====================================
SECOND SUPPLEMENTAL INDENTURE
between
NATIONSBANK CORPORATION
and
THE BANK OF NEW YORK
Dated as of December 17, 1996
=====================================
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms....................................................................2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 2.1 Designation and Principal Amount.......................................................7
SECTION 2.2 Maturity...............................................................................7
SECTION 2.3 Form and Payment.......................................................................7
SECTION 2.4 Global Form............................................................................7
SECTION 2.5 Interest...............................................................................9
ARTICLE III
PREPAYMENT OF THE NOTES
SECTION 3.1 Special Event Prepayment..............................................................10
SECTION 3.2 Optional Redemption by Company........................................................10
SECTION 3.3 No Sinking Fund.......................................................................11
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period..................................................11
SECTION 4.2 Notice of Extension...................................................................12
Section 4.3 Limitation of Transactions............................................................13
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses...................................................................13
Section 5.2 Payment Upon Resignation or Removal...................................................14
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1 Listing on an Exchange................................................................14
ARTICLE VII
FORM OF NOTE
SECTION 7.1 Form of Note..........................................................................14
i
Page
ARTICLE VIII
ORIGINAL ISSUE OF NOTES
SECTION 8.1 Original Issue of Notes...............................................................22
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Ratification of Indenture.............................................................22
SECTION 9.2 Trustee Not Responsible for Recitals..................................................22
SECTION 9.3 Governing Law.........................................................................23
SECTION 9.4 Separability..........................................................................23
SECTION 9.5 Counterparts..........................................................................23
ii
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of December 17,
1996 (the "Second Supplemental Indenture"), between NATIONSBANK CORPORATION, a
North Carolina corporation (the "Company"), and THE BANK OF NEW YORK, as
trustee, (the "Trustee") under the Indenture dated as of November 27, 1996
between the
Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the issuance of the Company's unsecured junior
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a series of its securities to be
known as its 7.83% Junior Subordinated Deferrable Interest Notes due 2026 (the
"Notes"), the form and substance of such Notes and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this Second
Supplemental Indenture;
WHEREAS, under the terms of an Underwriting Agreement dated as
of December 10, 1996 (the "Underwriting Agreement"), among the Company, NB
Capital Trust II (the "Trust") and the Underwriters named therein (the
"Underwriters"), the Trust has agreed to sell to the Underwriters $365,000,000
aggregate liquidation amount of its 7.83% Capital Securities (the "Capital
Securities");
WHEREAS, under the terms of a Subscription Agreement dated as
of December 10, 1996 between the Trust and the Company (the "Subscription
Agreement"), the Company has committed to purchase all of the Common Securities
of the Trust (the "Common Securities") from the Trust which Common Securities
represent at least 3% of the capital of the Trust;
WHEREAS, the Trust proposes to invest the gross proceeds from
such offering of Capital Securities, together with the gross proceeds of the
issuance and sale by the Trust to the Company of the Common Securities, in
Notes, as a result of which the Trust will initially purchase $376,300,000
aggregate principal amount of the Notes; and
WHEREAS, the Company has requested that the Trustee execute
and deliver this Second Supplemental Indenture, and all requirements necessary
to make this Second Supplemental Indenture
a valid instrument in accordance with its terms and to make the Notes, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this Second Supplemental Indenture have been duly authorized in all
respects:
NOW THEREFORE, in consideration of the purchase and acceptance
of the Notes by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Notes and the terms,
provisions and conditions thereof, the Company covenants and agrees with the
Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same
meaning when used in this Second Supplemental Indenture;
(b) a term defined anywhere in this Second
Supplemental Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a
Section or Article of this Second Supplemental Indenture;
(e) headings are for convenience of reference only and
do not affect interpretation;
(f) the following terms have the meanings given to
them in the Declaration: (i) Business Day; (ii) Clearing Agency;
(iii) Delaware Trustee; (iv) Depositary; (v) No Recognition
Opinion; (vi) Capital Security Certificate; (vii) Property
Trustee; and (viii) Regular Trustees;
(g) the following terms have the meanings given to
them in this Section 1.1(g):
"Additional Interest" shall have the meaning set forth
in Section 2.5.
2
"Adjusted Treasury Rate" means, with respect to any prepayment
date, the Treasury Rate plus (i) 1.00% if such prepayment date occurs on or
before December 15, 1997 or (ii) 0.50% if such prepayment date occurs after
December 15, 1997.
"Capital Treatment Event" means the reasonable determination
by the Company that, as a result of the occurrence of any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, and there is more than an insubstantial risk that the Company will
not be entitled to treat an amount equal to the aggregate liquidation amount of
the Capital Securities as Tier 1 capital (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve Board, as
then in effect and applicable to the Company.
"Comparable Treasury Dealer" means (i) NationsBanc Capital
Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan
Stanley & Co. Incorporated and their respective successors; provided, however,
that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury
Dealer selected by the Property Trustee after consultation with the Company.
"Comparable Treasury Issue" means with respect to any
prepayment date the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Remaining Life that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the Remaining Life. If no United States Treasury security has a
maturity which is within a period from three months before to three months after
December 15, 2006, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.
"Comparable Treasury Price" means (A) the average of three
Reference Treasury Dealer Quotations for such prepayment date or (B) if the
Property Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of the Quotations obtained.
3
"Compounded Interest" shall have the meaning set forth
in Section 4.1.
"Declaration" means the Amended and Restated Declaration of
Trust of NB Capital Trust II, a Delaware statutory business trust, dated as of
December 10, 1996.
"Deferred Interest" shall have the meaning set forth in
Section 4.1.
"Dissolution Election" means that, as a result of the election
of the Company, as Sponsor, the Trust is to be dissolved in accordance with the
Declaration, and the Notes held by the Property Trustee are to be distributed to
the holders of the Trust Securities issued by the Trust pro rata or other manner
specified in the Declaration.
"Extended Interest Payment Period" shall have the meaning set
forth in Section 4.1.
"Global Note" shall have the meaning set forth in
Section 2.4.
"Investment Company Event" means the receipt by the Trust of
an opinion of counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or 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"),
the Trust is or will be considered an investment company that is required to be
registered under the Investment Company Act of 1940, as amended, which Change in
1940 Act Law becomes effective on or after the date of original issuance of the
Capital Securities.
"Maturity Date" means the date on which the Notes mature and
on which the principal shall be due and payable together with all accrued and
unpaid interest thereon, including Compounded Interest and Additional Interest,
if any.
"Maturity Repayment Price" means the price, at the Maturity
Date, equal to the principal amount of, plus accrued interest thereon, the
Notes.
"Non-Book-Entry Capital Securities" shall have the
meaning set forth in Section 2.4.
"Optional Prepayment Price" means the percentage of the
outstanding principal amount of the Junior Subordinated Notes specified below,
plus, in each case, accrued interest thereon to the date of prepayment:
4
December 15, 2006 to December 14, 2007: 103.915%
December 15, 2007 to December 14, 2008: 103.524%
December 15, 2008 to December 14, 2009: 103.132%
December 15, 2009 to December 14, 2010: 102.741%
December 15, 2010 to December 14, 2011: 102.349%
December 15, 2011 to December 14, 2012: 101.958%
December 15, 2012 to December 14, 2013: 101.566%
December 15, 2013 to December 14, 2014: 101.175%
December 15, 2014 to December 14, 2015: 100.783%
December 15, 2015 to December 14, 2016: 100.392%
On or after December 15, 2016: 100.000%
"Optional Prepayment" means prepayment prior to the Maturity
Date of the Notes at the option of the Company in whole or in part at any time
on or after December 15, 2006.
"Quotation Agent" means NationsBanc Capital Markets,
Inc. or any successor appointed by the Company.
"Reference Treasury Dealer" means (i) NationsBanc Capital
Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated and their respective successors; provided, however,
that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury
Dealer selected by the Property Trustee after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any prepayment date, the average, as
determined by the Property Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Property Trustee by such Reference
Treasury Dealer at 2:00 p.m. on the third Business Day preceding such prepayment
date.
"Remaining Life" means the time period from any date of
prepayment before December 15, 2006 to, but not including, December 15, 2006.
"Special Event" means a Tax Event, Capital Treatment
Event or an Investment Company Event.
"Special Event Prepayment" means a prepayment of the Notes
prior to December 15, 2006, in whole but not in part, pursuant to a Tax Event, a
Capital Treatment Event or an Investment Company Event.
5
"Special Event Prepayment Price" means the greater of (i) 100%
of the principal amount of the Notes or (ii) as determined by a Quotation Agent,
the sum of (a) the present value of the principal amount and premium that would
be payable as part of the Optional Prepayment Price with respect to an Optional
Prepayment of any such Notes on December 15, 2006 and (b) the present values of
scheduled payments of interest from the prepayment date to December 15, 2006, in
each case discounted to the prepayment date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate,
plus, in the case of either (i) or (ii), accrued interest on the Notes up to but
excluding the date of prepayment.
"Tax Event" means that (i) the Company shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws or any regulations
thereunder of the United States or any political subdivision or taxing authority
thereof or therein or (b) any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the date of original issuance of the Capital Securities, there is more than an
insubstantial risk that interest payable on the Junior Subordinated Notes is
not, or within 90 days of the date thereof, will not be deductible, in whole or
in part, by the Company for United States federal income tax purposes or (ii)
the Regular Trustees have been informed by a nationally recognized independent
tax counsel that a No Recognition Opinion cannot be delivered. "No Recognition
Opinion" means as opinion of a nationally recognized independent tax counsel
experienced in such matters, which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the holders of the Capital
Securities and Common 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 the Junior Subordinated Notes.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the immediately prior week, appearing in the most
recently published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve Board and which
establishes yields on activity traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities", for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or
6
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such prepayment date. The Treasury Rate shall be
calculated on the third Business Day preceding the prepayment date.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 2.1 Designation and Principal Amount.
There is hereby authorized a series of Securities designated
the "7.83% Junior Subordinated Deferrable Interest Notes due 2026", limited in
aggregate principal amount to $376,300,000, which amount shall be as set forth
in any written order of the Company for the authentication and delivery of Notes
pursuant to Section 2.04 of the Indenture as well as in any subsequent or
supplemental written order of the Company.
SECTION 2.2 Maturity.
The Maturity Date is December 15, 2026.
SECTION 2.3 Form and Payment.
Except as provided in Section 2.4, the Notes shall be issued
in fully registered certificated form without interest coupons. Principal and
interest on the Notes issued in certificated form will be payable, the transfer
of such Notes will be registrable and such Notes will be exchangeable for Notes
bearing identical terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of any
Notes is the Property Trustee, the payment of the principal of and interest
(including Compounded Interest and Additional Interest, if any) on such Notes
held by the Property Trustee will be made at such place and to such account as
may be designated by the Property Trustee.
SECTION 2.4 Global Form
(a) In connection with a Dissolution Election,
7
(i) the Notes in certificated form may be
presented to the Trustee by the Property Trustee in exchange for a Global Note
in an aggregate principal amount equal to the aggregate principal amount of all
then outstanding Notes (a "Global Note"), to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the Depositary for
crediting to the accounts of its participants pursuant to the instructions of
the Regular Trustees. Upon any such presentation, the Company shall execute a
Global Note in such aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance with the Indenture and
this Second Supplemental Indenture. Payments on the Notes issued as a Global
Note will be made to the Depositary; and
(ii) if any Capital Securities are held in Non-
Book-Entry certificated form, the Notes in certificated form may be presented to
the Trustee by the Property Trustee and any Capital Security Certificate which
represents Capital Securities other than Capital Securities held by the Clearing
Agency or its nominee ("Non-Book-Entry Capital Securities") will be deemed to
represent beneficial interests in Notes presented to the Trustee by the Property
Trustee having an aggregate principal amount equal to the aggregate liquidation
amount of the Non-Book-Entry Capital Securities until such Capital Security
Certificates are presented to the Security Registrar for transfer or reissuance
at which time such Capital Security Certificates will be canceled and a Note,
registered in the name of the holder of the Capital Security Certificate or the
transferee of the holder of such Capital Security Certificate, as the case may
be, with an aggregate principal amount equal to the aggregate liquidation amount
of the Capital Security Certificate canceled, will be executed by the Company
and delivered to the Trustee for authentication and delivery in accordance with
the Indenture and this Second Supplemental Indenture. On issue of such Notes,
Notes with an equivalent aggregate principal amount that were presented by the
Property Trustee to the Trustee will be deemed to have been canceled.
(b) A Global Note may be transferred, in whole but not in
part, only to another nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such successor
Depositary.
(c) If at any time the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary or if at any time the
Depositary for such series shall no longer be registered or in good standing
under the Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation, and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, the
8
Company will execute, and, subject to Article II of the Indenture, the Trustee,
upon written notice from the Company, will authenticate and make available for
delivery the Notes in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Note in exchange for such Global Note. In addition, the
Company may at any time determine that the Notes shall no longer be represented
by a Global Note. In such event the Company will execute, and subject to Section
2.07 of the Indenture, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and deliver the
Notes in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Note in exchange for such Global Note. Upon the exchange of
the Global Note for such Notes in definitive registered form without coupons, in
authorized denominations, the Global Note shall be canceled by the Trustee. Such
Notes in definitive registered form issued in exchange for the Global Note shall
be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities
to the Depositary for delivery to the Persons in whose names such Securities are
so registered.
SECTION 2.5 Interest.
(a) Each Note will bear interest at the rate of 7.83% per
annum (the "Coupon Rate") from December 17, 1996 until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded semi-annually, payable
(subject to the provisions of Article IV) semi-annually in arrears on June 15
and December 15 of each year (each, an "Interest Payment Date," commencing on
June 15, 1997), to the Person in whose name such Note or any predecessor Note is
registered, at the close of business on the regular record date for such
interest installment, which, in respect of any Notes of which the Property
Trustee is the Holder of a Global Note, shall be the close of business on the
Business Day next preceding that Interest Payment Date. Notwithstanding the
foregoing sentence, if the Capital Securities are no longer in Book-Entry only
form, the relevant record dates shall be June 1 and December 1 prior to the
regular Interest Payment Date.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full semi-
9
annual period for which interest is computed, will be computed on the basis of
the actual number of days elapsed in such a 30-day period. In the event that any
date on which interest is payable on the Notes is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which 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, 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.
(c) If, at any time while the Property Trustee is the Holder
of any Notes, the Trust or the Property Trustee 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 domestic taxing
authority, then, in any case, the Company will pay as additional interest
("Additional Interest") on the Notes held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts the Trust
and the Property Trustee would have received had no such taxes, duties,
assessments or other government charges been imposed.
ARTICLE III
PREPAYMENT OF THE NOTES
SECTION 3.1 Special Event Prepayment.
If a Special Event has occurred and is continuing prior to
December 15, 2006 the Company shall have the right upon not less than 30 days
nor more than 60 days notice to the Holders of the Notes to prepay the Notes, in
whole but not in part, for cash within 90 days following the occurrence of such
Special Event (the "90 Day Period") at a prepayment price equal to the Special
Event Prepayment Price. The Special Event Prepayment Price shall be paid prior
to 12:00 noon, New York time, on the date of such repayment or such earlier time
as the Company determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Special Event Prepayment Price by 10:00
a.m., New York time, on the date such Special Event Prepayment Price is to be
paid.
SECTION 3.2 Optional Redemption by Company.
(a) Subject to the provisions of Section 3.2(b) and to
the provisions of Article Fourteen of the Indenture, the Company
shall have the right to prepay the Notes, in whole or in part, at
10
any time and from time to time, on or after December 15, 2006, at a redemption
price equal to the Optional Prepayment Price. Any prepayment pursuant to this
paragraph will be made upon not less than 30 days nor more than 60 days notice
to the Holder of the Notes, at the Optional Prepayment Price. If the Notes are
only partially prepaid pursuant to this Section 3.2, the Notes will be prepaid
pro rata or by lot or by any other method utilized by the Trustee; provided,
that if at the time of prepayment the Notes are registered as a Global Note, the
Depositary shall determine, in accordance with its procedures, the principal
amount of such Notes held by each Holder of Note to be prepaid. The Optional
Prepayment Price shall be paid prior to 12:00 noon, New York time, on the date
of such prepayment or at such earlier time as the Company determines provided
that the Company shall deposit with the Trustee an amount sufficient to pay the
Optional Prepayment Price by 10:00 a.m., New York time, on the date such
Optional Prepayment Price is to be paid.
(b) If a partial prepayment of the Notes would result in the
delisting of the Capital Securities issued by the Trust from any national
securities exchange or other organization on which the Capital Securities are
then listed, the Company shall not be permitted to effect such partial
prepayment and may only prepay the Notes in whole.
SECTION 3.3 No Sinking Fund.
The Notes are not entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period.
The Company shall have the right, at any time and from time to
time during the term of the Notes, to defer payments of interest by extending
the interest payment period of such Notes for a period not exceeding 10
consecutive semi-annual periods (the "Extended Interest Payment Period"), during
which Extended Interest Payment Period no interest shall be due and payable;
provided that no Extended Interest Payment Period may extend beyond the Maturity
Date. To the extent permitted by applicable law, interest, the payment of which
has been deferred because of the extension of the interest payment period
pursuant to this Section 4.1, will bear interest thereon at the Coupon Rate
compounded semi-annually for each semi-annual period of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest accrued and unpaid on the
Notes, including any
11
Additional Interest and Compounded Interest (together, "Deferred Interest") that
shall be payable to the Holders of the Notes in whose names the Notes are
registered in the Security Register on the first record date after the end of
the Extended Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Company may further extend such period, provided
that such period together with all such further extensions thereof shall not
exceed 10 consecutive semi-annual periods, or extend beyond the Maturity Date of
the Notes. Upon the termination of any Extended Interest Payment Period and upon
the payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period.
SECTION 4.2 Notice of Extension.
(a) If the Property Trustee is the only registered Holder of
the Notes at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the Property
Trustee and the Trustee of its selection of such Extended Interest Payment
Period at least one Business Day before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by the Trust are
payable, or (ii) the date the Trust is required to give notice of the record
date, or the date such Distributions are payable, to any applicable
self-regulatory organization or to holders of the Capital Securities issued by
the Trust, but in any event at least one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the
Notes at the time the Company selects an Extended Interest Payment Period, the
Company shall give the Holders of the Notes and the Trustee written notice of
its selection of such Extended Interest Payment Period at least 10 Business Days
before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to any applicable self-regulatory organization or to
Holders of the Notes.
(c) The semi-annual period in which any notice is given
pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as one of
the 10 semi-annual periods permitted in the maximum Extended Interest Payment
Period permitted under Section
4.1.
12
Section 4.3 Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment
of interest as provided in Section 4.1, or (ii) there shall have occurred and be
continuing any Event of Default or Nonpayment, as defined in the Indenture, then
(a) the Company shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock or make any guarantee payment with respect
thereto (other than (i) purchases or acquisitions of shares of its common stock
in connection with the satisfaction by the Company of its obligations under any
employee benefit plans, (ii) as a result of a reclassification of its capital
stock for another class or series of its capital stock or (iii) the purchase of
fractional interests in shares of its capital stock pursuant to an acquisition
or the conversion or exchange provisions of such capital stock or security being
converted or exchanged) or make any guarantee payment with respect thereto and
(b) the Company shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by the Company
which rank pari passu with or junior to the Notes.
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses.
In connection with the offering, sale and issuance of the
Notes to the Property Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with respect
to the Notes, shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Notes, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 6.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization, maintenance and
dissolution of the Trust, the offering, sale and issuance of the Trust
Securities (including commissions to the underwriters in connection therewith),
the fees and expenses of the Property Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
13
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets);
(c) be primarily and fully liable for any
indemnification obligations arising with respect to the
Declaration; and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
Section 5.2 Payment Upon Resignation or Removal.
Upon termination of this Second Supplemental Indenture or the
Indenture or the removal or resignation of the Trustee, unless otherwise stated,
the Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation. Upon termination of the Declaration or the
removal or resignation of the Delaware Trustee or the Property Trustee, as the
case may be, pursuant to Section 5.6 of the Declaration, the Company shall pay
to the Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued to the date of such termination, removal or resignation.
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1 Listing on an Exchange.
If the Notes are to be issued as a Global Note in connection
with the distribution of the Notes to the holders of the Capital Securities
issued by the Trust upon a Dissolution Election, the Company will use its best
efforts to list such Notes on any stock exchanges on which the Capital
Securities are then listed.
ARTICLE VII
FORM OF NOTE
SECTION 7.1 Form of Note.
The Notes and the Trustee's Certificate of Authentication to
be endorsed thereon are to be substantially in the following forms:
14
(FORM OF FACE OF NOTE)
[IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT - This Note is a
Global Note within the meaning of the Indenture hereinafter referred to and is
registered in the name of The Bank of New York, as Property Trustee of NB
Capital Trust II. This Note is exchangeable for Notes registered in the name of
a person other than The Bank of New York as Property Trustee of NB Capital Trust
II or its nominee only in the limited circumstances described in the Indenture,
and no transfer of this Note may be registered except in limited circumstances.
Unless this Note is presented by an authorized representative
of The Bank of New York, 101 Barclay Street, New York, New York to the issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of The Bank of New York, as Property Trustee of NB
Capital Trust II or such other name as requested by an authorized representative
of The Bank of New York and any payment hereon is made to The Bank of New York,
as Property Trustee of NB Capital Trust II, ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, The Bank of New York, as Property Trustee of NB Capital Trust II, has an
interest herein.]
THIS NOTE IS NOT A SAVINGS ACCOUNT OR A BANK DEPOSIT, IS NOT AN OBLIGATION OF OR
GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK CORPORATION AND
IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
CUSIP No. 638585 __ __
$---------------
No._____________
NATIONSBANK CORPORATION
7.83% JUNIOR SUBORDINATED DEFERRABLE INTEREST NOTES
DUE 2026
NATIONSBANK CORPORATION, a North Carolina corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________ or registered assigns, the principal sum of _____________ Dollars
($___________) on December 15, 2026(the "Maturity Date"), and to pay interest on
said principal sum from December 17, 1996, or from the most recent interest
payment date (each such date, an "Interest
15
Payment Date") to which interest has been paid or duly provided for,
semi-annually (subject to deferral as set forth herein) in arrears on June 15
and December 15 of each year commencing June 15, 1997, at the rate of 7.83% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum compounded
semi-annually. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months. In the event
that any date on which interest is payable on this Note is not a Business Day,
then payment of 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, 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. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Note (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest installment, which shall be the
close of business on the business day next preceding such Interest Payment Date.
[IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE NOTES ARE NO LONGER
REPRESENTED BY A GLOBAL NOTE -- which shall be the close of business on June 1
or December 1]. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holders on
such regular record date and may be paid to the Person in whose name this Note
(or one or more Predecessor Securities) is registered at the close of business
on a special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered Holders of
this series of Notes not less than 10 days prior to such special record date, or
may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture. The principal of (and premium, if any) and the interest on
this Note shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the registered Holder at such address as shall appear
in the Security Register. Notwithstanding the foregoing, so long as the Holder
of this Note is the Property Trustee, the payment of the principal of (and
16
premium, if any) and interest on this Note will be made at such place and to
such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Obligations (as defined in the Indenture)
and this Note is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Obligations, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
This Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed in its name by its duly authorized officers.
NATIONSBANK CORPORATION
By: ______________________
Name:_____________________
[Seal] Title:____________________
Attest:
By: ______________________
Name: _____________________
Title: ____________________
17
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated ______________________
The Bank of New York,
as Trustee
By ______________________
Authorized Signatory
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Notes of the
Company (herein sometimes referred to as the "Notes"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of November 27, 1996, duly executed and delivered
between the Company and The Bank of New York, as Trustee (the "Trustee"), as
supplemented by the Second Supplemental Indenture dated as of December 10, 1996,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Notes. By the terms of the Indenture, the Notes are issuable
in series that may vary as to amount, date of maturity, rate of interest and in
other respects as provided in the Indenture. This series of Notes is limited in
aggregate principal amount as specified in said Second Supplemental Indenture.
Because of the occurrence and continuation of a Special Event,
as defined in the Indenture, in certain circumstances, this Note may become due
and payable at a prepayment price equal to the greater of (i) 100% of the
principal amount of the Notes or (ii) as determined by a Quotation Agent, the
sum of (a) the present value of the principal amount and premium that would be
payable as part of the Optional Prepayment Price with respect to an Optional
Prepayment of any such Notes on December 15, 2006, and (b) the present values of
scheduled payments of interest from the prepayment date to December 15, 2006, in
each case discounted
18
to the prepayment date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in the
case of either (i) or (ii), accrued interest on the Notes up to but excluding
the date of prepayment (the "Special Event Prepayment Price"). The Special Event
Prepayment Price shall be paid prior to 12:00 noon, New York time, on the date
of such prepayment or at such earlier time as the Company determines. The
Company shall have the right to prepay this Note at the option of the Company,
in whole or in part at any time on or after December 15, 2006 (an "Optional
Prepayment"), or at any time in certain circumstances upon the occurrence of a
Special Event, at a redemption price equal to the percentage of the outstanding
principal amount of the Junior Subordinated Notes specified below, plus, in each
case, accrued interest thereon to the date of prepayment:
December 15, 2006 to December 14, 2007: 103.915%
December 15, 2007 to December 14, 2008: 103.524%
December 15, 2008 to December 14, 2009: 103.132%
December 15, 2009 to December 14, 2010: 102.741%
December 15, 2010 to December 14, 2011: 102.349%
December 15, 2011 to December 14, 2012: 101.958%
December 15, 2012 to December 14, 2013: 101.566%
December 15, 2013 to December 14, 2014: 101.175%
December 15, 2014 to December 14, 2015: 100.783%
December 15, 2015 to December 14, 2016: 100.392%
On or after December 15, 2016: 100.000%
(the "Optional Prepayment Price"). Any prepayment pursuant to this paragraph
will be made upon not less than 30 days nor more than 60 days notice, at the
Optional Prepayment Price. If the Notes are only partially redeemed by the
Company pursuant to an Optional Prepayment, the Notes will be redeemed pro rata
or by lot or by any other method utilized by the Trustee; provided that if, at
the time of prepayment, the Notes are registered as a Global Note, the
Depositary shall determine the principal amount of such Notes held by each Note
holder to be prepaid in accordance with its procedures.
In the event of prepayment of this Note in part only, a new
Note or Notes of this series for the unrepaid portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Notes may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
19
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Notes; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Notes of any series, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent of the Holder
of each Note so affected, or (ii) reduce the aforesaid percentage of Notes, the
Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holders of each Note then outstanding and affected
thereby. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Notes of any series at the time
outstanding affected thereby, on behalf of all of the Holders of the Notes of
such series, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the Indenture
with respect to such series, and its consequences. Any such consent or waiver by
the registered Holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and of any Note issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the time and place and at the rate and in the money
herein prescribed.
The Company shall have the right at any time during the term
of the Notes and from time to time to defer payment of interest by extending the
interest payment period of such Notes for a period not exceeding 10 consecutive
semi-annual periods (an "Extended Interest Payment Period"), at the end of which
period the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Notes to the extent that payment
of such interest is enforceable under applicable law); provided that no Extended
Interest Payment Period may last beyond the Maturity Date of the Notes. Before
the termination of any such Extended Interest Payment Period, the
20
Company may further extend such Extended Interest Payment Period, provided that
such Extended Interest Payment Period together with all such further extensions
thereof shall not exceed 10 consecutive semi-annual periods or extend the
Maturity Date of the Notes. At the termination of any such Extended Interest
Payment Period and upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may commence a new Extended Interest
Payment Period, subject to the requirements contained in this paragraph.
As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Note for registration of transfer at the office or agency of the Trustee in the
City and State of New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Note, the Company, the Trustee, any paying agent and the Security Registrar may
deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Note shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the Security Registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
This Global Note is exchangeable for Notes in definitive form
only under certain limited circumstances set
21
forth in the Indenture. Notes of this series so issued are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations herein and therein set forth, Notes of this series so issued are
exchangeable for a like aggregate principal amount of Notes of this series of a
different authorized denomination, as requested by the Holder surrendering the
same.
All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
ARTICLE VIII
ORIGINAL ISSUE OF NOTES
SECTION 8.1 Original Issue of Notes.
Notes in the aggregate principal amount of $376,300,000 may,
upon execution of this Second Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the Company,
signed by its Chief Executive Officer, Chief Financial Officer, its President,
or any Vice President or its Treasurer, without any further action by the
Company.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Ratification of Indenture.
The Indenture, as supplemented by this Second Supplemental
Indenture, is in all respects ratified and confirmed, and this Second
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 9.2 Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not
by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency
of this Second Supplemental Indenture.
22
SECTION 9.3 Governing Law.
This Second Supplemental Indenture and each Note shall be
deemed to be a contract made under the internal laws of the State of New York,
and for all purposes shall be construed in accordance with the laws of said
State.
SECTION 9.4 Separability.
In case any one or more of the provisions contained in this
Second Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Second
Supplemental Indenture or of the Notes, but this Second Supplemental Indenture
and the Notes shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
SECTION 9.5 Counterparts.
This Second Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed by their authorized respective
officers as of the day and year first above written.
NATIONSBANK CORPORATION
By: E. JEFFERY COUCH
Name: E. Jeffery Couch
Title: Senior Vice President
THE BANK OF NEW YORK
as Trustee
By /s/ BYRON MERINO
Name: Byron Merino
Title: Assistant Treasurer
23