferred securities you will only
be entitled to the accreted value, and not the stated liquidation amount, of
the preferred securities.
You may be required to elect whether to exercise your warrants within four
business days of notification of an election by us to optionally redeem the
warrants.
We are required to give holders of the warrants no more than five business
days' notice of its election to redeem the warrants. The warrants will be
redeemed on the redemption date unless a warrantholder affirmatively elects to
exercise its warrants. As a result, if we elect to redeem the warrants, a
holder may have only four business days to elect to exercise its warrants in
lieu of a redemption. If a holder does not receive the redemption notification
because of illness, absence or other circumstances the warrants held by that
holder will be redeemed. Because of the abbreviated notification period, a
warrantholder who intends to exercise its warrant upon an optional redemption
of the warrants may want to provide standing instructions for exercise of the
warrants and delivery of the shares to the warrant agent. See "Description of
the Warrants--Optional Redemption--Procedures."
The guarantee and your rights under the guarantee are limited.
Under the preferred securities guarantee, we guarantee to the holders of the
preferred securities, but only to the extent the trust has funds available for
these payments, the payment of:
. any accumulated and unpaid distributions required to be paid on the
preferred securities;
. the redemption price, plus all accrued and unpaid distributions, with
respect to the preferred securities called for redemption and the
repurchase price of preferred securities to be repurchased; and
. upon a voluntary or involuntary dissolution, winding-up or termination of
the trust (other than in connection with the distribution of debentures
to the holders of the preferred securities or a redemption of all the
preferred securities), the lesser of (A) the aggregate of the accreted
value and all accumulated and unpaid distributions on the preferred
securities to the date of the payment or (B) the amount of assets of the
trust remaining available for distribution to holders of the preferred
securities in liquidation of the trust.
The guarantee is qualified as an indenture under the Trust Indenture Act of
1939. The property trustee is the indenture trustee under the guarantee for the
purposes of compliance with the provisions of the Trust Indenture Act. The
guarantee trustee will hold the guarantee for the benefit of the holders of the
preferred securities.
The holders of a majority in liquidation amount of the preferred securities
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the guarantee trustee or to exercise any
trust or power conferred upon the guarantee trustee under the guarantee. If the
guarantee trustee fails
S-14
to enforce the guarantee, you may sue us directly to enforce your right to
receive payment under the guarantee without first suing the trust, the
guarantee trustee or any other person or entity. If we default on our
obligation to pay amounts on the debentures, the trust would lack available
funds for the payment of distributions or amounts payable on redemption of the
preferred securities or otherwise. The holders of the preferred securities
would not be able to rely upon the guarantee for payment of those amounts. A
holder of the preferred securities could instead rely on the enforcement by:
. the property trustee of its rights as registered holder of the debentures
against us to the terms of the debentures, or
. such holder of its right to bring a suit directly against us to enforce
payments on debentures.
The declaration states that each holder of preferred securities agrees to
the provisions of the guarantee (including the subordination provisions) and
the indenture.
Our obligations under the guarantee and the debentures are subordinated to our
obligations to pay "senior debt," as defined in the indenture and preferred
securities guarantee.
Our obligations under the guarantee and the debentures will be subordinate
and junior in right of payment to all of our present and future senior
indebtedness. "Senior indebtedness" includes:
. all of our indebtedness for money borrowed (other than trade accounts
payable in the ordinary course of business) or incurred in connection
with the condition of properties or assets;
. all of our obligations under leases required or permitted to be
capitalized under generally accepted accounting principles;
. any indebtedness of others of the kinds described above for which we are
liable as guarantor or otherwise; and
. amendments, renewals, extensions and refundings of the indebtedness
described above, unless any of the debt described above expressly
provides that the indebtedness is not superior in right of payment to the
debentures.
In addition, because we are a holding company, both the guarantee and the
debentures will be structurally subordinated to all of our subsidiaries'
obligations.
No payment of principal of (including redemption) or interest on the
debentures may be made:
. if any senior indebtedness is not paid when due and any applicable grace
period with respect to such default has ended and the default is not
cured or waived or has ceased to exist; or
. if the maturity of any senior indebtedness has been accelerated because
of a default.
The terms of our other debt may preclude us from paying interest on the
debentures, or distributions on the preferred securities. As a result, we may
defer these payments. As of September 30, 2002, our senior indebtedness was
approximately $187.8 million and the total liabilities of our subsidiaries
(excluding deposits) aggregated to approximately $3.7 billion. There are no
terms in the BONUSES units, the preferred securities, the debentures or the
guarantee that limit our or our subsidiaries' ability to incur additional
indebtedness, including secured indebtedness and other indebtedness that ranks
senior to the debentures and the guarantee.
The debentures do not contain certain restrictive covenants.
The terms of the debentures do not contain several types of restrictive
covenants that would protect holders of debentures from transactions that may
adversely affect the holders. In particular, the indenture governing the
debentures does not contain covenants that limit our ability, absent exercise
of our deferral option, to pay
S-15
dividends or make distributions on, or redeem or repurchase, our capital shares
and does not contain provisions that would give holders of the debentures the
right to require us to repurchase their debentures in the event of a change of
control of NYCB or a decline in the credit rating of us or our debt securities
as a result of a takeover, recapitalization or similar restructuring, or any
other reason. In addition, the indenture does not limit our ability to incur
additional indebtedness and therefore does not contain provisions that afford
holders of the debentures protection in the event of a highly leveraged
transaction or other similar transaction involving us that may adversely affect
the holders.
You must rely on the enforcement rights of the property trustee.
If:
. the trust fails to pay distributions in full on the preferred securities
(other than pursuant to a deferral of interest during an extension
period); or
. a trust enforcement event (as defined under "Description of the Preferred
Securities--Trust Enforcement Events" on page S-41 of this
prospectus-supplement), including a failure by us to make payments on the
debentures, occurs and is continuing,
the holders of preferred securities must rely upon the enforcement rights of
the property trustee, as a holder of the debentures, except for certain limited
rights to sue us directly as described below. The holders of a majority in
liquidation amount of the preferred securities will have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the property trustee or to direct the exercise of any trust or
power conferred upon the property trustee under the declaration, including the
right to direct the property trustee to exercise the remedies available to it
as a holder of the debentures.
If the property trustee fails to enforce its rights under the debentures, a
holder of preferred securities may sue us directly to enforce the property
trustee's rights under the debentures without first suing the property trustee.
If a trust enforcement event has occurred and is continuing and is attributable
to our failure to pay interest, principal or premium on the debentures when
due, then the registered holder of the preferred securities may sue directly
for enforcement of payment to the holder of the principal, premium or interest
on the debentures having a principal amount equal to the aggregate liquidation
amount of the preferred securities of such holder. As the holder of the common
securities of the trust, we will be subrogated to the rights of such holder of
preferred securities under the declaration to the extent of any payment made by
us to such holder of preferred securities in that suit. The holders of
preferred securities will not be able to exercise directly any other remedy
available to the holders of the debentures.
Holders of preferred securities will have only limited voting rights.
Holders of preferred securities will have limited voting rights and will not
be entitled to vote to appoint, remove or replace, the trustees. Holders will
not be able to increase or decrease the number of the trustees. Those voting
rights are held exclusively by the holders of the common securities of the
trust, which is initially NYCB.
Because of the lack of an established trading market for the BONUSES units, the
preferred securities and the warrants you may not be able to sell your BONUSES
units, preferred securities or warrants at all or at an attractive price.
Although we intend to apply to list the BONUSES units for quotation on the
Nasdaq National Market, we cannot assure you as to whether, or when, the
BONUSES units will be accepted for listing. The BONUSES units, the preferred
securities and the warrants constitute a new issue of securities with no
established trading market and there can be no assurance that any active or
liquid trading market will develop for these securities, even if the BONUSES
units are eventually listed on the Nasdaq National Market. If a market
develops, the securities could trade at prices that may be higher or lower than
the offering price. This could depend on many factors, including:
. prevailing interest rates;
. our operating results; and
S-16
. the market for similar securities.
No assurance can be given that the holders of the BONUSES units, the
preferred securities or the warrants will be able to sell their securities or
regarding the prices at which the securities may be sold.
Either satisfaction of the requirements of exemption from registration of the
Securities Act or an effective registration statement and delivery of a current
prospectus is required for the exercise of warrants.
If a holder of a warrant has received a warrant transferred pursuant to an
effective shelf registration statement, whether or not they have been separated
from a preferred security, they will effectively be able to exercise their
warrants only if:
. the shelf registration statement is effective;
. those shares have been registered, qualified or are exempt under the
securities laws of the state where the exercising holder of warrants
resides; and
. a current prospectus is delivered to that holder.
We currently have an effective registration statement covering the common
stock issuable upon exercise of the warrants. Although we have agreed to use
our best efforts, there can be no assurance that we will:
. maintain the effectiveness of the registration statement;
. have all the common stock registered or qualified under state securities
laws; or
. be able to deliver a current prospectus to warrantholders.
The warrant agreement governing the warrants states that the original
expiration date of the warrants will be extended to the extent we fail to
satisfy any of the foregoing requirements.
We have the option to extend interest payment periods, which may result in
adverse tax consequences and adversely affect the market price of the preferred
securities.
We have the right to defer payments of interest on the debentures by
extending the interest payment period for extension periods not exceeding 20
consecutive quarters with respect to each deferral period, provided that no
extension period may extend beyond maturity of the debentures. Prior to the end
of an extension period, we may, and at the end of such extension period we
shall, pay all interest then accrued and unpaid (together with interest thereon
at the stated rate borne thereby, compounded quarterly to the extent permitted
by applicable law). Prior to the termination of any extension period we may
further extend the extension period, provided that such extension period,
together with all previous and further extensions, may not exceed 20
consecutive quarters or extend beyond maturity of the debentures. Upon
termination of any extension period and the payment of all amounts then due,
including interest on deferred interest payments, we may select a new extension
period, subject to the above requirements. If interest payments on the
debentures are deferred, distributions on the preferred securities also will be
deferred and we, or any of our subsidiaries, will not be permitted, subject to
certain exceptions set forth herein, to:
. declare or pay dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our capital
stock; or
. make any payment of principal of, interest or premium, if any, on, or
repay, repurchase or redeem any indebtedness that ranks on par with or
junior in interest to the debentures or make any guarantee payment with
respect to any guarantees by us of the debt securities of any our
subsidiaries if such guarantee ranks on a par with or junior in interest
to the debentures.
S-17
During an extension period, interest on the debentures will continue to
accrue and, as a result, distributions on the preferred securities will
accumulate. See "Description of the Preferred Securities--Distributions" and
"Description of the Debentures--Option to Extend Interest Payment Period" on
pages S-32 and S-50, respectively, of this prospectus supplement.
Should an extension period occur, you will be required to accrue interest
(in the form of original issue discount) in income in respect of your pro rata
share of the debentures held by you for United States federal income tax
purposes. As a result, you will be required to include such interest in gross
income for United States federal income tax purposes in advance of receipt of
cash, and will not receive cash related to such income from the trust if you
dispose of your preferred securities prior to the record date for the payment
of distributions. See "Material United States Federal Income Tax
Consequences--The Preferred Securities--Interest Income and Original Issue
Discount" on page S-73 of this prospectus supplement.
We have no current intention of exercising our right to defer payments of
interest by extending the interest payment period on the debentures. However,
if we elect to exercise such right in the future, the market price of the
preferred securities is likely to be adversely affected. If you dispose of your
preferred securities during an extension period, you might not receive the same
return on your investment that you would if you continue to hold your preferred
securities. In addition, as a result of the existence of our right to defer
interest payments, the market price of the preferred securities (which
represent an undivided beneficial ownership interest in the debentures) may be
more volatile than other securities that do not have such rights.
Accrual of original issue discount will have tax consequences for holders of
the BONUSES units.
The issue price of the BONUSES units will be allocated to the preferred
securities (representing your interest in the underlying debentures) and the
warrants in proportion to an estimate of their respective fair market values at
the time of their issuances. This allocation will cause the debentures to be
treated as issued with original issue discount. You will be required to accrue
an amount of original issue discount in gross income each year with respect to
the preferred security you hold in advance of the receipt of cash attributable
to that income. See "Material United States Federal Income Tax
Consequences--The Preferred Securities--Interest Income and Original Issue
Discount" on page S-73 of this prospectus supplement.
S-18
USE OF PROCEEDS
The net proceeds after deducting underwriting discounts and commissions from
our sale of 4,800,000 BONUSES units in the offering will be approximately
$234.0 million, and approximately $268.1 million if the underwriters exercise
their over-allotment option in full, based on an assumed public offering price
of $50 per BONUSES unit.
We intend to use the net proceeds of this offering:
. to make equity contributions to the Bank;
. to finance multi-family loan originations and potential acquisitions of
banking branches, other financial institutions or other financial
services companies; and
. for general corporate purposes, including possible stock repurchases.
The precise amounts and timing of the application of proceeds, and the type
of investment, will depend upon our and our subsidiaries' funding requirements
and the availability of other funds. We do not have any specific plans for
acquisitions at this time.
REGULATORY CAPITAL RATIOS
The following table sets forth our consolidated capital ratios at June 30,
2002 on an actual basis and on an as adjusted basis to give effect to the sale
of the BONUSES units that we are offering, assuming no exercise of the
underwriters' over-allotment option, at the offering price of $50 per BONUSES
unit.
At June 30, 2002
-----------------
As
Actual Adjusted(1)
------ -----------
Tier 1 risk-based capital ratio 12.95% 16.72%
Total risk-based capital ratio. 13.76 17.49
Leverage ratio................. 7.22 9.51
- --------
(1) NYCB believes the net proceeds from the sale of the BONUSES units will be
available for inclusion as regulatory capital; however, no assurance can be
given that the Federal Reserve Board will agree with NYCB's treatment for
regulatory purposes of the BONUSES units and their separate components. The
as adjusted capital ratios assume regulatory capital treatment of the
components of the BONUSES units based on the allocated initial purchase
prices of those separate components set forth in this prospectus supplement
and that the net proceeds are invested in 100% risk-weighted assets.
S-19
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges were as follows for the
periods presented:
Six Months
Ended June 30, Year Ended December 31,
-------------- ------------------------
2002 2001 2000 1999 1998 1997
-------------- ---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits..... 3.52 3.25 1.90 2.72 3.10 4.43
Including Interest on Deposits..... 2.35 1.80 1.44 1.70 1.68 1.68
- --------
For the purpose of computing the ratio of earnings to fixed charges, "earnings"
consist of income before income taxes and extraordinary item plus fixed
charges, excluding capitalized interest. "Fixed charges" consist of interest on
short-term and long-term debt, including interest related to capitalized leases
and capitalized interest, and one-third of rent expense, which approximates the
interest component of that expense. In addition, where indicated, fixed charges
include interest on deposits.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
Our common stock is listed on the Nasdaq National Market and trades under
the symbol "NYCB." The following table sets forth for the periods indicated the
high and low composite per share closing sales prices as reported by the Nasdaq
National Market and the dividends paid in each period. All stock prices and
dividends have been restated to reflect the two 3-for-2 stock splits that
occurred on March 29 and September 20, 2001.
High Low Dividends
------ ------ ---------
Fiscal Year Ending December 31, 2002:
Fourth quarter (through October 28, 2002). $30.00 $25.15 $0.20(1)
Third quarter............................. 31.98 24.79 0.20
Second quarter............................ 30.12 25.18 0.20
First quarter............................. 29.65 23.07 0.16
Fiscal Year Ended December 31, 2001:
Fourth quarter............................ $28.41 $21.83 $0.16
Third quarter............................. 31.37 19.12 0.13
Second quarter............................ 25.10 19.54 0.13
First quarter............................. 19.33 14.97 0.11
Fiscal Year Ended December 31, 2000:
Fourth quarter............................ $16.67 $11.69 $0.11
Third quarter............................. 12.83 8.31 0.11
Second quarter............................ 9.19 7.97 0.11
First quarter............................. 11.94 7.89 0.11
- --------
(1) Payable on November 15, 2002.
On October 28, 2002, the last reported sale price of our common stock as
reported on the Nasdaq National Market was $28.05 per share. As of October 25,
2002, there were approximately 7,261 holders of record of our common stock.
We generally pay quarterly dividends on our common stock. As a bank holding
company, substantially all of our net earnings are generated by the Bank, which
makes these funds available to us in the form of dividends. The Bank's ability
to pay dividends is limited by certain regulatory requirements with respect to
the size of the Bank's statutory surplus levels. The declaration and amount of
dividends is subject to the discretion of our board of directors and will
depend upon various factors, including, in addition to the foregoing, our net
earnings, financial condition, cash requirements, future prospects and other
factors deemed relevant by our board of directors.
S-20
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below should be read in
conjunction with the information under the heading "Recent Developments"
beginning on page S-23 of this prospectus supplement, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the
Consolidated Financial Statements of New York Community Bancorp, Inc. and the
related notes in our most recent Quarterly Report on Form 10-Q, in our most
recent Annual Report on Form 10-K and in other reports filed with the SEC and
incorporated by reference in this prospectus supplement and the accompanying
prospectus. Historical results are not necessarily indicative of results to be
expected for any future period.
At or For the
Six Months At or For the Years Ended December 31,
Ended June 30, ----------------------------------------------------------------
2002 2001(1) 2000(2) 1999 1998 1997
-------------- ------------ ----------- ----------- ----------- -----------
(Unaudited) (dollars in thousands, except share data)
Earnings Summary
Net interest income..................... $ 178,498 $ 205,816 $ 73,081 $ 68,903 $ 68,522 $ 62,398
Reversal of provision for loan losses... -- -- -- (2,400) -- --
Other operating income.................. 47,775 90,615 21,645 2,523 2,554 2,305
Non-interest expense(3)................. 69,986 121,185 49,824 21,390 25,953 27,084
Income tax expense...................... 51,837 70,779 20,425 20,772 18,179 14,355
Net income(4)........................... 104,450 104,467 24,477 31,664 26,944 23,264
Earnings per share(4)(5)................ 1.04 1.36 0.58 0.76 0.63 0.51
Diluted earnings per share(4)(5)........ 1.03 1.34 0.56 0.74 0.60 0.48
Selected Ratios
Return on average assets................ 2.18 % 1.63 % 1.06 % 1.69 % 1.62 % 1.61 %
Return on average stockholders' equity.. 19.83 18.16 13.24 22.99 17.32 12.95
Operating expense to average assets..... 1.40 1.76 2.16 1.14 1.57 1.88
Efficiency ratio........................ 29.60 38.04 52.08 29.95 36.51 41.86
Interest rate spread.................... 4.15 3.38 3.00 3.41 3.76 3.84
Net interest margin..................... 4.33 3.59 3.33 3.79 4.24 4.45
Dividend payout ratio................... 34.95 39.55 78.57 60.00 50.00 38.00
Cash Earnings Data(6)
Earnings(4)............................. $ 126,356 $ 148,972 $ 58,495 $ 44,349 $ 43,758 $ 35,399
Earnings per share(4)(5)................ 1.26 1.94 1.38 1.06 1.02 0.77
Diluted earnings per share(4)(5)........ 1.25 1.91 1.33 1.04 0.96 0.72
Return on average assets................ 2.63 % 2.33 % 2.52 % 2.37 % 2.64 % 2.46 %
Return on average stockholders' equity.. 23.99 25.90 31.38 32.21 28.13 19.71
Operating expense to average assets..... 1.33 1.76 2.16 1.01 1.16 1.37
Efficiency ratio........................ 28.28 27.51 24.47 26.37 27.05 30.47
Balance Sheet Summary
Total assets............................ $ 10,239,883 $ 9,202,635 $ 4,710,785 $ 1,906,835 $ 1,746,882 $ 1,603,269
Loans, net.............................. 5,299,004 5,361,187 3,616,386 1,601,079 1,486,519 1,395,003
Allowance for loan losses............... 40,500 40,500 18,064 7,031 9,431 9,431
Securities held to maturity............. 284,037 203,195 222,534 184,637 152,280 94,936
Securities available for sale........... 3,429,320 2,374,782 303,734 12,806 4,656 2,617
Mortgage-backed securities held to
maturity............................... 44,619 50,865 1,923 2,094 19,680 49,781
Deposits................................ 5,284,752 5,450,602 3,257,194 1,076,018 1,102,285 1,069,161
Borrowings.............................. 3,545,729 2,506,828 1,037,505 636,378 439,055 309,664
Stockholders' equity.................... 1,212,990 983,134 307,410 137,141 149,406 170,515
Common shares outstanding(5)............ 107,950,268 101,845,276 66,555,279 47,272,785 47,814,518 50,330,670
Book value per share(5)(7).............. 11.58 10.05 4.94 3.34 3.61 3.92
Stockholders' equity to total assets.... 11.85 % 10.68 % 6.53 % 7.19 % 8.55 % 10.64 %
Assets Quality Ratios
Non-performing loans to loans, net...... 0.26 % 0.33 % 0.25 % 0.19 % 0.42 % 0.55 %
Non-performing assets to total assets... 0.14 0.19 0.19 0.17 0.38 0.54
Allowance for loan losses to non-
performing loans....................... 295.73 231.46 198.68 226.22 152.28 122.61
Allowance for loan losses to loans, net. 0.76 0.76 0.50 0.44 0.63 0.68
- --------
S-21
- --------
(1) We merged with Richmond County Financial Corp. on July 31, 2001 and treated
the merger as a purchase transaction. Accordingly, our 2001 earnings
reflect five months of combined operations.
(2) We acquired Haven Bancorp, Inc. on November 30, 2000 and treated the
acquisition as a purchase transaction. Accordingly, our 2000 earnings
reflect one month of combined operations.
(3) The June 30, 2002 amount includes $3.0 million in core deposit intangible
("CDI") amortization from the Richmond County merger. The 2001 amount
includes $5.9 million in goodwill amortization stemming from the Haven
acquisition and $2.5 million in core deposit intangible amortization
stemming from the Richmond County merger. The 2000 amount includes $494,000
in goodwill amortization stemming from the Haven acquisition.
(4) The 2001 amount reflects a gain of $39.6 million recorded in other
operating income and charges of $23.5 million and $3.0 million,
respectively, recorded in non-interest expense and income tax expense,
resulting in an after-tax net charge of $836,000, or $0.01 per share. The
2000 amount reflects a gain of $13.5 million recorded in other operating
income and a charge of $24.8 million recorded in other operating expense,
resulting in a net charge of $11.3 million, or $0.26 per share. The 1999
amount includes a curtailment gain of $1.6 million and a charge of
$735,000, both of which were recorded in operating expense and resulted in
an after-tax net gain of $1.5 million, or $0.04 per share. The 1997 amount
includes the reversal of a $1.3 million tax charge that had been incurred
in the prior year.
(5) Reflects shares issued as a result of 3-for-2 stock splits on April 10 and
October 1, 1997; September 29, 1998; and March 29 and September 20, 2001.
(6) Cash earnings is calculated by adding back to net income certain operating
and income tax expenses stemming from the amortization and appreciation of
shares held in our stock-related benefit plans, as well as the amortization
of the CDI and goodwill stemming from our merger with Richmond County on
July 31, 2001 and our acquisition of Haven on November 30, 2000. Although
cash earnings is not a measure of performance calculated in accordance with
generally accepted accounting principles, we believe that it is useful to
an investor in evaluating our operating performance and comparing us to
other companies in our business who report similar measures. However, you
should not consider cash earnings in isolation or as a substitute for
operating income, cash flows from operating activities and other income or
cash flow statement data prepared in accordance with generally accepted
accounting principles. Moreover, the way in which we calculate cash
earnings may differ from that of companies reporting similarly-named
measures.
(7) Excludes unallocated ESOP shares.
S-22
RECENT DEVELOPMENTS
The following tables set forth certain summary unaudited consolidated
financial and operating data and financial ratios for NYCB as of and for the
periods indicated. The results of operations, ratios and other data presented
for the three and nine month periods ending September 30, 2002 are not
necessarily indicative of the results of operations for the year ending
December 31, 2002.
We completed the merger with Richmond County on July 31, 2001, and, as a
result, the earnings information for the three months ended September 30, 2002
reflects three months of consolidated operations with Richmond County, compared
to two months of consolidated operations for the corresponding period in 2001.
The earnings information for the nine months ended September 30, 2002 reflects
nine months of consolidated operations with Richmond County, compared to two
months of consolidated operations for the corresponding period in 2001. In the
third quarter of 2001, we recorded a merger-related charge of $22.0 million and
a tax-rate adjustment-related charge of $3.0 million, which were offset by
combined after-tax gains of $12.0 million on the sale of securities, loans, and
a bank-owned property. In the nine months ended September 30, 2001, the net
charge recorded in the third quarter of 2001 was further offset by after-tax
gains of $23.1 million on the sale of securities and loans in the first quarter
of 2001.
At or For the At or For the
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------- ----------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(dollars in thousands, except per share data)
Earnings Summary
Net interest income.................... $98,857 $59,439 $277,356 $130,773
Provision for loan losses.............. -- -- -- --
Other operating income................. 23,606 32,023 71,382 71,632
Non-interest expense(1)................ 35,349 52,224 105,337 92,176
Income tax expense..................... 26,756 23,631 78,593 48,283
Net income(2).......................... 60,358 15,607 164,808 61,946
Earnings per share(2)(3)............... 0.58 0.18 1.63 0.90
Diluted earnings per share(2)(3)....... 0.58 0.18 1.61 0.87
Selected Ratios
Return on average assets............... 2.39 % 0.85 % 2.25 % 1.50 %
Return on average stockholders' equity. 19.74 8.45 19.79 18.89
Operating expense to average assets.... 1.34 2.72 1.38 2.10
Efficiency ratio....................... 27.64 54.39 28.91 42.85
Interest rate spread................... 4.28 3.44 4.18 3.26
Net interest margin.................... 4.44 3.63 4.36 3.47
Dividend payout ratio.................. 34.48 72.22 34.78 42.53
Cash Earnings Data(4)
Earnings(2)............................ $64,250 $48,146 $190,606 $105,535
Earnings per share(2)(3)............... 0.62 0.56 1.88 1.53
Diluted earnings per share(2)(3)....... 0.61 0.55 1.86 1.49
Return on average assets............... 2.54 % 2.63 % 2.60 % 2.55 %
Return on average stockholders' equity. 21.01 26.08 22.88 32.19
Operating expense to average assets.... 1.28 1.43 1.31 1.48
Efficiency ratio....................... 26.31 28.71 27.59 30.24
S-23
At
September At
30, 2002 December 31,
(Unaudited) 2001
------------ ------------
(dollars in thousands, except
per share data)
Balance Sheet Summary
Total assets...................................... $ 10,040,227 $ 9,202,635
Loans, net........................................ 5,301,838 5,361,187
Allowance for loan losses......................... 40,500 40,500
Securities held to maturity....................... 460,485 203,195
Securities available for sale..................... 3,035,206 2,374,782
Mortgage-backed securities held to maturity....... 42,116 50,865
Deposits.......................................... 5,141,205 5,450,602
Borrowings........................................ 3,450,898 2,506,828
Stockholders' equity.............................. 1,231,067 983,134
Common shares outstanding(3)...................... 107,274,197 101,845,276
Book value per share(5)........................... 11.88 10.05
Stockholders' equity to total assets.............. 12.26 % 10.68 %
Assets Quality Ratios
Non-performing loans to loans, net................ 0.21 % 0.33 %
Non-performing assets to total assets............. 0.11 0.19
Allowance for loan losses to non-performing loans. 367.90 231.46
Allowance for loan losses to loans, net........... 0.76 0.76
- --------
(1) The September 30, 2002 three and nine months include $1.5 million and $4.5
million, respectively, in CDI amortization from the Richmond County merger.
The 2001 three and nine months include $1.5 million and $4.4 million,
respectively, million in goodwill amortization stemming from the
acquisition of Haven Bancorp, Inc. on November 20, 2000 and $1.0 million in
core deposit intangible amortization stemming from the Richmond County
merger.
(2) The 2001 amount reflects a gain of $39.6 million recorded in other
operating income and charges of $23.5 million and $3.0 million,
respectively, recorded in non-interest expense and income tax expense,
resulting in an after-tax net charge of $836,000, or $0.01 per share.
(3) Reflects shares issued as a result of 3-for-2 stock splits on April 10 and
October 1, 1997; September 29, 1998; and March 29 and September 20, 2001.
(4) Cash earnings is calculated by adding back to net income certain operating
and income tax expenses stemming from the amortization and appreciation of
shares held in our stock-related benefit plans, as well as the amortization
of the CDI and goodwill stemming from its merger with Richmond County on
July 31, 2001 and the acquisition of Haven on November 30, 2000. Although
cash earnings is not a measure of performance calculated in accordance with
generally accepted accounting principles, we believe that it is useful to
an investor in evaluating our operating performance and comparing us to
other companies in our business who report similar measures. However, you
should not consider cash earnings in isolation or as a substitute for
operating income, cash flows from operating activities and other income or
cash flow statement data prepared in accordance with generally accepted
accounting principles. Moreover, the way in which we calculate cash
earnings may differ from that of companies reporting similarly-named
measures.
(5) Excludes unallocated ESOP shares.
S-24
CAPITALIZATION
The following table sets forth our unaudited capitalization as of June 30,
2002 on an actual basis and as adjusted basis to give effect to our receipt of
the net proceeds of this offering assuming no exercise of the underwriters'
over-allotment option. The information in the table below assumes no exercise
of the warrants issued in connection with this offering or outstanding stock
options granted under our benefit plans and no exercise of the underwriters'
over-allotment option. You should read this information in conjunction with the
sections of this prospectus supplement entitled "Recent Developments" and
"Selected Consolidated Financial Data" and in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Consolidated
Financial Statements of New York Community Bancorp, Inc. and the related notes
in our most recent Quarterly Report on Form 10-Q, in our most recent Annual
Report on Form 10-K and in other reports filed with the SEC and incorporated by
reference in this prospectus supplement and the accompanying prospectus.
At June 30, 2002
------------------------
As
Actual Adjusted
-------- --------
(unaudited, in millions)
Long-term borrowings:
Federal Home Loan Bank of New York advances...................................... $1,672.5 $1,672.5
Trust preferred securities.......................................................... 187.8 343.1
Stockholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued.. -- --
Common stock, $0.01 par value, 150,000,000 shares authorized, 108,224,425 shares
issued......................................................................... 1.1 1.1
Additional paid-in capital....................................................... 1,011.8 1,090.5
Retained earnings (substantially restricted)..................................... 182.7 182.7
Accumulated other comprehensive income, net of tax effect........................ 46.9 46.9
Less:
Treasury stock--274,157 shares................................................. 5.3 5.3
Unallocated common stock held by ESOP.......................................... 21.1 21.1
Common stock held by SERP and deferred compensation plans...................... 3.1 3.1
Unearned common stock held by RRPs............................................. -- --
-------- --------
Total stockholders' equity................................................... 1,213.0 1,291.7
-------- --------
Total capitalization...................................................... $3,073.3 $3,307.3
======== ========
S-25
ACCOUNTING TREATMENT
The financial statements of the trust will be consolidated with our
consolidated financial statements. The purchase price of each BONUSES unit will
be allocated between the preferred security and the warrant comprising such
unit in proportion to their relative values at the time of issue. The value
assigned to the warrants will be recorded as a component of additional paid in
capital in stockholders' equity in our consolidated financial statements. The
value assigned to the preferred securities component of the BONUSES units will
be included in the line item "Borrowings" in our balance sheet and described in
detail in the "Notes to our consolidated financial statements." The difference
between the assigned value and the stated liquidation amount of the trust
preferred securities will be treated as an original issue discount and
amortized on a level-yield basis over the life of the preferred securities.
Disclosures concerning the warrants, the preferred securities, the preferred
securities guarantee and the debentures will be included in the notes to our
consolidated financial statements.
Distributions on the preferred securities and amortization of the original
issue discount will be accounted for as "interest expense" in our consolidated
financial statements.
Prior to the issuance of our common stock upon the exercise of the warrants,
we expect that the BONUSES units will be reflected in our diluted earnings per
share calculations using the treasury stock method. Under this method, the
number of common shares used in calculating diluted earnings per share is
deemed to be increased by the excess, if any, of the number of shares issuable
upon exercise of the warrants over the number of shares that could be purchased
by us in the market at the average market price during the period using the
proceeds receivable upon exercise of the warrant.
S-26
DESCRIPTION OF THE BONUSES/SM/ UNITS
Unless otherwise specified, "NYCB," as used in this section, refers only to
New York Community Bancorp, Inc., a registered bank holding company, and not
its subsidiaries, and "the trust" refers to New York Community Capital Trust V,
a Delaware statutory trust.
The BONUSES units will be issued under a BONUSES unit agreement among NYCB,
the trust and Wilmington Trust Company, as warrant agent, property trustee and
agent. The preferred security constituting part of each BONUSES unit will be
issued under an amended and restated declaration of trust (the "declaration of
trust" or the "declaration") among NYCB, Wilmington Trust Company, as property
trustee and Delaware trustee, three administrative trustees and the holders of
undivided beneficial interests in the assets of the trust. The debentures
constituting the sole assets of the trust will be issued by NYCB under a
supplemental indenture to an indenture between NYCB and Wilmington Trust
Company, as debenture trustee. We refer to the indenture together with the
supplemental indenture as the "indenture." NYCB will fully and unconditionally
guarantee certain obligations of the trust pursuant to a preferred securities
guarantee agreement (the "preferred securities guarantee" or the "guarantee")
among NYCB and Wilmington Trust Company, as guarantee trustee. The warrant
constituting part of each BONUSES unit will be issued pursuant to a warrant
agreement (the "warrant agreement") between NYCB and Wilmington Trust Company,
as warrant agent.
We urge you to read the BONUSES unit agreement, declaration of trust,
indenture, preferred securities guarantee and warrant because they, and not
this description, define your rights as holder of the BONUSES units. You may
request copies of these documents from us at our address set forth under "Where
You Can Find Additional Information" in the accompanying prospectus.
General
Each BONUSES unit will consist of:
. a preferred security issued by the trust, having a stated liquidation
preference of $50, which is subject to adjustment upon a remarketing
following a reset event described below, representing an undivided
beneficial ownership interest in the assets of the trust, which assets
will consist solely of the debentures; and
. a warrant to purchase 1.4036 shares (the "conversion ratio") of common
stock of NYCB, subject to antidilution adjustments, at any time prior to
May 7, 2051. The exercise price will initially be $50, which is subject
to adjustment. The conversion price (initially $35.62) is the exercise
price divided by the conversion ratio.
At any time after issuance, the preferred security and the warrant
components of each BONUSES unit may be separated by the holder thereof and
transferred separately, and thereafter, any separated preferred security and
warrant may be combined to form a BONUSES unit.
The $50 purchase price of each BONUSES unit will be allocated between the
preferred security and the warrant comprising such BONUSES unit in proportion
to their respective fair market values at the time of issue. NYCB expects that,
at the time of issuance, the fair market value of each preferred security will
be $33.18 and the fair market value of each warrant will be $16.82. This
allocation generally will be binding on each beneficial owner of a BONUSES
unit, but not on the Internal Revenue Service. See "Material United States
Federal Income Tax Consequences--Allocation of Purchase Price of the BONUSES
Units" in this prospectus supplement.
Although we intend to apply to list the BONUSES units for quotation on the
Nasdaq National Market, we cannot assure you as to whether, or when, the
BONUSES units will be accepted for listing. The BONUSES units, the preferred
securities and the warrants constitute a new issue of securities with no
established trading market
S-27
and there can be no assurance that any active or liquid trading market will
develop for these securities, even if the BONUSES units are eventually listed
on the Nasdaq National Market. Neither the warrants nor the preferred
securities will initially be listed; however, if either of these securities are
separately traded to a sufficient extent that they meet applicable exchange
listing requirements, we may attempt to cause those securities to be listed on
the exchange on which the BONUSES units are then listed.
Distributions
Holders of BONUSES units will be entitled to receive cumulative cash
distributions payable on the related preferred securities by the trust at the
rate of 6% of the liquidation preference per annum, payable quarterly in
arrears, subject to reset upon a remarketing as described under "Description of
the Debentures--Interest." Cash distributions on the preferred securities will
be payable quarterly, in arrears, on February 1, May 1, August 1 and November 1
of each year, commencing February 1, 2003, and payable on a remarketing
settlement date, when, as and if available for payment, by the property
trustee. Distributions will accumulate from November 4, 2002.
The ability of the trust to pay the quarterly distributions on the preferred
securities will depend solely upon its receipt of corresponding interest
payments from NYCB on the debentures. Interest on the debentures not paid on
the scheduled quarterly interest payment date will accrue and compound
quarterly, to the extent permitted by law, at the applicable interest rate,
and, as a result, distributions on the preferred securities will continue to
accumulate and compound quarterly, to the extent permitted by law, at the
applicable distribution rate.
Holders of BONUSES units will also be entitled to receive a pro rata
distribution of payments of principal on the debentures, except that payments
of principal following an exchange of preferred securities for debentures will
be paid to the holder of the debentures.
At all times, the distribution rate, the distribution dates and other
payment dates for the BONUSES units will correspond to the interest rate,
interest payment dates and other payment dates on the debentures, which will be
the sole assets of the trust.
Distributions on the BONUSES units will be paid only to the extent that
payments are made in respect of the debentures and to the extent that the trust
has funds available for the payment of such distributions. See "Description of
the Debentures." If NYCB does not make payments on the debentures, the trust
will not have funds available to pay distributions on the BONUSES units.
So long as NYCB is not in default in the payment of interest on the
debentures and a failed remarketing has not occurred, NYCB will have the right
under the indenture to defer payments of interest on the debentures by
extending the interest payment period at any time, and from time to time, on
the debentures. See "Description of Debentures--Option to Extend Interest
Payment Period" below. During an extension period, no interest will be due and
payable. As a consequence of each such extension, distributions on the BONUSES
units would also be deferred by the trust for a corresponding period. Despite
such a deferral, payments of interest would continue to accrue at the then
applicable interest rate per annum compounded quarterly, to the extent
permitted by applicable law, and, as a result, distributions would continue to
accumulate at the then applicable distribution rate compounded quarterly, to
the extent permitted by law.
Prior to the termination of any extension period, NYCB may further defer
payments of interest by extending the interest payment period; provided that
such extension period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond the stated
maturity of the debentures. Upon the termination of any extension period and
the payment of all amounts then due, NYCB may commence a new extension period,
subject to the above requirements. NYCB has no current intention of exercising
its right to defer payments of interest by extending the interest payment
period of the debentures.
In the event that NYCB exercises this right to defer payments of interest,
then NYCB will not, and will not permit any subsidiary to:
. declare or pay any dividend on, make any distributions relating to, or
redeem, purchase, acquire or make a liquidation payment relating to, any
of NYCB's capital stock or any warrants, options or other rights
S-28
to acquire capital stock (but excluding any debt security that is
convertible into or exchangeable for capital stock); or
. make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by NYCB which rank
equally with or junior to the debentures or make any payments with
respect to any guarantee by NYCB of the debt securities of any subsidiary
of NYCB if such guarantee ranks equally with or junior in interest to the
debentures.
Notwithstanding the foregoing the following will be permitted:
. repurchases, or acquisitions of shares of capital stock of NYCB in
connection with any employee benefit plans or any other contractual
obligation of NYCB;
. dividends or distributions in either capital stock or rights to acquire
capital stock of NYCB;
. payments under the preferred securities guarantee; and
. any declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant to a rights agreement.
Change of Control
If a change of control (as defined below) occurs, each holder of a BONUSES
unit will have the right to:
. require NYCB to redeem that holder's related warrant on the date that is
45 days after the date NYCB gives notice at a redemption price in cash
equal to 100% of the warrant value on the redemption date; and
. exchange that holder's related preferred security for a debenture having
an accreted value equal to the accreted value of such preferred security
and to require NYCB to repurchase such debenture on the date that is 225
days following the date on which NYCB notifies holders of the change of
control (the "repurchase date") at a repurchase price in cash equal to
100% of the accreted value of the debenture on the repurchase date plus
accrued and unpaid interest (including deferred interest) on the
debentures to, but excluding, the repurchase date.
Within 30 days after the occurrence of a change of control, NYCB must give
notice to each holder of a BONUSES unit and the unit agent of the transaction
that constitutes the change of control and of the resulting redemption right
and exchange and repurchase right.
To exercise the warrant redemption right, a BONUSES unit holder must deliver
prior to or on the 30th day after the date of NYCB's change of control notice
irrevocable written notice to the warrant agent of the holder's exercise of its
redemption right.
To exercise the preferred security repurchase right, a holder must deliver
no earlier than 180 days and no later than 210 days after the date of NYCB's
change of control notice irrevocable written notice to NYCB, the trust and the
property trustee (in its capacity as property trustee and exchange agent) of
the holder's exercise of its repurchase right. The preferred securities will be
exchanged for debentures no less than three business days prior to the
repurchase date.
A "change of control" will be deemed to have occurred when any of the
following has occurred:
. the acquisition (other than open market purchases on any national
securities exchange or the Nasdaq National Market on which NYCB's capital
stock is traded) by any person of beneficial ownership, directly or
indirectly, through a purchase, merger or other acquisition transaction
or series of purchase, merger or other acquisition transactions of shares
of NYCB's capital stock entitling that person to
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exercise 50% or more of the total voting power of all shares of NYCB's
capital stock entitled to vote generally in elections of directors, other
than any such acquisition by NYCB, any of NYCB's subsidiaries or any of
NYCB's employee benefit plans; or
. the consolidation or merger of NYCB with or into any other person, any
merger of another person into NYCB, or any conveyance, transfer, sale,
lease or other disposition of all or substantially all of NYCB's
properties and assets to another person, other than:
. any transaction (A) that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of NYCB's
capital stock and (B) notwithstanding such transaction, during any
period of two consecutive years after such transaction individuals who
at the beginning of such period constituted the board of directors of
NYCB (together with any new directors whose election or appointment by
such board or whose nomination for election by the shareholders of
NYCB was approved by a vote of not less than two-thirds of the
directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved) continue to constitute at least 50% of the
board of directors of NYCB then in office; or
. any merger solely for the purpose of changing NYCB's jurisdiction of
incorporation and resulting in a reclassification, conversion or
exchange of outstanding shares of common stock solely into shares of
common stock of the surviving entity.
Beneficial ownership shall be determined in accordance with Rule 13d-3
promulgated by the SEC under the Exchange Act. The term "person" includes any
syndicate or group which would be deemed to be a "person" under Section
13(d)(3) of the Exchange Act.
However, a change of control will not be deemed to have occurred if:
. the closing sale price per share of NYCB's common stock for any five
trading days within the period of 10 consecutive trading days ending
immediately after the later of the change of control or the public
announcement of the change of control, in the case of a change of control
under the first clause above, or the period of 10 consecutive trading
days ending immediately before the change of control, in the case of a
change of control under the second clause above, equals or exceeds $39.18
(which equals 110% of the initial conversion price), subject to
antidilution adjustments; or
. at least 90% of the consideration in the transaction or transactions
constituting a change of control consists of shares of common stock
traded or to be traded immediately following such change of control on a
national securities exchange or the Nasdaq National Market and, as a
result of such transaction or transactions, the warrants become
exercisable solely into such common stock (and any rights attached
thereto).
Except as described above with respect to a change of control, the BONUSES
unit agreement does not contain provisions that permit the holders of BONUSES
units to require that NYCB redeem the warrants or repurchase the debentures in
the event of a takeover, recapitalization or similar transaction. In addition,
NYCB could enter into certain transactions, including acquisitions,
refinancings or other recapitalizations, that could affect NYCB's capital
structure or the value of NYCB's common stock, but that would not constitute a
change of control.
NYCB will comply with the requirements of the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the redemption of the warrants or
the repurchase of the debentures as a result of a change of control.
NYCB's ability to redeem warrants or repurchase debentures upon the
occurrence of a change of control is subject to important limitations. There
can be no assurance that NYCB would have the financial resources, or
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would be able to arrange financing, to pay the redemption price or repurchase
price for all the warrants and debentures, as the case may be, that might be
delivered by holders of the BONUSES units seeking to exercise the redemption
right and repurchase right. Any failure by NYCB to redeem the warrants or
repurchase the debentures when required following a change of control would
result in an event of default under the BONUSES unit agreement, the declaration
of trust and the indenture.
Amendment and Modification of the BONUSES Unit Agreement
The BONUSES unit agreement may be amended by us and the BONUSES unit agent,
without consent of the holders, for the purpose of curing any ambiguity, or
curing, correcting or supplementing any defective or inconsistent provision
therein or in any other manner which we and the BONUSES unit agent may deem
necessary or desirable and which will not adversely affect the interests of the
affected holders.
The BONUSES unit agreement will contain provisions permitting us and the
BONUSES unit agent, with the consent of the holders of a majority of the
BONUSES units at the time outstanding, to modify the rights of the holders of
the BONUSES units under the BONUSES unit agreement and the terms of the BONUSES
unit agreement, except that no modification may, without the consent of the
holder of each outstanding BONUSES unit affected thereby:
. materially adversely affect the holders' rights under any BONUSES unit; or
. reduce the aforesaid percentage of outstanding BONUSES units the consent
of holders of which is required for the modification or amendment of the
provisions of the BONUSES unit agreement.
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DESCRIPTION OF THE PREFERRED SECURITIES
The terms of the preferred securities include those stated in the
declaration of trust and those made part of the declaration of trust by the
Trust Indenture Act.
We urge you to read the declaration of trust (including the definitions of
certain terms therein), the Delaware Statutory Trust Act (the "Trust Act"), and
the Trust Indenture Act because they, and not this description, define your
rights as holder of the preferred securities, including as a component of the
BONUSES units. You may request copies of the declaration of trust from us at
our address set forth under "Where You Can Find Additional Information" in the
accompanying prospectus.
Distributions
Cash distributions on the preferred securities will be fixed at a rate per
annum of 6% of the liquidation preference of $50 per preferred security,
subject to reset in connection with a remarketing as described under
"Description of the Debentures--Interest," payable quarterly, in arrears, on
February 1, May 1, August 1 and November 1 of each year, commencing February 1,
2003, and payable on a remarketing settlement date, when, as and if available
for payment, by the property trustee. Distributions will accumulate from
November 4, 2002. At all times, the distribution rate, the distribution dates
and other payment dates for the preferred securities will correspond to the
interest rate, interest payment dates and other payment dates on the
debentures. Interest on the debentures not paid on the scheduled payment date
will accrue and compound quarterly, to the extent permitted by law, at the
applicable interest rate, and, as a result, distributions will accumulate and
compound quarterly, to the extent permitted by law, at the applicable
distribution rate ("compounded distributions").
The term "distribution" as used herein includes any regular quarterly
distributions, together with any compounded distributions, unless otherwise
stated. The amount of distributions payable for any period will be computed:
. for any full 90-day quarterly distribution period, on the basis of a
360-day year of twelve 30-day months;
. for any period shorter than a full 90-day distribution period, on the
basis of a 30-day month; and
. for periods of less than a month, on the basis of the actual number of
days elapsed per 30-day month.
In the event that any date on which distributions are payable on the
preferred securities is not a business day, then payment of the distributions
payable on the date will be made on the next succeeding day that is a business
day (and without any additional distributions or other payment in respect of
any such delay), except that, if such business day is in the next succeeding
calendar year, such payment will be made on the immediately preceding business
day, with the same force and effect as if made on the date such payment was
originally payable. A "business day" means any day, other than a Saturday or
Sunday, that is not a day on which banking institutions in the Borough of
Manhattan, in the City of New York, or Wilmington, Delaware are authorized or
required by law, regulation or executive order to close.
Distributions on the preferred securities (other than distributions on a
remarketing settlement date or redemption date) will be payable to the holders
thereof as their names appear in the register of the trust as of the close of
business on the relevant record dates. Distributions payable on any preferred
securities that are not punctually paid on any distribution date will cease to
be payable to the person in whose name such preferred securities are registered
on the relevant record date. The defaulted distribution will instead be payable
to the person in whose name such preferred securities are registered on the
special record date or other specified date determined in accordance with the
declaration of trust.
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Holders of BONUSES units will also be entitled to receive a pro rata
distribution of payments of principal on the debentures, except that payments
of principal following an exchange of preferred securities for debentures will
be paid to the holders of the debentures.
Distributions on the preferred securities will be paid only to the extent
that payments are made in respect of the debentures held by the property
trustee and to the extent that the trust has funds available for the payment of
such distributions. See "Description of the Debentures." If NYCB does not make
payments on the debentures, the property trustee will not have funds available
to make payments (including distributions) on the preferred securities.
So long as NYCB is not in default in the payment of interest on the
debentures and a failed remarketing has not occurred, NYCB will have the right
under the indenture to defer payments of interest on the debentures by
extending the interest payment period at any time, and from time to time, on
the debentures. See "Description of Debentures--Option to Extend Interest
Payment Period" below. As a consequence of each such extension, distributions
on the preferred securities would also be deferred by the trust for a
corresponding period. Despite such a deferral, payments of interest would
continue to accrue at the then applicable interest rate per annum compounded
quarterly, to the extent permitted by applicable law, and, as a result,
distributions would continue to accumulate at the then applicable distribution
rate compounded quarterly, to the extent permitted by law. The right to extend
the interest payment period for the debentures is limited to a period not
exceeding 20 consecutive quarters and no extension may extend beyond the stated
maturity of the debentures. Upon the termination of any extension period and
the payment of all amounts then due, NYCB may commence a new extension period.
Remarketing
A "remarketing event" will occur:
. in connection with a redemption of the warrants by NYCB; or
. on the expiration date of the warrants in connection with their
expiration.
Following the occurrence of a remarketing event, all of the preferred
securities other than the preferred securities as to which the holders have
opted not to participate in the remarketing, will be remarketed by an entity to
be designated by NYCB as remarketing agent, initially Salomon Smith Barney,
Inc. In the absence of an election to the contrary, holders of preferred
securities - whether or not components of BONUSES units - will be deemed to
have elected to participate in the remarketing. Under the remarketing
agreement, the remarketing agent will use its commercially reasonable efforts
to remarket the participating preferred securities at a price no less than 100%
of their accreted value as of the end of the day on the day before the
remarketing date. If the remarketing is in connection with the expiration of
the warrants, the accreted value will equal the principal amount at maturity.
The proceeds from the remarketed preferred securities will be paid to the
selling holders, unless the holders are BONUSES unit holders who have elected
to exercise their warrants, in which case the proceeds will be applied to
satisfy in full the exercise price of the warrants with any excess proceeds
being paid to the selling holders.
In connection with a remarketing related to a redemption of the warrants:
. the adjusted maturity of the debentures (and, as a result, the redemption
date of the preferred securities) will become the date that is 180 days
following the remarketing date;
. the amount due at the adjusted maturity date of the debentures will be
the accreted value of the debentures as of the end of the day before the
remarketing date (and as result, the amount due at the adjusted
redemption date of the preferred securities will be a corresponding
amount); and
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. beginning on the remarketing date, the debentures will bear interest on
their accreted value at the rate established in the remarketing.
In connection with a remarketing related to the expiration of the warrants:
. the maturity date of the debentures (and, as a result, the redemption
date of the preferred securities) will continue to be the scheduled
maturity date, which will be 180 days following the remarketing date; and
. beginning on the remarketing date, the debentures will bear interest on
their accreted value, which at that time will equal $50, at the rate
established in the remarketing.
Accordingly, holders of preferred securities - whether or not components of
BONUSES units - that elect not to participate in the remarketing will receive:
. distributions on their preferred securities for 180 days at the rate
equal to the rate established in the remarketing; and
. the accreted value of their preferred securities (which in connection
with the expiration of the warrants is $50) 180 days after the
remarketing date.
Remarketing Procedures
Set forth below is a summary of the procedures to be followed in connection
with a remarketing of the preferred securities.
Remarketing in Connection with an Optional or Special Event Redemption
In the event of a remarketing in connection with an optional or special
event redemption of the warrants, NYCB must cause written notice of the
remarketing to be given to the holders of the BONUSES units and the preferred
securities at the same time as notice of the related redemption is given by
NYCB to the holders of the BONUSES units and warrants. See "Description of the
Warrants--Optional Redemption--Procedures" and " --Redemption Upon Special
Event." The remarketing date will be two business days prior to the redemption
date. The remarketing settlement date will be the redemption date.
It is a condition precedent to the remarketing that, as of the date on which
NYCB elects to cause a remarketing of the preferred securities and on the
remarketing date, no deferral of distributions to holders of the preferred
securities as a result of NYCB electing to extend interest payments on the
debentures and no event of default under the declaration of trust shall have
occurred and be continuing. It is a further condition that the conditions to a
contemporaneous redemption of the warrants shall have been satisfied.
Remarketing in Connection with the Expiration of the Warrants
If not previously remarketed in connection with a redemption of the warrants
by NYCB, the preferred securities will be remarketed two business days prior to
the expiration date in connection with the expiration of the warrants. No
further action will be required of NYCB to select such date or give notice of
such date. The remarketing date will be two business days prior to the
expiration date. The remarketing settlement date will be the expiration date.
Absent an extension, the warrants will expire on May 7, 2051, the settlement
date for a remarketing in connection with the expiration of the warrants.
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If a remarketing of the preferred securities does not occur on the second
business day prior to the expiration date for any reason, the administrative
trustees will give notice thereof to all holders of preferred securities
(whether or not a component of a BONUSES unit) prior to the close of business
on the business day following the remarketing date. In such event:
. beginning on such date, interest will accrue on the accreted value of the
debentures, and distributions will accumulate on the accreted value of
the preferred securities;
. the interest rate on the accreted value of the debentures will be equal
to 11.10%, and, as a result, the distribution rate on the preferred
securities will increase correspondingly; and
. the accreted value of the debentures (and, as a result, the accreted
value of the preferred securities) will become due and payable on the
date which is 180 days after the remarketing date.
A Failed Remarketing
If, by 4:00 p.m., New York City time, on the remarketing date, the
remarketing agent is unable to remarket all the preferred securities deemed
tendered for purchase, a "failed remarketing" will have occurred. The
administrative trustees will give notice of a failed remarketing to NYCB and
all holders of preferred securities (whether or not a component of a BONUSES
unit) prior to the close of business on the business day following the
remarketing date.
Upon a failed remarketing,
. beginning on such date, interest will accrue on the accreted value of the
debentures, and distributions will accumulate on the accreted value of
the preferred securities;
. the interest rate on the accreted value of the debentures will be equal
to 11.10%, and, as a result, the distribution rate on the accreted value
of preferred securities will increase correspondingly;
. the stated maturity of the accreted value of the debentures and the
redemption date of the accreted value of the preferred securities will
become the date which is 180 days after the failed remarketing date; and
. NYCB will no longer have the option to defer interest payments on the
debentures.
A successful remarketing is not a condition to a redemption of the warrants,
see "Description of the Warrant--Optional Redemption," and the warrantholder
will have the option to exercise its warrants in lieu of such redemption.
General
The following common provisions apply to any remarketing.
Unless holders of preferred securities elect not to have their preferred
securities remarketed, all preferred securities will be remarketed on the
remarketing date. A holder may elect not to have its preferred securities
remarketed by notifying the remarketing agent of such election not later than
5:00 p.m., New York City time, on the business day preceding the remarketing
date. Any such notice will be irrevocable and may not be conditioned upon the
level at which the reset rate (as defined below) is established in the
remarketing. Not later than 5:00 p.m., New York City time, on the business day
before the remarketing date, the property trustee and the BONUSES unit agent,
as applicable, shall notify the trust, NYCB and the remarketing agent of the
number of preferred securities to be tendered for purchase in the remarketing.
Reset Rate. If none of the holders elects to have preferred securities
remarketed in the remarketing, the reset rate will be the rate determined by
the remarketing agent, in its sole discretion, as the rate that would have been
established had a remarketing been held on the remarketing date and the
modifications to the maturity date of the debentures and the expiration date of
the warrants will be effective as of the remarketing date. If the remarketing
agent determines prior to 4:00 p.m., New York City time, on the remarketing
date that it will be able
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to remarket all the preferred securities deemed tendered for purchase at a
price of no less than 100% of the accreted value of such preferred securities
as of the end of the day on the day next preceding the remarketing date, the
remarketing agent will determine the reset rate, which will be the rate,
rounded to the nearest one-thousandth (0.001) of one percent, per annum that
the remarketing agent determines, in its sole judgment, to be the lowest rate
per year that will enable it to remarket all the preferred securities deemed
tendered for remarketing at that price.
The right of each holder to have preferred securities tendered for purchase
will be limited to the extent that:
. the remarketing agent conducts a remarketing pursuant to the terms of the
remarketing agreement;
. the remarketing agent is able to find a purchaser or purchasers for
tendered preferred securities; and
. the purchaser or purchasers deliver the purchase price therefor to the
remarketing agent.
The remarketing agent is not obligated to purchase any preferred securities
that would otherwise remain unsold in the remarketing. Neither NYCB nor the
remarketing agent will be obligated in any case to provide funds to make
payment upon tender of preferred securities for remarketing.
NYCB will be liable for any and all costs and expenses incurred in
connection with the remarketing.
In connection with a remarketing of the preferred securities, and at any
time thereafter, a purchaser may elect to receive a debenture in lieu of
preferred securities. See "--Exchange."
Remarketing Agent
The remarketing agent will be determined by NYCB and will initially be
Salomon Smith Barney, Inc. The remarketing agreement will provide that the
remarketing agent will act as the exclusive remarketing agent and will use
commercially reasonable efforts to remarket preferred securities deemed
tendered for purchase in the remarketing at a price of no less than 100% of
their accreted value as of the end of the day on the day before the remarketing
date. Under certain circumstances, some portion of the preferred securities
tendered in the remarketing will be able to be purchased by the remarketing
agent.
The remarketing agreement will also provide that the remarketing agent will
incur no liability to NYCB or to any holder of the BONUSES units or the
preferred securities in its individual capacity or as remarketing agent for any
action or failure to act in connection with a remarketing or otherwise, except
as a result of negligence or willful misconduct on its part. NYCB will pay the
fee of the remarketing agent.
NYCB will agree to indemnify the remarketing agent against certain
liabilities, including liabilities under the Securities Act, arising out of or
in connection with its duties under the remarketing agreement.
The remarketing agreement also will provide that the remarketing agent may
resign and be discharged from its duties and obligations thereunder. However,
no resignation will become effective unless a nationally recognized
broker-dealer has been appointed by NYCB as successor remarketing agent and the
successor remarketing agent has entered into a remarketing agreement with NYCB.
In that case, NYCB will use reasonable efforts to appoint a successor
remarketing agent and enter into a remarketing agreement with that person as
soon as reasonably practicable.
Limited Right to Repurchase
If a holder of BONUSES units exercises its warrants, other than an exercise
in lieu of a redemption of the warrants (see "Description of the
Warrants--Optional Redemption" and "Description of the Warrants--Exercise of
Warrants"), such holder will have the right, on the next special distribution
date that is no less than 180 days following the exercise date of its warrants,
to require the trust to exchange the preferred securities related to such
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exercised warrants for debentures having a principal amount at maturity equal
to the liquidation preference of such preferred securities plus accumulated and
unpaid distributions (including deferred distributions) to such date and to
require NYCB to contemporaneously repurchase the exchanged debentures at their
principal amount at maturity plus accrued and unpaid interest (including
deferred interest) to, but excluding, the repurchase date. In order to effect a
repurchase of debentures, a BONUSES unit holder must:
. provide the administrative trustees and NYCB with notice of its election
to require an exchange of preferred securities and repurchase of
debentures to the trust no less than 30 days prior to the applicable
special distribution date on which such repurchase is to be effected;
. specify the number of the preferred securities to be exchanged for
debentures by the trust; and
. certify to the trust, the administrative trustees and NYCB that such
holder has exercised warrants having an exercise price no less than the
liquidation preference of the preferred securities sought to be exchanged
and that such holder is the beneficial owner of the preferred securities
to be exchanged.
On the repurchase date, NYCB will pay to the holders in redemption of an
aggregate principal amount of debentures having a principal amount at maturity
equal to the liquidation preference of preferred securities that were
exchanged, such principal amount at maturity together with accrued and unpaid
interest (including deferred interest) on such debentures to, but excluding,
the repurchase date. The fifteenth day of each calendar month will be a
"special distribution date."
Redemption
Upon the repayment of the debentures held by the trust, whether at stated
maturity (as adjusted in connection with a remarketing described above) or
otherwise, the proceeds from such repayment will be applied by the property
trustee to redeem a like aggregate liquidation amount of the preferred
securities. If less than all of the debentures held by the trust are to be
repaid, then, except as described under "--Subordination of Common Securities
of the Trust," and in the next paragraph, the proceeds from such repayment will
be allocated pro rata to the redemption of the preferred securities.
Under certain circumstances, a holder of preferred securities may elect to
exchange the preferred securities for an equivalent amount of debentures. See
"--Exchange." Also, in connection with a liquidation of the trust, the
debentures will be distributed to the holders of preferred securities. See
"--Distribution of Debentures Upon Tax Event or Investment Company Event" and
"--Liquidation Distribution Upon Dissolution." In any such event, payments
after an exchange made by NYCB on account of the debentures will be paid to the
holders of the debentures.
Redemption Procedures
The redemption price for the preferred securities will be, in the absence of
a remarketing, the stated liquidation preference of $50, plus accumulated but
unpaid distributions; or, in the event of a successful remarketing prior to
maturity, the preferred securities' accreted value (the "redemption price") and
will be paid with the applicable proceeds from the contemporaneous payment of
the debentures. Redemptions of the preferred securities will be made and the
redemption price will be payable on the redemption date only to the extent that
the trust has sufficient consideration available for the payment of such
redemption price. See "--Subordination of Common Securities of the Trust."
Distributions payable on or prior to the redemption date for any preferred
securities will be payable to the holders of record of such preferred
securities who are holders on the relevant record dates for the related
distribution dates. If notice of redemption shall have been given and
consideration deposited as required, then immediately prior to the close of
business on the date of such redemption, all rights of the holders of preferred
securities called for redemption will cease, except the right of the holders of
preferred securities to receive the
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redemption price, but without interest on such redemption price, and preferred
securities which are called for redemption will cease to be outstanding. In the
event that any date set for redemption of preferred securities is not a
business day, then payment of the redemption price payable on such date will be
made on the next day that is a business day (and without any interest or other
payment in respect of any, such delay), except that if such business day falls
in the next year, the payment will be made on the immediately preceding
business day, in each case with the same force and effect as if made on the
date such payment was originally payable.
In the event that payment of the redemption price in respect of preferred
securities called for redemption is improperly withheld or refused and not paid
either by the trust or by NYCB pursuant to the preferred securities guarantee
as described under "Description of the Preferred Securities Guarantee,"
distributions on such preferred securities will continue to accumulate at the
applicable rate per annum, from the redemption date originally established by
the trust for the preferred securities to the date such redemption price is
actually paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the redemption price. See
"--Distributions."
Subject to applicable law, NYCB or its subsidiaries may at any time and from
time to time purchase outstanding preferred securities by tender, in the open
market or by private agreement.
If preferred securities are represented by one or more global certificates,
they will be redeemed as described under "Book-Entry-Only Issuance."
Change of Control
If a change of control (as defined under "Description of the BONUSES units")
occurs, each holder of a preferred security will have the right to exchange any
or all of that holder's preferred securities for debentures having an accreted
value equal to the accreted value of such preferred securities and to require
NYCB to repurchase such debentures on the repurchase date at a repurchase price
in cash equal to 100% of the accreted value on the repurchase date of the
debentures that are exchanged for such holder's preferred securities, plus
accrued and unpaid interest (including deferred interest) on such debentures
to, but excluding, the repurchase date.
Within 30 days after the occurrence of a change of control, NYCB must give
notice to each holder of a preferred security and the property trustee of the
transaction that constitutes the change of control and of the resulting
repurchase right. To exercise the repurchase right, a preferred security holder
must deliver no earlier than 180 days and no later than 210 days after the date
of NYCB's irrevocable written notice to NYCB, the trust, the property trustee
and exchange agent of the holder's exercise of its repurchase right. The
preferred securities shall be exchanged for debentures no less than three
business days prior to the repurchase date. The repurchase date will be the
date that is 225 days after the date on which the change in control notice is
given.
Except as described above with respect to a change of control, the
declaration of trust does not contain provisions that permit the holders of
preferred securities to require the trust to exchange preferred securities for
debentures and NYCB to repurchase the debentures in the event of a takeover,
recapitalizations or similar transaction. In addition, NYCB could enter into
certain transactions, including acquisitions, refinancings or other
recapitalization, that could affect NYCB's capital structure or the value of
NYCB's common stock, but that would not constitute a change of control.
NYCB will comply with the requirements of the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the debentures
as a result of a change of control.
NYCB's ability to repurchase debentures upon the occurrence of a change of
control is subject to important limitations. There can be no assurance that
NYCB would have the financial resources, or would be able to
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arrange financing, to pay the repurchase price for all the debentures that
might be delivered by holders of debentures seeking to exercise the repurchase
right. Any failure by NYCB to repurchase the debentures when required following
a change of control would result in an event of default under the declaration
of trust.
Exchange
In connection with a remarketing of the preferred securities and at any time
thereafter, a purchaser may exchange its preferred securities for debentures,
assuming compliance with applicable securities laws. In such event, the
administrative trustees will cause debentures held by the property trustee,
having an aggregate accreted value equal to the aggregate accreted value of the
preferred securities purchased by such purchaser and with accrued and unpaid
interest equal to accumulated and unpaid distributions on the preferred
securities purchased by such purchaser, and having the same record date for
payment as the preferred securities, to be distributed to such purchaser in
exchange for such holders' pro rata interest in the trust. In such event, the
debentures held by the trust will decrease by the amount of debentures
delivered to the purchaser of preferred securities.
Distribution of Debentures Upon Tax Event or Investment Company Event
If, at any time, either a tax event or an investment company event occurs,
the administrative trustees may, with the consent of NYCB except in certain
limited circumstances, dissolve the trust and, after satisfaction of
liabilities to creditors, cause debentures held by the property trustee, having
an aggregate principal amount equal to the aggregate liquidation amount of the
preferred securities, with an interest rate identical to the distribution rate
of the preferred securities, and accrued and unpaid interest equal to
accumulated and unpaid distributions on the preferred securities, and having
the same record date for payment as the preferred securities, to be distributed
to the holders of the preferred securities and the common securities of the
trust in liquidation of such holders' interests in the trust on a pro rata
basis within 90 days following the occurrence of such event; provided, however,
that such dissolution and distribution shall be conditioned on:
. the administrative trustees' receipt of an opinion of independent counsel
to the effect that the holders of the preferred securities will not
recognize any gain or loss for United States federal income tax purposes
as a result of the dissolution of the trust and the distribution of
debentures (a "no recognition opinion"); and
. NYCB or the trust being unable to eliminate, which elimination shall be
complete within a 90-day period, such event by taking some ministerial
action (such as filing a form or making an election, or pursuing some
other reasonable measure) that has no material adverse effect on the
trust, NYCB or the holders of the preferred securities or does not
subject any of them to more than de minimis regulatory requirements.
If a tax event or an investment company event occurs and the administrative
trustees shall have been informed by an independent law firm that such firm
cannot deliver a no recognition opinion to the trust, NYCB shall have the right
to cause a remarketing of the preferred securities as described under
"--Remarketing" within 90 days following the occurrence of such event.
Under current United States federal income tax law, and interpretations
thereof and assuming that, as expected, the trust is treated as a grantor
trust, a distribution of the debentures will not be a taxable event to the
trust and/or to holders of the preferred securities. Should there be a change
in law, a change in legal interpretation, certain tax events or other
circumstances, however, the distribution of debentures could be a taxable event
to holders of the preferred securities in which event NYCB could, as provided
above, cause a remarketing of the preferred securities, and would not be
permitted to distribute the debentures at such time.
If NYCB does not elect any of the options described above, the preferred
securities will remain outstanding until the repayment of the debentures. In
the event a tax event has occurred and is continuing, under the indenture, NYCB
will be obligated to pay any taxes, duties, assessments and other governmental
charges to
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which the trust has become subject as a result of a tax event. See "Description
of the Debentures--Payment of Expenses of the Trust."
Subordination of Common Securities of the Trust
Payment of distributions on, and the redemption price of, the trust
securities, the preferred securities and common securities, as applicable
(collectively, the "trust securities"), shall be made pro rata based on the
liquidation amount of such trust securities; provided, however, that if on any
distribution date an indenture event of default (as defined below under
"--Trust Enforements Events") shall have occurred and be continuing, no payment
of any distribution on, or redemption price of, any of the common securities of
the trust, and no other payment on account of the redemption, liquidation or
other acquisition of the common securities of the trust, shall be made unless
payment in full in cash of all accumulated and unpaid distributions on all of
the outstanding preferred securities for all distribution periods terminating
on or prior thereto, or in the case of payment of the redemption price the full
amount of such redemption price on all of the outstanding preferred securities
then called for redemption, shall have been made or provided for, and all funds
available to the property trustee shall first be applied to the payment in full
in cash of all distributions on, or redemption price of, the preferred
securities then due and payable.
Liquidation Distribution Upon Dissolution
Pursuant to the declaration of trust, the trust shall automatically dissolve
on the first to occur of: (1) certain events of bankruptcy, dissolution or
liquidation of NYCB, (2) the distribution of the debentures to the holders of
the preferred securities, (3) the redemption of all of the common and preferred
securities and (4) the entry by a court of competent jurisdiction of an order
for the dissolution of the trust.
In the event of any voluntary or involuntary liquidation, dissolution, or
winding-up of the trust (each a "liquidation"), the holders of the trust
securities on the date of the liquidation will be entitled to receive, out of
the assets of the trust available for distribution to holders of trust
securities after satisfaction of the trust's liabilities to creditors, if any,
distributions in cash or other immediately available funds in an amount equal
to the accreted value of the trust securities plus accumulated and unpaid
distributions thereon to the date of payment (such amount being the
"liquidation distribution"), unless, in connection with such liquidation,
debentures in an aggregate stated principal amount equal to the aggregate
stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accumulated and
unpaid distributions on, such preferred securities shall be distributed on a
pro rata basis to the holders of the trust securities in exchange for the trust
securities. If liquidation distributions can be paid only in part because the
trust has insufficient assets available to pay in full the aggregate
liquidation distribution, then the amounts payable directly by the trust on the
preferred securities shall be paid on a pro rata basis so that the holders of
the common securities of the trust will be entitled to receive distributions
upon any such liquidation pro rata with the holders of the preferred
securities, except that if an indenture event of default has occurred and is
continuing, the preferred securities shall have a preference over the common
securities of the trust with regard to liquidation distributions.
After the liquidation date is fixed for any distribution of debentures to
holders of the preferred securities:
. the preferred securities will no longer be deemed to be outstanding;
. if the preferred securities are represented by one or more global
certificates, DTC or its nominee, as a record holder of preferred
securities, will receive a registered global certificate or certificates
representing the debentures to be delivered upon such distribution; and
. any certificates representing preferred securities not held by DTC or its
nominee will be deemed to represent debentures having an aggregate
principal amount equal to the aggregate liquidation amount of such
preferred securities, and bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid distributions on such
preferred securities, until such certificates are presented for
cancellation, at which time NYCB will issue to such holder, and the
debenture trustee will authenticate, a certificate representing such
debentures.
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Trust Enforcement Events
An event of default under the indenture (an "indenture event of default")
constitutes an event of default under the declaration of trust with respect to
the trust securities (a "trust enforcement event"). See "Description of the
Debentures--Indenture Events of Default."
Upon the occurrence and continuance of a trust enforcement event, the
property trustee as the sole holder of the debentures will have the right under
the indenture to declare the principal amount of the debentures due and
payable. NYCB and the trust are each required to file annually with the
property trustee an officer's certificate as to its compliance with all
conditions and covenants under the declaration of trust.
If the property trustee fails to enforce its rights under the debentures,
any holder of preferred securities may institute a legal proceeding against
NYCB to enforce the property trustee's rights under the debentures.
Notwithstanding the foregoing, if a trust enforcement event has occurred and is
continuing and such event is attributable to the failure of NYCB to pay the
principal of or premium, if any, or interest on the debentures on the date such
principal, premium or interest is otherwise payable (or in connection with a
repurchase of preferred securities, the repurchase date), then a registered
holder of preferred securities may institute a direct action against NYCB for
payment after the respective due date specified in the debentures. Except as
provided in this paragraph, the holders of preferred securities will not be
able to exercise directly any other remedy available to the holders of the
debentures.
Pursuant to the declaration of trust, the holder of the common securities of
the trust will be deemed to have waived any trust enforcement event with
respect to the common securities of the trust until all trust enforcement
events with respect to the preferred securities have been cured, waived or
otherwise eliminated. Until all trust enforcement events with respect to the
preferred securities have been so cured, waived or otherwise eliminated, the
property trustee will be deemed to be acting solely on behalf of the holders of
the preferred securities and only the holders of the preferred securities will
have the right to direct the property trustee in accordance with the terms of
the preferred securities.
Voting Rights, Amendment of the Declaration
Except as provided below and other than as required by law and the
declaration of trust, the holders of the preferred securities will have no
voting rights.
So long as any debentures are held by the property trustee, the holders of a
majority in liquidation amount of the preferred securities, voting separately
as a class, shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the property trustee, or
to direct the exercise of any trust or power conferred upon the property
trustee under the declaration of trust, including the right to direct the
property trustee, as holder of the debentures, to:
. exercise the remedies available to it under the indenture as a holder of
the debentures;
. consent to any amendment or modification of the indenture or the
debentures where such consent shall be required; or
. waive any past default and its consequences that is available under the
indenture;
provided, however, that if an indenture event of default has occurred and is
continuing, then the holders of at least 25% of the aggregate liquidation
amount of the preferred securities may direct the property trustee to declare
the principal of and premium, if any, and interest on the debentures due and
payable; provided, further, that where a consent or action under the indenture
would require the consent or act of the holders of more than a majority of the
aggregate principal amount of debentures affected thereby, only the holders of
the percentage of the aggregate stated liquidation amount of the preferred
securities which is at least equal to the percentage required under the
indenture may direct the property trustee to give such consent or to take such
action.
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The property trustee shall notify each holder of the preferred securities of
any notice of any indenture event of Default which it receives from NYCB with
respect to the debentures. The notice shall also state that the event of
default also constitutes a trust enforcement event. Except with respect to
directing the time, method, and place of conducting a proceeding for a remedy,
the property trustee shall be under no obligation to take any of the actions
described above unless the property trustee has obtained an opinion of a
nationally recognized independent tax counsel, to the effect that the trust
will not fail to be classified as a grantor trust for United States federal
income tax purposes as a result of such action, and that each holder will be
treated as owning an undivided beneficial ownership interest in the debentures.
If the consent of the property trustee as holder of the debentures is
required under the indenture for any amendment, modification or termination of
the indenture, the property trustee is required to request the written
direction of the holders of the trust securities. In that case, the property
trustee will vote as directed by a majority in liquidation amount of the trust
securities voting together as a single class. Where any amendment, modification
or termination under the indenture would require the consent of more than a
majority of the aggregate principal amount of debentures affected thereby,
however, the property trustee may only give that consent at the direction of
the holders of the percentage of the aggregate liquidation amount of the trust
securities which is at least equal to the percentage required under the
indenture. The property trustee is not required to take any such action in
accordance with the direction of the holders of the trust securities unless the
property trustee has obtained a tax opinion to the effect described above.
A waiver of an indenture event of default by the property trustee at the
direction of the holders of the preferred securities will constitute a waiver
of the corresponding trust enforcement event.
The declaration of trust may be amended from time to time by NYCB and a
majority of the administrative trustees (and in certain circumstances the
property trustee and the Delaware Trustee), without the consent of the holders
of the preferred securities,
. to cure any ambiguity or correct or supplement any provisions in the
declaration of trust that may be defective or inconsistent with any other
provision, or to make any other provisions with respect to matters or
questions arising under the declaration of trust that shall not be
inconsistent with the other provisions of the declaration of trust,
. to add to the covenants, restrictions or obligations of NYCB its capacity
as sponsor of the trust,
. to conform to any change in Rule 3a-5 under the 1940 Act or written
change in interpretation or application of Rule 3a-5 under the 1940 Act
by any legislative body, court, government agency or regulatory authority
which amendment does not have a material adverse effect on the rights,
preferences or privileges of the holders of the trust securities,
. to modify, eliminate or add to any provisions of the declaration of trust
to the extent necessary to ensure that the trust will be classified for
United States federal income tax purposes as a grantor trust at all times
that any trust securities are outstanding or to ensure that the trust
will not be required to register as an "investment company" under the
1940 Act, or
. to facilitate the tendering, remarketing and settlement of the preferred
securities;
provided, however, that none of the foregoing actions shall adversely affect in
any material respect the interests of any holder of trust securities, and any
amendments of the declaration of trust shall become effective when notice
thereof is given to the holders of trust securities.
The declaration of trust may be amended by NYCB, a majority of the
administrative trustees and the consent of holders representing not less than
66 2/3% in liquidation amount of the outstanding preferred securities if such
amendment would adversely affect the powers, preferences or special rights of
the trust securities, whether by way of amendment to the declaration of trust
or otherwise or would result in the dissolution, winding up or termination of
the Trust other than pursuant to the terms of the declaration of trust;
provided that if any amendment would adversely affect only the preferred
securities or the common securities of the trust, then only the affected class
will be entitled to vote on such amendment and such amendment shall not be
effective except with the approval of 66 2/3% in liquidation amount of such
class of trust securities affected thereby.
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In any event, without the consent of each holder of trust securities
affected thereby, the declaration of trust may not be amended to:
. change the amount or timing of any distribution on the trust securities
or otherwise adversely affect the amount of any distribution required to
be made in respect of the trust securities as of a specified date;
. restrict the right of a holder of trust securities to institute suit for
the enforcement of any such payment on or after such date; or
. change the right of any BONUSES unit holder to exchange its preferred
securities for debentures and to require repurchase of such debentures as
described under "--Limited Right to Repurchase."
Holders of the preferred securities may give any required approval or
direction at a separate meeting of holders of preferred securities convened for
that purpose, at a meeting of all of the holders of trust securities or by
written consent. The administrative trustees will mail to each holder of record
of preferred securities a notice of any meeting at which those holders are
entitled to vote, or of any matter upon which action by written consent of
those holders is to be taken. Each such notice will include a statement setting
forth the following information:
. the date of the meeting or the date by which the action is to be taken;
. a description of any resolution proposed for adoption at the meeting on
which those holders are entitled to vote or of the matter upon which
written consent is sought; and
. instructions for the delivery of proxies or consents.
No vote or consent of the holders of preferred securities will be required
for the trust to redeem and cancel the preferred securities in accordance with
the declaration of trust or to distribute the debentures in accordance with the
indenture.
Despite the fact that holders of preferred securities are entitled to vote
or consent under the circumstances described above, any of the preferred
securities that are owned at the time by NYCB or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, NYCB, will not be entitled to vote or consent. Instead, these
preferred securities will be treated as if they were not outstanding.
Registrar and Transfer Agent
Wilmington Trust Company, the property trustee, will also act as registrar
and transfer agent for the preferred securities.
Registration of transfers or exchanges of preferred securities will be
effected without charge by or on behalf of the trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange, the trust may charge a sum sufficient to cover any such
payment. If the preferred securities are to be redeemed in part, the trust will
not be required to:
. issue, register the transfer of or exchange any preferred securities
during a period beginning at the opening of business 15 days before the
day of the mailing of the relevant notice of redemption and ending at the
close of business on the day of such mailing; or
. register the transfer or exchange of any preferred securities so selected
for redemption, except in the case of any preferred securities being
redeemed in part, any portion thereof not to be redeemed.
Information Concerning the Property Trustee
The property trustee, other than during the occurrence and continuance of a
trust enforcement event, undertakes to perform only such duties as are
specifically set forth in the declaration of trust and, after such trust
enforcement event (which has not been cured or waived), must exercise the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the
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property trustee is under no obligation to exercise any of the powers vested in
it by the declaration of trust at the request of any holder of preferred
securities unless it is offered security and indemnity reasonably satisfactory
to it against the costs, expenses and liabilities that might be incurred
thereby.
Payment and Paying Agent
Payments in respect of the global certificates shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable distribution dates
or, if the preferred securities are not represented by one or more global
certificates, such payments shall be made by check mailed to the address of the
holder entitled thereto as such address shall appear on the register in respect
of the registrar. The paying agent (the "preferred securities paying agent")
shall initially be the property trustee and any co-paying agent chosen by the
property trustee and acceptable to the administrative trustees and NYCB. The
preferred securities paying agent shall be permitted to resign as preferred
securities paying agent upon 30 days' written notice to the administrative
trustees. In the event that the property trustee shall no longer be the
preferred securities paying agent, the administrative trustees shall appoint a
successor (which shall be a bank or trust company acceptable to NYCB) to act as
preferred securities paying agent.
Mergers, Consolidations, Conversions, Amalgamations or Replacements of the Trust
The trust may not merge with or into, consolidate with, convert into,
amalgamate with, or be replaced by, or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to any corporation or
other person, except as described below. The trust may, at the request of NYCB,
with the consent of the administrative trustees and without the consent of the
holders of the preferred securities, the Delaware Trustee or the property
trustee, merge with or into, consolidate with, convert into, amalgamate with,
be replaced by or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under the
laws of any State; provided that:
. such successor entity (if not the trust) either expressly assumes all of
the obligations of the trust with respect to the preferred securities and
the common securities of the trust or substitutes for the preferred
securities other securities having substantially the same terms as the
preferred securities (the "successor securities") so long as the
successor securities rank the same as the preferred securities rank in
priority with respect to distributions and payments upon liquidation,
redemption and otherwise;
. if the trust is not the successor entity, NYCB expressly appoints a
trustee of such successor entity possessing the same powers and duties as
the property trustee as the holder of the debentures;
. any successor securities are listed (or eligible for trading), or any
successor securities will be listed (or eligible for trading) upon
notification of issuance, on any national securities exchange or with any
other organization on which the preferred securities were listed or
quoted or eligible for trading prior to such merger, consolidation,
conversion, amalgamation, replacement, conveyance, transfer or lease;
. such merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease does not cause the preferred securities
(including any successor securities) to be downgraded by any nationally
recognized statistical rating organization;
. such merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the preferred securities
(including any successor securities) in any material respect;
. such successor entity (if not the trust) has a purpose identical in all
material respects to that of the trust;
. prior to such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease, NYCB has received an opinion
of counsel to the trust, rendered by an independent law firm experienced
in such matters, to the effect that (A) such merger, consolidation,
conversion, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the
holders of the preferred securities (including any successor securities)
in any material respect and (B) following such merger, consolidation,
conversion, amalgamation,
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replacement, conveyance, transfer or lease, (1) neither the trust nor
such successor entity will be required to register as an investment
company under the 1940 Act and (2) the trust or the successor entity, as
the case may be, will continue to be classified as a grantor trust for
United States federal income tax purposes;
. NYCB or any permitted successor or assignee owns all of the common
securities of the trust or such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at
least to the extent provided by the preferred securities guarantee; and
. such successor entity expressly assumes all of the obligations of the
trust.
Notwithstanding the foregoing, the trust shall not, except with the consent
of holders of 100% in aggregate liquidation amount of the preferred securities,
merge with or into, consolidate with, convert into, amalgamate with, be
replaced by or convey, transfer or acquire by conveyance, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
other entity or permit any other entity to merge with or into, consolidate
with, convert into, amalgamate with, or replace it or acquire by conveyance,
transfer or lease its properties and assets as an entirety or substantially as
an entirety, if such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease would cause the trust or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes or would cause each holder of the preferred
securities not to be treated as owning an undivided beneficial ownership
interest in the debentures.
Merger or Consolidation of Trustees
Any corporation into which the property trustee, the Delaware Trustee or any
administrative trustee that is not a natural person may be merged or converted
or with which such trustee may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such trustee, shall be the successor of such trustee under
the declaration of trust; provided that such corporation shall be otherwise
qualified and eligible.
Miscellaneous
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the trust in such a way that the trust will not be
deemed to be an "investment company" required to be registered under the 1940
Act or classified as other than a grantor trust for United States federal
income tax purposes and so that the debentures will be treated as indebtedness
of NYCB for United States federal income tax purposes. NYCB and the
administrative trustees are authorized to take any action, not inconsistent
with applicable law, the Certificate of trust or the declaration of trust, that
NYCB and the administrative trustees determine in their discretion to be
necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the preferred
securities.
The trust may not borrow money, issue debt, reinvest proceeds derived from
investments, or mortgage or pledge any of its assets. In addition, the trust
may not undertake any activity that would cause the trust not to be classified
as a grantor trust for United States federal income tax purposes.
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DESCRIPTION OF THE DEBENTURES
The following description is subject to, and is qualified in its entirety by
reference to, the first supplemental indenture, which we refer to in this
prospectus supplement as the "supplemental indenture," and the indenture.
We urge you to read the indenture (including definitions of terms used
therein) because it, and not this description, defines your rights as
beneficial holder of the debentures. You may request copies of these documents
from us at our address set forth under "Where You Can Find Additional
Information" in the accompanying prospectus.
General
The debentures are not subject to a sinking fund provision. The entire
principal amount of the debentures will mature and become due and payable,
together with any accrued and unpaid interest thereon, including "compounded
interest" (as defined herein), if any, on November 1, 2051, unless such
maturity date is earlier in connection with a remarketing of the preferred
securities as described under "Description of the Preferred
Securities--Remarketing," in which event the accreted value of the debentures
will be due and payable on such earlier maturity date, together with any
accrued and unpaid interest on the accreted value.
Debentures will initially be issued as a global certificate. See
"Book-Entry-Only Issuance." Under certain limited circumstances, debentures may
be issued in certificated form in exchange for a global certificate. See
"Book-Entry-Only Issuance--Depository Procedures." Payments on debentures
issued as a global certificate will be made through the paying agent for the
debentures to DTC. In the event debentures are issued in certificated form,
principal, premium, if any, and interest will be payable, the transfer of the
debentures will be registrable and debentures will be exchangeable for
debentures of other denominations of a like aggregate principal amount at the
corporate trust office of the debenture trustee in New York, New York; provided
that payment of interest may be made at the option of NYCB by check mailed to
the address of the holder entitled thereto. Notwithstanding the foregoing, so
long as the beneficial holder of the debentures is the property trustee, the
payment of principal, premium, if any, and interest on the debentures held by
the property trustee will be made through DTC to such account as may be
designated by the property trustee.
If a holder of BONUSES units exercises its warrants, other than an exercise
in lieu of a redemption of warrants, that holder will have the right to require
the trust to exchange its preferred securities for debentures and require NYCB
to repurchase its debentures as described in "Description of the Preferred
Securities--Limited Right to Repurchase."
Under certain circumstances involving the dissolution of the trust,
including following the occurrence of a tax event or an investment company
event, debentures may be distributed to the holders of the preferred securities
in liquidation of the trust, unless the preferred securities are otherwise
redeemed in connection with such event. See "Description of the Preferred
Securities--Distribution of Debentures Upon Tax or Investment Company Event."
Subordination
The payment of principal of and interest on the debentures will be, to the
extent provided in the indenture, subordinate to the prior payment in full of
all "senior indebtedness" (as defined below).
Upon any payment or distribution of assets of NYCB to creditors resulting
from any liquidation, dissolution, winding up or reorganization of, or any
insolvency proceedings involving, NYCB, or any assignment by NYCB for the
benefit of its creditors or any other marshaling of the assets and liabilities
of NYCB, the holders of all Senior Indebtedness will first be entitled to
receive payment in full before the holders of the debentures will be entitled
to receive any payment upon the principal of, premium, if any, or interest on
the debentures.
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Upon the happening and during the continuance of a default on any senior
indebtedness (other than a default described in clause (1) and (2) below) that
occurs and is continuing that permits the holders of such senior indebtedness
to accelerate its maturity, and following receipt by NYCB and the trustee of
the notice provided for by the indenture, no payment may be made on the
debentures for a period of up to 179 days after receipt of such notice, unless
such default is cured or waived or such senior indebtedness has been paid in
full. No payment of principal of, premium, if any, or interest on the
debentures may be made (1) if any senior indebtedness of NYCB is not paid when
due and any applicable grace period with respect to such default has ended with
such default not having been cured or waived or ceasing to exist or (2) if the
maturity of any senior indebtedness has been accelerated because of a default.
By reason of this subordination, in the event of NYCB's bankruptcy,
dissolution or reorganization, holders of Senior Indebtedness may receive more,
ratably, and holders of the debentures may receive less, ratably, than the
other creditors of NYCB. Such subordination will not prevent the occurrence of
an event of default under the indenture.
Subject to the qualifications described below, the term "senior
indebtedness" includes principal of, premium, if any, and interest on:
. all indebtedness of NYCB for money borrowed or incurred in connection
with the acquisition of properties or assets;
. all obligations of NYCB under leases required or permitted to be
capitalized under generally accepted accounting principles;
. any indebtedness of others of the kinds described above for which NYCB is
liable as guarantor or otherwise; and
. amendments, renewals, extensions and refundings of any such indebtedness.
Senior indebtedness does not include:
. any indebtedness in which the instrument or instruments evidencing or
securing such indebtedness or pursuant to which the same is outstanding,
or in any such amendment, renewal, extension or refunding, it is
expressly provided that such indebtedness is not superior in right of
payment to the debentures;
. trade accounts payable in the ordinary course of business; and
. any series of subordinated debt securities, whether currently outstanding
or created, assumed or incurred at a later date, initially issued to any
trust, partnerships or other entities affiliated with NYCB in connection
with an issuance of securities similar to the preferred securities.
In the event that notwithstanding any of the foregoing prohibitions the
trustee or the holders of the debentures receive any payment or distribution on
account of or in respect of the debentures, such payment or distribution will
be paid over and delivered to the holders of senior indebtedness or, in the
case of a bankruptcy, insolvency or similar proceeding of NYCB, to the trustee,
receiver or other person making payment or distribution of the assets of NYCB.
For purposes of the subordination provisions, the payment, issuance or delivery
of cash, property or securities (other than stock and certain subordinated
securities of NYCB) upon conversion of a debenture will be determined to
constitute payment on account of the principal of such debenture.
Both the preferred securities guarantee and the debentures will be
structurally subordinated to all obligations of NYCB's subsidiaries.
NYCB only has a stockholder's claim in the assets of its subsidiaries. This
stockholder's claim is junior to the claims that creditors of NYCB's
subsidiaries have against those subsidiaries, including in the case of
subsidiaries that are depository institutions, its depositors and the Federal
Deposit Insurance Corporation. Holders of the debentures and beneficiaries of
the preferred securities guarantee will only be creditors of NYCB.
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Such holders will not be creditors of NYCB's subsidiaries, where most of NYCB's
consolidated assets are located. All of NYCB's subsidiaries' existing and
future liabilities, including any claims of trade creditors and preferred
stockholders, will be effectively senior to the preferred securities guarantee
and the debentures.
NYCB's operations (other than certain investments) are conducted through its
subsidiaries. Therefore, NYCB's ability to service its debt, including the
preferred securities guarantee and the debentures, primarily depends upon the
earnings of these subsidiaries, primarily the Bank, and their ability to
distribute those earnings as dividends, loans or other payments to NYCB.
Certain laws restrict the ability of NYCB's subsidiaries to pay dividends and
make loans and advances to it. In particular, dividends by the Bank are
restricted under the laws and regulations applicable to New York -state
chartered savings banks and bank holding companies. NYCB will not be able to
use the earnings of its depository subsidiaries subject to distribution
restrictions to make payments on the preferred securities guarantee and the
debentures, except to the extent the restrictions are satisfied. Any of the
situations described above could make it more difficult for NYCB to service the
debentures or the preferred securities guarantee.
As of June 30, 2002, NYCB had no outstanding indebtedness that constituted
senior indebtedness. The indenture will not limit the amount of additional
indebtedness, including senior indebtedness, which NYCB can create, incur,
assume or guarantee, nor will the indenture limit the amount of indebtedness
which any subsidiary of NYCB can create, incur, assume or guarantee.
The total balance sheet liabilities (excluding deposits) of NYCB's
subsidiaries, as of June 30, 2002, excluding unused commitments made by
lenders, was approximately $3.7 billion. NYCB's subsidiaries also have other
liabilities and commitments, including contingent and other off-balance sheet
liabilities, that may be significant.
Certain Covenants of NYCB
Except as otherwise provided in the indenture, for so long as the debentures
are held by the property trustee, NYCB will covenant:
. to directly or indirectly maintain 100% ownership of the common
securities of the trust, unless a permitted successor of NYCB under the
indenture succeeds to NYCB's ownership of the common securities;
. to use its reasonable efforts to cause the trust to remain a statutory
trust, except in connection with the distribution of the debentures to
holders of trust securities in liquidation of the trust, the redemption
of all of the trust securities of the trust, or certain mergers,
consolidations, conversions or amalgamations, each as permitted by the
declaration of trust, and not to voluntarily dissolve, wind-up, liquidate
or be terminated, except as permitted by the declaration of trust and
otherwise continued to be classified as a grantor trust for U.S. federal
income tax purposes;
. to use its commercially reasonable efforts to ensure that the trust will
not be an "investment company" for purposes of the 1940 Act;
. to take no action that would be reasonably likely to cause the trust to
be classified as an association or a publicly traded partnership taxable
as a corporation for United States federal income tax purposes; and
. use its reasonable best efforts to cause each holder of trust securities
to be treated as owning an undivided beneficial interest in the
debentures.
Redemption
NYCB will not have the right to redeem the debentures in whole or in part at
any time.
If a holder of BONUSES units exercises its warrants, other than an exercise
in lieu of a redemption of warrants, that holder will have the right to require
the trust to exchange its preferred securities for debentures and
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require NYCB to repurchase its debentures as described in "Description of the
Preferred Securities--Limited Right to Repurchase."
Interest
Each debenture will bear interest on the stated principal amount thereof at
the rate of 6% per annum, subject to adjustment as described below and under
"Description of the Preferred Securities--Remarketing," from and including
November 4, 2002. Interest is payable quarterly in arrears on February 1, May
1, August 1 and November 1 of each year (each, an "interest payment date"),
commencing on February 1, 2003, to the person in whose name such debenture is
registered, subject to certain exceptions, at the close of business on the
business day before such interest payment date. In the event the preferred
securities shall not continue to remain in book-entry only form and the
debentures are not in the form of a global certificate, NYCB shall have the
right to select record dates, which shall be at least one business day before
an interest payment date.
The amount of interest payable for any full 90-day quarterly interest period
will be computed on the basis of a 360-day year of twelve 30-day months. The
amount of interest payable for any period shorter than a full 90-day quarterly
interest period for which interest is computed, will be computed on the basis
of 30-day months and, for periods of less than a month, on the basis of the
actual number of days elapsed per 30-day month. In the event that any date on
which interest is payable on the debentures is not a business day, then payment
of the interest payable on such date will be made on the next succeeding day
that is a business day (and without any interest or other payment in respect of
any such delay), except that if such business day is in the next succeeding
calendar year, then such payment shall be made on the immediately preceding
business day, in each case with the same force and effect as if made on such
date.
If a remarketing event, as defined under "Description of Preferred
Securities--Remarketing," occurs and the preferred securities are remarketed,
interest will accrue on the accreted value of the debentures at the reset rate,
as defined under "Description of Preferred Securities--Remarketing General,"
from the remarketing date to but not including the stated maturity (as modified
in connection with such remarketing). If there is a failed remarketing, as
described in "Description of the Preferred Securities--Remarketing," interest
will accrue on the accreted value of the debentures at a rate of 11.10% from
the failed remarketing date to but not including the stated maturity (as
modified in connection with such failed remarketing).
Terms Upon Remarketing of Preferred Securities; Failed Remarketing
In connection with a remarketing of the preferred securities as described in
"Description of the Preferred Securities--Remarketing":
. the aggregate accreted value of the debentures as of the end of the day
before the remarketing date will become due and payable on the date which
is 180 days after the remarketing date; and
. the debentures will have an interest rate payable on the accreted value
equal to the rate established in the remarketing.
In the event of a failed remarketing as described in "Description of the
Preferred Securities--Remarketing--
Remarketing Procedures--A Failed Remarketing":
. the interest rate on accreted value of the debentures as of the end of
the day before the remarketing date will equal 11.10% from the failed
remarketing date to but not including the stated maturity (as modified in
connection with such failed remarketing);
. the aggregate accreted value of the debentures will become due and
payable on the date which is 180 days after the failed remarketing date;
and
. NYCB may not defer interest payments on the debentures.
In the event debentures are distributed to holders of preferred securities,
the provisions describing the remarketing of the preferred securities shall
apply to the debentures.
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Option to Extend Interest Payment Period
So long as NYCB is not in default under the indenture and a failed
remarketing has not occurred, NYCB will have the right, at any time, and from
time to time during the term of the debentures, to defer payments of interest
by extending the interest payment period for a period (the "extension period")
not exceeding 20 consecutive quarters or extending beyond the stated maturity
of the debentures, during which extension period no interest will be due and
payable. No extension period shall end on a date other than an interest payment
date. The extension period will automatically terminate, and cash interest will
thereafter be payable, upon the occurrence of a failed remarketing. Despite
such deferral, interest will contine to accrue. At the end of the extension
period, NYCB shall pay all interest then accrued and unpaid, together with
interest thereon compounded quarterly at the then applicable rate for the
debentures to the extent permitted by applicable law ("compounded interest").
Prior to the termination of any extension period, NYCB may further extend such
extension period; provided that such extension period, together with all such
previous and further extensions thereof, may not exceed 20 consecutive quarters
or extend beyond the stated maturity of the debentures. Upon the termination of
any extension period and the payment of all amounts then due, NYCB may commence
a new extension period, subject to the above requirements. NYCB has no present
intention of exercising its right to defer payments of interest by extending
the interest payment period on the debentures.
During any such extension period, NYCB shall not, and shall not permit any
subsidiary to:
. declare or pay any dividend on, make any distributions relating to, or
redeem, purchase, acquire or make a liquidation payment relating to, any
of NYCB's capital stock or any warrants, options or other rights to
acquire capital stock (but excluding any debt security that is
convertible into or exchangeable for capital stock); or
. make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by NYCB which rank
equally with or junior to the debentures or make any payments with
respect to any guarantee by NYCB of the debt securities of any subsidiary
of NYCB if such guarantee ranks on a parity with or junior in interest to
the debentures;
other than
. dividends or distributions in capital stock or rights to acquire capital
stock of NYCB;
. payments under the preferred securities guarantee;
. any declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant to a rights agreement;
. repurchases or acquisitions of shares of capital stock of NYCB in
connection with any employee benefit plans or any other contractual
obligation of NYCB; and
. repurchases of capital stock of NYCB in connection with the satisfaction
by NYCB of its obligations pursuant to any acquisitions of businesses
made by NYCB (which repurchases are made in connection with the
satisfaction of indemnification obligations of the sellers of such
businesses).
If the property trustee is the only holder of the debentures, NYCB will give
the administrative trustees, the property trustee and the debenture trustee
notice of its election of such extension period at least one business day prior
to the earlier of (1) the next date on which distributions on the preferred
securities are payable or (2) the date the administrative trustees are required
to give notice of the record date or the date such distributions are payable
for the first quarter of such extension period to any national stock exchange
or other organization on which the preferred securities are listed or quoted,
if any, or to holders of the preferred securities as of the record date or the
distribution date. If the property trustee shall not be the holder of the
debentures, NYCB shall give the holders of the debentures notice of its
election of such extension period at least 10 business days prior to the
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earlier of (1) the interest payment date for the first quarter of such
extension period or (2) the date upon which NYCB is required to give notice of
the record or payment date of such related interest payment for the first
quarter to any national stock exchange or other organization on which the
debentures are listed or quoted, if any, or to holders of the debentures.
Prior to the exercise of its right to cause a remarketing of the debentures,
NYCB must pay all deferred interest and compounded interest thereon so that no
amounts are then owing on the debentures.
Payment of Expenses of the Trust
Under the terms of the indenture, NYCB has agreed to pay all fees and
expenses related to the organization and operations of the trust (including any
taxes, duties, assessments or other governmental charges of whatever nature
imposed on the trust by the United States or any other taxing authority) and
the offering of preferred securities and be responsible for all debts and
obligations of the trust (other than with respect to the trust securities), so
that the net amounts received, retained or paid by the trust after paying such
fees, expenses, debts and obligations will be equal to the amounts the trust
would have received or paid had no such fees, expenses, debts and obligations
been incurred by or imposed on the trust. The foregoing obligations of NYCB are
for the benefit of, and shall be enforceable by, any person to whom such fees,
expenses, debts and obligations are owed (each a "creditor") whether or not
such creditor has received notice thereof. Any such creditor may enforce such
obligations of NYCB directly against NYCB, and NYCB irrevocably waives any
right or remedy to require that any such creditor take any action against the
trust or any other person before proceeding against NYCB. NYCB shall execute
such additional agreements as may be necessary to give full effect to the
foregoing.
Consolidation, Merger and Sale of Assets
Except as otherwise provided in the indenture, NYCB may not merge or
consolidate with or sell or convey all or substantially all of its assets to
any person or entity unless:
. the successor corporation (if other than NYCB) is a corporation organized
under the laws of any State of the United States, and such successor
company assumes NYCB's obligations under the debentures and the
indenture; and
. immediately after giving effect to such transaction, no indenture event
of default shall have occurred and be continuing.
Indenture Events of Default
Any one of the following events will constitute an indenture event of
default with respect to the debentures:
. default in the payment of any interest on the debentures when due and
payable, if continued for 30 days after written notice has been given as
provided in the indenture, whether or not such payment is prohibited by
the subordination provisions of the indenture and the debentures;
provided, however, that a valid extension of the interest payment period
does not constitute a default in the payment of interest;
. default in the payment of principal of (or premium, if any, on) the
debentures when due and payable whether or not such payment is prohibited
by the subordination provisions of the indenture and the debentures;
. failure to perform any other covenant of NYCB in the indenture or the
debentures (other than a covenant included in the indenture solely for
the benefit of any series of debt securities other than the debentures),
if continued for 90 days after written notice has been given as provided
in the indenture;
. certain events of bankruptcy, insolvency or liquidation involving NYCB; or
. the voluntary or involuntary dissolution, winding-up, or termination of
the trust, except in connection with (A) the distribution of debentures
to the holders of trust securities in liquidation of the trust or their
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interest in the trust, (B) the redemption of all outstanding trust
securities and (C) certain mergers, consolidations or amalgamations, each
as permitted by the declaration of trust.
If any indenture event of default shall occur and be continuing, the
property trustee, as the holder of the debentures, will have the right under
the indenture to declare the principal of the debentures (including any
compounded interest, if any) and any other amounts payable under the indenture
to be forthwith due and payable and to enforce its other rights as a creditor
with respect to the debentures. An indenture event of default also constitutes
a trust enforcement event. The holders of preferred securities in certain
circumstances have the right to direct the property trustee to exercise its
rights as the holder of the debentures. In addition, if the property trustee
fails to enforce its rights under the debentures any holder of preferred
securities may institute a legal proceeding against NYCB to enforce the
property trustee's rights under the debentures. See "Description of the
Preferred Securities--Trust Enforcement Events" and "Description of the
Preferred Securities--Voting Rights, Amendment of the Declaration."
Notwithstanding the foregoing, if an indenture event of default has occurred
and is continuing and such event is attributable to the failure of NYCB to pay
interest or principal on the debentures on the date such interest or principal
is otherwise payable, NYCB acknowledges that then a holder of preferred
securities may institute a direct action for payment after the respective due
date specified in the debentures. Notwithstanding any payments made to such
holder of preferred securities by NYCB in connection with a direct action, NYCB
shall remain obligated to pay the principal of or interest on the debentures
held by the trust or the property trustee. The holders of preferred securities
will not be able to exercise directly any other available to the holders of the
debentures.
If any indenture event of default shall occur and be continuing and the
debentures have been distributed to the holders of the trust securities upon a
liquidation of the trust, the holders of not less than 25% in aggregate
principal amount of the debentures will have the right to declare the principal
of the debentures (including any compounded interest, if any) and any other
amounts payable under the indenture to be forthwith due and payable and to
enforce their other rights as a creditor with respect to the debentures.
Defeasance
The obligations of NYCB with respect to the payment of the principal,
premium, if any, and interest on, the debentures will terminate if NYCB
irrevocably deposits or causes to be deposited with the debenture trustee,
under the terms of an escrow trust agreement satisfactory to the debenture
trustee, as a trust fund specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the debentures,
. money,
. U.S. government obligations, which through the payment of interest and
principal in respect thereof in accordance with their terms will provide
money at such time or times as payments are due and payable on the
debentures, or
. a combination of the foregoing, sufficient to pay and discharge each
installment of principal, premium, if any, and interest on the debentures.
The discharge of the debentures is subject to certain other conditions,
including, without limitation,
. no indenture event of default or event (including such deposit) which
with notice or lapse of time would become an indenture event of default
shall have occurred and be continuing on the date of such deposit,
. such deposit and the related intended consequence will not result in any
default or event of default under any material indenture, agreement or
other instrument binding upon NYCB or its subsidiaries or any of their
properties, and
. NYCB shall have delivered to the debenture trustee an opinion of
independent tax counsel or a private letter ruling by the IRS
satisfactory to the debenture trustee to the effect that holders of the
debentures will not recognize income, gain or loss for United States
federal income tax purposes if NYCB makes such deposit.
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Notwithstanding a defeasance of the debentures, NYCB will continue to have
the right to cause a remarketing of the debentures so long as the amounts
described above are expected to be on deposit in the escrow trust account as of
such modified maturity date.
Modification, Waiver, Meetings and Voting
Modification of Indenture
The indenture will provide that NYCB and the debenture trustee may, without
the consent of any holders of debentures, enter into supplemental indentures
for the purposes, among other things, of adding to NYCB's covenants, adding
additional indenture events of default, or curing ambiguities or
inconsistencies in such indenture, or making other changes to the indenture or
form or terms of the debentures; provided that such action does not have a
material adverse effect on the interests of the holders of the debentures. In
addition, modifications and amendments of the indenture may be made by NYCB and
the debenture trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the debentures and all other series
of debt securities issued under the indenture then outstanding affected, acting
as one class, by such modification or amendment, provided, however, that no
such modification or amendment may, without the consent of each holder of
debentures outstanding that is affected thereby:
. change the stated maturity of the principal of, or any installment of
principal of or interest on the debentures;
. reduce the principal, premium, if any, or interest on any debentures;
. change the place of payment where the debentures or any premium or
interest thereon is payable;
. impair the right to institute suit for the enforcement of any payment on
or with respect to the debentures;
. reduce the percentage in principal amount of the debentures then
outstanding required for modification or amendment of the indenture or
for any waiver of compliance with certain provisions of the indenture or
for waiver of certain defaults;
. change any obligation of NYCB to maintain an office or agency in the
places and for the purposes required by the indenture; or
. modify any of the above provisions;
provided, further, that if the debentures are held by a trust or a trustee of a
trust, no such modification or amendment shall be effective until the holders
of not less than 66 2/3% of the aggregate liquidation amount of the trust
securities shall have consented to such modification or amendment; provided,
further, that where a consent under the indenture would require the consent of
the holders of more than 66 2/3% of the principal amount of the debentures,
such modification or amendment shall not be effective until the holders of at
least the same proportion in aggregate stated liquidation amount of the trust
securities shall have consented to such modification or amendment.
Waiver of Default
The holders of not less than a majority of aggregate principal amount of the
debentures then outstanding may, on behalf of the holders of all debentures,
waive any past default under the indenture with respect to the debentures
except a default in the payment of principal, premium, if any, or any interest
on the debentures and a default in respect of a covenant or provision of the
indenture which cannot be modified or amended without the consent of each
holder of the debentures then outstanding. Such waiver shall not be effective
until the holders of a majority in aggregate stated liquidation amount of
preferred securities shall have consented to such waiver; provided, further,
that where a consent under the indenture would require the consent of the
holders of more than a majority in principal amount of the debentures, such
waiver shall not be effective until the holders of at least the same proportion
in aggregate stated liquidation amount of the preferred securities shall have
consented to such waiver.
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Meetings and Voting
A meeting may be called at any time by the debenture trustee, and shall be
called upon request, by NYCB pursuant to a resolution of the board of directors
of NYCB or the holders of at least 20% in aggregate principal amount of the
debentures then outstanding. Except as described under "--Modification of
Indenture" and "--Waiver of Default," a resolution presented at a meeting or
reconvened meeting at which a quorum of the holders of debentures then
outstanding is present may be adopted by the affirmative vote of the lesser of:
. the holders of a majority in principal amount of the debentures then
outstanding, or
. the holders of 66 2/3 principal amount of the debentures then outstanding
represented and voting at the meeting;
provided, however, that if any consent, waiver or other action which the
indenture expressly provides may be made, given or taken by the holders of a
specified percentage, which is less than a majority of the principal amount of
the debentures then outstanding, such action may be adopted at a meeting or
reconvened meeting at which a quorum is present by the affirmative vote of the
lesser of:
. the holders of such specified percentage in principal amount of the
debentures then outstanding, or
. a majority in principal amount of debentures then outstanding of such
series represented and voting at the meeting.
Any resolution passed or decision taken at any meeting of holders of
debentures duly held in accordance with the indenture will be binding on all
holders of debentures whether or not present or represented at the meeting.
Except with respect to certain reconvened meetings, the quorum at a meeting
of the holders of debentures will be persons holding or representing a majority
in principal amount of the debentures then outstanding.
Governing Law
The indenture and the debentures will be governed by and construed in
accordance with the laws of the State of New York.
Miscellaneous
The indenture will provide that NYCB, as borrower, will pay all fees and
expenses related to:
. the issuance and exchange of the trust securities and the debentures;
. the organization, maintenance and dissolution of the trust;
. the retention of the trustees;
. the enforcement by the property trustee of its rights as a holder of
debentures; and
. all taxes and charges of whatever nature directly imposed on the trust.
In addition, NYCB will be primarily liable for any indemnification
obligations with respect to the declaration of trust.
NYCB will have the right at all times to assign any of its respective rights
or obligations under the indenture to a direct or indirect wholly owned
subsidiary of NYCB; provided that in the event of any such assignment, NYCB
will remain liable for all of its respective obligations. Subject to the
foregoing, the indenture will be binding upon and inure to the benefit of the
parties thereto and their respective successors and assigns. The indenture
provides that it may not otherwise be assigned by the parties thereto.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the preferred
securities guarantee which will be executed and delivered by NYCB for the
benefit of the holders from time to time of preferred securities. The preferred
securities guarantee will be qualified as an indenture under the Trust
Indenture Act. Wilmington Trust Company will act as the guarantee trustee for
purposes of the Trust Indenture Act. The terms of the preferred securities
guarantee will be those set forth in the preferred securities guarantee and
those made part of the preferred securities guarantee by the Trust Indenture
Act. The preferred securities guarantee will be held by the guarantee trustee
for the benefit of the holders of the preferred securities of the trust.
General
NYCB will irrevocably and unconditionally agree, to the extent set forth in
the preferred securities guarantee, to pay in full to the holders of the
preferred securities, the guarantee payments, as defined below, except to the
extent paid by the trust, as and when due, regardless of any defense, right of
set-off or, counterclaim which the trust may have or assert, other than the
defense of payment. The following payments, which are referred to as "guarantee
payments," will be guaranteed by NYCB, without duplication:
. any accrued and unpaid distributions that are required to be paid on the
preferred securities, to the extent the trust has funds available for
distributions;
. the redemption price, plus all accrued and unpaid distributions, to the
extent the trust has funds available for redemptions, relating to any
preferred securities called for redemption by the trust; and
. upon a voluntary or involuntary dissolution, winding-up or termination of
the trust, other than in connection with the distribution of junior
subordinated debentures to the holders of preferred securities or the
redemption of all of the preferred securities, the lesser of:
. the aggregate accreted value of the preferred securities and all
accrued and unpaid distributions on the preferred securities to the
date of payment; or
. the amount of assets of the trust remaining for distribution to
holders of the preferred securities in liquidation of the trust.
NYCB's obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by NYCB to the holders of preferred securities
or by causing the trust to pay those amounts to those holders.
The preferred securities guarantee will not apply to any payment of
distributions, except to the extent the trust will have funds available for
those payments. If NYCB does not make interest payments on the junior
subordinated debentures held by the trust for any period, the trust will not
pay distributions on the preferred securities for the corresponding period and
will not have funds available for those payments.
The preferred securities guarantee, when taken together with NYCB's
obligations under the junior subordinated debenture, the indenture and the
declaration, including its obligations to pay costs, expenses, debts and
liabilities of the trust, other than those relating to trust securities, will
provide a full and unconditional guarantee on a subordinated basis by NYCB of
payments due on the preferred securities.
NYCB has also agreed separately to irrevocably and unconditionally guarantee
the obligations of the trust with respect to the common securities to the same
extent as the preferred securities guarantee, except that upon an event of
default under the indenture, holders of preferred securities will have priority
over holders of common securities with respect to distributions and payments on
liquidation, redemption or otherwise.
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Certain Covenants of NYCB
NYCB will agree that, so long as any preferred securities of the trust
remain outstanding, if any event occurs that would constitute an event of
default under the preferred securities guarantee or the indenture, or if NYCB
has exercised its option to defer interest payments on the junior subordinated
debentures by extending the interest payment period and that period or
extension of that period is continuing, then:
. NYCB will not declare or pay any dividend on, make any distributions
relating to, or redeem, purchase, acquire or make a liquidation payment
relating to, any of its capital stock or make any guarantee payment with
respect thereto and will not make any payment of interest, principal or
premium, if any, on, or repay, repurchase or redeem any debt securities
issued by NYCB which rank equally with or junior to the junior
subordinated debentures other than:
. repurchases, redemptions or other acquisitions of shares of capital
stock of NYCB in connection with any employee benefit plans or any
other contractual obligation of NYCB;
. as a result of an exchange or conversion of any class or series of
NYCB's capital stock for any other class or series of NYCB's capital
stock; or
. the purchase of fractional interests in shares of NYCB's capital stock
pursuant to the conversion or exchange provisions of that NYCB capital
stock or the security being converted or exchanged.
Modification of the Preferred Securities Guarantee; Assignment
The preferred securities guarantee agreement may be amended only with the
prior approval of the holders of not less than a majority in aggregate
liquidation amount of the outstanding preferred securities. No vote will be
required, however, for any changes that do not adversely affect the rights of
holders of preferred securities in any material respect. All guarantees and
agreements contained in the preferred securities guarantee will bind the
successors, assignees, receivers, trustees and representatives of NYCB and will
be for the benefit of the holders of the preferred securities then outstanding.
Termination
The preferred securities guarantee will terminate upon:
. full payment of the redemption price of all preferred securities;
. distribution of the junior subordinated debentures to the holders of the
trust securities; or
. full payment of the amounts payable in accordance with the declaration
upon liquidation of the trust.
The preferred securities guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of preferred
securities must restore payment of any sums paid under the preferred securities
or the preferred securities guarantee.
Events of Default
An event of default under the preferred securities guarantee will occur upon
the failure of NYCB to perform any of its payment or other obligations under
the preferred securities guarantee.
The holders of a majority in liquidation amount of the preferred securities
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the guarantee trustee in respect of the
preferred securities guarantee or to direct the exercise of any trust or power
conferred upon the guarantee trustee under the preferred securities guarantee.
Any holder of preferred securities may institute a legal proceeding directly
against NYCB to enforce the guarantee trustee's rights and the obligations of
NYCB under the preferred securities guarantee, without first instituting a
legal proceeding against the trust, the guarantee trustee or any other person
or entity.
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Status of the Preferred Securities Guarantee
Unless otherwise specified in the prospectus supplement, the preferred
securities guarantee will constitute an unsecured obligation of NYCB and will
rank:
. subordinate and junior in right of payment to all other liabilities of
NYCB, except those made equal or subordinate by their terms;
. equally with the most senior preferred or preference stock now or
hereafter issued by NYCB and with any guarantee now or hereafter entered
into by NYCB in respect of any preferred or preference stock of any
affiliate of NYCB; and
. senior to NYCB common stock.
The terms of the preferred securities provide that each holder of preferred
securities by acceptance of those securities agrees to the subordination
provisions and other terms of the preferred securities guarantee.
The preferred securities guarantee will constitute a guarantee of payment
and not of collection. This means that the guaranteed party may sue the
guarantor to enforce its rights under the guarantee without suing any other
person or entity.
Information Concerning the Guarantee Trustee
Prior to the occurrence of a default relating to the preferred securities
guarantee, the guarantee trustee undertakes to perform only those duties as are
specifically set forth in the preferred securities guarantee. After default,
the guarantee trustee will exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Provided
that the foregoing requirements have been met, the guarantee trustee is under
no obligation to exercise any of the powers vested in it by the preferred
securities guarantee at the request of any holder of preferred securities,
unless offered indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred thereby.
Governing Law
The preferred securities guarantees will be governed by, and construed in
accordance with, the laws of the State of New York.
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RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE DEBENTURES AND THE PREFERRED
SECURITIES GUARANTEE
Full and Unconditional Guarantee
Payments of distributions and other amounts due on the preferred securities
(to the extent the trust has funds available for the payment of such
distributions) are irrevocably guaranteed by NYCB as and to the extent set
forth under "Description of the Preferred Securities Guarantee." If and to the
extent that NYCB does not make payments under the debentures, the trust will
not have sufficient funds to pay distributions or other amounts due on the
preferred securities. The preferred securities guarantee does not cover payment
of distributions when the trust does not have sufficient funds to pay such
distributions. In such event, a holder of preferred securities may institute a
legal proceeding directly against NYCB to enforce payment of such distributions
to such holder after the respective due dates. Taken together, NYCB's
obligations under the declaration of trust, the debentures, the indenture and
the preferred securities guarantee provide, in the aggregate, a full and
unconditional guarantee of payments of distributions and other amounts due on
the preferred securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full and unconditional guarantee of the trust's
obligations under the preferred securities. The obligations of NYCB under the
preferred securities guarantee are subordinate and junior in right of payment
to all Senior Indebtedness of NYCB.
Sufficiency of Payments
As long as payments of interest, principal and other payments are made when
due on the debentures, such payments will be sufficient to cover distributions
and other payments due on the preferred securities, because of the following
factors:
. the aggregate principal amount of the debentures will be equal to the sum
of the aggregate stated liquidation amount of the preferred securities;
. the interest rate and interest and other payment dates on the debentures
will match the distribution rate and distribution and other payment dates
for the preferred securities;
. pursuant to the indenture, NYCB, as borrower, will pay, and the trust
will not be obligated to pay, all costs, expenses and liabilities of the
trust except the trust's obligations under the preferred securities; and
. the declaration of trust further provides that the trust will not engage
in any activity that is not consistent with the limited purposes of the
trust.
Notwithstanding anything to the contrary in the indenture, NYCB has the
right to set-off any payment it is otherwise required to make thereunder with
and to the extent NYCB has theretofore made, or is concurrently on the date of
such payment making, a related payment under the preferred securities guarantee.
Enforcement Rights of Holders of Preferred Securities
If a trust enforcement event occurs and is continuing, the holders of
preferred securities would rely on the enforcement by the property trustee of
its rights as holder of the debentures against NYCB. In addition, the holders
of a majority in liquidation amount of the preferred securities will have the
right to direct the time, method, and place of conducting any proceeding for
any remedy available to the property trustee or to direct the exercise of any
trust or power conferred upon the property trustee under the declaration of
trust, including the right to direct the property trustee to exercise the
remedies available to it as the holder of the debentures. The indenture
provides that the debenture trustee shall give holders of debentures notice of
all defaults or events of default within 30 days after occurrence.
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If the property trustee fails to enforce its rights under the debentures in
respect of an indenture event of default after a holder of record of preferred
securities has made a written request, such holder of record of preferred
securities may, to the extent permitted by applicable law, institute a legal
proceeding against NYCB to enforce the property trustee's rights in respect of
debentures having a principal amount equal to the aggregate stated liquidation
amount of the preferred securities of such holder. In addition, if NYCB fails
to pay interest or principal on the debentures on the date such interest or
principal is otherwise payable, and such failure to pay is continuing, a holder
of preferred securities may institute a direct action for enforcement of
payment to such holder of the principal of or interest on the debentures having
a principal amount equal to the aggregate stated liquidation amount of the
preferred securities of such holder after the respective due date specified in
the debentures. In connection with such a direct action, NYCB will have the
right under the indenture to set off any payment made to such holder by NYCB.
The holders of preferred securities will not be able to exercise directly any
other remedy available to the holders of the debentures.
Limited Purpose of Trust
The preferred securities evidence beneficial interests in the trust, and the
trust exists for the sole purpose of issuing the preferred securities and
investing the proceeds thereof in debentures. A principal difference between
the rights of a holder of preferred securities and a holder of debentures is
that a holder of debentures is entitled to receive from NYCB the principal
amount of and interest accrued on debentures held, while a holder of preferred
securities is entitled to receive distributions from the trust (or from NYCB
under the preferred securities guarantee) if and to the extent the trust has
funds available for the payment of such distributions.
Rights Upon Termination
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
the trust involving the liquidation of the debentures, the holders of the trust
securities will be entitled to receive, out of assets held by the trust,
subject to the rights of creditors of the trust, if any, the liquidation
distribution in cash. See "Description of the Preferred Securities--Liquidation
Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation
or bankruptcy of NYCB, the property trustee, as holder of the debentures, would
be a subordinated creditor of NYCB, subordinated in right of payment to all
senior indebtedness as set forth in the indenture, but entitled to receive
payment in full of principal and interest before any stockholders of NYCB
receive payments or distributions. The positions of a holder of preferred
securities and a holder of the debentures relative to other creditors and to
stockholders of NYCB in the event of liquidation or bankruptcy of NYCB should
be substantially the same.
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DESCRIPTION OF THE WARRANTS
We urge you to read the warrant agreement, including the form of the warrant
and the definitions of terms used therein, because they, and not this
description, define your rights as holder of the warrants (including as a
component of the BONUSES units). You may request copies of these documents from
us at our address set forth under "Where You Can Find Additional Information"
in the accompanying prospectus. See "Description of Common Stock" on page 12 of
the prospectus accompanying this prospectus supplement for a description of the
NYCB common stock into which the warrants are exercisable.
General
A warrant will, unless exercised or extended, automatically expire on the
close of business on May 7, 2051 or earlier as described under "--Optional
Redemption." A warrant will be exercisable at any time, subject to satisfaction
of certain conditions set forth below, at the applicable exercise price. The
warrant exercise price will initially be $50.
Each warrant, when exercised, will entitle the holder to purchase 1.4036
fully paid and non-assessable shares of NYCB common stock (the "conversion
ratio"). However, the exercise price and the number of shares of NYCB common
stock issuable upon a holder's exercise of a warrant are subject to adjustment
in certain circumstances described under "--Anti-Dilution Adjustments." The
conversion price (initially $35.62) will be the exercise price (initially
$50.00) of the warrant divided by the conversion ratio.
Following an exercise of a warrant which is part of a BONUSES unit, other
than an exercise in connection with a redemption of the warrants as described
under "--Optional Redemption," the holder will have a limited right to require
the trust to distribute its pro rata share of debentures in exchange for the
preferred securities which had been part of the BONUSES unit and to require
NYCB to repurchase the debentures. See "Description of the Preferred
Securities--Limited Right to Repurchase."
NYCB's common stock is listed on the Nasdaq National Market under the
trading symbol "NYCB." On October 28, 2002, the last reported sale price of the
common stock on the Nasdaq National Market was $28.05 per share.
Exercise of Warrants
Absent an extension as described below, a holder may exercise warrants at
any time prior to the close of business on May 7, 2051 (as extended, the
"expiration date"), unless NYCB has redeemed the warrants on an earlier date in
connection with a remarketing as described under "--Optional Redemption." A
holder may exercise warrants by giving notice to the warrant agent no later
than 5:00 p.m., New York time, on the business day before the proposed date of
exercise. The exercise price on the date of exercise (other than in connection
with an exercise in lieu of redemption as described under "--Optional
Redemption") will be $50, subject to antidilution adjustments.
Notwithstanding a warrantholder's desire to exercise its warrants, the
warrants will not be exercisable unless, at the time of the exercise:
. NYCB has a registration statement in effect under the Securities Act
covering the issuance and sale of the shares of common stock upon
exercise of the warrants or the sale of the shares upon exercise of the
warrants is exempt from the registration requirements of the Securities
Act; and
. the shares have been registered, qualified or are deemed to be exempt
under applicable state securities laws; and
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. a then current prospectus is delivered to exercising holders of the
warrants.
NYCB currently has an effective registration statement covering the common
stock issuable upon exercise of the warrants. Although NYCB has agreed to use
its best efforts to maintain the effectiveness of such a registration statement
until the expiration date of the warrants, to continue to have all the shares
of common stock issuable upon exercise of the warrants so registered or
qualified and to deliver a then current prospectus to the exercising holders of
the warrants, there can be no assurance that it will be able to do so.
Notwithstanding the originally scheduled expiration date of the warrants,
however, such date will be extended if NYCB was required to but did not
maintain an effective registration statement with respect to the shares of
common stock underlying the warrants or was required to but did not deliver a
then current prospectus to exercising holders of the warrants during the 90
days immediately preceding such originally scheduled expiration date or if NYCB
has not maintained the registration or qualification of the shares under
applicable state securities laws during the period. The expiration date will
extend to the first date after the originally scheduled expiration date for
which NYCB has maintained an effective registration statement (and the
registration or qualification of the shares of common stock under the
applicable state securities laws) and made a then current prospectus available
to exercising holders of the warrants for a 90-day period.
In order to exercise a warrant, a holder must, prior to 5:00 p.m., New York
time, on the date of exercise:
. properly complete and execute a form of election to purchase;
. comply with the procedures described in the warrant agreement; and
. pay in full in cash (which may be a remarketing payment as described
below) the exercise price for each share of NYCB common stock to be
received upon exercise of such warrants.
In order to ensure timely exercise of a warrant, beneficial owners of
warrants held in book-entry form should consult their brokers or other
intermediaries as to applicable cut-off times they may have for accepting and
implementing exercise instructions from their customers and other exercise
mechanics. See "Book-Entry-Only Issuance."
Holders must pay the exercise price of their warrants in cash (including the
automatic application of the proceeds of any remarketing of preferred
securities as discussed under "--Optional Redemption"), by certified or
official bank check or by wire transfer to an account that NYCB has designated
for that purpose. In no circumstances may holders of BONUSES units tender their
preferred securities directly toward payment of the exercise price of the
warrants.
Following an exercise of a warrant that is part of a BONUSES unit other than
an exercise in connection with a redemption of the warrants as described under
"--Optional Redemption," the holder will have a limited right to require the
trust to exchange the related preferred securities for a corresponding amount
of debentures and to require NYCB to repurchase those debentures at their
principal amount at maturity. See "Description of the Preferred Securities
- --Limited Right to Repurchase" in this prospectus supplement.
Exercises in Connection with Optional Redemptions. A BONUSES unit holder
who exercises the warrant that is part of the BONUSES unit in connection with
an optional redemption of the warrants will satisfy in full the exercise price
by applying the proceeds of the related remarketing of the related preferred
securities. See "--Optional Redemption" and "Description of the Preferred
Securities--Remarketing," each in this prospectus supplement. In the event of a
failed remarketing (as described under "Description of the Preferred
Securities--Remarketing"):
. the warrants will still be redeemed on the redemption date (that is, a
successful remarketing of the preferred securities will not be a
condition to the redemption of the warrants on the redemption date); and
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. the holder will still have the option of exercising its warrant in lieu
of such redemption by paying the exercise price in cash.
Exercises in Connection with Expiration of Warrants. A BONUSES unit holder
who exercises the warrant that is part of the BONUSES unit in connection with
the expiration of the warrant will satisfy in full the exercise price by
applying the proceeds of the related remarketing of the related preferred
securities. See "Description of the Preferred Securities--Remarketing" in this
prospectus supplement. In the event of a failed remarketing:
. the warrants will still expire on the expiration date (that is, a
successful remarketing of the preferred securities on the corresponding
remarketing date will not be a condition to the expiration of the
warrants on the expiration date); and
. the holder will still have the option of exercising its warrant prior to
expiration by paying the exercise price in cash.
No service charge will be made for registration of transfer or exchange upon
surrender of any warrant certificate at the office of the warrant agent
maintained for that purpose. NYCB may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of warrant certificates.
If a holder has satisfied all of the procedures for exercising its warrants,
and NYCB has satisfied or caused to be satisfied the conditions to exercise set
forth above, on the exercise date, NYCB will deliver or cause to be delivered
to such holder, or upon such holder's written order, a certificate representing
the requisite number of shares of NYCB common stock to be received upon
exercise of such warrants. If a holder exercises less than all of the warrants
evidenced by a definitive warrant, a new definitive warrant will be issued to
such holder for the remaining number of warrants.
No fractional shares of NYCB common stock will be issued upon exercise of a
warrant. At the time of exercise of a warrant, NYCB will pay the holder of such
warrant an amount in cash equal to the then current market price of any such
fractional share of NYCB common stock.
Unless the warrants are exercised, the holders thereof will not be entitled
to receive dividends or other distributions, to vote, to receive notices for
any NYCB shareholders meeting for the election of directors or any other
purpose, or to exercise any other rights whatsoever as a NYCB shareholder.
In the event a bankruptcy or reorganization is commenced by or against NYCB,
a bankruptcy court may eliminate or extinguish the warrants as equity
securities of NYCB if NYCB is found insolvent. A bankruptcy court may also
decide that unexercised warrants are executory contracts that may be subject to
NYCB's rejection with approval of the bankruptcy court. As a result, a holder
of warrants may not, even if sufficient funds are available, be entitled to
receive any consideration or may receive an amount less than such holder would
be entitled to receive if such holder had exercised its warrants before the
commencement of any such bankruptcy or reorganization.
Optional Redemption
Prior to November 4, 2007, NYCB may not redeem the warrants. On or after
November 4, 2007, NYCB may, subject to satisfaction of the conditions set forth
under "--Conditions to Optional Redemption," redeem the warrants, in whole, but
not in part, for cash in an amount equal to the warrant value if on any date
but prior to the expiration date, the closing price of NYCB common stock
exceeds and has exceeded $44.53 (which equals 125% of the conversion price),
subject to adjustment as described under "--Anti-Dilution Adjustments," for at
least 20 trading days within the immediately preceding 30 consecutive trading
days and on the day on which NYCB makes such election.
We refer to these circumstances under which the price of NYCB common stock
reaches a specified level for a specified time period as a "reset event." NYCB
may elect to redeem the warrants within ten business days of a reset event.
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A "trading day" means any day on which shares of NYCB common stock or other
capital stock then issuable upon exercise of the warrants:
. are not suspended from trading on any national securities association or
exchange or over-the-counter market at the close of business; and
. have traded at least once on the national securities association or
exchange or over-the-counter market that is the primary market for the
trading of NYCB common stock.
If there occurs a reset event and the conditions to an optional redemption
have been satisfied (see "--Conditions to Optional Redemption") and NYCB elects
to redeem the warrants, NYCB will be obligated to cause a remarketing of the
preferred securities at a price equal to their accreted value. Holders of
preferred securities, whether or not holders of BONUSES units, may elect to
participate in the remarketing. See "Description of the Preferred
Securities--Remarketing." The settlement date of the remarketing shall be the
redemption date. On the redemption date, a warrantholder will have the choice
of:
. receiving the warrant value for such date, which will be equal to $50
minus the accreted value of the preferred security as of the end of the
day before the remarketing date; or
. exercising the warrant by tendering the warrant and the warrant exercise
price as of the day before the remarketing date, and following the
procedures set forth under "--Exercise of Warrants."
If the warrantholder does not elect to exercise the warrant, the warrant
will be redeemed on the redemption date. To exercise the warrant, the
warrantholder will be required to tender cash. If, however,
. a holder exercising warrants holds such warrants as part of BONUSES units
on the remarketing date; and
. the holder has not opted out of participating in the remarketing of the
preferred securities,
then, upon a successful remarketing, the proceeds of such remarketing will be
applied by the remarketing agent no later than the remarketing settlement date
to pay the exercise price of the warrants (a "remarketing payment"). In the
event of a failed remarketing:
. the warrants will still be redeemed for cash in an amount equal to the
warrant value on the redemption date (which would have also been the
remarketing settlement date); and
. holders of warrants who have elected to exercise their warrants (which
final date for election will occur after the remarketing date) will be
obligated to tender the applicable exercise price in cash.
A redemption of the warrants will be conditioned upon a contemporaneous
remarketing--whether successful or failed--of the preferred securities. A
warrant will cease to be outstanding upon payment by NYCB of the warrant value
on a redemption date or upon exercise of the warrant. In the absence of an
election to the contrary, BONUSES unit holders will be deemed to have elected
to participate in the remarketing.
Procedures
NYCB must cause written notice of its election to redeem the warrants to be
given to the holders of the BONUSES units and the warrants within five business
days from the date on which NYCB determines to redeem the warrants following a
reset event. NYCB may select a date, not less than five nor more than 20
business days after the date written notice is given to the holders of BONUSES
units and warrants, on which the redemption shall occur (the "redemption
date"). In addition, notice of redemption will be published in a newspaper of
general circulation in New York City, New York no less than five business days
before the redemption date.
If notice of redemption shall have been given and consideration deposited or
paid as required, then immediately prior to the close of business on the date
of such redemption, all rights of the holders of warrants
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will cease, except the right of the holders of warrants to receive the warrant
value (or NYCB common stock if the holder elected to exercise a warrant on the
redemption date), and the warrants will cease to be outstanding.
Subject to applicable law, NYCB or its subsidiaries may at any time and from
time to time purchase outstanding warrants by tender, in the open market or by
private agreement.
Election to Exercise
At any time prior to 5:00 p.m., New York City time, on the business day
prior to the applicable redemption date for the warrants, a warrantholder may
elect, at its option, to exercise its warrants in lieu of a redemption by
notifying NYCB of such election; provided that NYCB has satisfied or caused to
be satisfied, as of the date of exercise of such warrants, the conditions to
exercise of warrants set forth under "--Exercise of Warrants." In such event,
an electing warrantholder will be required to tender the exercise price (except
in the case of a remarketing payment as described above) to NYCB and follow the
procedures for exercising warrants specified under "--Exercise of Warrants" in
order to effect an exercise on the applicable redemption date. The exercise
price in connection with an exercise in lieu of redemption will be the exercise
price as of the day before the remarketing date.
The warrants will be redeemed on the redemption date unless a warrantholder
has affirmatively elected to exercise its warrants. As a result, upon an
election by NYCB to redeem the warrants, a holder may have only four business
days to elect to exercise its warrants in lieu of a redemption. If a holder
does not receive the redemption notification because of illness, absence or
other circumstances the warrants held by that holder will be redeemed. Because
of the abbreviated notification period, a warrantholder who intends to exercise
its warrant upon an optional redemption of the warrants may want to provide
standing instructions for exercise of the warrants and delivery of the shares
to the warrant agent. See "Description of the Warrants--Optional
Redemption--Procedures."
Conditions to Optional Redemption
The following will be conditions precedent to the right (or obligation) of
NYCB to redeem the warrants:
. as of the date on which NYCB elects to redeem the warrants and on the
redemption date, a registration statement covering the issuance and sale
or resale of shares of NYCB common stock to the holders of warrants upon
exercise of such warrants shall be effective under the Securities Act or
such issuance and sale shall be exempt from the registration requirements
of the Securities Act and the shares of NYCB common stock shall have been
registered, qualified or deemed to be exempt under applicable state
securities laws;
. as of the redemption date, a then current prospectus shall be delivered
to exercising holders of the warrants (other than holders who have
received warrants in transactions exempt from the registration
requirements under the Securities Act); and
. on the redemption date, NYCB shall have complied with all other
applicable laws and regulations, if any, including, without limitation,
the Securities Act, necessary to permit the redemption of the warrants.
In addition, the conditions to a contemporaneous remarketing of the
preferred securities as described under "Description of the Preferred
Securities--Remarketing--Remarketing Procedures" must be satisfied as a
condition to the contemporaneous redemption of the warrants. A failed
remarketing will not constitute a failure to satisfy the conditions to
remarketing.
If a remarketing of preferred securities cannot occur, however, because of
an inability to satisfy the applicable conditions precedent, the
contemporaneous redemption of the warrants will be canceled.
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If a redemption cannot occur because of NYCB's inability to satisfy the four
conditions precedent specified above and NYCB is using its best efforts to
satisfy such requirements, NYCB will have the right to redeem the warrants on a
subsequent date which is no later than the expiration date of the warrants.
Redemption Upon Special Event
If at any time:
. a tax event or an investment company event occurs and the administrative
trustees have been informed by an independent law firm that such firm,
for substantive reasons, cannot deliver a No Recognition Opinion (as
defined in "Description of the Preferred Securities--Distribution of
Debentures Upon Tax or Investment Company Event") to the trust; or
. a regulatory capital event occurs (any of the foregoing events, a
"special event").
NYCB may elect, at its option, to redeem the warrants for cash in an amount
equal to the warrant value, which will be equal to $50 minus the accreted value
of the preferred security as of the end of the day before the remarketing date.
If NYCB elects to cause a redemption of the warrants upon the occurrence of
a special event and the conditions to an optional redemption have been
satisfied (see "--Conditions to Optional Redemption"), NYCB will be obligated
to cause a remarketing of the preferred securities at a price equal to their
accreted value. Holders of preferred securities, whether or not holders of
BONUSES units, may elect to participate in the remarketing. See "Description of
the Preferred Securities--Remarketing." The settlement date of the remarketing
shall be the redemption date. On the redemption date, a warrantholder will have
the choice of:
. receiving the warrant value for such date, which will be equal to $50
minus the accreted value of the preferred security as of the end of the
day before the remarketing date; or
. exercising the warrant by tendering the warrant and the warrant exercise
price as of the day before the remarketing date, and following the
procedures set forth under "--Exercise of Warrants."
If the warrantholder does not elect to exercise the warrant, the warrant
will be redeemed on the redemption date.
The "accreted value" of a preferred security is equal to the accreted value
of a debenture, which is equal to the sum of the initial purchase price of the
preferred security component of each BONUSES unit (i.e., $33.18) plus accretion
of the discount (i.e. the difference between the principal amount of $50 and
$33.18, the initial purchase price of the preferred securities), calculated
using a per annum coupon of 6%, payable quarterly, and an all-in-yield of 9.10%
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 the warrant expiration date.
For example, because the purchase price of the BONUSES units initially
allocable to the preferred securities will be $33.18 , the accreted value of a
debenture will be equal to $33.31 on November 4, 2007, which is the first date
on which NYCB may redeem the warrants.
"Investment company event" means the receipt by the trust of an opinion of
counsel, rendered by an independent law firm having a recognized national
securities practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is more than an insubstantial
risk that the trust is or will be considered in an "investment company" that is
required to be registered under the 1940 Act, which Change in 1940 Act Law
becomes effective on or after the date on which the preferred securities were
initially issued and sold.
"Tax event" means the receipt by the trust of an opinion of counsel,
rendered by an independent law firm experienced in such matters, to the effect
that, as a result of (1) any amendment to, change in or announced
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proposed change in the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
(2) any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
proposed change, pronouncement or decision is announced on or after the date on
which the preferred securities were initially issued and sold, there is more
than an insubstantial risk that (x) the trust is, or will be within 90 days of
the date of such opinion, subject to United States federal income tax with
respect to interest received or accrued on the debentures, or (y) the trust is,
or will be within 90 days of the date of such opinion, subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
A "regulatory capital event" means that NYCB shall have become, or pursuant
to law or regulation will become within 180 days, subject to capital
requirements under which, in the written opinion of independent bank regulatory
counsel experienced in such matters, the preferred securities would not
constitute Tier 1 Capital applied as if NYCB (or its successor) were a bank
holding company (as that concept is used in the guidelines or regulations
issued by the Board of Governors of the Federal Reserve System as of the date
of this prospectus supplement or its then equivalent).
Conditions to Redemption Upon Special Event
In addition to the four conditions specified under "--Optional
Redemption--Conditions to Optional Redemption," the conditions to a
contemporaneous remarketing of the preferred securities as described under
"Description of the Preferred Securities--Remarketing--Remarketing Procedures"
must be satisfied as a condition to the contemporaneous redemption of the
warrants. A failed remarketing will not constitute a failure to satisfy the
conditions to remarketing. However, if a remarketing of preferred securities
following a special event cannot occur because of an inability to satisfy the
applicable conditions precedent, the contemporaneous redemption of the warrants
will be canceled.
If a redemption of the warrants cannot occur because of an inability to
satisfy the four conditions precedent set forth under "--Optional
Redemption--Conditions to Optional Redemption" and NYCB is using its best
efforts to satisfy such requirements; then NYCB will have the right to redeem
the warrants on a subsequent date which is no later than the expiration date of
the warrants.
Change of Control
If a change of control (as defined under "Description of the BONUSES units")
occurs, each holder of a warrant will have the right to require NYCB to redeem
that holder's warrant on the date that is 45 days after the date NYCB gives
notice at a redemption price in cash equal to 100% of the warrant value of the
warrant on the redemption date.
Within 30 days after the occurrence of a change of control, NYCB must give
notice to each holder of a warrant and the warrant agent of the transaction
that constitutes the change of control and of the resulting redemption right.
To exercise the redemption right, a warrantholder must deliver on or prior to
the 30th day after the date of NYCB's notice irrevocable written notice to the
warrant agent of the holder's exercise of its redemption right.
Except as described above with respect to a change of control, the warrant
agreement does not contain provisions that permit the holders of warrants to
require that NYCB redeem the warrants in the event of a takeover,
recapitalization or similar transaction. In addition, NYCB could enter into
certain transactions, including acquisitions, refinancings or other
recapitalizations, that could affect NYCB's capital structure or the value of
NYCB's common stock, but that would not constitute a change of control.
NYCB will comply with the requirements of the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the redemption of the warrants as
a result of a change of control.
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NYCB's ability to redeem warrants upon the occurrence of a change of control
is subject to important limitations. There can be no assurance that NYCB would
have the financial resources, or would be able to arrange financing, to pay the
redemption price for all the warrants that might be delivered by holders of
warrants seeking to exercise the redemption right. Any failure by NYCB to
redeem the warrants when required following a change of control would result in
an event of default under the BONUSES unit agreement.
Anti-Dilution Adjustments
The number of shares of NYCB common stock issuable upon the exercise of the
warrants will be subject to adjustment in certain circumstances, but subject to
certain exceptions, including:
. the issuance of NYCB common stock payable as a dividend or distribution
on its common stock;
. subdivisions and combinations of the common stock of NYCB;
. the issuance to all holders of NYCB common stock of certain rights or
warrants to purchase NYCB common stock (or securities convertible into
NYCB common stock) at less than (or having a conversion price per share
less than) the current market price of NYCB common stock;
. the dividend or other distribution to all holders of NYCB common stock of
shares of NYCB capital stock or evidences of NYCB indebtedness or its
assets (including securities, but excluding those rights and warrants
referred to above and dividends and distributions in connection with a
reclassification, change, consolidation, merger, combination, sale or
conveyance resulting in a change in the conversion consideration pursuant
to the second succeeding paragraph or distributions or dividends paid
exclusively in cash);
. dividends or other distributions consisting exclusively of cash to all
holders of NYCB common stock to the extent that such distributions,
combined together with (A) all other such all-cash distributions made
within the preceding 12 months for which no adjustment has been made plus
(B) any cash and the fair market value of other consideration paid for
any tender offers by NYCB or any of its subsidiaries for NYCB common
stock concluded within the preceding 12 months for which no adjustment
has been made, exceeds 10% of NYCB's market capitalization on the record
date for such distribution; market capitalization is the product of the
then current market price of NYCB common stock times the number of shares
of NYCB common stock then outstanding; and
. the purchase of NYCB common stock pursuant to a tender offer made by NYCB
or any of its subsidiaries to the extent that the same involves an
aggregate consideration that, together with (A) any cash and the fair
market value of any other consideration paid in any other tender offer by
NYCB or any of its subsidiaries for NYCB common stock expiring within the
12 months preceding such tender offer for which no adjustment has been
made plus (B) the aggregate amount of any all-cash distributions referred
to in the paragraph above to all holders of NYCB common stock within 12
months preceding the expiration of tender offer for which no adjustments
have been made, exceeds 10% of NYCB's market capitalization on the
expiration of such tender offer.
No adjustment in the amount of shares of NYCB common stock issuable upon
exercise of a warrant will be required unless such adjustment would require a
change of at least 1% in the amount of shares of NYCB common stock issuable
upon exercise of a warrant then in effect at such time. Any adjustment that
would otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment. Except as stated above, the amount of
shares of NYCB common stock issuable upon exercise of a warrant will not be
adjusted for the issuance of NYCB common stock or any securities convertible
into or exchangeable for NYCB common stock or carrying the right to purchase
any of the foregoing.
In the case of:
. any reclassification or change of NYCB common stock (other than changes
resulting from a subdivision or combination, or
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. a consolidation, merger or combination involving NYCB or a sale or
conveyance to another corporation of all or substantially all of NYCB's
property and assets, in each case as a result of which holders of NYCB
common stock are entitled to receive stock, other securities, other
property or assets (including cash or any combination thereof) with
respect to or in exchange for NYCB common stock, the holders of the
warrants then outstanding will be entitled thereafter to exercise those
warrants and receive the kind and amount of shares of stock, other
securities or other property or assets (including cash or any combination
thereof) which they would have owned or been entitled to receive upon
such reclassification, change, consolidation, merger, combination, sale
or conveyance had such warrants been exercised immediately prior to such
reclassification, change, consolidation, merger, combination, sale or
conveyance. NYCB will agree not to become a party to any such transaction
unless its terms are consistent with the foregoing.
In the event that we distribute shares of common stock of a subsidiary of
ours, the number of shares of our common stock issuable upon the exercise of
the warrants will be adjusted, if at all, based on the market value of the
subsidiary stock so distributed relative to the market value of our common
stock, in each case over a measurement period following distribution.
If a taxable distribution to holders of NYCB common stock or other
transaction occurs which results in any adjustment of the exercise price or the
amount of shares of NYCB common stock issuable upon exercise of a warrant, the
holders of warrants may, in certain circumstances, be deemed to have received a
distribution subject to United States federal income tax as a dividend. In
certain other circumstances, the absence of an adjustment may result in a
taxable dividend to the holders of common stock. See "Material United States
Federal Income Tax Considerations--The Warrants."
NYCB may from time to time, to the extent permitted by law and except in
connection with a change of control transaction, reduce the exercise price of
the warrants by any amount for any period of at least 20 days. In that case,
NYCB will give at least 15 days' notice of such decrease. NYCB may make such
reductions in the exercise price, in addition to those set forth above, as
NYCB's board of directors deems advisable to avoid or diminish any income tax
to holders of NYCB common stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for income
tax purposes.
Reservation of Shares
NYCB has authorized and will reserve for issuance the maximum number of
shares of its common stock as will be issuable upon the exercise of all
outstanding warrants. Such shares of common stock, when issued and paid for in
accordance with the warrant agreement, will be duly and validly issued, fully
paid and nonassessable, free of preemptive rights and free from all taxes,
liens, charges and security interests.
Governing Law
The warrants and the warrant agreement will be governed by, and construed in
accordance with, the laws of the State of New York.
Modifications and Amendments of the Warrant Agreement
Modifications of warrants issued as part of BONUSES units may only be made
in accordance with the terms of the warrant agreement. We and the warrant agent
may amend or supplement the terms of the warrant and the warrant agreement
without the consent of holders of the warrants for the purpose of curing any
ambiguity or correcting any inconsistent provisions therein or in any other
manner we deem necessary or desirable and which will not adversely affect the
interests of any holder of warrants.
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In addition, we and the warrant agent, with the consent of the holders of a
majority of the then outstanding unexercised warrants, may modify or amend the
warrants and the warrant agreement. However, we and the warrant agent may not
make any of the following modifications or amendments without the consent of
each holder of warrants:
. change the exercise price of the warrants, except as provided in the
warrant agreement;
. reduce the number of shares of common stock issuable upon exercise of the
warrants other than as specified under "--Anti-Dilution Adjustments";
. accelerate the expiration date of the warrants;
. materially and adversely affect the rights of any holder of warrants; or
. reduce the percentage of the outstanding unexercised warrants the consent
of whose holders is required for modifications and amendments.
Enforceability of Rights of Warrantholders; Governing Law
The warrant agent will act solely as our agent and will not assume any
obligation or relationship of agency or trust with the holders of the warrants.
Any record holder or beneficial owner of a warrant may, without anyone else's
consent, enforce by appropriate legal action, on its own behalf, its right to
exercise the warrant in the manner provided therein or in the warrant
agreement. A warrantholder will not be entitled to any of the rights of a
holder of the common stock or other securities purchasable upon the exercise of
the warrant before exercising the warrant.
Unsecured Obligations
The warrants are our unsecured contractual obligations and will rank equally
with all of our other unsecured contractual obligations and our unsecured and
unsubordinated debt. Since most of our assets are owned by our subsidiaries,
our rights and the rights of our creditors, including warrantholders, to
participate in the distribution or recapitalization will be subject to the
prior claim of that subsidiary's creditors.
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BOOK-ENTRY-ONLY ISSUANCE
General
The BONUSES units and the preferred securities and warrants that are
components of the BONUSES units will be represented by one or more global
securities that will be deposited with, and registered in the name of, DTC or
its nominee. This means that neither NYCB nor the trust will issue certificates
for the BONUSES units, preferred securities or warrants to you except in the
circumstances described under "--Exchange of Global Securities." Each global
security will be issued to DTC, which will keep a computerized record of its
participants whose clients have purchased the BONUSES units, preferred
securities or warrants. Each participant will then keep a record of its
clients. Unless a global security is exchanged in whole or in part for a
certificated security, a global security generally may not be transferred.
However, DTC, its nominees and their successors may transfer a global security
as a whole to one another.
Beneficial interests in a global security will be shown on, and transfers of
the global security will be made only through, records maintained by DTC and
its participants. DTC holds securities that its participants ("direct
participants") deposit with DTC. DTC also records the settlement among direct
participants of securities transactions, such as transfers and pledges, in
deposited securities through computerized records for direct participants'
accounts. This eliminates the need to exchange certificates. Direct
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC's book-entry system
is also used by other organizations such as securities brokers and dealers,
banks and trust companies that work through a direct participant. The rules
that apply to DTC and its participants are on file with the SEC.
DTC is owned by a number of its direct participants and by the New York
Stock Exchange, the American Stock Exchange and the National Association of
Securities Dealers, Inc. (the "NASD").
Purchases under the DTC System
When you purchase BONUSES units, preferred securities or warrants through
the DTC system, the purchases must be made by or through a direct participant,
who will receive credit for the BONUSES units, preferred securities or
warrants, as the case may be, on DTC's records. Because you actually own the
security, you are the beneficial owner. Your ownership interest will be
recorded only on the direct (or indirect) participants' records. DTC has no
knowledge of your individual beneficial ownership of the securities. DTC's
records show only the identity of the direct participants and the amount of the
securities held by or through them.
You will not receive a written confirmation of your purchase or sale or any
periodic account statement directly from DTC. You will receive these from your
direct (or indirect) participant. As a result, the direct (or indirect)
participants are responsible for keeping an accurate account of the holdings of
their customers, like you. Beneficial owners of any BONUSES unit, preferred
security or warrant represented by a global security should consult their
brokers or other intermediaries as to applicable procedures for (1) separating
the BONUSES unit into its component parts and (2) exercising a warrant, whether
such warrant is held separately or as a component of a BONUSES unit.
Payments under the DTC System
NYCB, the trust and the property trustee will treat DTC's nominee as the
owner and holder of each global security representing BONUSES units, preferred
securities or warrants for all purposes. The property trustee will wire
payments in respect of the BONUSES units, preferred securities and warrants to
DTC's nominee. Accordingly, NYCB, the trust and the property trustee will have
no direct responsibility or liability to pay amounts due in respect of a global
security to you or any other beneficial owners of any global security.
It is DTC's current practice, upon receipt of any payment of distributions,
remarketing proceeds or accreted liquidation amount applicable to the preferred
securities, to credit direct participants' accounts on the payment
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date based on their beneficial ownership of the global security as shown on
DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to direct participants whose accounts are credited
with securities on a record date, by using an omnibus proxy. Payments by
participants to beneficial owners of the global security, and voting by
participants, will be based on the customary practices between the participants
and beneficial owners, as is the case with securities held for the account of
customers registered in "street name." However, payments will be the
responsibility of the participants and not of DTC, NYCB, the trust or the
property trustee.
Exchange of Global Securities
Each of the BONUSES units, preferred securities or warrants represented by a
global security will be exchangeable for certificated securities with the same
terms only if:
. DTC is unwilling or unable to continue as depositary or if DTC ceases to
be a clearing agency registered under the Securities Exchange Act of 1934
and a successor depositary is not appointed by the trust within 90 days;
. NYCB decides to discontinue use of the system of book-entry transfer
through DTC (or any successor depositary); or
. a default under the declaration of trust or the warrant agreement occurs
and is continuing.
If the book-entry-only system is discontinued, the BONUSES unit agent,
property trustee and/or warrant agent, as the case may be, will keep the
registration books for the applicable securities at its corporate office and
follow the practices and procedures discussed below.
Replacement of Certificates
A mutilated certificate evidencing a certificated BONUSES unit, preferred
security or warrant will be replaced at the expense of the holder upon
surrender of the certificate to the BONUSES unit agent, the property trustee or
the warrant agent, as the case may be. Certificates that have been destroyed,
lost or stolen will be replaced at the expense of the holder upon delivery to
the BONUSES unit agent, the property trustee or the warrant agent, as the case
may be, of evidence of the destruction, loss or theft thereof satisfactory to
the BONUSES unit agent, the property trustee or the warrant agent, as the case
may be. In the case of a destroyed, lost or stolen certificate, an indemnity
satisfactory to the BONUSES unit agent, the property trustee or the warrant
agent, as the case may be, may be required at the expense of the holder of the
relevant security evidenced by the certificate before a replacement will be
issued.
Certificated Securities--Registration and Transfer
Certificated securities, if any are issued, will be registered in the name
of each holder of a BONUSES unit (or any preferred security or warrant issued
as part of a BONUSES unit). The securities may be transferred or exchanged,
based on administrative procedures in the BONUSES unit agreement, the
declaration of trust, or the warrant agreement, as the case may be, without the
payment of any service charge (other than any tax or other governmental charge)
by contacting: in the case of a BONUSES unit, the BONUSES unit agent,
Wilmington Trust Company, at 1100 North Market Street, Rodney Square North,
Wilmington, Delaware 19890; in the case of a preferred security, the property
trustee, Wilmington Trust Company, at 1100 North Market Street, Rodney Square
North, Wilmington, Delaware 19890; and, in the case of a warrant, the warrant
agent, Wilmington Trust Company, at 1100 North Market Street, Rodney Square
North, Wilmington, Delaware 19890. The transfer or exchange will be effected
only if the relevant agent or property trustee is satisfied with the documents
of title and indemnity of the person making the request.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a description of the material United States federal income
tax consequences of the purchase, ownership and disposition of the BONUSES
units, preferred securities and warrants. Where noted, it constitutes the
opinion of Muldoon Murphy & Faucette LLP, counsel to NYCB and the trust.
Except where we state otherwise this summary deals only with BONUSES units
held as capital assets by a holder who is a United States person (as defined
below) and who purchases the BONUSES units upon original issuance at their
original issue price. A "United States person" is any beneficial owner who is
one of the following:
. a citizen or resident of the United States;
. a corporation or other entity treated as a corporation for United States
federal income tax purposes created or organized in or under the laws of
the United States or any political subdivision of the United States;
. an estate, the income of which is subject to United States federal income
taxation regardless of its source; or
. any trust (x) that is subject to the supervision of a court within the
United States and the control of one or more United States persons as
described in section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended (the "Code") or (y) that has a valid election in effect under
applicable U.S. Treasury regulations to be treated as a United States
person.
A "Non-U.S. Holder" is a beneficial owner of a BONUSES unit who is not a
United States person.
If a partnership holds BONUSES units, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership. If you are a partner of a partnership holding BONUSES units, we
suggest that you consult your tax advisor.
Your tax treatment may vary depending on your particular situation. Except
where noted, this summary does not deal with special situations. For example,
this summary does not address:
. tax consequences to holders who may be subject to special tax treatment
such as dealers in securities or currencies, traders in securities that
elect to use the mark to market method of accounting for their
securities, real estate investment trusts, and regulated investment
companies;
. tax consequences to persons who hold the BONUSES units, preferred
securities or warrants as part of a hedging, integrated, conversion or
constructive sale transaction or a straddle;
. tax consequences to holders of the BONUSES units, preferred securities or
warrants whose "functional currency" is not the U.S. dollar;
. alternative minimum tax consequences, if any; or
. any state, local or foreign tax consequences.
This summary is based on the Code, the Treasury Regulations promulgated
under the Code and administrative and judicial interpretations. These income
tax laws, regulations and interpretations, however, may change at any time. Any
change could be retroactive to the issuance date of the BONUSES units.
The authorities on which this summary is based are subject to various
interpretations. The opinions of Muldoon Murphy & Faucette LLP expressed herein
are not binding on the Internal Revenue Service ("IRS") or the courts. Either
the IRS or the courts could disagree with the explanations or conclusions
contained in this summary, and there can be no assurance that the IRS will not
challenge the opinions expressed herein or that a court would not sustain such
a challenge. This summary merely represents the best judgment of Muldoon
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Murphy & Faucette LLP as to the likely outcome if the matters discussed herein
were challenged in court in a properly presented case.
You are urged to consult your tax advisor with respect to the tax
consequences to you of the purchase, ownership and disposition of the BONUSES
units, including the tax consequences under state, local, foreign, and other
tax laws, and the possible effects of changes in United States federal income
tax laws.
Allocation of Purchase Price of the BONUSES Units
Your acquisition of a BONUSES unit will be treated as an acquisition of an
"investment unit" consisting of a preferred security and a warrant. The
purchase price of each BONUSES unit will be allocated between the preferred
security and the warrant in proportion to their respective fair market values
at the time of purchase. This allocation will establish your initial tax bases
in the preferred security and the warrant. We will report the fair market value
of each preferred security as $33.18 and the fair market value of each warrant
as $16.82. This position will be binding on you (but not the IRS) unless you
explicitly disclose a contrary position on a statement attached to your timely
filed United States federal tax return for the taxable year in which you
acquire the BONUSES unit. Thus, absent such disclosure, you must allocate the
purchase price for each BONUSES unit in accordance with the foregoing. The
remainder of this discussion assumes that this allocation of the purchase price
will be respected for United States federal income tax purposes.
Classification of the Trust
In connection with the issuance of the preferred securities, Muldoon Murphy
& Faucette LLP will render its opinion that under current law and
interpretations thereof, and assuming full compliance with the terms of the
declaration of trust, and based upon certain facts and assumptions contained in
such opinion, the trust will be classified as a grantor trust for United States
federal income tax purposes and not as an association taxable as a corporation.
As a result, for United States federal income tax purposes, each holder of a
preferred security (a "securityholder") generally will be treated as owning an
undivided beneficial ownership interest in the debentures held by the trust,
and will be taxed as if the securityholder directly held its pro rata share of
the debentures. Thus, you will be required to include in your gross income your
pro rata share of the interest income or original issue discount that is paid
or accrued on the debentures. See "--Interest Income and Original Issue
Discount."
Classification of the Debentures
In connection with the issuance of the debentures, Muldoon Murphy & Faucette
LLP will render its opinion that under current law and assuming full compliance
with the terms of the indenture and certain other documents, and based upon
certain facts and assumptions described in the opinion, the debentures will be
classified, for United States federal income tax purposes, as indebtedness of
NYCB.
The Preferred Securities
Interest Income and Original Issue Discount
Payments of Stated Interest
So long as no event of default under the debentures has occurred and is
continuing, we can, on one or more occasions, defer interest payments on the
debentures for up to 20 quarterly periods. Under applicable Treasury
Regulations, if the legal terms and conditions of an instrument are such that
there is only a remote likelihood that a company will not make its stated
interest payments on time, such contingency will not be considered to result in
the creation of original issue discount ("OID") within the meaning of section
1273(a) of the Code. We believe that the likelihood that we will elect to defer
interest payments is remote, and have made a representation to this effect to
our counsel. Accordingly, we intend to take the position that the stated
interest payable on the debentures will not be taxed as OID. Therefore, except
as set forth below under "deferral of interest," a securityholder will
generally be taxed on the stated interest on the debentures as ordinary income
at the time it is paid or accrued in accordance with such securityholder's
regular method of tax accounting, unless the
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securityholder either (1) takes the position that the stated interest is OID
and discloses this position on its tax return or (2) makes an election to
accrue all interest on the debentures on a current basis.
If, however, we were to exercise our right to defer payments of stated
interest on the debentures, the debentures would be treated, as reissued (for
the purposes of redetermining OID only) and such stated interest would become
OID at that time. Each securityholder would then be required to accrue such
stated interest on a daily economic accrual basis (as described below), both
during and after the deferral period, even if the securityholder otherwise uses
the cash method of accounting and such stated interest would not separately be
included in income when paid.
The Treasury Regulations dealing with OID and the deferral of interest
payments have not yet been addressed in any rulings or other interpretations by
the IRS, and it is possible that the IRS could take a contrary position. If the
IRS were to assert successfully that the stated interest on the debentures was
OID regardless of whether NYCB exercised its right to defer interest payments,
all securityholders would be required to include such stated interest in income
on a daily economic accrual basis as described below.
OID Resulting from Allocation of Purchase Price
As noted above, the amount of the initial purchase price of a BONUSES unit
will be allocated between the preferred security and the warrant. Because the
amount so allocated to the preferred security, which, as noted above, will be
treated for tax purposes as ownership of the underlying debentures, is less
than 100% of the debenture redemption amount, the debentures will be treated as
having been issued with OID in an amount equal to the difference between their
stated redemption price at maturity (the sum of all payments made on the
debentures other than stated interest (unless the stated interest is considered
OID as stated above)) and their issue price. You should be aware that if you
hold a preferred security, you must include OID in gross income in advance of
the receipt of cash attributable to that income.
Under the OID economic accrual rules, the following occurs:
. each securityholder would accrue an amount of OID each year using the
constant-yield-to-maturity method of accrual described in section 1272 of
the Code assuming a maturity date of the debentures as of November 1,
2051;
. any amount of OID included in the securityholder's gross income (whether
or not during a deferral period) with respect to the preferred securities
(and the underlying debentures) will increase such securityholder's tax
basis in such preferred securities (and the underlying debentures); and
. the actual cash payments (other than stated interest unless the stated
interest is considered OID as described above) received on the preferred
securities would not be reported separately as taxable income, but such
payments will reduce the securityholder's tax basis in such preferred
securities (and the underlying debentures).
Following the exercise of the warrants (other than an exercise in connection
with a redemption of the warrants or a change of control), the holder may
require the trust to exchange the related preferred securities for debentures
and require NYCB to repurchase such debentures at their principal amount at
maturity. Since it is not considered likely warrants will in fact be exercised
under the conditions that permit holders to put debentures to NYCB for
repurchase, the possibility that debentures might be so repurchased has been
disregarded in calculating OID. If this possibility were required to be taken
into account in calculating OID, the amount of OID reportable holders might be
substantially increased.
In the event of a remarketing of the preferred securities, each
securityholder who does not participate in the remarketing of the debentures
would not accrue OID after the date of the remarketing.
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If you are a corporate holder of preferred securities, you will not be
entitled to a dividends-received deduction with respect to any income you
recognize with respect to the preferred securities.
Distribution of Debentures Upon Liquidation of the Trust
As described under the captions "Description of the Preferred
Securities--Redemption" and "Description of the Preferred
Securities--Exchange," the debentures held by the trust may be distributed to
securityholders in exchange for their preferred securities in certain
circumstances. Under current law and interpretations thereof, and assuming
that, as expected, the trust is treated as a grantor trust, this type of
distribution would not be taxable. Upon a distribution, each securityholder
will receive his, her or its pro rata share of the debentures previously held
indirectly through the trust. Each securityholder's aggregate tax basis in the
debentures will be the same as the aggregate tax basis that such securityholder
had in the preferred securities before the distribution and the
securityholder's holding period in the debentures will include the holding
period for the preferred securities surrendered in the exchange.
If you receive debentures in exchange for your preferred securities
(including a repurchase of your preferred securities by the trust), you would
continue to accrue interest and OID in respect of the debentures received from
the trust in the manner described above under "Interest Income and Original
Issue Discount."
Sales of Preferred Securities
If you sell or otherwise dispose of preferred securities (including pursuant
to a remarketing of the preferred securities), you will recognize gain or loss
equal to the difference between:
. your amount realized on the sale or other disposition of the preferred
securities (except to the extent that any amount realized is treated as
payment of accrued but unpaid interest, other than OID, with respect to
your pro rata share of the debentures, which will be taxable as
interest); and
. your adjusted tax basis in the preferred securities sold.
Your gain or loss will be a capital gain or loss. The gain or loss will
generally be a long-term capital gain or loss if you have held your preferred
securities for more than one year. Long-term capital gains of individuals
derived with respect to capital assets held for more than one year are subject
to United States federal income tax at reduced rates. Your ability to deduct
capital losses currently is subject to limitations.
The Warrants
Acquisition of NYCB Common Stock
The exercise of the warrants to purchase our common stock generally will not
constitute a taxable event. Accordingly, a holder of a warrant (a
"warrantholder") will not recognize gain or loss upon the exercise of the
warrants, except with respect to any cash paid in lieu of a fractional share of
NYCB common stock. Rather, a warrantholder will recognize taxable gain or loss
if and when the warrantholder disposes of the NYCB common stock in a taxable
transaction. The aggregate initial tax basis in the warrantholder's common
stock will be equal to the amount paid to NYCB upon exercise of the warrants
plus the warrantholder's tax basis in the warrants, less any portion of the
purchase price and tax basis allocable to the cash received in lieu of a
fractional share. In the case of a warrantholder who acquires warrants as part
of the BONUSES units, the warrantholder's basis in the warrants will equal the
portion of the initial purchase price of the BONUSES units allocable to the
warrant component. See "Allocation of Purchase Price of the BONUSES units."
Cash received in lieu of a fractional share of NYCB common stock should be
treated as a payment in exchange for the fractional share interest. Upon
the receipt of cash in lieu of a fractional share interest, a warrantholder
will recognize capital gain or loss in an amount equal to the difference, if
any, between the amount of cash received and the warrantholder's tax basis
allocable to the fractional share interest. Following the exercise of the
warrants (other than an exercise in
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connection with a redemption of the warrants or a change of control), the
warrantholder may require the trust to exchange the related preferred
securities for debentures and require NYCB to repurchase such debentures at
their principal amount at maturity. Upon such a repurchase a warrantholder
might recognize substantial gain. See "Sales of Preferred Securities."
The warrants may be treated on issuance as having an exercise price in
connection with certain optional redemptions that is below the current fair
market value of the portion of a share of our stock that could be purchased on
exercise of a warrant. In some instances, the IRS has taken the position that a
warrant with a below-market exercise price was the equivalent of the stock
purchasable on exercise. We believe that the warrants should be treated as
warrants and not as stock. However, even if the warrants were treated as stock,
a warrantholder would not recognize taxable income from the exercise or holding
of a warrant, and the basis consequences described above would be unchanged.
Ownership of NYCB Common Stock
If you dispose of our common stock in a taxable transaction other than a
sale to NYCB, you will recognize capital gain or loss in an amount equal to the
difference between the proceeds you receive and your tax basis in our common
stock. The resulting gain or loss will be either short-term or long-term
capital gain or loss depending on your holding period for the NYCB common
stock. The holding period for the common stock will begin the day you exercise
the warrants. Capital gains realized by individuals on assets held for more
than one year are subject to United States federal income tax at reduced rates.
Your ability to deduct capital losses is subject to limitations.
Disposition of Warrants
If you sell your warrants or if we redeem your warrants, you will recognize
capital gain or loss equal to the difference between the proceeds you receive
and your tax basis in the warrants. The resulting gain or loss will be either
short-term or long-term depending on whether you have held the warrants for
more than one year. If you do not exercise the warrants and they expire, you
will recognize a short-term or long-term capital loss when they expire equal to
your tax basis in the warrants. In the case of a warrantholder that acquires
warrants as part of BONUSES units, your tax basis in the warrants will equal
the portion of the purchase price of the BONUSES units allocable to the warrant
component (as described above) and your holding period for the warrants will
commence on the date that you purchase the BONUSES units.
Adjustment to Exercise Price
Warrantholders might be treated as receiving a constructive distribution
from NYCB if:
. the exercise price is adjusted and as a result of such adjustment the
warrantholder's proportionate interest in our assets or earnings and
profits is increased, and
. the adjustment is not made pursuant to a bona fide, reasonable
anti-dilution formula.
An adjustment in the exercise price is not made pursuant to a bona fide
formula if, for example, the adjustment is made to compensate for certain
taxable distributions with respect to our common stock. Thus, under some
circumstances, an adjustment in the exercise price might give rise to a taxable
dividend to a warrantholder even though the warrantholder would not receive any
cash.
Non-U.S. Holders
The following discussion only applies to you if you are a Non-U.S. Holder.
As discussed above, the preferred securities will be treated as evidence of a
beneficial ownership interest in the debentures. See "--Classification of the
Trust."
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United States Federal Withholding Tax
The 30% United States federal withholding tax will not apply to any payment
of principal or interest (including OID) on the preferred securities or
debentures provided that:
. the beneficial owner of the preferred securities does not actually or
constructively own 10% or more of the total combined voting power of all
classes of NYCB voting stock within the meaning of the Code and the
Treasury Regulations (including NYCB common stock that would be received
upon the exercise of any warrants held by such beneficial owner);
. the beneficial owner of the preferred securities is not a controlled
foreign corporation that is related to NYCB through stock ownership;
. the beneficial owner of the preferred securities is not a bank whose
receipt of interest on the preferred securities or debentures is
described in section 881(c)(3)(A) of the Code; and
. either (A) the beneficial owner of the preferred securities provides his,
her or its name and address on an IRS Form W-8BEN (or other applicable
form), and certifies, under penalties of perjury, that such beneficial
owner is not a United States person, or (B) if the preferred securities
or debentures are held through certain foreign intermediaries, the
beneficial owner satisfies the certification requirements of applicable
Treasury Regulations.
If the beneficial owner of the preferred securities cannot satisfy the
requirements described above, payments of interest (including OID) made to such
beneficial owner will be subject to the 30% United States federal withholding
tax, unless the beneficial owner provides us with a properly executed (1) IRS
Form W-8BEN (or other applicable form) claiming an exemption from, or reduction
in the rate of, withholding under the benefit of an applicable tax treaty or
(2) IRS Form W-8ECI (or successor form) stating that interest paid on the
preferred securities or the debentures is not subject to withholding tax
because it is effectively connected with the conduct by the beneficial owner of
a trade or business in the United States.
Dividends paid to a Non-U.S. Holder of our common stock acquired through the
exercise of a warrant (and any constructive distribution you may be deemed to
receive as described above under "The Warrants--Adjustment to Exercise Price")
will be subject to withholding of United States federal income tax at a 30%
rate or such lower rate as may be specified by an applicable income tax treaty.
However, dividends that are effectively connected with the conduct of a trade
or business by the Non-U.S. Holder within the United States and, where a tax
treaty applies, are attributable to a United States permanent establishment of
the Non-U.S. Holder, are not subject to the withholding tax, but instead are
subject to United States federal income tax as described below.
A Non-U.S. Holder of our common stock eligible for a reduced rate of United
States withholding tax pursuant to an income tax treaty may obtain a refund of
any excess amounts withheld by filing an appropriate claim for refund with the
IRS.
Except as discussed below, the 30% United States federal withholding tax
will not apply to any gain that you realize on the sale, exchange, retirement
or other disposition of preferred securities, debentures, warrants or NYCB
common stock.
United States Federal Income Tax
If a Non-U.S. Holder is engaged in a trade or business in the United States
and the interest, including OID, on the preferred securities or debentures or
the dividends on the NYCB common stock is effectively connected with the
conduct of that trade or business, such Non-U.S. Holder will be subject to
United States federal income tax on that interest, OID and dividends on a net
income basis (although exempt from the 30% withholding tax if the payor is
supplied with the appropriate IRS forms) in the same manner as if such Non-U.S.
Holder were a United States person as defined under the Code. In addition, if
the Non-U.S. Holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30% (or lower applicable treaty rate) of its earnings and
profits for the taxable year, subject to adjustments, that are effectively
connected with the conduct by it of a trade or business in the United States.
For this purpose, interest, including OID, on the preferred securities or
debentures and dividends on our common stock will be included in earnings and
profits.
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Any gain or income realized by a Non-U.S. Holder on the disposition of a
BONUSES unit, preferred security, debenture, warrant or NYCB common stock will
generally not be subject to United States federal income or withholding tax
unless:
. that gain or income is effectively connected with the conduct of a trade
or business in the United States by the Non-U.S. Holder;
. the Non-U.S. Holder is an individual who is present in the United States
for 183 days or more in the taxable year of that disposition, and certain
other conditions are met;
. in the case of gain representing accrued interest on the debentures, the
requirements described above are under "United States Federal Withholding
Tax" are not met; or
. in the case of NYCB common stock or warrants, NYCB is or has been a
"United States real property holding corporation" for United States
federal income tax purposes.
An individual Non-U.S. Holder described in the first bullet point above will
be subject to tax on the net gain derived from the sale under regular graduated
United States federal income tax rates. An individual Non-U.S. Holder described
in the second bullet point above will be subject to a flat 30% tax on the gain
derived from the sale, which may be offset by United States source capital
losses (even though the individual is not considered a resident of the United
States). If a Non-U.S. Holder that is a foreign corporation falls under the
first bullet point above, it will be subject to tax on its gain under regular
graduated United States federal income tax rates and, in addition, may be
subject to the branch profits tax equal to 30% of its effectively connected
earnings and profits or at such lower rate as may be specified by an applicable
income tax treaty.
We believe that NYCB never has been, is not currently and is not likely in
the future to become a United States real property holding corporation. Even if
NYCB is or becomes a United States real property holding corporation, so long
as our common stock continues to be regularly traded on an established
securities market, (1) a Non-U.S. Holder will not be subject to United States
federal income tax on the disposition of NYCB common stock (by reason of NYCB
being a United States real property holding corporation) unless the Non-U.S.
Holder actually or constructively (including through ownership of warrants)
holds or has held at any time during the five year period preceding the date of
disposition more than five percent of the total fair market value of the
outstanding NYCB common stock, and (2) the Non-U.S. Holder will not be subject
to United States federal income tax on the disposition of the warrants (by
reason of NYCB being a United States real property holding corporation) unless
on the day the Non-U.S. Holder acquired the warrants, such warrants had a fair
market value greater than the fair market value of five percent of the total
outstanding NYCB common stock.
Special rules may apply to you if you are a "controlled foreign
corporation," "passive foreign investment company," "foreign personal holding
company," or company that accumulates earnings for the purpose of avoiding tax,
and are subject to special treatment under the Code. If you are such an entity,
you should consult your tax advisor to determine the United States federal,
state, local and other tax consequences that may be relevant to you.
United States Federal Estate Tax
The estate of an individual Non-U.S. Holder will not be subject to United
States federal estate tax on the preferred securities beneficially owned by the
Non-U.S. Holder at the time of his or her death, provided that (1) the Non-U.S.
Holder does not actually or constructively own 10% or more of the total
combined voting power of all classes of NYCB voting stock, within the meaning
of the Code and Treasury Regulations, and (2) income from the preferred
securities not have been, if received at the time of his or her death,
effectively connected with the conduct by him or her of a trade or business in
the United States. NYCB common stock acquired upon an exercise of a warrant and
owned by a Non-U.S. Holder at the time of his or her death will be subject to
United States federal estate tax unless an applicable estate tax treaty
provides otherwise. Warrants owned by a Non-U.S. Holder at the time of his or
her death may be subject to United States federal estate tax unless an
applicable estate tax treaty provides otherwise.
Information Reporting and Backup Withholding
Payments made on, and proceeds from the sale, exchange, redemption or other
disposition of the BONUSES units, preferred securities, debentures, warrants
and NYCB common stock may be subject to information
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reporting and may be subject to United States federal backup withholding at the
rate of 30% (which rate under current law will be reduced periodically to 28%
for payments made in 2006 and later years) unless the security holder or
warrant holder supplies an accurate taxpayer identification number in or
otherwise complies with applicable United States information reporting or
certification requirements.
In general, no information reporting or backup withholding will be required
regarding payments of interest on the preferred securities or debentures if we
do not have actual knowledge that the security holder is a United States person
and we have received the certification described above in the fourth bullet
point under the caption "Non-U.S. Holders--U.S. Federal Withholding Tax."
Any amounts withheld from you under the backup withholding rules generally
will be allowed as a refund or a credit against your United States federal
income tax liability, provided the required information is furnished to the IRS.
ERISA CONSIDERATIONS
The following is a summary of certain considerations associated with the
purchase of the BONUSES units (including the underlying debentures, preferred
securities and warrants and any shares of common stock of NYCB received upon
the exercise or redemption thereof, collectively, the "Securities") by employee
benefit plans that are subject to Title I of the U.S. Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), plans or individual
retirement accounts that are subject to Section 4975 of the Code and other
arrangements that are subject to provisions under any federal, state, local,
non-U.S. or other laws or regulations that are similar to such provisions of
the Code or ERISA (collectively, "Similar Laws"), and entities whose underlying
assets are considered to include "plan assets" of such plans, accounts and
arrangements (each, a "Plan").
General Fiduciary Matters
ERISA imposes certain duties on persons who are fiduciaries of a Plan
subject to Title I of ERISA, and ERISA and Section 4975 of the Code prohibit
certain transactions involving the assets of a Plan and its fiduciaries or
other certain interested parties. Under ERISA and the Code, any person who
exercises any discretionary authority or control over the administration of
such a Plan or the management or disposition of the assets of such a Plan, or
who renders investment advice for a fee or other compensation to such a Plan,
is generally considered to be a fiduciary of the Plan.
In considering an investment in the Securities of a portion of the assets of
any Plan, a fiduciary should determine whether the investment is in accordance
with the documents and instruments governing the Plan and the applicable
provisions of ERISA, Section 4975 of the Code or any Similar Law.
Any insurance company proposing to invest assets of its general account in
the Securities should consider the extent that such investment would be subject
to the requirements of ERISA in light of the U.S. Supreme Court's decision in
John Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank and
under any subsequent legislation or other guidance relating to that decision,
including the enactment of Section 401(c) of ERISA by the Small Business Job
Protection Act of 1996 and the regulations promulgated thereunder.
Prohibited Transaction Issues
Section 406 of ERISA and Section 4975 of the Code prohibit Plans subject
thereto from engaging in specified transactions involving plan assets with
persons or entities who are "parties in interest" within the meaning of ERISA
or "disqualified persons" within the meaning of Section 4975 of the Code,
unless an exemption is available. A party in interest or disqualified person
who engages in a non-exempt prohibited transaction may be subject to excise
taxes and other penalties and liabilities under ERISA and the Code. In
addition, the fiduciary of the Plan that engaged in such a non-exempt
prohibited transaction may be subject to penalties and liabilities under ERISA.
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Whether or not the underlying assets of the trust or NYCB are deemed to
include "plan assets," as described below, the acquisition and/or holding of
the Securities by a Plan subject to Title I of ERISA or Section 4975 of the
Code with respect to which the trust, NYCB or a prior purchaser, is considered
a party in interest or a disqualified person may constitute or result in a
direct or indirect prohibited transaction under Section 406 of ERISA and/or
Section 4975 of the Code, unless the investment is acquired and is held in
accordance with an applicable statutory, class or individual prohibited
transaction exemption. In this regard, the U.S. Department of Labor (the "DOL")
has issued prohibited transaction class exemptions, or "PTCEs," that may apply
to the acquisition and holding of the Securities. These class exemptions
include, without limitation, PTCE 84-14 respecting transactions determined by
independent qualified professional asset managers, PTCE 90-1 respecting
insurance company pooled separate accounts, PTCE 91-38 respecting bank
collective investment trust funds, PTCE 95-60 respecting life insurance company
general accounts and PTCE 96-23 respecting transactions determined by in-house
asset managers, although there can be no assurance that all of the conditions
of any such exemptions will be satisfied.
Plan Asset Issues
Regulations (the "Plan Asset Regulations") promulgated under ERISA by the
DOL generally provide that when a Plan subject to Title I of ERISA or Section
4975 of the Code acquires an equity interest in an entity that is neither a
"publicly-offered security" nor a security issued by an investment company
registered under the Investment Company Act, the Plan's assets include both the
equity interest and an undivided interest in each of the underlying assets of
the entity unless it is established either that equity participation in the
entity by "benefit plan investors" is not significant or that the entity is an
"operating company," in each case as defined in the Plan Asset Regulations. For
purposes of the Plan Asset Regulations, equity participation in an entity by
benefit plan investors will not be significant if they hold, in the aggregate,
less than 25% of the value of any class of such entity's equity, excluding
equity interests held by persons (other than benefit plan investors) with
discretionary authority or control over the assets of the entity or who provide
investment advice for a fee (direct or indirect) with respect to such assets,
and any affiliates thereof. For purposes of this 25% test, "benefit plan
investors" include all employee benefit plans, whether or not subject to ERISA
or Section 4975 of the Code, including "Keogh" plans, governmental plans,
individual retirement accounts and pension plans maintained outside the United
States, as well as any entity whose underlying assets are deemed to include
"plan assets" under the Plan Asset Regulations (e.g., an entity of which 25% or
more of the value of any class of equity interests is held by benefit plan
investors and which does not satisfy another exception under the Plan Asset
Regulations).
For purposes of the Plan Asset Regulations, a "publicly offered security" is
a security that is (1) "freely transferable", (2) part of a class of securities
that is "widely held," and (3) (A) sold to the Plan as part of an offering of
securities to the public pursuant to an effective registration statement under
the Securities Act of 1933 and the class of securities to which such security
is a part is registered under the Securities Exchange Act of 1934 within 120
days after the end of the fiscal year of the issuer during which the offering
of such securities to the public has occurred, or (B) is part of a class of
securities that is registered under Section 12 of the Exchange Act.
In addition, it is not anticipated that the BONUSES units (and the
underlying debentures, preferred securities or warrants) will constitute
"publicly offered securities" for purposes of the Plan Asset Regulations or
that the trust will constitute an investment company under the Investment
Company Act or an operating company within the meaning of the Plan Asset
Regulations. Furthermore, no monitoring or other measures will be taken to
determine or limit the value of any class of Securities underlying the BONUSES
units that is acquired or held from time to time by "benefit plan investors" or
to determine whether investment in the trust by benefit plan investors is
"significant" as described above. Consequently, there can be no assurance that
the underlying assets of the trust will not constitute "plan assets" for
purposes of ERISA and the Code.
Moreover, while it is currently anticipated that the shares of common stock
delivered to warrantholders upon the exercise or redemption of the warrants
will qualify as "publicly offered securities" for purposes of the Plan Asset
Regulations and/or that NYCB will qualify as an operating company for purposes
of the Plan Asset Regulations, there can be no assurance in such regard.
S-80
Plan Asset Consequences
If our assets or the trust were deemed to be "plan assets" under ERISA, this
would result, among other things, in (1) the application of the prudence and
other fiduciary responsibility standards of ERISA to investments made by NYCB
or the trust, as applicable (including the liability of Plan fiduciaries for
the breach of fiduciary responsibility of another fiduciary of the Plan) and
(2) the possibility that certain transactions in which NYCB or the trust, as
applicable, might seek to engage could constitute "prohibited transactions"
under ERISA and the Code.
Even if the conditions of one or more of the foregoing prohibited
transaction exemptions are satisfied with respect to the acquisition and
holding of the Securities, no assurance can be given that such exemptions would
apply to transactions engaged in by the trust or NYCB or to the potential
fiduciary or co-fiduciary breaches that might occur with respect to the assets
of the trust or NYCB if the assets of the trust or NYCB were deemed to include
"plan assets" for purposes of ERISA and the Code.
Representation
Each purchaser and subsequent transferee of the Securities will be deemed to
have represented and warranted that the acquisition and holding of the
Securities by such purchaser or transferee will not constitute a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
or similar violation under any applicable Similar Laws.
The foregoing discussion is general in nature and is not intended to be
all-inclusive. Due to the complexity of these rules and the penalties that may
be imposed upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries, or other persons considering
purchasing the Securities on behalf of, or with the assets of, any employee
benefit plan, consult with their counsel to determine whether such employee
benefit plan is subject to Title I of ERISA, Section 4975 of the Code or any
Similar Laws and the potential applicability of such laws to the acquisition or
holding of the Securities.
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UNDERWRITING
Subject to the terms and conditions stated in the underwriting agreement
dated the date of this prospectus supplement, each underwriter named below has
agreed to purchase, and we have agreed to sell to that underwriter, the number
of BONUSES units set forth opposite the underwriter's name:
Number of
Underwriters BONUSES units
------------ -------------
Salomon Smith Barney Inc......... 2,400,000
Lehman Brothers Inc.............. 1,200,000
Bear, Stearns & Co. Inc.......... 480,000
Keefe, Bruyette & Woods, Inc..... 360,000
Sandler O'Neill & Partners, L.P.. 360,000
---------
Total........................... 4,800,000
=========
The underwriting agreement provides that the obligations of the underwriters
to purchase the BONUSES units included in this offering are subject to approval
of legal matters by counsel and to other conditions. The underwriters are
obligated to purchase all of the BONUSES units (other than those covered by the
over-allotment option described below), if they purchase any of the BONUSES
units.
The underwriters propose to offer some of the BONUSES units directly to the
public at the public offering price set forth on the cover page of this
prospectus supplement and some of the BONUSES units to dealers at the public
offering price less a concession not to exceed $0.75 per BONUSES unit. The
underwriters may allow, and dealers may reallow, a concession not to exceed
$0.10 per unit on sales to other dealers. If all of the BONUSES units are not
sold at the initial offering price, the representatives may change the public
offering price and the other selling terms.
We have granted to the underwriters an option, exercisable for 30 days from
the date of this prospectus supplement, to purchase up to an additional 700,000
BONUSES units at the public offering price less the underwriting discount. The
underwriters may exercise the option solely for the purpose of covering
over-allotments, if any, in connection with this offering. To the extent the
option is exercised, each underwriter must purchase a number of additional
BONUSES units approximately proportionate to that underwriter's initial
purchase commitment.
We, our officers and directors have agreed that, for a period of 90 days
from the date of this prospectus supplement, we and they will not, without the
prior written consent of Salomon Smith Barney, dispose of or hedge any BONUSES
units, shares of our common stock or any securities convertible into, or
exercisable, or exchangeable for shares of our common stock, the preferred
securities, any securities substantially similar to the preferred securities or
any guarantee of such securities. Salomon Smith Barney in its sole discretion
may release any of the securities subject to these lock-up agreements at any
time without notice.
Salomon Smith Barney has informed us that it has no present intent or
arrangement to release any of the BONUSES units subject to the lock-up
agreement. The release of BONUSES units subject to any of the lock-up
agreements is considered on a case by case basis. Factors in deciding whether
to release these BONUSES units may include the length of time before the
particular lock-up expires, the number of BONUSES units involved, historical
trading volumes of our BONUSES units and whether the person seeking the release
is an officer, director or affiliate of ours.
The following table shows the underwriting discounts and commissions that we
are to pay to the underwriters in connection with this offering. These amounts
are shown assuming both no exercise and full exercise of the underwriters'
option to purchase additional BONUSES units.
Paid by NYCB
-------------------------
No Exercise Full Exercise
----------- -------------
Per BONUSES unit $ 1.25 $ 1.25
Total........... $6,000,000 $6,875,000
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In connection with the offering, Salomon Smith Barney, on behalf of the
underwriters, may purchase and sell BONUSES units in the open market. These
transactions may include short sales, syndicate covering transactions and
stabilizing transactions. Short sales involve syndicate sales of BONUSES units
in excess of the number of BONUSES units to be purchased by the underwriters in
the offering, which creates a syndicate short position. "Covered" short sales
are sales of BONUSES units made in an amount up to the number of BONUSES units
represented by the underwriters' over-allotment option. In determining the
source of BONUSES units to close out the covered syndicate short position, the
underwriters will consider, among other things, the price of BONUSES units
available for purchase in the open market as compared to the price at which
they may purchase BONUSES units through the over-allotment option. Transactions
to close out the covered syndicate short involve either purchase of the BONUSES
units in the open market after the distribution has been completed or the
exercise of the over-allotment option. The underwriters may also make "naked"
short sales of BONUSES units in excess of the over-allotment option. The
underwriters must close out any naked short position by purchasing BONUSES
units in the open market. A naked short position is more likely to be created
if the underwriters are concerned that there may be downward pressure on the
price of the BONUSES units in the open market after pricing that could
adversely affect investors who purchase in the offering. Stabilizing
transactions consist of bids for or purchases of BONUSES units in the open
market while the offering is in progress.
The underwriters also may impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when
Salomon Smith Barney repurchases BONUSES units originally sold by that
syndicate member in order to cover syndicate short positions or make
stabilizing purchases.
Any of these activities may have the effect of preventing or retarding a
decline in the market price of the BONUSES units. They may also cause the price
of the BONUSES units to be higher than the price that would otherwise exist in
the open market in the absence of these transactions. The underwriters may
conduct these transactions on the Nasdaq National Market or in the
over-the-counter market, or otherwise. If the underwriters commence any of
these transactions, they may discontinue them at any time.
We estimate that our respective portion of the total expenses of this
offering will be $800,000.
Certain of the underwriters have performed investment banking and advisory
services for us from time to time for which they have received customary fees
and expenses. The underwriters may, from time to time, engage in transactions
with and perform services for us in the ordinary course of their business.
A prospectus and the accompanying prospectus supplement may be made
available in electronic format on the websites maintained by one or more of the
underwriters. The representatives may agree to allocate a number of BONUSES
units to underwriters for sale to their online brokerage account holders. The
underwriters will allocate BONUSES units to underwriters that may make Internet
distributions on the same basis as other allocations. In addition, BONUSES
units may be sold by the underwriters to securities dealers who resell BONUSES
units to online brokerage account holders.
We and the trust have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute
to payments the underwriters may be required to make because of any of those
liabilities.
It is expected that delivery of the BONUSES units will be made against
payment therefor on or about November 4, 2002, which will be the fifth business
day following the date of pricing of the BONUSES units (such settlement being
referred to as "T+5"). Under Rule 15(c)6-1 under the Exchange Act, trades in
the secondary market generally are required to settle in three business days
unless the parties to any such trade expressly agree otherwise. Accordingly,
purchasers who wish to trade the BONUSES units on the date of pricing or the
next three succeeding business days will be required, by virtue of the fact
that the BONUSES units initially will settle in T+5, to specify an alternate
settlement cycle at the time of any such trade to prevent failed settlement.
Purchasers of the BONUSES units who wish to trade the BONUSES units on the date
of pricing or the next three succeeding business days should consult their own
advisors.
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LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the preferred
securities, the enforceability of the declaration and the formation of the
trust will be passed upon by Morris, James, Hitchens & Williams LLP,
Wilmington, Delaware, special Delaware counsel to NYCB and the trust. The
validity of the debentures, the guarantee and the warrants and certain United
States federal income tax matters will be passed upon for NYCB and the trust by
Muldoon Murphy & Faucette LLP, Washington, D.C. Certain legal matters in
connection with the offering will be passed upon for the underwriters by Weil,
Gotshal & Manges LLP, New York, New York, and by Luse Gorman Pomerenk & Schick,
P.C., Washington, D.C.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them. This means that we can disclose important information to you by referring
you to other documents filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus
supplement and the accompanying prospectus.
We incorporate by reference in the prospectus to which this prospectus
supplement is a part the documents listed below and any future filings we make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until
we sell all of the securities.
SEC Filings Period or Date (as applicable)
----------- ------------------------------
Annual Report on Form 10-K.................... Year ended December 31, 2001, as filed on April 1, 2002
Quarterly Report on Form 10-Q................. Quarter ended March 31, 2002, as filed on May 8, 2002
and for the quarter ended June 30, 2002, as filed on
August 14, 2002
Current Reports on Form 8-K................... April 19, 2002
April 23, 2002
May 21, 2002
July 18, 2002
July 25, 2002
Proxy Statement for the Annual Meeting of
Shareholders................................ April 16, 2002
The description of NYCB common stock set
forth in The registration statement on
Form 8-A (No. 0-22278) and any amendment
or report filed with the SEC for the purpose
of updating this description................ August 19, 1993
S-84
All documents filed by us with the SEC pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this prospectus supplement and
prior to the termination of the offering of the BONUSES will be deemed to be
incorporated herein by reference and to be a part hereof from the date of
filing such documents. You should not assume the information in this prospectus
supplement, the accompanying prospectus or other documents incorporated by
reference is accurate as of any date other than the date on the front of those
documents. In particular, any statement contained herein or in any document
incorporated or deemed to be incorporated by reference herein will be deemed to
be modified or superseded for purposes of this prospectus supplement to the
extent that a statement contained in any subsequently filed document which also
is, or is deemed to be, incorporated by reference herein modifies or supersedes
such statement. Any modified or superseded statement will not be deemed, except
as modified or superseded, to constitute a part of this prospectus supplement.
You should rely only on the information incorporated by reference or
provided in this prospectus supplement or the accompanying prospectus. We have
not authorized anyone else to provide you with different information.
S-85
PROSPECTUS
[LOGO] New York Community
Bancorp, Inc.
------------------
New York Community Bancorp, Inc.
New York Community Capital Trust V
Equity Redeemable Preferred
Securities Units
The units:
Each unit being offered consists of:
. preferred security issued by New York Community Capital Trust V (the
"trust"); and
. warrant to purchase shares of common stock of New York Community
Bancorp, Inc.
The Trust:
The trust is a Delaware statutory trust that:
. sells preferred securities representing undivided beneficial interests
in the trust to the public;
. sells common securities representing undivided beneficial interests in
the trust to New York Community Bancorp, Inc.;
. uses the proceeds from these sales to buy an equal principal amount of
junior subordinated debentures of New York Community Bancorp, Inc.; and
. distributes the cash payments it receives on the junior subordinated
debentures it owns to the holders of the preferred and common securities.
Distributions:
. For each unit that you own, you will receive cumulative cash
distributions on the liquidation amount of the preferred security. The
rate at which cash distributions will be paid and the liquidation amount
per preferred security will be set forth in the accompanying prospectus
supplement.
New York Community Bancorp, Inc.:
. New York Community Bancorp, Inc. will fully and unconditionally
guarantee the payment by the trust of the preferred securities as
described in this prospectus.
This prospectus provides you with a general description of the units we may
offer. Each time we offer securities, we will provide you with a prospectus
supplement that will describe the specific amounts, prices and terms of the
securities being offered. These supplements may also add, update or change
information contained in this prospectus. To understand the terms of the
securities, you should carefully read this prospectus with the applicable
supplements, which together provide the specific terms of the securities that
we are offering.
These securities are not deposits or obligations of a bank or savings
association and are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency.
This prospectus may be used to offer and sell securities, only if
accompanied by the prospectus supplement for those securities.
-----------------
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus or the
accompanying prospectus supplement is truthful or complete. Any representation
to the contrary is a criminal offense.
The date of this prospectus is May 8, 2002
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
We provide information to you about the securities we are offering in two
separate documents that progressively provide more detail:
. this prospectus, which provides general information, some of which may
not apply to your securities; and
. the accompanying prospectus supplement, which describes the specific and
final terms of your securities.
If the terms of your securities vary between the prospectus supplement and
the accompanying prospectus, you should rely on the information in the
following order of priority:
. the prospectus supplement; and
. the prospectus.
We include cross-references in this prospectus and the accompanying
prospectus supplement to captions in these materials where you can find further
related discussions. The following Table of Contents and the Table of Contents
included in the accompanying prospectus supplement provide the pages on which
these captions are located.
-----------------
Unless indicated in the applicable prospectus supplement, we have not taken
any action that would permit us to publicly sell these securities in any
jurisdiction outside the United States. If you are an investor outside the
United States, you should inform yourself about and comply with any
restrictions as to the offering of the securities and the distribution of this
prospectus.
2
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS............................................. 4
WHERE YOU CAN FIND MORE INFORMATION............................... 4
FORWARD-LOOKING STATEMENTS........................................ 6
NEW YORK COMMUNITY BANCORP, INC................................... 7
THE TRUST......................................................... 8
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES.................. 9
USE OF PROCEEDS................................................... 9
REGULATION AND SUPERVISION........................................ 9
DESCRIPTION OF UNITS.............................................. 10
DESCRIPTION OF WARRANTS........................................... 11
DESCRIPTION OF COMMON STOCK....................................... 12
DESCRIPTION OF THE PREFERRED SECURITIES........................... 14
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE................. 18
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES................. 20
EFFECT OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBENTURES AND
THE PREFERRED SECURITIES GUARANTEE.............................. 25
PLAN OF DISTRIBUTION.............................................. 26
LEGAL MATTERS..................................................... 27
EXPERTS........................................................... 27
3
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC, the "SEC," utilizing a "shelf" registration process. Under this shelf
registration process, we may from time to time sell the units described in this
prospectus in one or more offerings up to a total dollar amount of
$400,000,000. We may also sell other securities under the registration
statement that will reduce the total dollar amount of securities that we may
sell under this prospectus. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read both
this prospectus and any prospectus supplement together with the additional
information described under the heading "Where You Can Find More Information."
Unless otherwise indicated or unless the context requires otherwise, all
references in this prospectus to "NYCB," "we," "us," "our" or similar
references mean New York Community Bancorp, Inc., references to the "Bank" mean
New York Community Bank, and references to the "trust" mean New York Community
Capital Trust V.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities Act
of 1933 that registers, among other securities, the offer and sale of the
securities offered by this prospectus. The registration statement, including
the attached exhibits and schedules included or incorporated by reference in
the registration statement, contains additional relevant information about us.
The rules and regulations of the SEC allow us to omit certain information
included in the registration statement from this prospectus.
In addition, we file reports, proxy statements and other information with
the SEC under the Securities Exchange Act of 1934, as amended, the "Exchange
Act". You may read and copy this information at the following locations of the
SEC:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
Northeast Regional Office
The Woolworth Building
233 Broadway
New York, New York 10279
Midwest Regional Office
500 West Madison Street
Suite 1400
Chicago, Illinois 60661-2511
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers like us who file
electronically with the SEC. The address of that site is:
http://www.sec.gov
4
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document that we file separately with the SEC. The
information incorporated by reference is considered to be a part of this
prospectus, except for any information that is superseded by information that
is included directly in this document or in a more recent incorporated document.
This prospectus incorporates by reference the documents listed below that we
have previously filed with the SEC.
SEC Filings Period or Date (as applicable)
----------- ------------------------------
Annual Report on Form 10-K........... Year ended December 31, 2001, as
filed on April 1, 2002
Quarterly Reports on Form 10-Q....... Filed after the date of this
prospectus.
Current Reports on Form 8-K.......... Filed after the date of this
prospectus.
In addition, we also incorporate by reference all future filings we make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of our initial registration statement relating to the securities until
the completion of the distribution of the units covered by this prospectus.
These documents include periodic reports, such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (other than
Current Reports furnished under Item 9 of Form 8-K), as well as proxy
statements.
The information incorporated by reference contains information about us and
our financial condition and is an important part of this prospectus.
-----------------
You can obtain any of the documents incorporated by reference in this
document through us, or from the SEC through the SEC's Internet world wide web
site at www.sec.gov. Documents incorporated by reference are available from us
without charge, excluding any exhibits to those documents, unless the exhibit
is specifically incorporated by reference as an exhibit in this prospectus. You
can obtain documents incorporated by reference in this prospectus by requesting
them in writing or by telephone from us at the following address:
Investor Relations Department
New York Community Bancorp, Inc.
615 Merrick Avenue
Westbury, New York 11590
(516) 683-4100
We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, those
contained in this prospectus or in any of the materials that we have
incorporated into this prospectus. If anyone does give you information of this
sort, you should not rely on it. If you are in a jurisdiction where offers to
sell, or solicitations of offers to purchase, the securities offered by this
document are unlawful, or if you are a person to whom it is unlawful to direct
these types of activities, then the offer presented in this document does not
extend to you. The information contained in this document speaks only as of the
date of this document unless the information specifically indicates that
another date applies.
We have not included separate financial statements for the trust in this
prospectus. We do not believe that holders of the units would find these
financial statements meaningful because:
. all of the voting securities of the trust will be owned, directly or
indirectly, by NYCB, a reporting company under the Exchange Act;
. the trust has no independent assets, operations, revenues or cash flows
and exists for the sole purpose of issuing the preferred securities and
investing the proceeds in junior subordinated debentures issued by NYCB;
. NYCB's obligations described in this prospectus and in any accompanying
prospectus supplement constitute a full and unconditional guarantee of
payments due on the preferred securities; and
. The trust does not file reports with the SEC.
5
FORWARD-LOOKING STATEMENTS
This prospectus, including information included or incorporated by
reference, contains statements which are not historical facts but
"forward-looking statements" with respect to our financial condition, results
of operations, plans, objectives, future performance and business, as that term
is defined in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and uncertainties which could
cause actual results to differ materially from those currently anticipated due
to a number of factors, which include, but are not limited to, factors
discussed in documents that we file with the SEC from time to time.
These forward-looking statements may be identified by the use of such words
as "believe," "expect," "anticipate," "should," "planned," "estimated,"
"intend" and "potential." Examples of forward looking statements include, but
are not limited to, estimates with respect to our financial condition, expected
or anticipated revenue, results of operations and our business, including with
respect to:
. earnings growth (on both a generally accepted accounting principles, or
"GAAP," and cash basis);
. revenue growth in retail banking, lending and other areas;
. origination volume in our multi-family, consumer, commercial and other
lending businesses;
. current and future capital management programs;
. non-interest income levels, including fees from services and product
sales;
. tangible capital generation;
. market share;
. expense levels; and
. other business operations and strategies,
each of which are subject to various factors which could cause actual results
to differ materially from these estimates. Our ability to predict results or
the actual effect of future plans or strategies is inherently uncertain.
Factors which could have a material adverse effect on our operations and
those of our subsidiaries include, but are not limited to, changes in:
. interest rates;
. general economic conditions;
. monetary and fiscal policies of the U.S. Government, including policies
of the U.S. Treasury and the Federal Reserve Board;
. war on terrorist activities;
. the quality or composition of the loan or investment portfolios;
. demand for loan products;
. deposit flows;
. real estate values;
. the level of defaults;
. losses and prepayments on loans held by us in portfolio or sold in the
secondary markets;
. demand for financial services in our market area;
. competition;
6
. changes in accounting principles, policies, practices or guidelines;
. changes in legislation or regulation; and
. other economic, competitive, governmental, regulatory, and technological
factors affecting our operations, pricing, products and services.
These forward-looking statements are made as of the date of the applicable
document, and, except as required by applicable law, we assume no obligation to
update the forward-looking statements or to update the reasons why actual
results could differ from those projected in the forward-looking statements.
You should consider these risks and uncertainties in evaluating
forward-looking statements and you should not place undue reliance on these
statements.
NEW YORK COMMUNITY BANCORP, INC.
New York Community Bancorp, Inc. ("NYCB"), formerly known as Queens County
Bancorp, Inc., was incorporated in the State of Delaware on July 20, 1993 as
the holding company for New York Community Bank, formerly known as Queens
County Savings Bank, the first savings bank chartered by the State of New York
in the Borough of Queens, on April 14, 1859. NYCB acquired all of the stock of
the Bank upon its conversion from a New York State-chartered mutual savings
bank to a New York State-chartered stock form savings bank on November 23, 1993.
On November 21, 2000, the Company changed its name from Queens County
Bancorp, Inc. to New York Community Bancorp, Inc., in anticipation of its
acquisition of Haven Bancorp, Inc. ("Haven"), parent company of CFS Bank. On
November 30, 2000, Haven was merged with and into the Company, and on January
31, 2001, CFS Bank merged with and into New York Community Bank.
On July 31, 2001, the Company completed a merger-of-equals with Richmond
County Financial Corp. ("Richmond County"), parent company of Richmond County
Savings Bank. At the same time, Richmond County Savings Bank merged with and
into the Bank.
The Bank currently serves its customers through a network of 114 banking
offices including 53 traditional branches, 60 in-store branch offices and one
convenience center in New York City, Long Island, Rockland and Westchester
counties, and New Jersey, and operates through six divisions: Queens County
Savings Bank, Richmond County Savings Bank, CFS Bank, First Savings Bank of New
Jersey, Ironbound Bank, and South Jersey Bank. The Bank is in the process of
opening a new branch on Staten Island, New York and a new branch in Nassau
County. The Bank also expects its sale of seven New Jersey and Rockland County
branches to be completed in May 2002.
In addition to operating the largest supermarket banking franchise in the
metro New York region, the Bank is the second largest producer of multi-family
mortgage loans in the City of New York.
The Company recorded total assets of $9.3 billion at March 31, 2002,
including total loans of $5.5 billion, and total deposits of $5.4 billion,
including core deposits of $3.2 billion.
The Bank is subject to comprehensive regulation, examination and supervision
by the New York State Banking Department, the "NYSBD," and the Federal Deposit
Insurance Corporation, the "FDIC". NYCB is subject to regulation, examination
and supervision by the Federal Reserve Board, the "FRB," as a bank holding
company.
NYCB's principal executive offices are located at 615 Merrick Avenue,
Westbury, New York 11590 and its telephone number is (516) 683-4100.
7
Additional information about New York Community Bancorp, Inc. and its
subsidiaries is included in documents incorporated by reference in this
prospectus. See "Where You Can Find More Information" on page 2 of this
prospectus.
THE TRUST
The trust is a statutory trust formed under Delaware law pursuant to a
declaration of trust, the "initial declaration," and an amended and restated
declaration of trust, the "declaration," executed by NYCB, as sponsor for the
trust, and the NYCB capital trustees, as defined below, for the trust, and the
filing of a certificate of trust with the Delaware Secretary of State.
The trust exists for the exclusive purposes of:
. issuing the preferred securities and common securities representing
undivided beneficial interests in the assets of the trust;
. investing the gross proceeds of the preferred securities and the common
securities, together the "trust securities," in junior subordinated
debentures issued by NYCB; and
. engaging in only those other activities necessary or incidental to the
activities described in the previous two bullets.
All of the common securities will be directly or indirectly owned by NYCB.
The common securities of the trust will rank equally, and payments will be made
pro rata, with the preferred securities of other similar trusts, except that
upon an event of default under the declaration (as defined below), the rights
of the holders of the 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 preferred securities. NYCB will, directly or
indirectly, purchase common securities of the trust in an aggregate liquidation
amount equal to at least 3% of the total capital of the trust.
The trust's business and affairs will be conducted by the trustees, the
"NYCB capital trustees." Unless an event of default has occurred and is
continuing, as a direct or indirect holder of all the common securities, NYCB
will be entitled to appoint, remove or replace any of, or increase or reduce
the number of, the NYCB capital trustees of the trust. The duties and
obligations of the NYCB capital trustees will be governed by the declaration of
the trust. One or more of the NYCB capital trustees for the trust will be
persons who are employees or officers of or persons affiliated with NYCB, the
"administrative trustees." One NYCB capital trustee of the trust will be a
financial institution which will be unaffiliated with NYCB and which will act
as property trustee under the declaration and as indenture trustee for purposes
of the Trust Indenture Act of 1939, as amended, the "Trust Indenture Act,"
pursuant to the terms set forth in a prospectus supplement. In addition, one
NYCB capital trustee of the trust will have its principal place of business or
reside in the State of Delaware.
The trust has a term of approximately 40 years, but may dissolve earlier as
provided in the applicable declaration.
NYCB will pay all fees and expenses related to the trust and the offering of
trust securities.
The office of the Delaware trustee for the trust in Delaware, and such
trustee's principal place of business, is Wilmington Trust Company, Attention:
Corporate Trust Administration, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890. The principal place of business of the trust will
be c/o New York Community Bancorp, Inc., 615 Merrick Avenue, Westbury, New York
11590.
8
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
NYCB's consolidated ratios of earnings to fixed charges were as follows for
the period presented:
Three Months
Ended March 31, Year Ended December 31,
--------------- ------------------------
2002 2001 2000 1999 1998 1997
--------------- ---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits..... 3.28 3.25 1.90 2.72 3.10 4.43
Including Interest on Deposits..... 2.15 1.80 1.44 1.70 1.68 1.68
- --------
For the purpose of computing the ratio of earnings to fixed charges,
"earnings" consist of income before income taxes and extraordinary item plus
fixed charges, excluding capitalized interest. "Fixed charges" consist of
interest on short-term and long-term debt, including interest related to
capitalized leases and capitalized interest, and one-third of rent expense,
which approximates the interest component of that expense. In addition, where
indicated, fixed charges include interest on deposits.
USE OF PROCEEDS
The trust will use the proceeds of the sale of the trust securities to
acquire junior subordinated debentures from NYCB. NYCB intends to use the net
proceeds from the sale of the junior subordinated debentures for general
corporate purposes unless otherwise indicated in the prospectus supplement.
NYCB's general corporate purposes may include repurchasing its outstanding
common stock, financing possible acquisitions of branches or other financial
institutions or financial service companies, extending credit to, or funding
investments in, its subsidiaries and repaying, reducing or refinancing
indebtedness. The precise amounts and the timing of NYCB's use of the net
proceeds will depend upon market conditions, its subsidiaries' funding
requirements, the availability of other funds and other factors. Until NYCB
uses the net proceeds for general corporate purposes, it will use the net
proceeds to reduce its indebtedness or for temporary investments. NYCB expects
that it will, on a recurrent basis, engage in additional financings as the need
arises to finance its corporate strategies, to fund its subsidiaries, to
finance acquisitions or otherwise.
REGULATION AND SUPERVISION
Our principal subsidiary, New York Community Bank, is a New York
State-chartered savings bank and is subject to regulation and supervision by
the NYSBD, its chartering agency, and by the FDIC. As the holding company for
New York Community Bank, NYCB is a bank holding company subject to regulation
and supervision by the FRB.
Because we are a holding company, our rights and the rights of our
creditors, including the holders of the securities we are offering under this
prospectus, to participate in the assets of any of our subsidiaries upon the
subsidiary's liquidation or reorganization will be subject to the prior claims
of the subsidiary's creditors, except to the extent that we may ourselves be a
creditor with recognized claims against the subsidiary.
In addition, dividends, loans and advances from New York Community Bank are
restricted by federal and state statutes and regulations. Under applicable
banking statutes, at March 31, 2002, the Bank could have declared additional
dividends of approximately $195.1 million without further regulatory approval.
The FDIC, the FRB and the NYSBD also have the authority to limit further the
Bank's payment of dividends based on other factors, such as the maintenance of
adequate capital for such subsidiary bank.
In addition, there are various statutory and regulatory limitations on the
extent to which New York Community Bank can finance or otherwise transfer funds
to us or to our nonbanking subsidiaries, whether in the form of loans,
extensions of credit, investments or asset purchases. These general extensions
of credit by New York Community Bank to us or a nonbanking subsidiary are
limited in amount to 10% of its capital and surplus and, with respect to us and
all such nonbanking subsidiaries, to an aggregate of 20% of its capital and
surplus. Furthermore, loans and extensions of credit are required to be secured
in specified amounts and are required to be on terms and conditions consistent
with safe and sound banking practices.
9
For a discussion of the material elements of the regulatory framework
applicable to bank holding companies and their subsidiaries, and specific
information relevant to us, you should refer to our Annual Report on Form 10-K
for the year ended December 31, 2001 and any other subsequent reports filed by
us with the SEC, which are incorporated by reference in this prospectus. This
regulatory framework is intended primarily for the protection of depositors and
the deposit insurance funds that insure deposits of banks, rather than for the
protection of security holders. A change in the statutes, regulations or
regulatory policies applicable to us or our subsidiaries may have a material
effect on our business.
Changes to the laws and regulations can affect the operating environment of
bank holding companies and their subsidiaries in substantial and unpredictable
ways. We cannot accurately predict whether those changes in laws and
regulations will occur, and, if those changes occur, the ultimate effect they
would have upon our or our subsidiaries' financial condition or results of
operations.
DESCRIPTION OF UNITS
We may issue units comprised of a warrant to purchase common stock and a
preferred security. The warrants and preferred securities that comprise the
units are further described in "Description of Warrants" and "Description of
the Preferred Securities." Units will be issued under a unit agreement with a
unit agent designated in the appropriate prospectus supplement. The following
summary of the provisions of the unit agreement is not complete and is subject
to, and is qualified in its entirety by reference to, all the provisions of the
unit agreement. The unit agreement will be filed as an exhibit to or
incorporated by reference in the registration statement. We urge you to read
the unit agreement and the form of the unit, and the warrant agreement
(including the definitions of terms) because they, and not this description,
define the rights of holders of the units.
If units are offered, the appropriate prospectus supplement will describe
the terms of the units, including the following:
. all terms of the units and of the warrants and preferred securities
comprising the units, including whether and under what circumstances the
securities comprising the units may or may not be traded separately,
distributions to which unitholders will be entitled and circumstances
under which distributions will be paid;
. effects of a change in control of NYCB on the unitholders;
. a description of the terms of any agreement to be entered into between us
and a bank or trust company as unit agent governing the units; and
. a description of the provisions for the payment, settlement, transfer or
exchange of the units.
We and the unit agent may amend the terms of the unit agreement without the
consent of the unitholders for the purpose of curing any ambiguity or
correcting or supplementing any inconsistent provision therein or in any other
manner we deem necessary or desirable and which will not adversely affect the
interests of the affected holders. In addition, the unit agreement will contain
provisions permitting us and the unit agent, with the consent of the holders of
a majority of the outstanding units to modify the rights of the unitholders and
the terms of the unit agreement, except that no modification may, without the
consent of the holder of each outstanding unit affected thereby:
. materially adversely affect the holders' rights under any unit; or
. reduce the aforesaid percentage of outstanding units the consent of
holders of which is required for the modification or amendment of the
provisions of the unit agreement.
10
DESCRIPTION OF WARRANTS
We may issue units comprised of a warrant and a preferred security. The
warrant to be issued in connection with the units will be convertible into
shares of NYCB common stock. The warrant and the related preferred security may
be separated and traded separately from each other. Warrants will be issued
under a warrant agreement with a warrant agent designated in the appropriate
prospectus supplement. The following summary of the provisions of the warrant
agreement and form of warrant is not complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the warrant
agreement and the form of warrant. The warrant agreement and the form of
warrant will be filed as exhibits to or incorporated by reference in the
registration statement. We urge you to read the warrant agreement, including
the form of the warrant (including the definitions of terms) because they, and
not this description, define the rights of holders of the warrants (including
as a component of the units).
If units are offered, the prospectus supplement relating to the units will
describe the terms of the warrants offered in connection with the units and the
warrant agreement relating to the warrant, including the following:
. the offering price;
. the number of shares of common stock purchasable upon exercise of the
warrant and the price at which such number of shares of common stock may
be purchased upon such exercise;
. if applicable, the designation and terms of the series of common stock
with which such warrants are being offered and the number of such
warrants being offered with each share of common stock;
. the dates on which the right to exercise such warrants shall commence and
expire;
. any applicable anti-dilution provisions;
. any applicable redemption or call provisions;
. the circumstances under which the warrant exercise price may be adjusted;
. the terms of the preferred security with which the warrant is issued;
. the extent to which the warrant and the related preferred security will
be separately transferable;
. if applicable, a discussion of certain Federal income tax consequences;
. whether the warrant or related preferred security will be listed on any
securities exchange;
. the warrant agent; and
. any other terms of such warrants.
Warrants will be offered and exercisable for U.S. dollars only and will be
in registered form only.
Exercise of Warrants
Each warrant will entitle the holder thereof to purchase such shares of
common stock at the exercise price set forth in the prospectus supplement
relating to the 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,
unexercised warrants will become void.
Warrants may be exercised by delivering to the warrant agent the warrant
certificate and payment as provided in the applicable prospectus supplement of
the amount required to purchase such shares of common stock. The date on which
such warrant certificate and payment are received by the warrant agent shall be
the date on which the warrant is exercised and common stock issued. 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.
11
Modification
We and the warrant agent may amend the terms of any warrant agreement and
the warrants without the consent of the holders for the purpose of curing any
ambiguity or correcting any inconsistent provision therein or in any other
manner we deem necessary or desirable and which will not adversely affect the
interests of the holders in any respect. In addition, we may amend the warrant
agreement and the terms of the warrants with the consent of the owners of a
majority of the outstanding unexercised warrants affected. However, any
modification to the warrants cannot change the exercise price, reduce the
amounts receivable upon exercise, cancellation or expiration, shorten the time
period during which the warrants may be exercised or otherwise materially and
adversely affect the rights of the owners of the warrants or reduce the
percentage of outstanding warrants required to modify or amend the warrant
agreement or the terms of the warrants, without the consent of the affected
owners.
Enforceability of Rights of Warrantholders; Governing Law
The warrant agent will act solely as our agent and will not assume any
obligation or relationship of agency or trust with the holders of the warrants.
Any record holder or beneficial owner of a warrant may, without anyone else's
consent, enforce by appropriate legal action, on its own behalf, its right to
exercise the warrant in the manner provided therein or in the warrant
agreement. A warrantholder will not be entitled to any of the rights of a
holder of the common stock or other securities purchasable upon the exercise of
the warrant before exercising the warrant.
Unsecured Obligations
The warrants are our unsecured contractual obligations and will rank equally
with all of our other unsecured contractual obligations and our unsecured and
unsubordinated debt. Since most of our assets are owned by our subsidiaries,
our rights and the rights of our creditors, including warrantholders, to
participate in the distribution or recapitalization will be subject to the
prior claim of that subsidiary's creditors.
DESCRIPTION OF COMMON STOCK
Company
NYCB, which is incorporated under the General Corporation Law of the State
of Delaware, is authorized to issue 150,000,000 shares of its common stock,
$0.01 par value, of which 102,182,204 shares were issued and outstanding as of
March 31, 2002. NYCB's board of directors may at any time, without additional
approval of the holders of common stock, issue additional authorized but
previously unissued shares of common stock.
Voting Rights
The holders of common stock are entitled to one vote per share on all
matters presented to shareholders. Holders of common stock are not entitled to
cumulate their votes in the election of directors.
No Preemptive or Conversion Rights
The holders of common stock do not have preemptive rights to subscribe for a
proportionate share of any additional securities issued by NYCB before such
securities are offered to others. The absence of preemptive rights increases
NYCB's flexibility to issue additional shares of common stock in connection
with NYCB's acquisitions, employee benefit plans and for other purposes,
without affording the holders of common stock a right to subscribe for their
proportionate share of those additional securities. The holders of common stock
are not entitled to any redemption privileges, sinking fund privileges or
conversion rights.
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Dividends
Holders of common stock are entitled to receive dividends ratably when, as
and if declared by NYCB's board of directors from assets legally available
therefor, after payment of all dividends on preferred stock, if any is
outstanding. Under Delaware Law, NYCB may pay dividends out of surplus or net
profits for the fiscal year in which declared and/or for the preceding fiscal
year, even if its surplus accounts are in a deficit position. Dividends paid by
its subsidiary Bank are the primary source of funds available to NYCB for
payment of dividends to its stockholders and for other needs. NYCB's board of
directors intends to maintain its present policy of paying regular quarterly
cash dividends. The declaration and amount of future dividends will depend on
circumstances existing at the time, including NYCB's earnings, financial
condition and capital requirements, as well as regulatory limitations and such
other factors as NYCB's board of directors deems relevant. See "Regulation and
Supervision."
NYCB's principal assets and sources of income consist of investments in its
operating subsidiaries, which are separate and distinct legal entities.
Liquidation
Upon liquidation, dissolution or the winding up of the affairs of NYCB,
holders of common stock are entitled to receive their pro rata portion of the
remaining assets of NYCB after the holders of NYCB's preferred stock have been
paid in full any sums to which they may be entitled.
Certain Charter and Bylaw Provisions Affecting Stock
NYCB's Certificate of Incorporation and Bylaws contain several provisions
that may make NYCB a less attractive target for an acquisition of control by
anyone who does not have the support of NYCB's board of directors. Such
provisions include, among other things, the requirement of a supermajority vote
of stockholders or directors to approve certain business combinations and other
corporate actions, a minimum price provision, several special procedural rules,
a staggered board of directors, and the limitation that stockholders actions
without a meeting may only be taken by unanimous written stockholder consent.
The foregoing is qualified in its entirely by reference to NYCB's Certificate
of Incorporation, as amended, and Bylaws both of which are on file with the SEC.
Restrictions on Ownership
The Bank Holding Company Act of 1956, "the BHC Act," generally would
prohibit any company that is not engaged in banking activities and activities
that are permissible for a bank holding company or a financial holding company
from acquiring control of NYCB. "Control" is generally defined as ownership of
25% or more of the voting stock or other exercise of a controlling influence.
In addition, any existing bank holding company would need the prior approval of
the FRB before acquiring 5% or more of the voting stock of NYCB. In addition,
the Change in Bank Control Act of 1978, as amended, prohibits a person or group
of persons from acquiring control of a bank holding company unless the FRB has
been notified and has not objected to the transaction. Under a rebuttable
presumption established by the FRB, the acquisition of 10% or more of a class
of voting stock of a bank holding company with a class of securities registered
under Section 12 of the Exchange Act, such as NYCB, would, under the
circumstances set forth in the presumption, constitute acquisition of control
of the bank holding company.
NYCB Stockholder Protection Rights Agreement
The following is a description of the rights issued under the NYCB
stockholder protection rights agreement, as amended. This description is
subject to, and is qualified in its entirety by reference to, the text of the
rights agreement. A description of the rights agreement specifying the terms of
the rights has been included in reports filed by NYCB under the Securities
Exchange Act. See "Where You Can Find More Information" on page 2.
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Each issued share of NYCB common stock has attached to it one right issued
pursuant to a Stockholder Protection Rights Agreement, dated as of January 16,
1996 and amended on March 27, 2001, between NYCB and Mellon Investor Services
L.L.C., as rights agent. Each right entitles its holder to purchase one
one-hundredth of a share of participating preferred stock of NYCB at an
exercise price of $120, subject to adjustment, after the separation time, which
means after the close of business on the earlier of
the tenth business day after commencement of a tender or exchange offer that,
if consummated, would result in the offeror becoming an "acquiring person,"
which is defined in the rights agreement as a person beneficially owning 10% or
more of the outstanding shares of NYCB common stock; and
the tenth business day after the first date of public announcement that a
person has become an acquiring person, which is also called the flip-in date.
The rights are not exercisable until the business day following the
separation time. The rights expire on the earlier of:
. the close of business on January 16, 2006;
. redemption, as described below;
. an exchange for common stock, as described below; or
. the merger of NYCB into another corporation pursuant to an agreement
entered into prior to a flip-in date.
The NYCB board of directors may, at any time prior to the occurrence of a
flip-in date, redeem all the rights at a price of $0.01 per right.
If a flip-in date occurs, each right, other than those held by the acquiring
person or any affiliate or associate of the acquiring person or by any
transferees of any of these persons, will constitute the right to purchase
shares of NYCB common stock having an aggregate market price equal to $240 in
cash, subject to adjustment. In addition, the NYCB board of directors may, at
any time between a flip-in date and the time that an acquiring person becomes
the beneficial owner of more than 50% of the outstanding shares of NYCB common
stock, elect to exchange the rights for shares of NYCB common stock at an
exchange ratio of one share of NYCB common stock per right.
Under the rights agreement, after a flip-in date occurs, NYCB may not
consolidate or merge, or engage in other similar transactions, with an
acquiring person without entering into a supplemental agreement with the
acquiring person providing that, upon consummation or occurrence of the
transaction, each right shall thereafter constitute the right to purchase
common stock of the acquiring person having an aggregate market price equal to
$240 in cash, subject to adjustment.
These rights may not prevent a takeover of NYCB. The rights, however, may
have antitakeover effects. The rights may cause substantial dilution to a
person or group that acquires 10% or more of the outstanding NYCB common stock
unless the rights are first redeemed by the NYCB board of directors.
On March 27, 2001, NYCB and Mellon amended the rights agreement to
substantially prevent the merger agreement with Richmond County, the stock
option agreements, and the merger with Richmond County from triggering the
provisions of the rights agreement.
DESCRIPTION OF THE PREFERRED SECURITIES
The preferred securities, which form a part of the units and which, under
certain circumstances, will trade separately from the warrants also forming a
part of the units, will be issued pursuant to the declaration (as defined
below). The trust may issue only one series of preferred securities having
terms described in the accompanying prospectus supplement. The series of
preferred securities will be issued pursuant to the terms of
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an amended and restated declaration of trust, a "declaration." The declaration
will be qualified as an indenture under the Trust Indenture Act. Wilmington
Trust Company will act as trustee under the declaration for purposes of
compliance with the provisions of the Trust Indenture Act.
The preferred securities will have those terms, including distribution,
redemption, voting, liquidation rights and such other preferred, deferred or
other special rights or such restrictions as will be set forth in the
declaration or made part of the declaration by the Trust Indenture Act. The
terms of the preferred securities will mirror the terms of the junior
subordinated debentures of NYCB in which the trust invests the proceeds from
the sale of preferred securities. The terms of the preferred securities and the
junior subordinated debentures are described in the accompanying prospectus
supplement and may include:
. the distinctive designation of the preferred securities;
. the number of preferred securities issuable by the trust;
. the right of the unitholders to have the preferred securities in certain
circumstances remarketed;
. the annual distribution rate, or method of determining that rate
(including the adjustment that would occur upon remarketing), for
preferred securities and the date or dates upon which those
distributions will be payable;
. whether distributions on preferred securities will be cumulative, and,
if so, the date or dates or method of determining the date or dates from
which distributions on preferred securities will be cumulative;
. when a remarketing event will occur;
. when a failed remarketing has occurred;
. the amount or amounts which will be paid out of the assets of the trust
to the holders of preferred securities upon voluntary or involuntary
dissolution, winding-up or termination of that trust;
. the obligation, if any, of the trust to purchase (including when the
unit holder exercises its warrants or when a change of control occurs)
or redeem preferred securities issued by that trust and the price or
prices at which, the period or periods within which, and the terms and
conditions upon which, preferred securities issued by that trust will be
purchased or redeemed, in whole or in part, pursuant to that obligation;
. the voting rights, if any, of holders of preferred securities in
addition to those required by law or described in this prospectus
supplement, including the number of votes per preferred security and any
requirement for the approval by the holders of preferred securities, as
a condition to specified action or amendments to the declaration of the
trust;
. the terms and conditions, if any, upon which NYCB can redeem the junior
subordinated debentures prior to the first optional redemption date, if
any;
. the terms and conditions, if any, upon which the junior subordinated
debentures owned by the trust may be distributed to holders of preferred
securities;
. if applicable, any securities exchange upon which the preferred
securities will be listed; and
. any other relevant rights, preferences, privileges, limitations or
restrictions of preferred securities not inconsistent with the
declaration or with applicable law.
All preferred securities will be guaranteed by NYCB to the extent set forth
below under "Description of the Preferred Securities Guarantees."
Certain United States federal income tax considerations applicable to any
offering of preferred securities will be described in the prospectus supplement
relating to the offering.
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Deferral of Distributions of Preferred Securities
So long as NYCB is not in default of interest on the junior subordinated
debentures, and so long as a failed remarketing has not occurred. NYCB may, on
one or more occasions, defer payments of interest on the junior subordinated
debentures as described under "Description of Junior Subordinated
Debentures--Deferral of Distributions of Purchased Securities." In the event
NYCB elects to defer interest payments on any series of its junior subordinated
debentures, the trust will also defer distributions on its preferred
securities. During this deferral period, distributions will continue to accrue
at the rate specified in the prospectus supplement. If NYCB elects to defer
interest payments on the junior subordinated debentures, it will be restricted
from making payments on its capital stock and other capital instruments as
described in the prospectus supplement.
Voting Rights
Except as described in this prospectus, under the Delaware Statutory Trust
Act, the Trust Indenture Act, under "Description of the Preferred Securities
Guarantee--Modification of the Preferred Securities Guarantees; Assignment" in
this prospectus, and under any prospectus supplement relating to the issuance
of a series of preferred securities, and as otherwise required by law and the
declarations, the holders of the preferred securities will have no voting
rights.
The holders of a majority in aggregate liquidation amount of the preferred
securities have the right to direct any proceeding for any remedy available to
the property trustee so long as the property trustee receives the tax opinion
discussed below. The holders also have the right to direct the property trustee
under the declaration to:
(1) direct any proceeding for any remedy available to the trustee of the
indenture under which the junior subordinated debentures will be issued
and purchased by the trust, or exercising any trust or power conferred
on the debenture trustee;
(2) waive any past indenture event of default that is waivable under the
indenture; and
(3) consent to any amendment, modification or termination where that consent
is required.
If there is an event of default on the preferred securities, and that
default is a result of a payment default under the junior subordinated
debentures, the holders of the preferred securities may also sue NYCB directly,
a "direct action," to enforce payment of the principal of, or interest on, the
junior subordinated debentures having a principal amount equal to the aggregate
liquidation amount of the preferred securities of the holder on or after the
due date specified in the junior subordinated debentures.
Where a consent or action under the indenture would require the consent or
act of holders of more than a majority in principal amount of the junior
subordinated debentures, called a "super majority," then only a super majority
may direct the property trustee to give that consent or take that action. Where
a consent or action under the indenture would require the consent or act of
individual holders of the junior subordinated debentures, then only those
individual holders may direct the property trustee to give that consent or take
that action. If the property trustee fails to enforce its rights under the
junior subordinated debentures, to the fullest extend permitted by law, any
record holder of preferred securities may directly sue NYCB to enforce the
property trustee' rights under the junior subordinated debentures. The record
holder does not have to sue the property trustee or any other person or entity
before enforcing his or her rights.
The property trustee is required to notify all holders of the preferred
securities of any notice of default received from the indenture trustee. The
notice is required to state that the event of default also constitutes a
declaration event of default. Except for directing the time, method and place
of conducting a proceeding for a remedy available to the property trustee, the
property trustee will not take any of the actions described in clauses (1), (2)
or (3) above unless the property trustee receives an opinion of a nationally
recognized independent tax counsel stating that, as a result of that action,
the trust will not fail to be classified as a grantor trust for United States
federal income tax purposes.
16
If the consent of the property trustee is required under the indenture for
any amendment, modification or termination of the indenture, the property
trustee is required to request the written direction of the holders of the
trust securities. In that case, the property trustee will vote as directed by a
majority in liquidation amount of the trust securities voting together as a
single class. Where any amendment, modification or termination under the
indenture would require the consent of a super majority or an individual
holder, however, the property trustee may only give that consent at the
direction of the holders of the same super majority of the holders of the trust
securities or that individual holder, as applicable. The property trustee is
not required to take any such action in accordance with the directions of the
holders of the trust securities unless the property trustee has obtained a tax
opinion to the effect described above.
A waiver of an indenture event of default by the property trustee at the
direction of the holders of the preferred securities will constitute a waiver
of the corresponding declaration event of default.
Holders of the preferred securities may give any required approval or
direction at a separate meeting of holders of preferred securities convened for
that purpose, at a meeting of all of the holders of trust securities or by
written consent. The administrative trustee will mail to each holder of record
of preferred securities a notice of any meeting at which those holders are
entitled to vote, or of any matter upon which action by written consent of
those holders is to be taken. Each such notice will include a statement setting
forth the following information:
. the date of the meeting or the date by which the action is to be taken;
. a description of any resolution proposed for adoption at the meeting on
which those holders are entitled to vote or of the matter upon which
written consent is sought; and
. instructions for the delivery of proxies or consents.
No vote or consent of the holders of preferred securities will be required
for the trust to redeem and cancel preferred securities or distribute junior
subordinated debentures in accordance with the declaration.
Despite the fact that holders of preferred securities are entitled to vote
or consent under the circumstances described above, any of the preferred
securities that are owned at the time by NYCB or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, NYCB, will not be entitled to vote or consent. Instead, these
preferred securities will be treated as if they were not outstanding.
Holders of the preferred securities generally will have no rights to appoint
or remove the NYCB capital trustees. Instead, the trustees may be appointed,
removed or replaced solely by NYCB as the indirect or direct holder of all of
the common securities.
Common Securities
In connection with the issuance of preferred securities, the trust will
issue one series of common securities having the terms (including
distributions, redemption, voting, liquidation rights or such restrictions) as
will be set forth in the prospectus supplement. Except for voting rights, the
terms of the common securities will be substantially identical to the terms of
the preferred securities. The common securities will rank equally, and payments
will be made on the common securities pro rata, with the preferred securities,
except that, upon an event of default, the rights of the holders of the 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 preferred securities. Unless an event of default has occurred
and is continuing, the common securities carry the right to vote and to
appoint, remove or replace any of the NYCB capital trustees. All of the common
securities of the trust will be directly or indirectly owned by NYCB.
17
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the preferred
securities guarantee which will be executed and delivered by NYCB for the
benefit of the holders from time to time of preferred securities. The preferred
securities guarantee will be qualified as an indenture under the Trust
Indenture Act. Wilmington Trust Company will act as the guarantee trustee for
purposes of the Trust Indenture Act. The terms of the preferred securities
guarantee will be those set forth in the preferred securities guarantee and
those made part of the preferred securities guarantee by the Trust Indenture
Act. The summary of the material terms of the preferred securities guarantee is
not intended to be complete and is qualified in all respects by the provisions
of the form of preferred securities guarantee which is filed as an exhibit to
the registration statement which contains this prospectus, and the Trust
Indenture Act. The preferred securities guarantee will be held by the guarantee
trustee for the benefit of the holders of the preferred securities of the trust.
General
NYCB will irrevocably and unconditionally agree, to the extent set forth in
the preferred securities guarantee, to pay in full to the holders of the
preferred securities, the guarantee payments, as defined below, except to the
extent paid by the trust, as and when due, regardless of any defense, right of
set-off or counterclaim which the trust may have or assert, other than the
defense of payment. The following payments, which are referred to as "guarantee
payments," will be guaranteed by NYCB, without duplication:
. any accrued and unpaid distributions that are required to be paid on the
preferred securities, to the extent the trust has funds available for
distributions;
. the redemption price, plus all accrued and unpaid distributions, to the
extent the trust has funds available for redemptions, relating to any
preferred securities called for redemption by the trust; and
. upon a voluntary or involuntary dissolution, winding-up or termination
of the trust, other than in connection with the distribution of junior
subordinated debentures to the holders of preferred securities or the
redemption of all of the preferred securities, the lesser of:
(1) the aggregate accreted value of the preferred securities and all
accrued and unpaid distributions on the preferred securities to the
date of payment; or
(2) the amount of assets of the trust remaining for distribution to
holders of the preferred securities in liquidation of the trust.
. NYCB's obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by NYCB to the holders of preferred
securities or by causing the trust to pay those amounts to those holders.
. The preferred securities guarantee will not apply to any payment of
distributions, except to the extent the trust will have funds available
for those payments. If NYCB does not make interest payments on the
junior subordinated debentures held by the trust for any period, the
trust will not pay distributions on the preferred securities for the
corresponding period and will not have funds available for those
payments.
. The preferred securities guarantee, when taken together with NYCB's
obligations under the junior subordinated debenture, the indenture and
the declaration, including its obligations to pay costs, expenses, debts
and liabilities of the trust, other than those relating to trust
securities, will provide a full and unconditional guarantee on a
subordinated basis by NYCB of payments due on the preferred securities.
. NYCB has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the trust with respect to the common
securities to the same extent as the preferred securities guarantee,
except that upon an event of default under the indenture, holders of
preferred securities will have priority over holders of common
securities with respect to distributions and payments on liquidation,
redemption or otherwise.
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Certain Covenants of NYCB
NYCB will agree that, so long as any preferred securities of the trust
remain outstanding, if any event occurs that would constitute an event of
default under the preferred securities guarantee or the indenture, or if NYCB
has exercised its option to defer interest payments on the junior subordinated
debentures by extending the interest payment period and that period or
extension of that period is continuing, then:
. NYCB will not declare or pay any dividend on, make any distributions
relating to, or redeem, purchase, acquire or make a liquidation payment
relating to, any of its capital stock or make any guarantee payment with
respect thereto and will not make any payment of interest, principal or
premium, if any, on, or repay, repurchase or redeem any debt securities
issued by NYCB which rank equally with or junior to the junior
subordinated debentures other than:
. repurchases, redemptions or other acquisitions of shares of capital
stock of NYCB in connection with any employee benefit plans or any other
contractual obligation of NYCB;
. as a result of an exchange or conversion of any class or series of
NYCB's capital stock for any other class or series of NYCB's capital
stock; or
. the purchase of fractional interests in shares of NYCB's capital stock
pursuant to the conversion or exchange provisions of that NYCB capital
stock or the security being converted or exchanged.
Modification of the Preferred Securities Guarantee; Assignment
The preferred securities guarantee may be amended only with the prior
approval of the holders of not less than a majority in aggregate liquidation
amount of the outstanding preferred securities. No vote will be required,
however, for any changes that do not adversely affect the rights of holders of
preferred securities in any material respect. All guarantees and agreements
contained in the preferred securities guarantee will bind the successors,
assignees, receivers, trustees and representatives of NYCB and will be for the
benefit of the holders of the preferred securities then outstanding.
Termination
The preferred securities guarantee will terminate upon:
. full payment of the redemption price of all preferred securities;
. distribution of the junior subordinated debentures to the holders of the
trust securities; or
. full payment of the amount payable in accordance with the declaration
upon liquidation of the trust.
The preferred securities guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder or preferred
securities must restore payment of any sums paid under the preferred securities
or the preferred securities guarantee.
Events of Default
An event of default under the preferred securities guarantee will occur upon
the failure of NYCB to perform any of its payment or other obligations under
the preferred securities guarantee.
The holders of a majority in liquidation amount of the preferred securities
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the guarantee trustee in respect of the
preferred securities guarantee or to direct the exercise of any trust or power
conferred upon the guarantee trustee under the preferred securities guarantee.
Any holder of preferred securities may institute a legal proceeding directly
against NYCB to enforce the guarantee trustee's rights and the obligations of
NYCB under the preferred securities guarantee, without first instituting a
legal proceeding against the trust, the guarantee trustee or any other person
or entity.
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Status of the Preferred Securities Guarantee
Unless otherwise specified in the prospectus supplement, the preferred
securities guarantee will constitute an unsecured obligation of NYCB and will
rank:
.. subordinate and junior in right of payment to all other liabilities of NYCB,
except those made equal or subordinate by their terms;
.. equally with the most senior preferred or preference stock now or hereafter
issued by NYCB and with any guarantee now or hereafter entered into by NYCB
in respect of any preferred or preference stock of any affiliate of NYCB; and
.. senior to NYCB common stock.
The terms of the preferred securities provide that each holder of preferred
securities by acceptance of those securities agrees to the subordination
provisions and other terms of the preferred securities guarantee.
The preferred securities guarantee will constitute a guarantee of payment
and not of collection. This means that the guaranteed party may sue the
guarantor to enforce its rights under the guarantee without suing any other
person or entity.
Information Concerning the Guarantee Trustee
Prior to the occurrence of a default relating to the preferred securities
guarantee, the guarantee trustee undertakes to perform only those duties as are
specifically set forth in the preferred securities guarantee. After default,
the guarantee trustee will exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Provided
that the foregoing requirements have been met, the guarantee trustee is under
no obligation to exercise any of the powers vested in it by the preferred
securities guarantee at the request of any holder of preferred securities,
unless offered indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred thereby.
Governing Law
The preferred securities guarantees will be governed by, and construed in
accordance with, the laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
NYCB may issue junior subordinated debentures from time to time in one or
more series under an indenture, between NYCB and Wilmington Trust Company, as
trustee, the "debenture trustee," as supplemented by a supplemental indenture
or a resolution of NYCB's board of directors or a special committee appointed
by the board of directors. The indenture, as supplemented by the supplemental
indenture, is called the "indenture." The terms of the junior subordinated
debentures will include those stated in the indenture and those made part of
the indenture by reference to the Trust Indenture Act.
Set forth below is a description of the general terms of the junior
subordinated debentures in which the trust will invest the proceeds from the
issuance and sale of the trust securities. The particular terms of the junior
subordinated debentures will be described in the prospectus supplement relating
to the preferred securities being offered. The following description is not
intended to be complete and is qualified by the indenture, the form of which is
filed as an exhibit to the registration statement which contains this
prospectus, and by the Trust Indenture Act.
General
The junior subordinated debentures will be unsecured debt of NYCB. The
junior subordinated debentures will be fully subordinated as described in the
accompanying prospectus supplement under "Description of the Junior
Subordinated Debentures--Subordination." The indenture does not limit the
aggregate principal amount of junior subordinated debentures which may be
issued and provides that the junior subordinated debentures may be issued from
time to time in one or more series.
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The prospectus supplement relating to the particular junior subordinated
debentures being offered will describe the terms of those securities, which may
include:
. the designation of the junior subordinated debentures;
. the aggregate principal amount of the junior subordinated debentures;
. the percentage of their principal amount at which the junior
subordinated debentures will be issued;
. the date or dates on which the junior subordinated debentures will
mature and the right, if any, to shorten or extend the maturity date or
dates;
. the rate or rates, if any, per annum, at which the junior subordinated
debentures will bear interest, or the method of determination of the
interest rate or rates (including the adjustment that would occur upon
remarketing of the preferred securities);
. the date or dates from which interest will accrue and the interest
payment and record dates;
. any right to extend the interest payment periods and the duration of
that extension;
. any provisions for redemption or purchase of the junior-subordinated
debentures (including when, as described in the declaration, the unit
holder exercises its warrants or when a change of control occurs); and
. any other specific terms of the junior subordinated debentures.
If the junior subordinated debentures will be denominated in a currency or
currency unit other than United States dollars, the prospectus supplement will
also specify the denomination in which the junior subordinated debentures will
be issued and the coin or currency in which the principal, premium, if any, and
interest, if any, on the junior subordinated debentures will be payable, which
may be United States dollars based upon the exchange rate for that other
currency or currency unit existing on or about the time a payment is due.
Additional Interest
If, at any time, the trust is required to pay any taxes, duties, assessments
or governmental charges of whatever nature, other than withholding taxes,
imposed by the United States, or any other taxing authority, then NYCB will be
required to pay additional interest on the junior subordinated debentures. The
amount of any additional interest will be an amount sufficient so that the net
amounts received and retained by the trust after paying any such taxes, duties,
assessments or other governmental charges will be not less than the amounts
that the trust would have received had no such taxes, duties, assessments or
other governmental charges been imposed. This means that the trust will be in
the same position it would have been in if it did not have to pay those taxes,
duties, assessments or other charges.
Form, Exchange, Registration, Transfer and Payment
Unless otherwise indicated in the applicable prospectus supplement, NYCB
will issue the junior subordinated debentures in registered form only, without
coupons and in denominations of $1,000 and multiples of $1,000. No service
charge will be made for any transfer or exchange of the junior subordinated
debentures. However, NYCB or the debenture trustee may require a holder to pay
an amount sufficient to cover any tax or other governmental charge payable in
connection with a transfer or exchange.
NYCB will pay or deliver principal and any premium and interest in the
manner, at the places and subject to the restrictions set forth in the
indenture and the prospectus supplement. However, at NYCB's option, it may pay
any interest by check mailed to the registered holders of junior subordinated
debentures at their registered addresses.
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Global Junior Subordinated Debentures
The indenture provides that NYCB may issue junior subordinated debentures in
global form. The applicable prospectus supplement will describe any
circumstances under which beneficial owners of interests in any global junior
subordinated debentures may exchange their interest for junior subordinated
debentures of that series and of like tenor and principal amount in any
authorized form and denomination.
Subordination
The junior subordinated debentures will be subordinated and junior in right
of payment to other indebtedness of NYCB as described in the prospectus
supplement.
Certain Covenants of NYCB
If junior subordinated debentures are issued to a trust or a trustee of a
trust in connection with the issuance of trust securities and:
. an event of default has occurred and is continuing;
. NYCB has given notice of its election to defer payments of interest on
the junior subordinated debentures by extending the interest payment
period and that period, or any extension of that period, is continuing;
then
. NYCB will not declare or pay any dividend on, make any distributions
relating to, or redeem, purchase, acquire or make a liquidation payment
relating to, any of its capital stock or make any payment with respect
to any guarantee by NYCB of the debt securities of any subsidiary of
NYCB if such guarantee ranks on a parity with or junior in interest to
the junior subordinated debentures and will not make any payment of
interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by NYCB which rank equally with or
junior to the junior subordinated debentures other than:
(1) repurchases, or acquisitions of shares of capital stock of NYCB in
connection with any employee benefit plans or any other contractual
obligation of NYCB; or
(2) dividends or distributions in capital stock (or rights to acquire
capital stock) of NYCB; or
(3) payments under the preferred securities guarantee;
(4) any declarations of a dividend in connection with the implementation of
a shareholders' rights plan, or the issuances of stock under any such
plan in the future, or redemptions or repurchases of any rights pursuant
to a rights agreement; and
(5) repurchases of capital stock of NYCB in connection with the satisfaction
by NYCB of its obligations pursuant to any acquisition of business made
by NYCB (which repurchases are made in connection with the satisfaction
of indemnification obligations of the seller of such businesses).
So long as the junior subordinated debentures remain outstanding, NYCB will
covenant to:
. directly or indirectly maintain 100% ownership of the common securities
of the trust, unless a permitted successor of NYCB succeeds to its
ownership of the common securities;
. use its reasonable efforts to cause the trust to:
(1) remain a statutory trust, except in connection with the distribution of
junior subordinated debentures to the holders of trust securities in
liquidation of the trust, the redemption of all of the trust securities
of the trust, or mergers, consolidations or amalgamations, each as
permitted by the declaration; and
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(2) otherwise continue to be classified as a grantor trust for United States
federal income tax purposes; and
. use its reasonable efforts to cause each holder of trust securities to
be treated as owning an undivided beneficial interest in the junior
subordinated debentures.
Consolidation, Mergers and Sales of Assets
Unless otherwise indicated in the prospectus supplement, NYCB may
consolidate or merge with or into any other corporation, and may sell, lease or
convey all or substantially all of its assets to any corporation, provided that:
. the resulting corporation, if other than NYCB, is a corporation
organized and existing under the laws of the United States of America or
any U.S. state and assumes all of our obligations to:
(1) pay or deliver the principal or maturity consideration of, and any
premium, or interest on, the junior subordinated debentures; and
(2) perform and observe all of our other obligations under the indenture, and
. neither NYCB nor any successor corporation, as the case may be, is,
immediately after any consolidation or merger, in default under the
indenture.
The indenture does not provide for any right of acceleration in the event of
a consolidation, merger, sale of all or substantially all of the assets,
recapitalization or change in our stock ownership. In addition, the indenture
does not contain any provision which would protect the holders of the junior
subordinated debentures against a sudden and dramatic decline in credit quality
resulting from takeovers, recapitalizations or similar restructurings.
Events of Default, Waiver and Notice
The indenture provides that the following are events of default relating to
the junior subordinated debentures:
. default in the payment of the principal of, or premium, if any, on, any
junior subordinated debenture when due;
. default in the payment of any interest on any junior subordinated
debenture when due, which continues for 30 days; provided, however, a
valid extension of an interest payment by NYCB will not constitute an
event of default;
. default in the performance of any other covenant or obligation in
respect of the junior subordinated debenture, which continues for 90
days after written notice; and
. specified events of bankruptcy, insolvency or reorganization of NYCB or,
with certain exceptions, the trust.
If an indenture event of default occurs and is continuing, the debenture
trustee or the holders of not less than 25% in aggregate principal amount of
the junior subordinated debentures of that series then outstanding may declare
the principal of all junior subordinated debentures of that series to be due
and payable immediately.
The holders of a majority in aggregate outstanding principal amount of that
series of junior subordinated debentures may annul the declaration and waive
the default if the default has been cured and a sum sufficient to pay all
matured installments of interest and principal due other than by acceleration
has been deposited with the debenture trustee. The majority holders may not
waive a payment default on the junior subordinated debentures which has become
due solely by acceleration.
The holders of a majority in principal amount of the junior subordinated
debentures of any series affected may direct the time, method and place of
conducting any proceeding for any remedy available to the debenture trustee
under the indenture or exercising any trust or power conferred on the debenture
trustee with respect to that series, provided that any direction is not in
conflict with any rule of law or the indenture. Subject to the provisions of
the indenture relating to the duties of the trustee, before proceeding to
exercise any right or power under the indenture at the direction of the
holders, the trustee is entitled to receive from those holders reasonable
security or indemnity against the costs, expenses and liabilities which it
might incur in complying with any direction.
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The indenture requires the annual filing by NYCB with the debenture trustee
of a certificate as to the absence of certain defaults under the indenture.
The debenture trustee may withhold notice of any event of default from the
holders of the junior subordinated debentures, except in the payment of
principal, interest or premium, if the debenture trustee considers it in the
interest of those holders to do so.
Distribution of the Junior Subordinated Debentures
Under circumstances discussed more fully in the prospectus supplement
involving the dissolution of the trust, after satisfaction of liabilities to
creditors of the trust, junior subordinated debentures may be distributed to
the holders of the trust securities in liquidation of that trust. See
"Description of the Preferred Securities -- Distribution of the Junior
Subordinated Debentures" in the accompanying prospectus supplement.
Modification of the Indenture
Modifications and amendments to the indenture may be made by NYCB and the
debenture trustee with the consent of the holders of a majority in aggregate
principal amount of the junior subordinated debentures at the time outstanding.
However, no such modification or amendment may, without the consent of the
holder of each junior subordinated debenture affected:
. modify the payment terms of the junior subordinated debentures; or
. reduce the percentage of holders of junior subordinated debentures
necessary to modify or amend the indenture or waive compliance by NYCB
with any covenant or past default.
If the junior subordinated debentures are held by a trust or a trustee of a
trust, the supplemental indenture will not be effective until the holders of
66 2/3% in aggregate stated liquidation amount of trust securities of that
trust have consented to the supplemental indenture. However, if the consent of
the holder of each outstanding junior subordinated debenture is required, the
supplemental indenture will not be effective until each holder of the trust
securities of that trust, has consented to the supplemental indenture.
We and the debenture trustee may also amend and modify the indenture without
the consent of any holder under certain circumstances described in the
indenture.
Defeasance and Discharge
The indenture provides that NYCB, at its option:
(1) will be discharged from all obligations in respect of the junior
subordinated debentures of a series, except for obligations to register
the transfer or exchange of junior subordinated debentures, replace
stolen, lost or mutilated junior subordinated debentures, maintain
paying agencies and hold moneys for payment in trust; or
(2) need not comply with specified restrictive covenants of the indenture;
in each case if NYCB deposits, in trust, money or U.S. government
obligations in an amount sufficient to pay all the principal of, and
interest and premium, if any, on, the junior subordinated debentures
when those payments are due.
To exercise any such option, NYCB is required to deliver an opinion of
counsel that:
. the deposit and related defeasance would not cause the holders of the
junior subordinated debentures of that series to recognize income, gain
or loss for U.S. federal income tax purposes and, in the case of a
discharge pursuant to clause (1) above, the opinion will be accompanied
by a private letter ruling to that effect received by NYCB from the
United States Internal Revenue Service or a revenue ruling pertaining to
a comparable form of transaction to that effect published by the United
States Internal Revenue Service; and
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. if listed on any national securities exchange, the junior subordinated
debentures would not be delisted from that exchange as a result of the
exercise of the defeasance option.
Governing Law
The indenture and the junior subordinated debentures will be governed by,
and construed in accordance with, the laws of the State of New York.
The Debenture Trustee
The occurrence of any default under either of the indenture or the senior or
subordinated indentures between NYCB and the debenture trustee relating to
NYCB's senior and subordinated debt securities, which may also be issued under
this registration statement, could create a conflicting interest for the
debenture trustee under the Trust Indenture Act. If that default has not been
cured or waived within 90 days after the debenture trustee has acquired a
conflicting interest, the debenture trustee would generally be required by the
Trust Indenture Act to eliminate the conflicting interest or resign as trustee
with respect to the debt securities issued under the senior indenture or the
subordinated indenture or with respect to the junior subordinated debentures
issued under the indenture. If the debenture trustee resigns, NYCB is required
to promptly appoint a successor trustee with respect to the affected securities.
The Trust Indenture Act also imposes certain limitations on the right of the
debenture trustee, as a creditor of NYCB, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
cash claim or otherwise. The debenture trustee will be permitted to engage in
other transactions with NYCB, provided that if it acquires a conflicting
interest within the meaning of section 310 of the Trust Indenture Act, it must
generally either eliminate that conflict or resign.
EFFECT OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED
DEBENTURES AND THE PREFERRED SECURITIES GUARANTEES
As set forth in the declaration, the sole purposes of the trust are to issue
the trust securities and to invest the proceeds from that issuance and sale in
the junior subordinated debentures.
As long as payments of interest and other payments are made by NYCB when due
on the junior subordinated debentures, those payments will be sufficient to
cover the distributions and payments due on the trust securities. This is due
to the following factors:
. the aggregate principal amount of junior subordinated debentures will be
equal to the sum of the aggregate stated liquidation amount of the trust
securities;
. the interest rate and the interest and other payment dates on the junior
subordinated debentures will match the distribution rate and
distribution and other payment dates for the trust securities;
. under the indenture, NYCB will pay, and the trust will not be obligated
to pay, directly or indirectly, all costs, expenses, debts and
obligations of the trust, other than those relating to the trust
securities; and
. the declaration further provides that the NYCB trustees may not cause or
permit the trust to engage in any activity that is not consistent with
the purposes of the trust.
Payments of distributions, to the extent there are available funds, and
other payments due on the preferred securities, to the extent there are
available funds, are guaranteed by NYCB to the extent described in this
prospectus. If NYCB does not make interest payments on the junior subordinated
debentures, the trust will not have sufficient funds to pay distributions on
the preferred securities. Each preferred securities guarantee is a subordinated
guarantee in relation to the preferred securities. The preferred securities
guarantee does not apply to any payment or distributions unless the trust has
sufficient funds for the payment of those distributions. See "Description of
the Preferred Securities Guarantees."
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The preferred securities guarantee covers the payment of distributions and
other payments on the preferred securities only if and to the extent that NYCB
has made a payment of interest or principal or other payments on the junior
subordinated debentures. The preferred securities guarantee, when taken
together with NYCB's obligations under the junior subordinated debentures and
the indenture and its obligations under the declaration, will provide a full
and unconditional guarantee of distributions, redemption payments and
liquidation payments on the preferred securities.
If NYCB fails to make interest or other payments on the junior subordinated
debentures when due, taking account of any extension period, the declaration
allows the holders of the preferred securities to direct the property trustee
to enforce its rights under the junior subordinated debentures. If the property
trustee fails to enforce these rights, to the fullest extent permitted by law,
any holder of preferred securities may directly sue NYCB to enforce these
rights without first suing the property trustee or any other person or entity.
See "Description of the Preferred Securities--Book Entry Only Issuance--The
Depository Trust Company" and "--Voting Rights" in the accompanying prospectus
supplement.
A holder of preferred securities may institute a direct action if a
declaration event of default has occurred and is continuing and that event is
attributable to the failure of NYCB to pay interest or principal on the junior
subordinated debentures on the date the interest or principal is otherwise
payable. A direct action may be brought without first (1) directing the
property trustee to enforce the terms of the junior subordinated debentures or
(2) suing NYCB to enforce the property trustee's rights under the junior
subordinated debentures. In connection with that direct action, NYCB will be
subrogated to the rights of the holder of preferred securities under the
declaration to the extent of any payment made by NYCB to that holder of
preferred securities. Consequently, NYCB will be entitled to payment of amounts
that a holder of preferred securities receives in respect of an unpaid
distribution to the extent that the holder receives or has already received
full payment relating to that unpaid distribution from a trust.
NYCB acknowledges that the guarantee trustee will enforce the preferred
securities guarantee on behalf of the holders of the preferred securities. If
NYCB fails to make payments under the preferred securities guarantee, the
preferred securities guarantee allows the holders of the preferred securities
to direct the guarantee trustee to enforce its rights thereunder. If the
guarantee trustee fails to enforce the preferred securities guarantee, any
holder of preferred securities may directly sue NYCB to enforce the guarantee
trustee's rights under the preferred securities guarantee. The holder need not
first sue the trust, the guarantee trustee, or any other person or entity. A
holder of preferred securities may also directly sue NYCB to enforce the
holder's right to receive payment under the preferred securities guarantee. The
holder need not first (1) direct the guarantee trustee to enforce the terms of
the preferred securities guarantee or (2) sue the trust or any other person or
entity.
NYCB and the trust believe that the above mechanisms and obligations, taken
together, are equivalent to a full and unconditional guarantee by NYCB of
payments due on the preferred securities. See "Description of the Preferred
Securities Guarantees--General."
PLAN OF DISTRIBUTION
NYCB may sell the junior subordinated debentures and the trust may sell
preferred securities:
. directly to purchasers;
. through agents; or
. through underwriters or dealers.
Offers or sales of those securities may include secondary market
transactions by affiliates of NYCB.
Offers to purchase preferred securities may be solicited directly by NYCB
and/or the trust, as the case may be, or by agents designated by NYCB and/or
the trust, as the case may be, from time to time. Any such agent, who may be
deemed to be an underwriter as that term is defined in the Securities Act,
involved in the offer or sale of the preferred securities in respect of which
this prospectus is delivered will be named, and any
26
commissions payable by NYCB to that agent will be set forth, in the prospectus
supplement. Unless otherwise indicated in the prospectus supplement, any such
agency will be acting on a best efforts basis for the period of its appointment
which is ordinarily five business days or less. Agents, dealers and
underwriters may be customers of, engage in transactions with, or perform
services for NYCB in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale, NYCB will
execute an underwriting agreement with those underwriters at the time of sale
to them and the names of the underwriters and the terms of the transaction will
be set forth in the prospectus supplement, which will be used by the
underwriters to make releases of the preferred securities in respect of which
this prospectus is delivered to the public.
If a dealer is utilized in the sale of the preferred securities in respect
of which this prospectus is delivered, NYCB and/or the trust, as the case may
be, will sell those preferred securities to the dealer, as principal. The
dealer may then resell those preferred securities to the public at varying
prices to be determined by that dealer at the time of resale. The name of the
dealer and the terms of the transaction will be set forth in the prospectus
supplement. Agents, underwriters, and dealers may be entitled under the
relevant agreements to indemnification by NYCB and/or the trust, as the case
may be, against certain liabilities, including liabilities under the Securities
Act.
Underwriters, agents or their controlling persons may engage in transactions
with and perform services for NYCB in the ordinary course of business.
Certain of the underwriters may use this prospectus and the accompanying
prospectus supplement for offers and sales related to market-making
transactions in the securities. These underwriters may act as principal or
agent in these transactions, and the sales will be made at prices related to
prevailing market prices at the time of sale.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the preferred
securities will be passed upon on behalf of the trust by Morris, James,
Hitchens & Williams LLP, Wilmington, Delaware, special Delaware counsel to the
trust. The validity of the junior subordinated debentures and the preferred
securities guarantee and certain matters relating thereto will be passed upon
for NYCB and certain United States federal income taxation matters will be
passed upon for NYCB and the trust by Muldoon Murphy & Faucette LLP,
Washington, D.C.
EXPERTS
The consolidated financial statements of NYCB and subsidiaries as of
December 31, 2001 and December 31, 2000 and for each of the years in the
three-year period ended December 31, 2001 have been incorporated by reference
herein in reliance upon the report, also incorporated by reference herein, of
KPMG LLP, independent certified public accountants, and upon the authority of
said firm as experts in accounting and auditing. The Report of KPMG LLP refers
to changes, in 2001, in NYCB's methods of accounting for goodwill and
intangible assets resulting from business combinations consummated after June
30, 2001.
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4,800,000 Bifurcated Option Note Unit SecuritiES/SM/
(BONUSES/SM/) Units
[LOGO] NEW YORK COMMUNITY
BANCORP, INC.
New York Community
Capital Trust V
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PROSPECTUS SUPPLEMENT
October 28, 2002
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Salomon Smith Barney
Lehman Brothers
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Bear, Stearns & Co. Inc.
Keefe, Bruyette & Woods, Inc.
Sandler O'Neill & Partners, L.P.
- --------
/SM /Service mark of Salomon Smith Barney Inc.
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