As filed with the Securities and Exchange Commission on May 29, 2002
Registration No. 333-72374
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Wachovia Corporation
(Formerly named First Union Corporation)
(Exact name of registrant as specified in its charter)
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North Carolina 56-0898180
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
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One Wachovia Center
Charlotte, North Carolina 28288-0013
(704) 374-6565
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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Ross E. Jeffries, Jr., Esq.
Senior Vice President and Assistant General Counsel
Wachovia Corporation
One Wachovia Center
Charlotte, North Carolina 28288-0630
(704) 374-6611
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
Mark J. Menting, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004-2498
(212) 558-4859
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, as determined
in the light of market and other conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the SEC
is effective. This prospectus is not an offer to sell these securities and we
are not soliciting an offer to buy these securities in any state where the
offer or sale is prohibited.
Subject to Completion, Dated May 29, 2002
$4,000,000,000
WACHOVIA CORPORATION
(Formerly named First Union Corporation)
Senior Global Medium-Term Notes, Series E
and
Subordinated Global Medium-Term Notes, Series F
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Terms of Sale
Wachovia Corporation may from time to time offer and sell notes with various
terms, including the following:
..stated maturity of 9 months or longer .amount of principal or interest may be determined by
..fixed or floating interest rate, zero-coupon or issued reference to an index or formula
with original issue discount; a floating interest rate .book-entry form only through The Depository Trust
may be based on: Company
.commercial paper rate .redemption at the option of Wachovia or repayment at
.prime rate the option of the holder
.LIBOR .interest on notes paid monthly, quarterly, semi-
.EURIBOR annually or annually
.treasury rate .denominations of $1,000 and multiples of $1,000
.CMT rate .denominated in a currency other than U.S dollars or
.CD rate in a composite currency
.federal funds rate .settlement in immediately available funds
..ranked as senior or subordinated indebtedness
of Wachovia
The final terms of each note will be included in a pricing supplement.
Wachovia will receive between $3,995,000,000 and $3,960,000,000 of the proceeds
from the sale of the notes, after paying the agents' commissions of between
$5,000,000 and $40,000,000.
Wachovia has filed an application to list notes issued under this prospectus
on the Luxemburg Stock Exchange. The Luxembourg Stock Exchange has advised us
that with respect to notes so listed, this prospectus is valid for one year
from the date of this prospectus.
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Prior to September 1, 2001, our company was named "First Union Corporation".
We changed our name on September 1, 2001, following our merger with the former
Wachovia Corporation.
Neither the Securities and Exchange Commission, any state securities
commission or the Commissioner of Insurance of the state of North Carolina has
approved or disapproved of the securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
These securities will be our unsecured obligations and will not be savings
accounts, deposits or other obligations of any bank or non-bank subsidiary of
ours and are not insured by the Federal Deposit Insurance Corporation, the Bank
Insurance Fund or any other governmental agency.
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Wachovia may sell the notes directly or through one or more agents or
dealers, including the agents listed below. The agents are not required to sell
any particular amount of the notes.
Wachovia may use this prospectus in the initial sale of any notes. In
addition, First Union Securities, Inc. or any other affiliate of Wachovia may
use this prospectus in a market-making or other transaction in any note after
its initial sale. Unless Wachovia or its agent informs the purchaser otherwise
in the confirmation of sale or pricing supplement, this prospectus is being
used in a market-making transaction.
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WACHOVIA SECURITIES
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This prospectus is dated , 2002
TABLE OF CONTENTS
About This Prospectus................................... 1
Where You Can Find More Information..................... 3
Forward-Looking Statements.............................. 4
Wachovia Corporation.................................... 4
Risk Factors............................................ 5
Use of Proceeds......................................... 8
Consolidated Earnings Ratios............................ 8
Selected Consolidated Condensed Financial Data.......... 9
Capitalization.......................................... 10
Regulatory Considerations............................... 10
Description of the Notes We May Offer................... 11
Global Notes............................................ 43
United States Taxation.................................. 47
Proposed European Union Directive on Taxation of Savings 58
Employee Retirement Income Security Act................. 59
Plan of Distribution.................................... 60
Validity of The Notes................................... 64
Experts................................................. 64
Listing and General Information......................... 64
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ABOUT THIS PROSPECTUS
General
This document is called a prospectus and is part of a registration statement
that we filed with the SEC using a "shelf" registration or continuous offering
process. Under this shelf registration, we may from time to time sell any
combination of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $4,000,000,000.
This prospectus provides you with a general description of the securities we
may offer. Each time we sell securities we will provide a pricing supplement
containing specific information about the terms of the securities being
offered. That pricing supplement may include a discussion of any risk factors
or other special considerations that apply to those securities. The pricing
supplement may also add, update or change the information in this prospectus.
If there is any inconsistency between the information in this prospectus and
any pricing supplement, you should rely on the information in that pricing
supplement. You should read both this prospectus and any pricing supplement
together with additional information described under the heading "Where You Can
Find More Information".
The registration statement containing this prospectus, including exhibits to
the registration statement, provides additional information about us and the
securities offered under this prospectus. The registration statement can be
read at the SEC web site or at the SEC offices mentioned under the heading
"Where You Can Find More Information".
When acquiring any securities discussed in this prospectus, you should rely
only on the information provided in this prospectus and in any pricing
supplement, including the information incorporated by reference. Neither we nor
any underwriters or agents have authorized anyone to provide you with different
information. We are not offering the securities in any state where the offer is
prohibited. You should not assume that the information in this prospectus, any
pricing supplement or any document incorporated by reference is truthful or
complete at any date other than the date mentioned on the cover page of these
documents.
We may sell securities to underwriters who will sell the securities to the
public on terms fixed at the time of sale. In addition, the securities may be
sold by us directly or through dealers or agents designated from time to time,
which agents may be our affiliates. If we, directly or through agents, solicit
offers to purchase the securities, we reserve the sole right to accept and,
together with our agents, to reject, in whole or in part, any of those offers.
The pricing supplement will contain the names of the underwriters, dealers
or agents, if any, together with the terms of offering, the compensation of
those underwriters and the net proceeds to us. Any underwriters, dealers or
agents participating in the offering may be deemed "underwriters" within the
meaning of the Securities Act of 1933 (the "Securities Act").
One or more of our subsidiaries, including First Union Securities, Inc., may
buy and sell any of the securities after the securities are issued as part of
their business as a broker-dealer. Those subsidiaries may use this prospectus
and the related pricing supplement in those transactions. Any sale by a
subsidiary will be made at the prevailing market price at the time of sale.
Unless otherwise mentioned or unless the context requires otherwise, any
reference in this prospectus to "Wachovia Securities" means First Union
Securities, Inc. and does not mean Wachovia Securities, Inc., a broker-dealer
subsidiary of Wachovia which is not participating in this offering.
Unless otherwise mentioned or unless the context requires otherwise, all
references in this prospectus to "Wachovia", "we", "us", "our" or similar
references mean Wachovia Corporation and its subsidiaries.
Selling Restrictions Outside the United States
Offers and sales of the notes are subject to restrictions in the United
Kingdom. The distribution of this prospectus and the offering of the notes in
certain other jurisdictions may also be restricted by law. This
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prospectus does not constitute an offer of, or an invitation on Wachovia's
behalf or on behalf of the agents or any of them to subscribe to or purchase,
any of the notes. This prospectus may not be used for or in connection with an
offer or solicitation by anyone in any jurisdiction in which such an offer or
solicitation is not authorized or to any person to whom it is unlawful to make
such an offer or solicitation. Please refer to the section entitled "Plan of
Distribution".
As long as the notes are listed on the Luxembourg Stock Exchange, a
supplemental prospectus will be prepared and filed with the Luxembourg Stock
Exchange in the event of a material change in the financial condition of
Wachovia that is not reflected in this prospectus, for the use in connection
with any subsequent issue of debt securities to be listed on the Luxembourg
Stock Exchange. As long as the notes are listed on the Luxembourg Stock
Exchange, if the terms and conditions of the notes are modified or amended in a
manner which would make this prospectus materially inaccurate or misleading, a
new prospectus or supplemental prospectus will be prepared.
Wachovia accepts responsibility for the information contained in this
prospectus. The Luxembourg Stock Exchange takes no responsibility for the
contents of this document, makes no representation as to its accuracy or
completeness and expressly disclaims any liability whatsoever for any loss no
matter how arising from or in reliance upon the whole or any part of the
contents of this prospectus.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room in Washington, D.C. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. In
addition, our SEC filings are available to the public at the SEC's web site at
http://www.sec.gov. You can also inspect reports, proxy statements and other
information about us at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York.
The SEC allows us to "incorporate by reference" into this prospectus the
information in documents we file with it. This means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus and should be read with the same care. When we update the
information contained in documents that have been incorporated by reference by
making future filings with the SEC the information incorporated by reference in
this prospectus is considered to be automatically updated and superseded. In
other words, in the case of a conflict or inconsistency between information
contained in this prospectus and information incorporated by reference into
this prospectus, you should rely on the information contained in the document
that was filed later. We incorporate by reference the documents listed below
and any documents we file with the SEC in the future under Section 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
until our offering is completed:
. Annual Report on Form 10-K for the year ended December 31, 2001;
. Quarterly Report on Form 10-Q for the quarter ended March 31, 2002; and
. Current Reports on Form 8-K dated August 30, 2001, September 6, 2001,
January 23, 2002 and April 18, 2002.
You may request a copy of these filings, other than an exhibit to a filing
unless that exhibit is specifically incorporated by reference into that filing,
at no cost, by writing to or telephoning us at the following address:
Corporate Relations
Wachovia Corporation
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288-0206
(704) 374-6782
As long as the notes are listed on the Luxembourg Stock Exchange, you may
also obtain documents incorporated by reference in this prospectus free of
charge from the Luxembourg Listing Agent or the Luxembourg Paying Agent and
Transfer Agent.
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FORWARD-LOOKING STATEMENTS
This prospectus and applicable pricing supplements contain or incorporate
statements that are "forward-looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. These statements
can be identified by the use of forward-looking language such as "will likely
result", "may", "are expected to", "is anticipated", "estimate", "projected",
"intends to", or other similar words. Our actual results, performance or
achievements could be significantly different from the results expressed in or
implied by these forward-looking statements. These statements are subject to
certain risks and uncertainties, including but not limited to certain risks
described in the pricing supplement or the documents incorporated by reference.
When considering these forward-looking statements, you should keep in mind
these risks, uncertainties and other cautionary statements made in this
prospectus and the pricing supplements. You should not place undue reliance on
any forward-looking statement, which speaks only as of the date made. You
should refer to our periodic and current reports filed with the SEC for
specific risks which could cause actual results to be significantly different
from those expressed or implied by these forward-looking statements.
WACHOVIA CORPORATION
Wachovia was incorporated under the laws of North Carolina in 1967. We are
registered as a financial holding company and a bank holding company under the
Bank Holding Company Act of 1956, as amended, and are supervised and regulated
by the Board of Governors of the Federal Reserve System. Our banking and
securities subsidiaries are supervised and regulated by various federal and
state banking and securities regulatory authorities. On September 1, 2001, the
former Wachovia Corporation merged with and into First Union Corporation, and
First Union Corporation changed its name to "Wachovia Corporation".
In addition to North Carolina, Wachovia's full-service banking subsidiaries
operate in Connecticut, Delaware, Florida, Georgia, Maryland, New Jersey, New
York, Pennsylvania, South Carolina, Virginia and Washington, D.C. These
full-service banking subsidiaries provide a wide range of commercial and retail
banking and trust services. Wachovia also provides various other financial
services, including mortgage banking, home equity lending, leasing, investment
banking, insurance and securities brokerage services through other subsidiaries.
In 1985, the Supreme Court upheld regional interstate banking legislation.
Since then, Wachovia has concentrated its efforts on building a large regional
banking organization in what it perceives to be some of the better banking
markets in the eastern United States. Since November 1985, Wachovia has
completed over 90 banking-related acquisitions.
Wachovia continually evaluates its business operations and organizational
structures to ensure they are aligned closely with its goal of maximizing
performance in its core business lines, Capital Management, Wealth Management,
the General Bank and Corporate and Investment Banking. When consistent with our
overall business strategy, we may consider the disposition of certain of our
assets, branches, subsidiaries or lines of business. We continue to routinely
explore acquisition opportunities, particularly in areas that would complement
our core business lines, and frequently conduct due diligence activities in
connection with possible acquisitions. As a result, acquisition discussions
and, in some cases, negotiations frequently take place, and future acquisitions
involving cash, debt or equity securities can be expected.
Wachovia is a separate and distinct legal entity from its banking and other
subsidiaries. Dividends received from our subsidiaries are our principal source
of funds to pay dividends on our common and preferred stock and debt service on
our debt. Various federal and state statutes and regulations limit the amount
of dividends that our banking and other subsidiaries may pay to us without
regulatory approval.
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RISK FACTORS
Our Credit Ratings May Not Reflect All Risks of An Investment in the Notes
The credit ratings of our medium-term note program may not reflect the
potential impact of all risks related to structure and other factors on any
trading market for, or trading value of, your notes. In addition, real or
anticipated changes in our credit ratings will generally effect any trading
market for, or trading value of, your notes.
Risks Relating to Indexed Notes
We use the term "indexed notes" to mean notes whose value is linked to an
underlying property or index. Indexed notes may present a high level of risk,
and those who invest in indexed notes may lose their entire investment. In
addition, the treatment of indexed notes for U.S. federal income tax purposes
is often unclear due to the absence of any authority specifically addressing
the issues presented by any particular indexed note. Thus, if you propose to
invest in indexed notes, you should independently evaluate the federal income
tax consequences of purchasing an indexed note that apply in your particular
circumstances. You should also read "United States Taxation" for a discussion
of U.S. tax matters.
Investors in Indexed Notes Could Lose Their Investment
The amount of principal and/or interest payable on an indexed note and the
cash value or physical settlement value of a physically settled note will be
determined by reference to the price, value or level of one or more securities,
currencies, commodities or other properties, any other financial, economic or
other measure or instrument, including the occurrence or non-occurrence of any
event or circumstance, and/or one or more indices or baskets of any of these
items. We refer to each of these as an "index". The direction and magnitude of
the change in the price, value or level of the relevant index will determine
the amount of principal and/or interest payable on the indexed note, and the
cash value or physical settlement value of a physically settled note. The terms
of a particular indexed note may or may not include a guaranteed return of a
percentage of the face amount at maturity or a minimum interest rate. Thus, if
you purchase an indexed note, you may lose all or a portion of the principal or
other amount you invest and may receive no interest on your investment.
The Issuer of a Security or Currency That Serves as an Index Could Take
Actions That May Adversely Affect an Indexed Note
The issuer of a security that serves as an index or part of an index for an
indexed note will have no involvement in the offer and sale of the indexed note
and no obligations to the holder of the indexed note. The issuer may take
actions, such as a merger or sale of assets, without regard to the interests of
the holder. Any of these actions could adversely affect the value of a note
indexed to that security or to an index of which that security is a component.
If the index for an indexed note includes a non-U.S. dollar currency or
other asset denominated in a non-U.S. dollar currency, the government that
issues that currency will also have no involvement in the offer and sale of the
indexed note and no obligations to the holder of the indexed note. That
government may take actions that could adversely affect the value of the note.
See "--Risks Relating to Notes Denominated or Payable in or Linked to a
Non-U.S. Dollar Currency" below for more information about these kinds of
government actions.
An Indexed Note May Be Linked to a Volatile Index, Which Could Hurt Your
Investment
Some indices are highly volatile, which means that their value may change
significantly, up or down, over a short period of time. The amount of principal
or interest that can be expected to become payable on an indexed note may vary
substantially from time to time. Because the amounts payable with respect to an
indexed note are
generally calculated based on the value or level of the relevant index on a
specified date or over a limited period of time, volatility in the index
increases the risk that the return on the indexed note may be adversely
affected by a fluctuation in the level of the relevant index.
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The volatility of an index may be affected by political or economic events,
including governmental actions, or by the activities of participants in the
relevant markets. Any of these events or activities could adversely affect the
value of an indexed note.
An Index to Which a Note Is Linked Could Be Changed or Become Unavailable
Some indices compiled by us or our affiliates or third parties may consist
of or refer to several or many different securities, commodities or currencies
or other instruments or measures. The compiler of such an index typically
reserves the right to alter the composition of the index and the manner in
which the value or level of the index is calculated. An alteration may result
in a decrease in the value of or return on an indexed note that is linked to
the index. The indices for our indexed notes may include published indices of
this kind or customized indices developed by us or our affiliates in connection
with particular issues of indexed notes.
A published index may become unavailable, or a customized index may become
impossible to calculate in the normal manner, due to events such as war,
natural disasters, cessation of publication of the index or a suspension or
disruption of trading in one or more securities, commodities or currencies or
other instruments or measures on which the index is based. If an index becomes
unavailable or impossible to calculate in the normal manner, the terms of a
particular indexed note may allow us to delay determining the amount payable as
principal or interest on an indexed note, or we may use an alternative method
to determine the value of the unavailable index. Alternative methods of
valuation are generally intended to produce a value similar to the value
resulting from reference to the relevant index. However, it is unlikely that
any alternative method of valuation we use will produce a value identical to
the value that the actual index would produce. If we use an alternative method
of valuation for a note linked to an index of this kind, the value of the note,
or the rate of return on it, may be lower than it otherwise would be.
Some indexed notes are linked to indices that are not commonly used or that
have been developed only recently. The lack of a trading history may make it
difficult to anticipate the volatility or other risks associated with an
indexed note of this kind. In addition, trading in these indices or their
underlying stocks, commodities or currencies or other instruments or measures,
or options or futures contracts on these stocks, commodities or currencies or
other instruments or measures, may be limited, which could increase their
volatility and decrease the value of the related indexed notes or the rates of
return on them.
We May Engage in Hedging Activities that Could Adversely Affect an Indexed
Note
In order to hedge an exposure on a particular indexed note, we may, directly
or through our affiliates, enter into transactions involving the securities,
commodities or currencies or other instruments or measures that underlie the
index for the note, or involving derivative instruments, such as swaps, options
or futures, on the index or any of its component items. By engaging in
transactions of this kind, we could adversely affect the value of an indexed
note. It is possible that we could achieve substantial returns from our hedging
transactions while the value of the indexed note may decline.
Information About Indices May Not Be Indicative of Future Performance
If we issue an indexed note, we may include historical information about the
relevant index in the relevant pricing supplement. Any information about
indices that we may provide will be furnished as a matter of information only,
and you should not regard the information as indicative of the range of, or
trends in, fluctuations in the relevant index that may occur in the future.
We May Have Conflicts of Interest Regarding an Indexed Note
First Union Securities, Inc. and our other affiliates may have conflicts of
interest with respect to some indexed notes. First Union Securities, Inc. and
our other affiliates may engage in trading, including trading for hedging
purposes, for their proprietary accounts or for other accounts under their
management, in indexed notes and in the securities, commodities or currencies
or other instruments or measures on which the index is based or in other
derivative instruments related to the index or its component items. These
trading activities could adversely affect the value of indexed notes. We and
our affiliates may also issue or underwrite securities or
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derivative instruments that are linked to the same index as one or more indexed
notes. By introducing competing products into the marketplace in this manner,
we could adversely affect the value of an indexed note.
Wachovia Bank, N.A. (formerly named First Union National Bank) or another of
our affiliates may serve as calculation agent for the indexed notes and may
have considerable discretion in calculating the amounts payable in respect of
the notes. To the extent that Wachovia Bank, N.A. or another of our affiliates
calculates or compiles a particular index, it may also have considerable
discretion in performing the calculation or compilation of the index.
Exercising discretion in this manner could adversely affect the value of an
indexed note based on the index or the rate of return on the security.
Risks Relating to Notes Denominated or Payable in or Linked to a Non-U.S.
Dollar Currency
If you intend to invest in a non-U.S. dollar note -- e.g., a note whose
principal and/or interest is payable in a currency other than U.S. dollars or
that may be settled by delivery of or reference to a non-U.S. dollar currency
or property denominated in or otherwise linked to a non-U.S. dollar currency --
you should consult your own financial and legal advisors as to the currency
risks entailed by your investment. Notes of this kind may not be an appropriate
investment for investors who are unsophisticated with respect to non-U.S.
dollar currency transactions.
An Investment in a Non-U.S. Dollar Note Involves Currency-Related Risks
An investment in a non-U.S. dollar note entails significant risks that are
not associated with a similar investment in a note that is payable solely in
U.S. dollars and where settlement value is not otherwise based on a non-U.S.
dollar currency. These risks include the possibility of significant changes in
rates of exchange between the U.S. dollar and the various non-U.S. dollar
currencies or composite currencies and the possibility of the imposition or
modification of foreign exchange controls or other conditions by either the
United States or non-U.S. governments. These risks generally depend on factors
over which we have no control, such as economic and political events and the
supply of and demand for the relevant currencies in the global markets.
Changes in Currency Exchange Rates Can Be Volatile and Unpredictable
Rates of exchange between the U.S. dollar and many other currencies have
been highly volatile, and this volatility may continue and perhaps spread to
other currencies in the future. Fluctuations in currency exchange rates could
adversely affect an investment in a note denominated in, or where value is
otherwise linked to, a specified currency other than U.S. dollars. Depreciation
of the specified currency against the U.S. dollar could result in a decrease in
the U.S. dollar-equivalent value of payments on the note, including the
principal payable at maturity. That in turn could cause the market value of the
note to fall. Depreciation of the specified currency against the U.S. dollar
could result in a loss to the investor on a U.S. dollar basis.
In courts outside of New York, investors may not be able to obtain judgment
in a specified currency other than U.S. dollars. For example, a judgment for
money in an action based on a non-U.S. dollar note in many other U.S. federal
or state courts ordinarily would be enforced in the United States only in U.S.
dollars. The date used to determine the rate of conversion of the currency in
which any particular note is denominated into U.S. dollars will depend upon
various factors, including which court renders the judgment.
Information About Exchange Rates May Not Be Indicative of Future Performance
If we issue a non-U.S. dollar note, we may include in the relevant pricing
supplement a currency supplement that provides information about historical
exchange rates for the relevant non-U.S. dollar currency or currencies. Any
information about exchange rates that we may provide will be furnished as a
matter of information only, and you should not regard the information as
indicative of the range of, or trends in, fluctuations in currency exchange
rates that may occur in the future. That rate will likely differ from the
exchange rate used under the terms that apply to a particular note.
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USE OF PROCEEDS
Wachovia currently intends to use the net proceeds from the sale of any
notes for general corporate purposes, which may include:
. reducing debt;
. investments at the holding company level;
. investing in, or extending credit to, our operating subsidiaries;
. acquisitions;
. stock repurchases; and
. other purposes as mentioned in any pricing supplement.
Pending such use, we may temporarily invest the net proceeds. The precise
amounts and timing of the application of proceeds will depend upon our funding
requirements and the availability of other funds. Except as mentioned in any
pricing supplement, specific allocations of the proceeds to such purposes will
not have been made at the date of that pricing supplement.
Based upon our historical and anticipated future growth and our financial
needs, we may engage in additional financings of a character and amount that we
determine as the need arises.
CONSOLIDATED EARNINGS RATIOS
The following table provides Wachovia's consolidated ratios of earnings to
fixed charges and preferred stock dividends:
Three Months
Ended
March 31, Years Ended December 31,
------------ ------------------------
2002 2001 2000 1999 1998 1997
------------ ---- ---- ---- ---- ----
Consolidated Ratios of Earnings to Fixed Charges and
Preferred Stock Dividends
Excluding interest on deposits...................... 3.20x 1.61 1.13 2.29 2.13 2.50
Including interest on deposits...................... 1.88x 1.27 1.06 1.62 1.51 1.57
For purposes of computing these ratios
. earnings represent income from continuing operations before extraordinary
items and cumulative effect of a change in accounting principles, plus
income taxes and fixed charges (excluding capitalized interest);
. fixed charges, excluding interest on deposits, represent interest
(including capitalized interest), one-third of rents and all amortization
of debt issuance costs; and
. fixed charges, including interest on deposits, represent all interest
(including capitalized interest), one-third of rents and all amortization
of debt issuance costs.
One-third of rents is used because it is the proportion deemed
representative of the interest factor.
8
SELECTED CONSOLIDATED CONDENSED FINANCIAL DATA
The following is selected unaudited consolidated condensed financial
information for Wachovia for the three months ended March 31, 2002, and for the
year ended December 31, 2001. The summary below should be read in conjunction
with the consolidated financial statements of Wachovia, and the related notes
thereto, and the other detailed information contained in Wachovia's March 31,
2002 Quarterly Report on Form 10-Q and 2001 Annual Report on Form 10-K.
Three Months
Ended Year Ended
March 31, December 31,
2002 2001(a)
(In millions, except per share data) ------------ ------------
CONSOLIDATED CONDENSED SUMMARIES OF INCOME
Interest income.................................... $ 3,903 $ 16,100
Interest expense................................... 1,477 8,325
-------- --------
Net interest income................................ 2,426 7,775
Provision for loan losses.......................... 339 1,947
-------- --------
Net interest income after provision for loan losses 2,087 5,828
Securities transactions............................ (6) (67)
Noninterest income................................. 2,033 6,363
Merger-related and restructuring charges........... (8) 106
Noninterest expense................................ 2,777 9,725
-------- --------
Income before income taxes......................... 1,345 2,293
Income taxes....................................... 432 674
-------- --------
Net income......................................... 913 1,619
Dividends on preferred stock....................... 6 6
-------- --------
Net income available to common stockholders........ $ 907 $ 1,613
======== ========
PER COMMON SHARE DATA
Basic earnings..................................... $ 0.67 $ 1.47
Diluted earnings................................... 0.66 1.45
Cash dividends..................................... 0.24 0.96
Average common shares--basic....................... 1,355 1,096
Average common shares--diluted..................... $ 1,366 $ 1,105
======== ========
CONSOLIDATED CONDENSED PERIOD-END BALANCE SHEETS
Cash and cash equivalents.......................... $ 26,548 $ 34,711
Trading account assets............................. 28,227 25,386
Securities......................................... 57,382 58,467
Loans, net of unearned income...................... 162,294 163,801
Allowance for loan losses.......................... (2,986) (2,995)
-------- --------
Loans, net....................................... 159,308 160,806
Goodwill and other intangibles..................... 12,716 12,772
Other assets....................................... 35,672 38,310
-------- --------
Total assets..................................... $319,853 $330,452
======== ========
Deposits........................................... 180,033 187,453
Short-term borrowings.............................. 46,559 44,385
Trading account liabilities........................ 10,261 11,437
Other liabilities.................................. 14,279 16,989
Long-term debt..................................... 39,936 41,733
-------- --------
Total liabilities................................ 291,068 301,997
Stockholders' equity............................... 28,785 28,455
-------- --------
Total liabilities and stockholders' equity....... $319,853 $330,452
======== ========
(a) The merger of the former Wachovia Corporation and First Union Corporation
closed on September 1, 2001, and was accounted for under the purchase method of
accounting.
9
CAPITALIZATION
The following table sets forth the unaudited capitalization of Wachovia at
March 31, 2002.
March 31, 2002
(In millions) --------------
Long-term Debt
Total long-term debt.................................................. $39,936
-------
Stockholders' Equity
Dividend Equalization Preferred shares, issued 97 million shares...... 11
Common stock, authorized 3 billion shares, issued 1.368 billion shares 4,559
Paid-in capital....................................................... 17,989
Retained earnings..................................................... 6,136
Accumulated other comprehensive income, net........................... 90
-------
Total stockholders' equity.......................................... 28,785
-------
Total long-term debt and stockholders' equity......................... $68,721
=======
As of the date of this prospectus, there has been no material change in the
capitalization of Wachovia since March 31, 2002.
REGULATORY CONSIDERATIONS
As a financial holding company and a bank holding company under the Bank
Holding Company Act, the Federal Reserve Board regulates, supervises and
examines Wachovia. For a discussion of the material elements of the regulatory
framework applicable to financial holding companies, bank holding companies and
their subsidiaries and specific information relevant to Wachovia, please refer
to Wachovia's annual report on Form 10-K for the fiscal year ended December 31,
2001, and any subsequent reports we file with the SEC, which are incorporated
by reference in this prospectus. This regulatory framework is intended
primarily for the protection of depositors and the federal deposit insurance
funds and not for the protection of security holders. As a result of this
regulatory framework, Wachovia's earnings are affected by actions of the
Federal Reserve Board, the Office of Comptroller of the Currency, that
regulates our banking subsidiaries, the Federal Deposit Insurance Corporation,
that insures the deposits of our banking subsidiaries within certain limits,
and the SEC, that regulates the activities of certain subsidiaries engaged in
the securities business.
Wachovia's earnings are also affected by general economic conditions, our
management policies and legislative action.
In addition, there are numerous governmental requirements and regulations
that affect our business activities. A change in applicable statutes,
regulations or regulatory policy may have a material effect on Wachovia's
business.
Depository institutions, like Wachovia's bank subsidiaries, are also
affected by various federal laws, including those relating to consumer
protection and similar matters. Wachovia also has other financial services
subsidiaries regulated, supervised and examined by the Federal Reserve Board,
as well as other relevant state and federal regulatory agencies and
self-regulatory organizations. Wachovia's non-bank subsidiaries may be subject
to other laws and regulations of the federal government or the various states
in which they are authorized to do business.
10
DESCRIPTION OF THE NOTES WE MAY OFFER
The following information outlines some of the provisions of the indentures
and the notes. This information may not be complete in all respects, and is
qualified entirely by reference to the indenture under which the notes are
issued. These indentures are incorporated by reference as exhibits to the
registration statement of which this prospectus is a part. This information
relates to certain terms and conditions that generally apply to the notes. The
specific terms of any series of notes will be described in the relevant pricing
supplement. As you read this section, please remember that the specific terms
of your note as described in your pricing supplement will supplement and, if
applicable, may modify or replace the general terms described in this section.
If your pricing supplement is inconsistent with this prospectus, your pricing
supplement will control with regard to your note. Thus, the statements we make
in this section may not apply to your note.
General
Senior notes will be issued under an indenture, dated as of April 1, 1983,
as amended and supplemented, between Wachovia and JPMorgan Chase Bank,
(formerly known as The Chase Manhattan Bank) as trustee. Subordinated notes
will be issued under an indenture, dated as of March 15, 1986, as amended and
supplemented, between Wachovia and Bank One Trust Company, N.A., as trustee.
Each of the senior and the subordinated notes constitutes a single series of
debt securities of Wachovia issued under the senior and the subordinated
indenture, respectively. The term "debt securities," as used in this
prospectus, refers to all debt securities, including the notes, issued and
issuable from time to time under the relevant indenture. The indentures are
subject to, and governed by, the Trust Indenture Act of 1939, as amended. These
indentures are more fully described below in this section. Whenever we refer to
specific provisions or defined terms in one or both of the indentures, those
provisions or defined terms are incorporated in this prospectus by reference.
Section references used in this discussion are references to the relevant
indenture. Capitalized terms which are not otherwise defined shall have the
meaning given to them in the relevant indenture. As long as the notes are
listed on the Luxembourg Stock Exchange, the indentures will be available for
inspection at the offices of the Luxembourg Listing Agent and Luxembourg Paying
Agent and Transfer Agent.
The notes will be limited to an aggregate initial offering price of
$4,000,000,000, or at Wachovia's option if so specified in the relevant pricing
supplement, the equivalent of this amount in any other currency or currency
unit, and will be Wachovia's direct, unsecured obligations. The notes will not
be deposits or other bank obligations and will not be FDIC insured.
The notes are being offered on a continuous basis by Wachovia through one or
more agents listed under "Plan of Distribution". The indentures do not limit
the aggregate principal amount of senior or subordinated notes that we may
issue. We may, from time to time, without the consent of the holders of the
notes, provide for the issuance of notes or other debt securities under the
indentures in addition to the $4,000,000,000 aggregate initial offering price
of notes noted on the cover of this prospectus. Each note issued under this
prospectus will mature nine months or more from its date of issue, as selected
by the purchaser and agreed to by Wachovia and may be subject to redemption or
repayment before its stated maturity. Notes may be issued at significant
discounts from their principal amount due on the stated maturity (or on any
prior date on which the principal or an installment of principal of a note
becomes due and payable, whether by the declaration of acceleration, call for
redemption at the option of Wachovia, repayment at the option of the holder or
otherwise), and some notes may not bear interest. Wachovia may from time to
time, without the consent of the existing holders of the relevant notes, create
and issue further notes having the same terms and conditions as such notes in
all respects, except for the issue date, issue price and, if applicable, the
first payment of interest thereon. Additional notes issued in this manner will
be consolidated with, and will form a single series with, the previously
outstanding notes.
Unless we specify otherwise in the relevant pricing supplement, currency
amounts in this prospectus are expressed in United States dollars. Unless we
specify otherwise in any note and pricing supplement, the notes will be
denominated in U.S. dollars and payments of principal, premium, if any, and any
interest on the notes will be made in U.S. dollars. If any note is to be
denominated other than exclusively in U.S. dollars, or if the principal
11
of, premium, if any, or any interest on the note is to be paid in one or more
currencies (or currency units or in amounts determined by reference to an index
or indices) other than that in which that note is denominated, additional
information (including authorized denominations and related exchange rate
information) will be provided in the relevant pricing supplement. Unless we
specify otherwise in any pricing supplement, notes denominated in U.S. dollars
will be issued in denominations of $1,000 or any integral multiple of $1,000.
Interest rates that we offer on the notes may differ depending upon, among
other factors, the aggregate principal amount of notes purchased in any single
transaction. Notes with different variable terms other than interest rates may
also be offered concurrently to different investors. We may change interest
rates or formulas and other terms of notes from time to time, but no change of
terms will affect any note we have previously issued or as to which we have
accepted an offer to purchase.
Each note will be issued as a book-entry note in fully registered form
without coupons. Each note issued in book-entry form will be represented by a
global note that we deposit with and register in the name of a financial
institution or its nominee, that we select. The financial institution that we
select for this purpose is called the depositary. Unless we specify otherwise
in the applicable pricing supplement, The Depository Trust Company, New York,
New York, will be the depositary for all notes in global form. Except as
discussed below under "Global Notes", owners of beneficial interests in
book-entry notes will not be entitled to physical delivery of notes in
certificated form. We will make payments of principal of, and premium, if any
and interest, if any, on the notes through the applicable trustee to the
depositary for the notes. See "Global Notes".
The indentures do not limit the aggregate principal amount of debt
securities or of any particular series of debt securities which may be issued
under the indentures and provide that these debt securities may be issued at
various times in one or more series, in each case with the same or various
maturities, at par or at a discount. (Section 301) The indentures provide that
there may be more than one trustee under the indentures with respect to
different series of debt securities. As of March 31, 2002, $12.5 billion
aggregate principal amount of senior debt securities was outstanding under the
senior indenture. The senior trustee is trustee for such series. As of March
31, 2002, $27.5 billion aggregate principal amount of subordinated debt
securities was outstanding under the subordinated indenture. The subordinated
trustee is trustee for such series.
The indentures do not limit the amount of other debt that Wachovia may issue
and do not contain financial or similar restrictive covenants. As of March 31,
2002, Wachovia had an aggregate of $4.1 billion of short-term senior
indebtedness outstanding which consisted primarily of commercial paper.
Wachovia expects from time to time to incur additional senior indebtedness and
Other Financial Obligations (as defined below). The indentures do not prohibit
or limit additional senior indebtedness or Other Financial Obligations.
Because Wachovia is a holding company and a legal entity separate and
distinct from its subsidiaries, Wachovia's rights to participate in any
distribution of assets of any subsidiary upon its liquidation, reorganization
or otherwise, and the holders of notes' ability to benefit indirectly from such
distribution, would be subject to prior creditor's claims, except to the extent
that Wachovia itself may be a creditor of that subsidiary with recognized
claims. Claims on Wachovia's subsidiary banks by creditors other than Wachovia
include long-term debt and substantial obligations with respect to deposit
liabilities and federal funds purchased, securities sold under repurchase
agreements, other short-term borrowings and various other financial
obligations. The indentures do not contain any covenants designed to afford
holders of notes protection in the event of a highly leveraged transaction
involving Wachovia.
Legal Ownership
Street Name and Other Indirect Holders
Investors who hold their notes in accounts at banks or brokers will
generally not be recognized by us as legal holders of notes. This is called
holding in street name. Instead, we would recognize only the bank or broker, or
the financial institution the bank or broker uses to hold its notes. These
intermediary banks, brokers and other
12
financial institutions pass along principal, interest and other payments on the
notes, either because they agree to do so in their customer agreements or
because they are legally required to do so. If you hold your notes in street
name, you should check with your own institution to find out:
. how it handles note payments and notices;
. whether it imposes fees or charges;
. how it would handle voting if it were ever required;
. whether and how you can instruct it to send you notes registered in your
own name so you can be a direct holder as described below; and
. how it would pursue rights under the notes if there were a default or
other event triggering the need for holders to act to protect their
interests.
Direct Holders
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by us or the trustee, under the notes run only to
persons who are registered as holders of notes. As noted above, we do not have
obligations to you if you hold in street name or other indirect means, either
because you choose to hold your notes in that manner or because the notes are
issued in the form of global securities as described below. For example, once
we make payment to the registered holder we have no further responsibility for
the payment even if that holder is legally required to pass the payment along
to you as a street name customer but does not do so.
Global Notes
A global note is a special type of indirectly held security, as described
above under "--Street Name and Other Indirect Holders". If we choose to issue
notes in the form of global notes, the ultimate beneficial owners of global
notes can only be indirect holders. We require that the global note be
registered in the name of a financial institution we select.
We also require that the notes included in the global note not be
transferred to the name of any other direct holder except in the special
circumstances described in the section "Global Notes". The financial
institution that acts as the sole direct holder of the global note is called
the depositary. Any person wishing to own a global note must do so indirectly
by virtue of an account with a broker, bank or other financial institution that
in turn has an account with the depositary. The pricing supplement indicates
whether your series of notes will be issued only in the form of global notes.
Further details of legal ownership are discussed in the section "Global
Notes" below.
In the remainder of this description "you" or "holder" means direct holders
and not street name or other indirect holders of notes. Indirect holders
should read the previous subsection titled "--Street Name and Other Indirect
Holders".
Types of Notes
We may issue the following four types of notes:
.. Fixed Rate Notes. A note of this type will bear interest at a fixed rate
described in the applicable pricing supplement. This type includes
zero-coupon notes, which bear no interest and are instead issued at a price
lower than the principal amount.
.. Floating Rate Notes. A note of this type will bear interest at rates that
are determined by reference to an interest rate formula. In some cases, the
rates may also be adjusted by adding or subtracting a spread or
13
multiplying by a spread multiplier and may be subject to a minimum rate or a
maximum rate. The various interest rate formulas and these other features are
described below in "--Interest Rates--Floating Rate Notes". If your note is a
floating rate note, the formula and any adjustments that apply to the
interest rate will be specified in your pricing supplement.
.. Indexed Notes. A note of this type provides that the principal amount
payable at its maturity, and/or the amount of interest payable on an interest
payment date, will be determined by reference to:
. one or more securities;
. one or more currencies;
. one or more commodities;
. any other financial, economic or other measures or instruments, including
the occurrence or non-occurrence of any event or circumstance; and/or
. indices or baskets of any of these items.
If you are a holder of an indexed note, you may receive a principal amount
at maturity that is greater than or less than the face amount of your note
depending upon the value of the applicable index at maturity. That value may
fluctuate over time. If you purchase an indexed note your pricing supplement
will include information about the relevant index and about how amounts that
are to become payable will be determined by reference to that index. Before you
purchase any indexed note, you should read carefully the section entitled "Risk
Factors--Risks Relating to Indexed Notes" above.
.. Exchangeable Notes. We may issue notes, which we refer to as "exchangeable
notes," that are exchangeable, at our option or the option of the holder,
into securities of an issuer other than Wachovia or into other property. The
exchangeable notes may or may not bear interest or be issued with original
issue discount or at a premium. The general terms of the exchangeable notes
are described below.
Optionally Exchangeable Notes. The holder of an optionally exchangeable
note may, during a period, or at specific times, exchange the note for the
underlying property at a specified rate of exchange. If specified in your
pricing supplement, we will have the option to redeem the optionally
exchangeable note prior to maturity. If the holder of an optionally
exchangeable note does not elect to exchange the note prior to maturity or any
redemption date, the holder will receive the principal amount of the note plus
any accrued interest at maturity or upon redemption.
Mandatorily Exchangeable Notes. At maturity, the holder of a mandatorily
exchangeable note must exchange the note for the underlying property at a
specified rate of exchange, and, therefore, depending upon the value of the
underlying property at maturity, the holder of a mandatorily exchangeable note
may receive less than the principal amount of the note at maturity. If so
indicated in your pricing supplement, the specified rate at which a mandatorily
exchangeable note may be exchanged may vary depending on the value of the
underlying property so that, upon exchange, the holder participates in a
percentage, which may be less than, equal to, or greater than 100% of the
change in value of the underlying property. Mandatorily exchangeable notes may
include notes where we have the right, but not the obligation, to require
holders of notes to exchange their notes for the underlying property.
Payments upon Exchange. Your pricing supplement will specify if upon
exchange, at maturity or otherwise, the holder of an exchangeable note may
receive, at the specified exchange rate, either the underlying property or the
cash value of the underlying property. The underlying property may be the
securities of either U.S. or foreign entities or both. The exchangeable notes
may or may not provide for protection against fluctuations in the exchange rate
between the currency in which that note is denominated and the currency or
currencies in which the market prices of the underlying security or securities
are quoted. Exchangeable notes may have other terms, which will be specified in
your pricing supplement.
14
Special Requirements for Exchange of Global Securities. If an optionally
exchangeable note is represented by a global security, the depositary's nominee
will be the holder of that note and therefore will be the only entity that can
exercise a right to exchange. In order to ensure that the depositary's nominee
will timely exercise a right to exchange a particular note or any portion of a
particular note, the beneficial owner of the note must instruct the broker or
other direct or indirect participant through which it holds an interest in that
note to notify the depositary of its desire to exercise a right to exchange.
Different firms have different deadlines for accepting instructions from their
customers. Each beneficial owner should consult the broker or other participant
through which it holds an interest in a note in order to ascertain the deadline
for ensuring that timely notice will be delivered to the depositary.
Payments upon Acceleration of Maturity or upon Tax Redemption. If the
principal amount payable at maturity of any exchangeable note is declared due
and payable prior to maturity, the amount payable on:
. an optionally exchangeable note will equal the face amount of the note
plus accrued interest, if any, to but excluding the date of payment,
except that if a holder has exchanged an optionally exchangeable note
prior to the date of declaration or tax redemption without having received
the amount due upon exchange, the amount payable will be an amount of cash
equal to the amount due upon exchange and will not include any accrued but
unpaid interest; and
. a mandatorily exchangeable note will equal an amount determined as if the
date of declaration or tax redemption were the maturity date plus accrued
interest, if any, to but excluding the date of payment.
Original Issue Discount Notes
A fixed rate note, a floating rate note or an indexed note may be an
original issue discount note. A note of this type is issued at a price lower
than its principal amount and provides that, upon redemption or acceleration of
its maturity, an amount less than its principal amount will be payable. An
original issue discount note may be a zero coupon note. A note issued at a
discount to its principal may, for U.S. federal income tax purposes, be
considered an original issue discount note, regardless of the amount payable
upon redemption or acceleration of maturity. See "United States Taxation" below
for a brief description of the U.S. federal income tax consequences of owning
an original issue discount note.
Information in the Pricing Supplement
Your pricing supplement will describe one or more of the following terms of
your note:
. the stated maturity;
. the specified currency or currencies for principal and interest, if not
U.S. dollars;
. the price at which we originally issue your note, expressed as a
percentage of the principal amount, and the original issue date;
. whether your note is a fixed rate note, a floating rate note, an indexed
note or an exchangeable note;
. if your note is a fixed rate note, the yearly rate at which your note will
bear interest, if any, and the interest payment dates;
. if your note is a floating rate note, the interest rate basis, which may
be one of the eight interest rate bases described in "-- Interest Rates --
Floating Rate Notes" below; any applicable index currency or maturity,
spread or spread multiplier or initial, maximum or minimum rate; and the
interest reset, determination, calculation and payment dates, all of which
we describe under " -- Interest Rates -- Floating Rate Notes" below;
. if your note is an indexed note, the principal amount, if any, we will pay
you at maturity, the amount of interest, if any, we will pay you on an
interest payment date or the formula we will use to calculate these
amounts, if any, and whether your note will be exchangeable for or payable
in cash, securities of an issuer other than Wachovia or other property;
15
. if your note is an exchangeable note, the securities or property for which
the notes may be exchanged, whether the notes are exchangeable at your
option or at Wachovia's option, and the other items described in
"Exchangeable Notes" above;
. if your note is an original issue discount note, the yield to maturity;
. if applicable, the circumstances under which your note may be redeemed at
our option before the stated maturity, including any redemption
commencement date, redemption price(s) and redemption period(s);
. if applicable, the circumstances under which you may demand repayment of
your note before the stated maturity, including any repayment commencement
date, repayment price(s) and repayment period(s);
. any special United States federal income tax consequences of the purchase,
ownership or disposition of a particular issuance of notes;
. the use of proceeds, if materially different than those discussed in this
prospectus; and
. any other terms of your note, which could be different from those
described in this prospectus.
.. Market-Making Transactions. lf you purchase your note in a market-making
transaction, you will receive information about the price you pay and your
trade and settlement dates in a separate confirmation of sale. A
market-making transaction is one in which Wachovia Securities or another of
our affiliates resells a note that it has previously acquired from another
holder. A market-making transaction in a particular note occurs after the
original sale of the note.
Redemption at the Option of Wachovia; No Sinking Fund
If an initial redemption date is specified in the applicable pricing
supplement, we may redeem the particular notes prior to their stated maturity
date at our option on any date on or after that initial redemption date in
whole or from time to time in part in increments of $1,000 or any other
integral multiple of an authorized denomination specified in the applicable
pricing supplement (provided that any remaining principal amount thereof shall
be at least $1,000 or other minimum authorized denomination applicable
thereto), at the applicable redemption price (as defined below), together with
unpaid interest accrued thereon to the date of redemption. We must give written
notice to registered holders of the particular notes to be redeemed at our
option not more than 60 nor less than 30 calendar days prior to the date of
redemption. "Redemption price", with respect to a note, means an amount equal
to the initial redemption percentage specified in the applicable pricing
supplement (as adjusted by the annual redemption percentage reduction, if
applicable) multiplied by the unpaid principal amount thereof to be redeemed.
The initial redemption percentage, if any, applicable to a note shall decline
at each anniversary of the initial redemption date by an amount equal to the
applicable annual redemption percentage reduction, if any, until the redemption
price is equal to 100% of the unpaid principal amount thereof to be redeemed.
The notes will not be subject to, or entitled to the benefit of, any sinking
fund.
Repayment at the Option of the Holder
If one or more optional repayment dates are specified in the applicable
pricing supplement, registered holders of the particular notes may require us
to repay those notes prior to their stated maturity date on any optional
repayment date in whole or from time to time in part in increments of $1,000 or
any other integral multiple of an authorized denomination specified in the
applicable pricing supplement (provided that any remaining principal amount
thereof shall be at least $1,000 or other minimum authorized denomination
applicable thereto), at a repayment price equal to 100% of the unpaid principal
amount thereof to be repaid, together with unpaid interest accrued thereon to
the date of repayment. A registered holder's exercise of the repayment option
will be irrevocable.
For any note to be repaid, the applicable trustee must receive, at its
corporate trust office in the Borough of Manhattan, The City of New York, not
more than 60 nor less than 30 calendar days prior to the date of repayment, the
particular notes to be repaid and, in the case of a book-entry note, repayment
instructions from the applicable beneficial owner (as defined below) to the
depositary and forwarded by the depositary.
16
Only the depositary may exercise the repayment option in respect of global
notes representing book-entry notes. Accordingly, beneficial owners of global
notes that desire to have all or any portion of the book-entry notes
represented thereby repaid must instruct the participant (as defined below)
through which they own their interest to direct the depositary to exercise the
repayment option on their behalf by forwarding the repayment instructions to
the applicable trustee as aforesaid. In order to ensure that these instructions
are received by the applicable trustee on a particular day, the applicable
beneficial owner must so instruct the participant through which it owns its
interest before that participant's deadline for accepting instructions for that
day. Different firms may have different deadlines for accepting instructions
from their customers. Accordingly, beneficial owners should consult their
participants for the respective deadlines. All instructions given to
participants from beneficial owners of global notes relating to the option to
elect repayment shall be irrevocable. In addition, at the time repayment
instructions are given, each beneficial owner shall cause the participant
through which it owns its interest to transfer the beneficial owner's interest
in the global note representing the related book-entry notes, on the
depositary's records, to the applicable trustee. See "Global Notes."
If applicable, we will comply with the requirements of Section 14(e) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
promulgated thereunder, and any other securities laws or regulations in
connection with any repayment of notes at the option of the registered holders
thereof.
We may at any time purchase notes at any price or prices in the open market
or otherwise. Notes so purchased by us may, at our discretion, be held, resold
or surrendered to the applicable trustee for cancellation.
Interest
Each interest-bearing note will bear interest from its date of issue at the
rate per annum, in the case of a fixed rate note, or pursuant to the interest
rate formula, in the case of a floating rate note, in each case as specified in
the applicable pricing supplement, until the principal thereof is paid. We will
make interest payments in respect of fixed rate notes and floating rate notes
in an amount equal to the interest accrued from and including the immediately
preceding interest payment date in respect of which interest has been paid or
from and including the date of issue, if no interest has been paid, to but
excluding the applicable interest payment date or the maturity date, as the
case may be (each, an "interest period").
Interest on fixed rate notes and floating rate notes will be payable in
arrears on each interest payment date and on the maturity date. The first
payment of interest on any note originally issued between a regular record date
and the related interest payment date will be made on the interest payment date
immediately following the next succeeding record date to the registered holder
on the next succeeding record date. The "regular record date" shall be the
fifteenth calendar day, whether or not a "business day", immediately preceding
the related interest payment date. "Business Day" is defined below under
"--Interest Rates--Special Rate Calculation Terms". For the purpose of
determining the holder at the close of business on a regular record date when
business is not being conducted, the close of business will mean 5:00 P.M., New
York City time, on that day.
Interest Rates
This subsection describes the different kinds of interest rates that may
apply to your note, if it bears interest.
Fixed Rate Notes
The relevant pricing supplement will specify the interest payment dates for
a fixed rate note as well as the maturity date. Interest on fixed rate notes
will be computed on the basis of a 360-day year of twelve 30-day months or such
other day count fraction set forth in the pricing supplement.
If any interest payment date or the maturity date of a fixed rate note falls
on a day that is not a business day, we will make the required payment of
principal, premium, if any, and/or interest on the next succeeding business
day, and no additional interest will accrue in respect of the payment made on
that next succeeding business day.
17
Floating Rate Notes
In this subsection, we use several specialized terms relating to the manner in
which floating interest rates are calculated. These terms appear in bold,
italicized type the first time they appear, and we define these terms in
"--Special Rate Calculation Terms" at the end of this subsection.
The following will apply to floating rate notes.
Interest Rate Basis. We currently expect to issue floating rate notes that
bear interest at rates based on one or more of the following interest rate
bases:
. commercial paper rate;
. prime rate;
. LIBOR;
. EURIBOR;
. treasury rate;
. CMT rate;
. CD rate; and/or
. federal funds rate.
We describe each of the interest rate bases in further detail below in this
subsection. If you purchase a floating rate note, your pricing supplement will
specify the interest rate basis that applies to your note.
Calculation of Interest. Calculations relating to floating rate notes will
be made by the calculation agent, an institution that we appoint as our agent
for this purpose. That institution may include any affiliate of ours, such as
Wachovia Securities or Wachovia Bank, N.A. (formerly named First Union National
Bank). If other than Wachovia Securities or Wachovia Bank, N.A., the pricing
supplement for a particular floating rate note will name the institution that
we have appointed to act as the calculation agent for that note as of its
original issue date. We may appoint a different institution to serve as
calculation agent from time to time after the original issue date of the note
without your consent and without notifying you of the change.
For each floating rate note, the calculation agent will determine, on no
later than the corresponding interest calculation date or on the interest
determination date, as described below, the interest rate that takes effect on
each interest reset date. In addition, the calculation agent will calculate the
amount of interest that has accrued during each interest period--i.e., the
period from and including the original issue date, or the last date to which
interest has been paid or made available for payment, to but excluding the
payment date. For each interest period, the calculation agent will calculate
the amount of accrued interest by multiplying the face or other specified
amount of the floating rate note by an accrued interest factor for the interest
period. This factor will equal the sum of the interest factors calculated for
each day during the interest period. The interest factor for each day will be
expressed as a decimal and will be calculated by dividing the interest rate,
also expressed as a decimal, applicable to that day by 360 or by the actual
number of days in the year, as specified in the relevant pricing supplement.
Upon the request of the holder of any floating rate note, the calculation
agent will provide for that note the interest rate then in effect--and, if
determined, the interest rate that will become effective on the next interest
reset date. The calculation agent's determination of any interest rate, and its
calculation of the amount of interest for any interest period, will be final
and binding in the absence of manifest error.
All percentages resulting from any calculation relating to a note will be
rounded upward or downward, as appropriate, to the next higher or lower one
hundred-thousandth of a percentage point, e.g., 9.876541% (or
18
..09876541) being rounded down to 9.87654% (or .0987654) and 9.876545% (or
..09876545) being rounded up to 9.87655% (or .0987655). All amounts used in or
resulting from any calculation relating to a floating rate note will be rounded
upward or downward, as appropriate, to the nearest cent, in the case of U.S.
dollars, or to the nearest corresponding hundredth of a unit, in the case of a
currency other than U.S. dollars, with one-half cent or one-half of a
corresponding hundredth of a unit or more being rounded upward.
In determining the interest rate basis that applies to a floating rate note
during a particular interest period, the calculation agent may obtain rate
quotes from various banks or dealers active in the relevant market, as
discussed below. Those reference banks and dealers may include the calculation
agent itself and its affiliates, as well as any agent participating in the
distribution of the relevant floating rate notes and its affiliates, and they
may include affiliates of Wachovia.
Initial Interest Rate. For any floating rate note, the interest rate in
effect from the original issue date to the first interest reset date will be
the initial interest rate. We will specify the initial interest rate or the
manner in which it is determined in the relevant pricing supplement.
Spread or Spread Multiplier. In some cases, the interest rate basis for a
floating rate note may be adjusted:
. by adding or subtracting a specified number of basis points, called the
spread, with one basis point being 0.01%; or
. by multiplying the interest rate basis by a specified percentage, called
the spread multiplier.
If you purchase a floating rate note, your pricing supplement will indicate
whether a spread or spread multiplier will apply to your note and, if so, the
amount of the spread or spread multiplier.
Maximum and Minimum Rates. The actual interest rate, after being adjusted
by the spread or spread multiplier, may also be subject to either or both of
the following limits:
. a maximum rate--i.e., a specified upper limit that the actual interest
rate in effect at any time may not exceed; and/or
. a minimum rate--i.e., a specified lower limit that the actual interest
rate in effect at any time may not fall below.
If you purchase a floating rate note, your pricing supplement will indicate
whether a maximum rate and/or minimum rate will apply to your note and, if so,
what those rates are.
Whether or not a maximum rate applies, the interest rate on a floating rate
note will in no event be higher than the maximum rate permitted by New York
law, as it may be modified by U.S. law of general application. Under current
New York law, the maximum rate of interest, with some exceptions, for any loan
in an amount less than $250,000 is 16% and for any loan in the amount of
$250,000 or more but less than $2,500,000 is 25% per year on a simple interest
basis. These limits do not apply to loans of $2,500,000 or more.
The rest of this subsection describes how the interest rate and the interest
payment dates will be determined, and how interest will be calculated, on a
floating rate note.
Interest Reset Dates. The rate of interest on a floating rate note will be
reset, by the calculation agent described below, daily, weekly, monthly,
quarterly, semi-annually or annually. The date on which the interest rate
resets and the reset rate becomes effective is called the interest reset date.
Except as otherwise specified in the applicable pricing supplement, the
interest reset date will be as follows:
. for floating rate notes that reset daily, each business day;
. for floating rate notes that reset weekly and are not treasury rate notes,
the Wednesday of each week;
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. for treasury rate notes that reset weekly, the Tuesday of each week;
. for floating rate notes that reset monthly, the third Wednesday of each
month;
. for floating rate notes that reset quarterly, the third Wednesday of
March, June, September and December of each year;
. for floating rate notes that reset semi-annually, the third Wednesday of
each of two months of each year as indicated in the relevant pricing
supplement; and
. for floating rate notes that reset annually, the third Wednesday of one
month of each year as indicated in the relevant pricing supplement.
For a floating rate note, the interest rate in effect on any particular day
will be the interest rate determined with respect to the latest interest reset
date that occurs on or before that day. There are several exceptions, however,
to the reset provisions described above.
The interest rate in effect from the original issue date to the first
interest reset date will be the initial interest rate.
If any interest reset date for a floating rate note would otherwise be a day
that is not a business day, the interest reset date will be postponed to the
next day that is a business day. For a LIBOR or EURIBOR note, however, if that
business day is in the next succeeding calendar month, the interest reset date
will be the immediately preceding business day.
Interest Determination Dates. The interest rate that takes effect on an
interest reset date will be determined by the calculation agent by reference to
a particular date called an interest determination date. Except as otherwise
indicated in the relevant pricing supplement:
. for commercial paper rate, federal funds rate and prime rate notes, the
interest determination date relating to a particular interest reset date
will be the business day preceding the interest reset date;
. for CD rate and CMT rate notes, the interest determination date relating
to a particular interest reset date will be the second business day
preceding the interest reset date;
. for LIBOR notes, the interest determination date relating to a particular
interest reset date will be the second London business day preceding the
interest reset date, unless the index currency is pounds sterling, in
which case the interest determination date will be the interest reset
date. We refer to an interest determination date for a LIBOR note as a
LIBOR interest determination date;
. for EURIBOR notes, the interest determination date relating to a
particular interest reset date will be the second euro business day
preceding the interest reset date. We refer to an interest determination
date for a EURIBOR note as a EURIBOR interest determination date; and
. for treasury rate notes, the interest determination date relating to a
particular interest reset date, which we refer to as a treasury interest
determination date, will be the day of the week in which the interest
reset date falls on which treasury bills--i.e., direct obligations of the
U.S. government--would normally be auctioned. Treasury bills are usually
sold at auction on the Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the following
Tuesday, except that the auction may be held on the preceding Friday. If
as the result of a legal holiday an auction is held on the preceding
Friday, that Friday will be the treasury interest determination date
relating to the interest reset date occurring in the next succeeding week.
The interest determination date pertaining to a floating rate note the
interest rate of which is determined with reference to two or more interest
rate bases will be the latest business day which is at least two business days
before the related interest reset date for the applicable floating rate note on
which each interest rate basis is determinable.
20
Interest Calculation Dates. As described above, the interest rate that
takes effect on a particular interest reset date will be determined by
reference to the corresponding interest determination date. Except for LIBOR
notes and EURIBOR notes, however, the determination of the rate will actually
be made on a day no later than the corresponding interest calculation date. The
interest calculation date will be the earlier of the following:
. the tenth calendar day after the interest determination date or, if that
tenth calendar day is not a business day, the next succeeding business
day; and
. the business day immediately preceding the interest payment date or the
maturity, whichever is the day on which the next payment of interest will
be due.
The calculation agent need not wait until the relevant interest calculation
date to determine the interest rate if the rate information it needs to make
the determination is available from the relevant sources sooner.
Interest Payment Dates. The interest payment dates for a floating rate note
will depend on when the interest rate is reset and, unless we specify otherwise
in the relevant pricing supplement, will be as follows:
. for floating rate notes that reset daily, weekly or monthly, the third
Wednesday of each month or the third Wednesday of March, June, September
and December of each year, as specified in the relevant pricing supplement;
. for floating rate notes that reset quarterly, the third Wednesday of
March, June, September and December of each year;
. for floating rate notes that reset semi-annually, the third Wednesday of
the two months of each year specified in the relevant pricing supplement;
or
. for floating rate notes that reset annually, the third Wednesday of the
month specified in the relevant pricing supplement.
Regardless of these rules, if a note is originally issued after the regular
record date and before the date that would otherwise be the first interest
payment date, the first interest payment date will be the date that would
otherwise be the second interest payment date.
In addition, the following special provision will apply to a floating rate
note with regard to any interest payment date other than one that falls on the
maturity. If the interest payment date would otherwise fall on a day that is
not a business day, then the interest payment date will be the next day that is
a business day. However, if the floating rate note is a LIBOR note or a EURIBOR
note and the next business day falls in the next calendar month, then the
interest payment date will be advanced to the next preceding day that is a
business day. If the maturity date of a floating rate note falls on a day that
is not a business day, we will make the required payment of principal, premium,
if any, and interest on the next succeeding business day, and no additional
interest will accrue in respect of the payment made on that next succeeding
business day.
Calculation Agent. We have initially appointed First Union Securities, Inc.
as our calculation agent for the notes. See "--Calculation of Interest" above
for details regarding the role of the calculation agent.
Commercial Paper Rate Notes
If you purchase a commercial paper rate note, your note will bear interest
at an interest rate equal to the commercial paper rate and adjusted by the
spread or spread multiplier, if any, indicated in your pricing supplement.
The commercial paper rate will be the money market yield of the rate, for
the relevant interest determination date, for commercial paper having the index
maturity indicated in your pricing supplement, as published in
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H.15(519) under the heading "Commercial Paper--Nonfinancial". If the commercial
paper rate cannot be determined as described above, the following procedures
will apply.
. If the rate described above does not appear in H.15(519) at 3:00 P.M., New
York City time, on the relevant interest calculation date, unless the
calculation is made earlier and the rate is available from that source at
that time, then the commercial paper rate will be the rate, for the
relevant interest determination date, for commercial paper having the
index maturity specified in your pricing supplement, as published in H.15
daily update or any other recognized electronic source used for displaying
that rate, under the heading "Commercial Paper--Nonfinancial".
. If the rate described above does not appear in H.15(519), H.15 daily
update or another recognized electronic source at 3:00 P.M., New York City
time, on the relevant interest calculation date, unless the calculation is
made earlier and the rate is available from one of those sources at that
time, the commercial paper rate will be the money market yield of the
arithmetic mean of the following offered rates for U.S. dollar commercial
paper that has the relevant index maturity and is placed for an industrial
issuer whose bond rating is "AA", or the equivalent, from a nationally
recognized rating agency: the rates offered as of 11:00 A.M., New York
City time, on the relevant interest determination date, by three leading
U.S. dollar commercial paper dealers in New York City selected by the
calculation agent.
. If fewer than three dealers selected by the calculation agent are quoting
as described above, the commercial paper rate for the new interest period
will be the commercial paper rate in effect for the prior interest period.
If the initial interest rate has been in effect for the prior interest
period, however, it will remain in effect for the new interest period.
Prime Rate Notes
If you purchase a prime rate note, your note will bear interest at an
interest rate equal to the prime rate and adjusted by the spread or spread
multiplier, if any, indicated in your pricing supplement.
The prime rate will be the rate, for the relevant interest determination
date, published in H.15(519) under the heading "Bank Prime Loan". If the prime
rate cannot be determined as described above, the following procedures will
apply.
. If the rate described above does not appear in H.15(519) at 3:00 P.M., New
York City time, on the relevant interest calculation date, unless the
calculation is made earlier and the rate is available from that source at
that time, then the prime rate will be the rate, for the relevant interest
determination date, as published in H.15 daily update or another
recognized electronic source used for the purpose of displaying that rate,
under the heading "Bank Prime Loan".
. If the rate described above does not appear in H.15(519), H.15 daily
update or another recognized electronic source at 3:00 P.M., New York City
time, on the relevant interest calculation date, unless the calculation is
made earlier and the rate is available from one of those sources at that
time, then the prime rate will be the arithmetic mean of the following
rates as they appear on the Reuters screen US PRIME 1 page: the rate of
interest publicly announced by each bank appearing on that page as that
bank's prime rate or base lending rate, as of 11:00 A.M., New York City
time, on the relevant interest determination date.
. If fewer than four of these rates appear on the Reuters screen US PRIME 1
page, the prime rate will be the arithmetic mean of the prime rates or
base lending rates, as of the close of business on the relevant interest
determination date, of three major banks in New York City selected by the
calculation agent. For this purpose, the calculation agent will use rates
quoted on the basis of the actual number of days in the year divided by a
360-day year.
. If fewer than three banks selected by the calculation agent are quoting as
described above, the prime rate for the new interest period will be the
prime rate in effect for the prior interest period. If the initial
interest rate has been in effect for the prior interest period, however,
it will remain in effect for the new interest period.
22
LIBOR Notes
If you purchase a LIBOR note, your note will bear interest at an interest
rate equal to LIBOR, which will be the London interbank offered rate for
deposits in U.S. dollars or any other index currency, as noted in your pricing
supplement. In addition, when LIBOR is the interest rate basis the applicable
LIBOR rate will be adjusted by the spread or spread multiplier, if any,
indicated in your pricing supplement. LIBOR will be determined in the following
manner:
. LIBOR will be either:
. the offered rate appearing on the Telerate LIBOR page; or
. the arithmetic mean of the offered rates appearing on the Reuters screen
LIBOR page unless that page by its terms cites only one rate, in which
case that rate;
in either case, as of 11:00 A.M., London time, on the relevant LIBOR interest
determination date, for deposits of the relevant index currency having the
relevant index maturity beginning on the relevant interest reset date. Your
pricing supplement will indicate the index currency, the index maturity and the
reference page that apply to your LIBOR note. If no reference page is mentioned
in your pricing supplement, Telerate LIBOR page will apply to your LIBOR note.
. If Telerate LIBOR page applies and the rate described above does not
appear on that page, or if Reuters screen LIBOR page applies and fewer
than two of the rates described above appears on that page or no rate
appears on any page on which only one rate normally appears, then LIBOR
will be determined on the basis of the rates, at approximately 11:00 A.M.,
London time, on the relevant LIBOR interest determination date, at which
deposits of the following kind are offered to prime banks in the London
interbank market by four major banks in that market selected by the
calculation agent: deposits of the index currency having the relevant
index maturity, beginning on the relevant interest reset date, and in a
representative amount. The calculation agent will request the principal
London office of each of these banks to provide a quotation of its rate.
If at least two quotations are provided, LIBOR for the relevant LIBOR
interest determination date will be the arithmetic mean of the quotations.
. If fewer than two quotations are provided as described above, LIBOR for
the relevant LIBOR interest determination date will be the arithmetic mean
of the rates for loans of the following kind to leading European banks
quoted, at approximately 11:00 A.M., in the principal financial center for
the country of the index currency, on that LIBOR interest determination
date, by three major banks in that financial center selected by the
calculation agent: loans of the index currency having the relevant index
maturity, beginning on the relevant interest reset date, and in a
representative amount.
. If fewer than three banks selected by the calculation agent are quoting as
described above, LIBOR for the new interest period will be LIBOR in effect
for the prior interest period. If the initial interest rate has been in
effect for the prior interest period, however, it will remain in effect
for the new interest period.
EURIBOR Notes
If you purchase a EURIBOR note, your note will bear interest at an interest
rate equal to the interest rate for deposits in euro, designated as "EURIBOR"
and sponsored jointly by the European Banking Federation and ACI--the Financial
Market Association, or any company established by the joint sponsors for
purposes of compiling and publishing that rate. In addition, when EURIBOR is
the interest rate basis the EURIBOR base rate will be adjusted by the spread or
spread multiplier, if any, specified in your pricing supplement. EURIBOR will
be determined in the following manner:
. EURIBOR will be the offered rate for deposits in euros having the index
maturity specified in your pricing supplement, beginning on the second
euro business day after the relevant EURIBOR interest determination date,
as that rate appears on Telerate page 248 as of 11:00 A.M., Brussels time,
on the relevant EURIBOR interest determination date.
23
. If the rate described above does not appear on Telerate page 248, EURIBOR
will be determined on the basis of the rates, at approximately 11:00 A.M.,
Brussels time, on the relevant EURIBOR interest determination date, at
which deposits of the following kind are offered to prime banks in the
euro-zone interbank market by the principal euro-zone office of each of
four major banks in that market selected by the calculation agent: euro
deposits having the relevant index maturity, beginning on the relevant
interest reset date, and in a representative amount. The calculation agent
will request the principal euro-zone office of each of these banks to
provide a quotation of its rate. If at least two quotations are provided,
EURIBOR for the relevant EURIBOR interest determination date will be the
arithmetic mean of the quotations.
. If fewer than two quotations are provided as described above, EURIBOR for
the relevant EURIBOR interest determination date will be the arithmetic
mean of the rates for loans of the following kind to leading euro-zone
banks quoted, at approximately 11:00 A.M., Brussels time on that EURIBOR
interest determination date, by three major banks in the euro-zone
selected by the calculation agent: loans of euros having the relevant
index maturity, beginning on the relevant interest reset date, and in a
representative amount.
. If fewer than three banks selected by the calculation agent are quoting as
described above, EURIBOR for the new interest period will be EURIBOR in
effect for the prior interest period. If the initial interest rate has
been in effect for the prior interest period, however, it will remain in
effect for the new interest period.
Treasury Rate Notes
If you purchase a treasury rate note, your note will bear interest at an
interest rate equal to the treasury rate and adjusted by the spread or spread
multiplier, if any, indicated in your pricing supplement.
The treasury rate will be the rate for the auction, on the relevant treasury
interest determination date, of treasury bills having the index maturity
specified in your pricing supplement, as that rate appears on Telerate page 56
or 57 under the heading "Investment Rate". If the treasury rate cannot be
determined in this manner, the following procedures will apply.
. If the rate described above does not appear on either page at 3:00 P.M.,
New York City time, on the relevant interest calculation date, unless the
calculation is made earlier and the rate is available from that source at
that time, the treasury rate will be the bond equivalent yield of the
rate, for the relevant interest determination date, for the type of
treasury bill described above, as published in H.15 daily update, or
another recognized electronic source used for displaying that rate, under
the heading "U.S. Government Securities/Treasury Bills/Auction High".
. If the rate described in the prior paragraph does not appear in H.15 daily
update or another recognized electronic source at 3:00 P.M., New York City
time, on the relevant interest calculation date, unless the calculation is
made earlier and the rate is available from one of those sources at that
time, the treasury rate will be the bond equivalent yield of the auction
rate, for the relevant treasury interest determination date and for
treasury bills of the kind described above, as announced by the U.S.
Department of the Treasury.
. If the auction rate described in the prior paragraph is not so announced
by 3:00 P.M., New York City time, on the relevant interest calculation
date, or if no such auction is held for the relevant week, then the
treasury rate will be the bond equivalent yield of the rate, for the
relevant treasury interest determination date and for treasury bills
having a remaining maturity closest to the specified index maturity, as
published in H.15(519) under the heading "U.S. Government Securities
/Treasury Bills/Secondary Market".
. If the rate described in the prior paragraph does not appear in H.15(519)
at 3:00 P.M., New York City time, on the relevant interest calculation
date, unless the calculation is made earlier and the rate is
24
available from one of those sources at that time, then the treasury rate
will be the rate, for the relevant treasury interest determination date
and for treasury bills having a remaining maturity closest to the
specified index maturity, as published in H.15 daily update, or another
recognized electronic source used for displaying that rate, under the
heading "U.S. Government Securities/Treasury Bills/Secondary Market".
. If the rate described in the prior paragraph does not appear in H.15 daily
update or another recognized electronic source at 3:00 P.M., New York City
time, on the relevant interest calculation date, unless the calculation is
made earlier and the rate is available from one of those sources at that
time, the treasury rate will be the bond equivalent yield of the
arithmetic mean of the following secondary market bid rates for the issue
of treasury bills with a remaining maturity closest to the specified index
maturity: the rates bid as of approximately 3:30 P.M., New York City time,
on the relevant treasury interest determination date, by three primary
U.S. government securities dealers in New York City selected by the
calculation agent.
. If fewer than three dealers selected by the calculation agent are quoting
as described in the prior paragraph, the treasury rate in effect for the
new interest period will be the treasury rate in effect for the prior
interest period. If the initial interest rate has been in effect for the
prior interest period, however, it will remain in effect for the new
interest period.
CD Rate Notes
If you purchase a CD rate note, your note will bear interest at an interest
rate equal to the CD rate and adjusted by the spread or spread multiplier, if
any, indicated in your pricing supplement.
The CD rate will be the rate, on the relevant interest determination date,
for negotiable U.S. dollar certificates of deposit having the index maturity
specified in your pricing supplement, as published in H.15(519) under the
heading "CDs (Secondary Market)". If the CD rate cannot be determined in this
manner, the following procedures will apply.
. If the rate described above does not appear in H.15(519) at 3:00 P.M., New
York City time, on the relevant interest calculation date, unless the
calculation is made earlier and the rate is available from that source at
that time, then the CD rate will be the rate, for the relevant interest
determination date, described above as published in H.15 daily update, or
another recognized electronic source used for displaying that rate, under
the heading "CDs (Secondary Market)."
. If the rate described above does not appear in H.15(519), H.15 daily
update or another recognized electronic source at 3:00 P.M., New York City
time, on the relevant interest calculation date, unless the calculation is
made earlier and the rate is available from one of those sources at that
time, the CD rate will be the arithmetic mean of the following secondary
market offered rates for negotiable U.S. dollar certificates of deposit of
major U.S. money market banks with a remaining maturity closest to the
specified index maturity, and in a representative amount: the rates
offered as of 10:00 A.M., New York City time, on the relevant interest
determination date, by three leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in New York City, as selected by the
calculation agent.
. If fewer than three dealers selected by the calculation agent are quoting
as described above, the CD rate in effect for the new interest period will
be the CD rate in effect for the prior interest period. If the initial
interest rate has been in effect for the prior interest period, however,
it will remain in effect for the new interest period.
CMT Rate Notes
If you purchase a CMT rate note, your note will bear interest at an interest
rate equal to the CMT rate and adjusted by the spread or spread multiplier, if
any, indicated in your pricing supplement.
25
The CMT rate will be the following rate displayed on the designated CMT
Moneyline Telerate page under the heading ". . . Treasury Constant Maturities .
.. . Federal Reserve Board Release H.15 Mondays Approximately 3:45 P.M.," under
the column for the designated CMT index maturity:
. if the designated CMT Moneyline Telerate page is Telerate page 7051, the
rate for the relevant interest determination date; or
. if the designated CMT Moneyline Telerate page is Telerate page 7052, the
weekly or monthly average, as specified in your pricing supplement, for
the week that ends immediately before the week in which the relevant
interest determination date falls, or for the month that ends immediately
before the month in which the relevant interest determination date falls,
as applicable.
If the CMT rate cannot be determined in this manner, the following
procedures will apply.
. If the applicable rate described above is not displayed on the relevant
designated CMT Moneyline Telerate page at 3:00 P.M., New York City time,
on the relevant interest calculation date, unless the calculation is made
earlier and the rate is available from that source at that time, then the
CMT rate will be the applicable treasury constant maturity rate described
above--i.e., for the designated CMT index maturity and for either the
relevant interest determination date or the weekly or monthly average, as
applicable--as published in H.15(519).
. If the applicable rate described above does not appear in H.15(519) at
3:00 P.M., New York City time, on the relevant interest calculation date,
unless the calculation is made earlier and the rate is available from one
of those sources at that time, then the CMT rate will be the treasury
constant maturity rate, or other U.S. treasury rate, for the designated
CMT index maturity and with reference to the relevant interest
determination date, that:
. is published by the Board of Governors of the Federal Reserve System, or
the U.S. Department of the Treasury; and
. is determined by the calculation agent to be comparable to the
applicable rate formerly displayed on the designated CMT Moneyline
Telerate page and published in H.15(519).
. If the rate described in the prior paragraph does not appear at 3:00 P.M.,
New York City time, on the relevant interest calculation date, unless the
calculation is made earlier and the rate is available from one of those
sources at that time, then the CMT rate will be the yield to maturity of
the arithmetic mean of the following secondary market bid rates for the
most recently issued treasury notes having an original maturity of
approximately the designated CMT index maturity and a remaining term to
maturity of not less than the designated CMT index maturity minus one
year, and in a representative amount: the bid rates, as of approximately
3:30 P.M., New York City time, on the relevant interest determination
date, of three primary U.S. government securities dealers in New York City
selected by the calculation agent. In selecting these bid rates, the
calculation agent will request quotations from five of these primary
dealers and will disregard the highest quotation--or, if there is
equality, one of the highest--and the lowest quotation--or, if there is
equality, one of the lowest. Treasury notes are direct, non-callable,
fixed rate obligations of the U.S. government.
. If the calculation agent is unable to obtain three quotations of the kind
described in the prior paragraph, the CMT rate will be the yield to
maturity of the arithmetic mean of the following secondary market bid
rates for treasury notes with an original maturity longer than the
designated CMT index maturity, with a remaining term to maturity closest
to the designated CMT index maturity and in a representative amount: the
bid rates, as of approximately 3:30 P.M., New York City time, on the
relevant interest determination date, of three primary U.S. government
securities dealers in New York City selected by the calculation agent. In
selecting these bid rates, the calculation agent will request quotations
from five of these primary dealers and will disregard the highest
quotation--or, if there is equality, one of the highest and the lowest
quotation--or, if there is equality, one of the lowest. If two treasury
notes with an original maturity longer than the designated CMT index
maturity have remaining terms to maturity that
26
are equally close to the designated CMT index maturity, the calculation
agent will obtain quotations for the treasury note with the shorter
remaining term to maturity.
. If fewer than five but more than two of these primary dealers are quoting
as described in the prior paragraph, then the CMT rate for the relevant
interest determination date will be based on the arithmetic mean of the
bid rates so obtained, and neither the highest nor the lowest of those
quotations will be disregarded.
. If two or fewer primary dealers selected by the calculation agent are
quoting as described above, the CMT rate in effect for the new interest
period will be the CMT rate in effect for the prior interest period. If
the initial interest rate has been in effect for the prior interest
period, however, it will remain in effect for the new interest period.
Federal Funds Rate Notes
If you purchase a federal funds rate note, your note will bear interest at
an interest rate equal to the federal funds rate and adjusted by the spread or
spread multiplier, if any, indicated in your pricing supplement.
The federal funds rate will be the rate for U.S. dollar federal funds on the
relevant interest determination date, as published in H.15 (519) under the
heading "Federal Funds (Effective)", as that rate is displayed on Telerate page
120. If the federal funds rate cannot be determined in this manner, the
following procedures will apply.
. If the rate described above is not displayed on Telerate page 120 at 3:00
P.M., New York City time, on the relevant interest calculation date,
unless the calculation is made earlier and the rate is available from that
source at that time, then the federal funds rate, for the relevant
interest determination date, will be the rate described above as published
in H.15 daily update, or another recognized electronic source used for
displaying that rate, under the heading "Federal Funds (Effective)".
. If the rate described above is not displayed on Telerate page 120 and does
not appear in H.15(519), H.15 daily update or another recognized
electronic source at 3:00 P.M., New York City time, on the relevant
interest calculation date, unless the calculation is made earlier and the
rate is available from one of those sources at that time, the federal
funds rate will be the arithmetic mean of the rates for the last
transaction in overnight, U.S. dollar federal funds arranged, before 9:00
A.M., New York City time, on the relevant interest determination date, by
three leading brokers of U.S. dollar federal funds transactions in New
York City selected by the calculation agent.
. If fewer than three brokers selected by the calculation agent are quoting
as described above, the federal funds rate in effect for the new interest
period will be the federal funds rate in effect for the prior interest
period. If the initial interest rate has been in effect for the prior
interest period, however, it will remain in effect for the new interest
period.
. If fewer than five but more than two of these primary dealers are quoting
as described in the prior paragraph, then the CMT rate for the relevant
interest determination date will be based on the arithmetic mean of the
offered rates so obtained, and neither the highest nor the lowest of those
quotations will be disregarded.
Special Rate Calculation Terms
In this subsection entitled "-- Interest Rates", we use several terms that
have special meanings relevant to calculating floating interest rates. We
define these terms as follows:
27
The term "bond equivalent yield" means a yield expressed as a percentage and
calculated in accordance with the following formula:
D X N
bond equivalent yield = --------------------------- X 100
360 - (D X M)
where
. "D" means the annual rate for treasury bills quoted on a bank discount
basis and expressed as a decimal;
. "N" means 365 or 366, as the case may be; and
. "M" means the actual number of days in the applicable interest reset
period.
The term "business day" means, for any note, a day that meets all the
following applicable requirements:
. for all notes, is a Monday, Tuesday, Wednesday, Thursday or Friday that is
not a day on which banking institutions in New York City generally are
authorized or obligated by law, regulation or executive order to close;
. if the note is a LIBOR note, is also a London business day;
. if the note has a specified currency other than U.S. dollars or euros, is
also a day on which banking institutions are not authorized or obligated
by law, regulation or executive order to close in the principal financial
center of the country issuing the specified currency; and
. if the note is a EURIBOR note or has a specified currency of euros, or is
a LIBOR note for which the index currency is euros, is also a TARGET
business day.
The term "designated CMT index maturity" means the index maturity for a CMT
rate note and will be the original period to maturity of a U.S. treasury
security--either 1, 2, 3, 5, 7, 10, 20 or 30 years--specified in the applicable
pricing supplement.
The term "designated CMT Moneyline Telerate page" means the Telerate page
mentioned in the relevant pricing supplement that displays treasury constant
maturities as reported in H.15(519). If no Telerate page is so specified, then
the applicable page will be Telerate page 7052. If Telerate page 7052 applies
but the relevant pricing supplement does not specify whether the weekly or
monthly average applies, the weekly average will apply.
The term "euro business day" means any day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer (TARGET) System, or any
successor system, is open for business.
The term "euro-zone" means, at any time, the region comprised of the member
states of the European Economic and Monetary Union that, as of that time, have
adopted a single currency in accordance with the Treaty on European Union of
February 1992.
"H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15 (519)", or any successor publication, published by the Board of
Governors of the Federal Reserve System.
"H.15 daily update" means the daily update of H.15(519) available through
the worldwide website of the Board of Governors of the Federal Reserve System,
at http://www.federalreserve.gov/releases/h15/update, or any successor site or
publication.
The term "index currency" means, with respect to a LIBOR note, the currency
specified as such in the relevant pricing supplement. The index currency may be
U.S. dollars or any other currency, and will be U.S. dollars unless another
currency is specified in the relevant pricing supplement.
28
The term "index maturity" means, with respect to a floating rate note, the
period to maturity of the instrument or obligation on which the interest rate
formula is based, as specified in the applicable pricing supplement.
"London business day" means any day on which dealings in the relevant index
currency are transacted in the London interbank market.
The term "money market yield" means a yield expressed as a percentage and
calculated in accordance with the following formula:
D X 360
money market yield = _______________________ X 100
360 - (D x M)
where
. "D" means the annual rate for commercial paper quoted on a bank discount
basis and expressed as a decimal; and
. "M" means the actual number of days in the relevant interest reset period.
The term "representative amount" means an amount that, in the calculation
agent's judgment, is representative of a single transaction in the relevant
market at the relevant time.
"Reuters screen LIBOR page" means the display on the Reuters Monitor Money
Rates Service, or any successor service, on the page designated as "LIBO" or
any replacement page or pages on which London interbank rates of major banks
for the relevant index currency are displayed.
"Reuters screen US PRIME 1 page" means the display on the "US PRIME 1" page
on the Reuters Monitor Money Rates Service, or any successor service, or any
replacement page or pages on that service, for the purpose of displaying prime
rates or base lending rates of major U.S. banks.
"Telerate LIBOR page" means Telerate page 3750 or any replacement page or
pages on which London interbank rates of major banks for the relevant index
currency are displayed.
"Telerate page" means the display on Moneyline Telerate, or any successor
service, on the page or pages specified in this prospectus or the relevant
pricing supplement, or any replacement page or pages on that service.
If, when we use the terms designated CMT Moneyline Telerate page, H.15(519),
H.15 daily update, Reuters screen LIBOR page, Reuters screen US PRIME 1 page,
Telerate LIBOR page or Telerate page, we refer to a particular heading or
headings on any of those pages, those references include any successor or
replacement heading or headings as determined by the calculation agent.
Payment of Additional Amounts to United States Aliens
Wachovia will, subject to certain exceptions and limitations listed below
(unless otherwise specified in any pricing supplement), pay to the holder of
any note who is a United States Alien (as defined below), as additional
interest, certain amounts ("Additional Amounts") as may be necessary so that
every net payment on that note (including payment of the principal of and
interest on that note) by Wachovia or a paying agent, after deduction or
withholding for or on account of any present or future tax, assessment or other
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority
29
of or in the United States), will not be less than the amount provided in that
note to be then due and payable; this obligation to pay Additional Amounts,
however, will not apply to:
(a) any tax, assessment or other governmental charge that would not have
been so imposed but for (i) the existence of any present or former
connection between the holder or beneficial owner of that note (or between a
fiduciary, settlor or beneficiary of, or a person holding a power over, that
holder, if that holder is an estate or a trust, or a member or shareholder
of that holder, if that holder is a partnership or corporation) and the
United States or any political subdivision or taxing authority, including
but not limited to that holder (or the fiduciary, settlor, beneficiary,
person holding a power, member or shareholder) being or having been a
citizen or resident of the United States or treated as a resident of the
United States or being or having been engaged in a trade or business in the
United States or present in the United States or having or having had a
permanent establishment in the United States or (ii) that holder's or
beneficial owner's past or present status as a personal holding company,
foreign personal holding company, foreign private foundation or other
foreign tax-exempt organization relating to the United States, controlled
foreign corporation for United States tax purposes or corporation that
accumulates earnings to avoid United States Federal income tax;
(b) any estate, inheritance, gift, excise, sales, transfer, wealth or
personal property tax or any similar tax, assessment or other governmental
charge;
(c) any tax, assessment or other governmental charge that would not have
been imposed but for the presentation by the holder of a note for payment
more than 30 days after the date on which that payment became due and
payable or the date on which payment on that note was duly provided for,
whichever occurred later;
(d) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from a payment on a note;
(e) any tax, assessment or other governmental charge required to be
withheld by any paying agent from a payment on a note, if that payment can
be made without that withholding by any other paying agent;
(f) any tax, assessment or other governmental charge that would not have
been imposed but for a failure to comply with applicable certification,
information, documentation, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the
United States of the holder or beneficial owner of a note if that compliance
is required by statute or regulation of the United States or by an
applicable tax treaty to which the United States is a party as a
precondition to relief or exemption from that tax, assessment or other
governmental charge;
(g) any tax, assessment or other governmental charge imposed on a holder
that actually or constructively owns 10 percent or more of the combined
voting power of all classes of Wachovia's stock;
(h) any withholding or deduction imposed pursuant to any European Union
Directive on the taxation of savings implementing the conclusions of the
ECOFIN Council meeting of November 26 and 27, 2000 or any law or regulation
implementing such directive; or
(i) any combination of items (a), (b), (c), (d), (e), (f), (g) and (h);
nor shall Additional Amounts be paid in relation to a payment on a note to a
holder that is a fiduciary or partnership or other than the sole beneficial
owner of that payment to the extent a beneficiary or settlor with respect to
that fiduciary or a member of that partnership or a beneficial owner would not
have been entitled to Additional Amounts (or payment of Additional Amounts
would not have been necessary) had that beneficiary, settlor, member or
beneficial owner been the holder of that note.
For the purposes of this discussion, a "United States Alien" means any
person who, for United States Federal income tax purposes, is a foreign
corporation, a non-resident alien individual, a non-resident alien fiduciary of
a foreign estate or trust, or a foreign partnership one or more of the members
of which is, for United States Federal income tax purposes, a foreign
corporation, a non-resident alien individual or a non-resident alien
30
fiduciary, of a foreign estate or trust. "United States" means the United
States of America (including the States and the District of Columbia) and its
territories, its possessions and other areas that come under its jurisdiction.
Redemption for Tax Purposes
If (a) as a result of any change in the laws, regulations or rulings of the
United States (or any political subdivision or taxing authority of or in the
United States), or any change in the official application (including a ruling
by a court of competent jurisdiction in the United States) or interpretation of
those laws, regulations or rulings, which change or amendment is announced or
becomes effective on or after the consummation of any offering of the notes,
Wachovia is obligated to pay Additional Amounts as described above or (b) any
act is taken by a taxing authority of the United States on or after the
consummation of any offering of the notes, whether or not this act is taken in
relation to Wachovia or any affiliate, that results in a substantial likelihood
that Wachovia will or may be required to pay these Additional Amounts, then
Wachovia may, at its option, redeem, as a whole, but not in part, the notes on
not less than 30 nor more than 60 days' prior notice, at a redemption price
equal to 100% of their principal amount, together with accrued interest to the
date fixed for redemption; provided that Wachovia determines, in its business
judgment, that the obligation to pay these Additional Amounts cannot be avoided
by the use of reasonable measures available to it, not including substitution
of the obligor under the notes or any action that would entail a material cost
to Wachovia. No redemption under (b) above may be made unless Wachovia shall
have received an opinion of independent counsel to the effect that an act taken
by a taxing authority of the United States results in a substantial likelihood
that it will or may be required to pay Additional Amounts described above and
Wachovia shall have delivered to the Trustee a certificate, signed by a duly
authorized officer, saying that based on this opinion Wachovia is entitled to
redeem the notes according to their terms.
Other Provisions; Addenda
Any provisions relating to the notes, including the determination of the
interest rate basis, calculation of the interest rate applicable to a floating
rate note, its interest payment dates, any redemption or repayment provisions,
or any other term relating thereto, may be modified and/or supplemented by the
terms as specified under "Other Provisions" on the face of the applicable notes
or in an Addendum relating to the applicable notes, if so specified on the face
of the applicable notes, and, in each case, in the relevant pricing supplement.
Subordination of the Subordinated Notes
Wachovia's obligations to make any payment of the principal and interest on
any subordinated notes will, to the extent the subordinated indenture
specifies, be subordinate and junior in right of payment to all of Wachovia's
senior indebtedness. Unless otherwise specified in the pricing supplement
relating to a specific series of subordinated notes, Wachovia's "senior
indebtedness" is defined in the subordinated indenture to mean the principal
of, premium and interest, if any, on
.. all Wachovia indebtedness for money borrowed, including indebtedness Wachovia
guarantees, other than the subordinated notes, whether outstanding on the
date of execution of the indenture or incurred afterward, except
. any obligations on account of Existing Subordinated Indebtedness and
. indebtedness as is by its terms expressly stated to be not superior in
payment right to the subordinated notes or to rank equal to the
subordinated notes and
.. any deferrals, renewals or extensions of any such senior indebtedness.
(Section 101 of the subordinated indenture)
The payment of the principal and interest on the subordinated notes will, to
the extent described in the subordinated indenture, be subordinated in payment
right to the prior payment of all senior indebtedness. Unless otherwise
described in the pricing supplement relating to the specific series of
subordinated notes, in certain
31
events of insolvency, the payment of the principal and interest on the
subordinated notes, other than subordinated notes that are also Existing
Subordinated Indebtedness, will, to the extent described in the subordinated
indenture, also be effectively subordinated in payment right to the prior
payment of all Other Financial Obligations. Upon any payment or distribution of
assets to creditors under Wachovia's liquidation, dissolution, winding up,
reorganization, assignment for the benefit of creditors, or any bankruptcy,
insolvency or similar proceedings, all senior indebtedness holders will be
entitled to receive payment in full of all amounts due before the subordinated
note holders will be entitled to receive any payment in respect of the
principal or interest on their securities. If upon any such payment or asset
distribution to creditors, there remains, after giving effect to those
subordination provisions in favor of senior indebtedness holders, any amount of
cash, property or securities available for payment or distribution in respect
of subordinated notes (defined in the subordinated indenture as "Excess
Proceeds") and if, at that time, any Entitled Persons (as defined below) in
respect of Other Financial Obligations have not received payment of all amounts
due on such Other Financial Obligations, then such Excess Proceeds shall first
be applied to pay these Other Financial Obligations before any payment may be
applied to the subordinated notes which are not Existing Subordinated
Indebtedness. In the event of the acceleration of the maturity of any
subordinated notes, all senior indebtedness holders will be entitled to receive
payment of all amounts due before the subordinated note holders will be
entitled to receive any payment upon the principal of or interest on their
subordinated notes. (Sections 1403, 1404 and 1413 of the subordinated indenture)
By reason of such subordination in favor of senior indebtedness holders, in
the event of insolvency, Wachovia's creditors who are not senior indebtedness
holders or subordinated note holders may recover less, ratably, than senior
indebtedness holders and may recover more, ratably, than subordinated note
holders. By reason of subordinated note holders (other than Existing
Subordinated Indebtedness) to pay over any Excess Proceeds to Entitled Persons
in respect to Other Financial Obligations, in the event of insolvency, Existing
Subordinated Indebtedness holders may recover less, ratably, than Entitled
Persons in respect of Other Financial Obligations and may recover more,
ratably, than the subordinated note holders (other than Existing Subordinated
Indebtedness).
Unless otherwise specified in the pricing supplement relating to the
particular subordinated notes series offered by it, "Existing Subordinated
Indebtedness" means subordinated notes issued under the subordinated indenture
prior to November 15, 1992. (Section 101 of the subordinated indenture)
Unless otherwise specified in the pricing supplement relating to the
particular subordinated notes series offered by it, "Other Financial
Obligations" means all obligations of Wachovia to make payment under the terms
of financial instruments, such as
.. securities contracts and foreign currency exchange contracts;
.. derivative instruments such as
. swap agreements (including interest rate and foreign exchange rate swap
agreements);
. cap agreements;
. floor agreements;
. collar agreements;
. interest rate agreements;
. foreign exchange rate agreements;
. options;
. commodity futures contracts;
. commodity option contracts; and
32
.. similar financial instruments other than
. obligations on account of senior indebtedness; and
. obligations on account of indebtedness for money borrowed ranking equal or
subordinate to the subordinated notes. (Section 101 of the subordinated
indenture)
Unless otherwise described in the pricing supplement relating to a specific
series of subordinated notes, "Entitled Persons" means any person who is
entitled to payment under the terms of Other Financial Obligations. (Section
101 of the subordinated indenture)
Wachovia's obligations under the subordinated notes shall rank equal in
right of payment with each other and with the Existing Subordinated
Indebtedness, subject, unless otherwise described in the pricing supplement
relating to a specific series of subordinated notes, to the obligations of
subordinated note holders (other than Existing Subordinated Indebtedness) to
pay over any Excess Proceeds to Entitled Persons in respect of Other Financial
Obligations as provided in the subordinated indenture. (Section 1413 of the
subordinated indenture)
The relevant pricing supplement may further describe the provisions, if any,
applicable to the subordination of the subordinated notes of a particular
series.
Defaults
The Senior Indenture
The senior indenture defines an "event of default" as
. default in any principal or premium payment on any senior note of that
series at maturity;
. default for 30 days in interest payment of any senior note of that series;
. failure to deposit any sinking fund payment when due in respect of that
series;
. Wachovia's failure for 60 days after notice in performing any other
covenants or warranties in the senior indenture (other than a covenant or
warranty solely for the benefit of other senior notes series);
. failure to pay when due any Wachovia indebtedness or Wachovia Bank, N.A.
indebtedness in excess of $5,000,000, or maturity acceleration of any
indebtedness exceeding that amount if acceleration results from a default
under the instrument giving rise to that indebtedness and is not annulled
within 30 days after due notice;
. Wachovia's or Wachovia Bank, N.A.'s bankruptcy, insolvency or
reorganization; and
. any other event of default provided for senior notes of that series.
(Section 501)
The senior indenture provides that, if any event of default for senior notes
of any series outstanding occurs and is continuing, either the senior trustee
or the holders of not less than 25% in principal amount of the outstanding
senior notes of that series may declare the principal amount (or, if the notes
of that series are original issue discount notes, such principal amount portion
as the terms of that series specify) of all senior notes of that series to be
due and payable immediately. However, no such declaration is required upon
certain bankruptcy events. In addition, upon fulfillment of certain conditions,
this declaration may be annulled and past defaults waived by the holders of a
majority in principal amount of the outstanding senior notes of that series on
behalf of all senior note holders of that series. (Sections 502 and 513) In the
event of Wachovia's bankruptcy, insolvency or reorganization, senior note
holders' claims would fall under the broad equity power of a federal bankruptcy
court, and to that court's determination of the nature of those holders' rights.
The senior indenture contains a provision entitling the senior trustee,
acting under the required standard of care, to be indemnified by the holders of
any outstanding senior note series before proceeding to exercise any right or
power under the senior indenture at the holders' request. (Section 603) The
holders of a majority in
33
principal amount of outstanding senior notes of any series may direct the time,
method and place of conducting any proceeding for any remedy available to the
senior trustee, or exercising any trust or other power conferred on the senior
trustee, with respect to the senior notes of such series. The senior trustee,
however, may decline to act if that direction is contrary to law or the senior
indenture or would involve the senior trustee in personal liability. (Section
512)
Wachovia will file annually with the senior trustee a compliance certificate
as to all conditions and covenants in the senior indenture. (Section 1007)
The Subordinated Indenture
Subordinated notes principal payment may be accelerated only upon an event
of default. There is no acceleration right in the case of a default in the
payment of interest or principal prior to the maturity date or a default in
Wachovia performing any covenants in the subordinated indenture, unless a
specific series of subordinated notes provide otherwise, which will be
described in the relevant pricing supplement.
The subordinated indenture defines an "event of default" as certain events
involving Wachovia's bankruptcy, insolvency or reorganization and any other
event of default provided for the subordinated notes of that series. (Section
501) The subordinated indenture defines a "default" to include
. any event of default;
. a default in any principal or premium payment of any subordinated debt
security of that series at maturity;
. default in any interest payment when due and continued for 30 days;
. a default in any required designation of funds as "available funds"; or
. default in the performance, or breach, of Wachovia's covenants in the
subordinated indenture or in the subordinated notes of that series and
continued for 90 days after written notice to
. Wachovia by the subordinated trustee; or
. Wachovia and the subordinated trustee by the holders of not less than
25% in aggregate principal amount of the outstanding subordinated notes
of that series. (Section 503)
If an event of default for subordinated notes of any series occurs and is
continuing, either the subordinated trustee or the holders of not less than 25%
in aggregate principal amount of the outstanding subordinated notes of that
series may accelerate the maturity of all outstanding subordinated notes of
such series. The holders of a majority in aggregate principal amount of the
outstanding subordinated notes of that series may waive an event of default
resulting in acceleration of the subordinated notes of such series, but only if
all events of default have been remedied and all payments due on the
subordinated notes of that series (other than those due as a result of
acceleration) have been made and certain other conditions have been met.
(Section 502) Subject to subordinated indenture provisions relating to the
subordinated trustee's duties, in case a default shall occur and be continuing,
the subordinated trustee will be under no obligation to exercise any of its
rights or powers under the subordinated indenture at the holders' request or
direction, unless such holders shall have offered to the subordinated trustee
reasonable indemnity. (Section 603) Subject to such indemnification provisions,
the holders of a majority in aggregate principal amount of the outstanding
subordinated notes of that series will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
subordinated trustee or exercising any trust or power conferred on the
subordinated trustee. (Section 512) The holders of a majority in aggregate
principal amount of the outstanding subordinated notes of that series may waive
any past default under the subordinated indenture with respect to such series,
except a default in principal or interest payment or a default of a
subordinated indenture covenant which cannot be modified without the consent of
each outstanding subordinated note holder of the series affected. (Section 513)
In the event of Wachovia's bankruptcy, insolvency or reorganization,
subordinated note holders' claims would fall under the broad equity power of a
federal bankruptcy court, and to that court's determination of the nature of
those holders' rights.
34
Wachovia will file annually with the subordinated trustee a compliance
certificate as to all conditions and covenants in the subordinated indenture.
(Section 1007)
Modification and Waiver
Each indenture may be modified and amended by Wachovia and the relevant
trustee. Certain modifications and amendments require the consent of the
holders of at least a majority in aggregate principal amount of the outstanding
notes of each series issued under that indenture and affected by the
modification or amendment. No such modification or amendment may, without the
consent of the holder of each outstanding note issued under such indenture and
affected by it
. change the stated maturity of the principal, or any installment of
principal or interest, on any outstanding note;
. reduce any principal amount, premium or interest, on any outstanding note,
including in the case of an original issue discount note the amount
payable upon acceleration of the maturity of that note;
. change the place of payment where, or the coin or currency or currency
unit in which, any principal, premium or interest, on any outstanding note
is payable;
. impair the right to institute suit for the enforcement of any payment on
or after the stated maturity, or in the case of redemption, on or after
the redemption date;
. reduce the above-stated percentage of outstanding notes necessary to
modify or amend the applicable indenture; or
. modify the above requirements or reduce the percentage of aggregate
principal amount of outstanding notes of any series required to be held by
holders seeking to waive compliance with certain provisions of the
relevant indenture or seeking to waive certain defaults. (Section 902)
The holders of at least a majority in aggregate principal amount of the
outstanding notes of any series may on behalf of all outstanding note holders
of that series waive, insofar as that series is concerned, Wachovia's
compliance with certain restrictive provisions of the relevant indenture.
(Section 1008) The holders of at least a majority in aggregate principal amount
of the outstanding notes of any series may on behalf of all outstanding note
holders of that series waive any past default under the relevant indenture with
respect to that series, except a default in the payment of the principal, or
premium, if any, or interest on any outstanding note of that series or in
respect of an indenture covenant which cannot be modified or amended without
each outstanding note holder consenting. (Section 513)
Certain modifications and amendments of each indenture may be made by
Wachovia and the relevant trustee without the outstanding note holders
consenting. (Section 901)
Each indenture provides that in determining whether the holders of the
requisite principal amount of the outstanding notes have given any request,
demand, authorization, direction, notice, consent or waiver under that
indenture or are present at a meeting of holders of outstanding notes for
quorum purposes
. the principal amount of an original issue discount note that shall be
deemed to be outstanding shall be the amount of the principal that would
be due and payable as of the date of such determination upon acceleration
of its maturity; and
. the principal amount of outstanding notes denominated in a foreign
currency or currency unit shall be the U.S. dollar equivalent, determined
on the date of original issuance of that outstanding note, of the
principal amount of that outstanding note or, in the case of an original
issue discount note, the U.S. dollar equivalent, determined on the date of
original issuance of such outstanding note, of the amount determined as
provided in the above bullet-point. (Section 101)
35
Consolidation, Merger and Sale of Assets
The indentures each provide that Wachovia may not consolidate with or merge
into any other corporation or transfer its properties and assets substantially
as an entirety to any person unless
. the corporation formed by the consolidation or into which Wachovia is
merged, or the person to which Wachovia's properties and assets are so
transferred, shall be a corporation organized and existing under the laws
of the U.S., any state or Washington, D.C. and shall expressly assume by
supplemental indenture the payment of any principal, premium or interest
on the notes, and the performance of Wachovia's other covenants under the
relevant indenture;
. immediately after giving effect to this transaction, no event of default
or default, as applicable, and no event which, after notice or lapse of
time or both, would become an event of default or default, as applicable,
shall have occurred and be continuing; and
. certain other conditions are met. (Section 801)
Limitation on Disposition of Wachovia Bank, N.A. Stock
The indentures each contain Wachovia's covenant that, so long as any of the
debt securities issued under that indenture before August 1, 1990 are
outstanding, but subject to Wachovia's rights in connection with its
consolidation with or merger into another corporation or a sale of Wachovia's
assets, it will not sell, assign, transfer, grant a security interest in or
otherwise dispose of any shares of, securities convertible into, or options,
warrants or rights to subscribe for or purchase shares of, Wachovia Bank, N.A.
voting stock, nor will it permit Wachovia Bank, N.A. to issue any shares of, or
securities convertible into, or options, warrants or rights to subscribe for or
purchase shares of, Wachovia Bank, N.A. voting stock, unless
. any such sale, assignment, transfer, issuance, grant of a security
interest or other disposition is made for fair market value, as determined
by Wachovia's board; and
. Wachovia will own at least 80% of the issued and outstanding Wachovia
Bank, N.A. voting stock free and clear of any security interest after
giving effect to such transaction. (Section 1006)
The above covenant is not a covenant for the benefit of any series of notes
issued on or after August 1, 1990.
Restriction on Sale or Issuance of Voting Stock of Major Subsidiary Bank
With respect to the senior notes, the senior indenture contains Wachovia's
covenant that it will not, and will not permit any subsidiary to, sell, assign,
transfer, grant a security interest in, or otherwise dispose of, any shares of
voting stock, or any securities convertible into shares of voting stock, of any
"Major Subsidiary Bank" (as defined below) or any subsidiary owning, directly
or indirectly, any shares of voting stock of any Major Subsidiary Bank and that
it will not permit any Major Subsidiary Bank or any subsidiary owning, directly
or indirectly, any shares of voting stock of a Major Subsidiary Bank to issue
any shares of its voting stock or any securities convertible into shares of its
voting stock, except for sales, assignments, transfers or other dispositions
which
. are for the purpose of qualifying a person to serve as a director;
. are for fair market value, as determined by Wachovia's board, and, after
giving effect to such dispositions and to any potential dilution, Wachovia
will own not less than 80% of the shares of voting stock of such Major
Subsidiary Bank or any such subsidiary owning any shares of voting stock
of such Major Subsidiary Bank;
. are made
. in compliance with court or regulatory authority order; or
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. in compliance with a condition imposed by any such court or authority
permitting Wachovia's acquisition of any other bank or entity; or
. in compliance with an undertaking made to such authority in connection
with such an acquisition; provided, in the case of the two preceding
bullet-points, the assets of the bank or entity being acquired and its
consolidated subsidiaries equal or exceed 75% of the assets of such
Major Subsidiary Bank or such subsidiary owning, directly or indirectly,
any shares of voting stock of a Major Subsidiary Bank and its respective
consolidated subsidiaries on the date of acquisition; or
. to Wachovia or any wholly-owned subsidiary.
Despite the above requirements, any Major Subsidiary Bank may be merged into
or consolidated with another banking institution organized under U.S. or state
law, if after giving effect to that merger or consolidation Wachovia or any
wholly-owned subsidiary owns at least 80% of the voting stock of the other
banking institution free and clear of any security interest and if, immediately
after the merger or consolidation, no event of default, and no event which,
after notice or lapse of time or both, would become an event of default, shall
have happened and be continuing. (Section 1007) A "Major Subsidiary Bank" is
defined in each indenture to mean any subsidiary which is a bank and has total
assets equal to 25% or more of Wachovia's consolidated assets determined on the
date of the most recent audited financial statements of these entities. At
present, the Major Subsidiary Bank is Wachovia Bank, N.A.
The above covenant is not a covenant for the benefit of any series of debt
securities issued before August 1, 1990, or, in the case of subordinated debt
securities including the subordinated notes, issued after November 15, 1992.
Form, Exchange and Transfer
If the notes cease to be issued in global form, they will be issued:
. only in fully registered form;
. without interest coupons; and
. unless we indicate otherwise in your pricing supplement, in
denominations of $1,000 and that are multiples of $1,000.
Holders may exchange their notes for notes of smaller denominations or
combined into fewer notes of larger denominations, as long as the total
principal amount is not changed.
Holders may exchange or transfer their notes at the office of the relevant
trustee, or in the event definitive notes are issued and so long as the notes
are listed on the Luxembourg Stock Exchange, at the offices of the paying
agent. We have appointed the respective trustees to act as our agents for
registering notes in the names of holders and transferring notes. We may
appoint another entity to perform these functions or perform them ourselves.
Holders will not be required to pay a service charge to transfer or exchange
their notes, but they may be required to pay for any tax or other governmental
charge associated with the exchange or transfer. The transfer or exchange will
be made only if our transfer agent is satisfied with the holder's proof of
legal ownership.
If we have designated additional transfer agents for your note, they will be
named in your pricing supplement. We may appoint additional transfer agents or
cancel the appointment of any particular transfer agent. We may also approve a
change in the office through which any transfer agent acts.
If any notes are redeemable and we redeem less than all those notes, we may
block the transfer or exchange of those notes during the period beginning 15
days before the day we mail the notice of redemption and ending on the day of
that mailing, in order to freeze the list of holders to prepare the mailing. We
may also refuse to
37
register transfers of or exchange any note selected for redemption, except that
we will continue to permit transfers and exchanges of the unredeemed portion of
any note being partially redeemed.
If a note is issued as a global note, only the depositary -- e.g., DTC,
Euroclear and Clearstream -- will be entitled to transfer and exchange the note
as described in this subsection, since it will be the sole holder of the note.
Payment Mechanics
Who Receives Payment?
If interest is due on a note on an interest payment date, we will pay the
interest to the person or entity in whose name the note is registered at the
close of business on the regular record date relating to the interest payment
date. If interest is due at maturity but on a day that is not an interest
payment date, we will pay the interest to the person or entity entitled to
receive the principal of the note. If principal or another amount besides
interest is due on a note at maturity, we will pay the amount to the holder of
the note against surrender of the note at a proper place of payment (or, in the
case of a global note, in accordance with the applicable policies of the
depositary).
How We Will Make Payments Due in U.S. Dollars
We will follow the practice described in this subsection when paying amounts
due in U.S. dollars. Payments of amounts due in other currencies will be made
as described in the next subsection.
Payments on Global Notes. We will make payments on a global note in
accordance with the applicable policies of the depositary as in effect from
time to time. Under those policies, we will pay directly to the depositary, or
its nominee, and not to any indirect holders who own beneficial interests in
the global note. An indirect holder's right to receive those payments will be
governed by the rules and practices of the depositary and its participants, as
described under "--Global Notes" and "Global Notes".
Payments on Non-Global Notes. We will make payments on a note in non-global
form as follows. We will pay interest that is due on an interest payment date
by check mailed on the interest payment date to the holder at his or her
address shown on the trustee's records as of the close of business on the
regular record date. We will make all other payments by check at the paying
agent described below, against surrender of the note. All payments by check
will be made in next-day funds -- i.e., funds that become available on the day
after the check is cashed.
Alternatively, if a non-global note has a face amount of at least $1,000,000
and the holder asks us to do so, we will pay any amount that becomes due on the
note by wire transfer of immediately available funds to an account at a bank in
New York City, on the due date. To request wire payment, the holder must give
the paying agent appropriate wire transfer instructions at least five business
days before the requested wire payment is due. In the case of any interest
payment due on an interest payment date, the instructions must be given by the
person or entity who is the holder on the relevant regular record date. In the
case of any other payment, payment will be made only after the note is
surrendered to the paying agent. Any wire instructions, once properly given,
will remain in effect unless and until new instructions are given in the manner
described above.
Book-entry and other indirect holders should consult their banks or brokers
for information on how they will receive payments on their notes.
How We Will Make Payments Due In Other Currencies
We will follow the practice described in this subsection when paying amounts
that are due in a specified currency other than U.S. dollars.
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Payments on Global Notes. We will make payments on a global note in
accordance with the applicable policies as in effect from time to time of the
depositary, which will be DTC, Euroclear or Clearstream. Unless we specify
otherwise in the applicable pricing supplement, DTC will be the depositary for
all notes in global form. We understand that DTC's policies, as currently in
effect, are as follows.
Unless otherwise indicated in your pricing supplement, if you are an
indirect holder of global notes denominated in a specified currency other than
U.S. dollars and if you elect to receive payments in that other currency, you
must notify the participant through which your interest in the global note is
held of your election:
. on or before the applicable regular record date, in the case of a
payment of interest, or
. on or before the 16th day prior to stated maturity, or any redemption or
repayment date, in the case of payment of principal or any premium.
You may elect to receive all or only a portion of any interest, principal or
premium payment in a specified currency other than U.S. dollars.
Your participant must, in turn, notify DTC of your election on or before the
third DTC business day after that regular record date, in the case of a payment
of interest, and on or before the 12th DTC business day prior to stated
maturity, or on the redemption or repayment date if your note is redeemed or
repaid earlier, in the case of a payment of principal or any premium.
DTC, in turn, will notify the paying agent of your election in accordance
with DTC's procedures.
If complete instructions are received by the participant and forwarded by
the participant to DTC, and by DTC to the paying agent, on or before the dates
noted above, the paying agent, in accordance with DTC's instructions will make
the payments to you or your participant by wire transfer of immediately
available funds to an account maintained by the payee with a bank located in
the country issuing the specified currency or in another jurisdiction
acceptable to us and the paying agent.
If the foregoing steps are not properly completed, we expect DTC to inform
the paying agent that payment is to be made in U.S. dollars. In that case, we
or our agent will convert the payment to U.S. dollars in the manner described
below under "--Conversion to U.S. Dollars". We expect that we or our agent will
then make the payment in U.S. dollars to DTC, and that DTC in turn will pass it
along to its participants.
Indirect holders of a global note denominated in a currency other than U.S.
dollars should consult their banks or brokers for information on how to
request payment in the specified currency.
Payments on Non-Global Notes. Except as described in the last paragraph
under this heading, we will make payments on notes in non-global form in the
applicable specified currency. We will make these payments by wire transfer of
immediately available funds to any account that is maintained in the applicable
specified currency at a bank designated by the holder and is acceptable to us
and the trustee. To designate an account for wire payment, the holder must give
the paying agent appropriate wire instructions at least five business days
before the requested wire payment is due. In the case of any interest payment
due on an interest payment date, the instructions must be given by the person
or entity who is the holder on the regular record date. In the case of any
other payment, the payment will be made only after the note is surrendered to
the paying agent. Any instructions, once properly given, will remain in effect
unless and until new instructions are properly given in the manner described
above.
If a holder fails to give instructions as described above, we will notify
the holder at the address in the trustee's records and will make the payment
within five business days after the holder provides appropriate
39
instructions. Any late payment made in these circumstances will be treated
under the indenture as if made on the due date, and no interest will accrue on
the late payment from the due date to the date paid.
Although a payment on a note in non-global form may be due in a specified
currency other than U.S. dollars, we will make the payment in U.S. dollars if
the holder asks us to do so. To request U.S. dollar payment, the holder must
provide appropriate written notice to the trustee at least five business days
before the next due date for which payment in U.S. dollars is requested. In the
case of any interest payment due on an interest payment date, the request must
be made by the person or entity who is the holder on the regular record date.
Any request, once properly made, will remain in effect unless and until revoked
by notice properly given in the manner described above.
Book-entry and other indirect holders of a note with a specified currency
other than U.S. dollars should contact their banks or brokers for information
about how to receive payments in the specified currency or in U.S. dollars.
Conversion to U.S. Dollars. When we are asked by a holder to make payments
in U.S. dollars of an amount due in another currency, either on a global note
or a non-global note as described above, the exchange rate agent described
below will calculate the U.S. dollar amount the holder receives in the exchange
rate agent's discretion.
A holder that requests payment in U.S. dollars will bear all associated
currency exchange costs, which will be deducted from the payment.
When the Specified Currency is Not Available. If we are obligated to make
any payment in a specified currency other than U.S. dollars, and the specified
currency or any successor currency is not available to us due to circumstances
beyond our control--such as the imposition of exchange controls or a disruption
in the currency markets--we will be entitled to satisfy our obligation to make
the payment in that specified currency by making the payment in U.S. dollars,
on the basis of the exchange rate determined by the exchange rate agent
described below, in its discretion.
The foregoing will apply to any note, whether in global or non-global form,
and to any payment, including a payment at maturity. Any payment made under the
circumstances and in a manner described above will not result in a default
under any note or the relevant indenture.
Exchange Rate Agent. If we issue a note in a specified currency other than
U.S. dollars, we will appoint a financial institution to act as the exchange
rate agent and will name the institution initially appointed when the note is
originally issued in the applicable pricing supplement. We may select Wachovia
Bank, N.A. or another of our affiliates to perform this role. We may change the
exchange rate agent from time to time after the original issue date of the note
without your consent and without notifying you of the change.
All determinations made by the exchange rate agent will be at its sole
discretion unless we state in the applicable pricing supplement that any
determination requires our approval. In the absence of manifest error, those
determinations will be conclusive for all purposes and binding on you and us,
without any liability on the part of the exchange rate agent.
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Payment When Offices Are Closed
If any payment is due on a note on a day that is not a business day, we will
make the payment on the next day that is a business day. Payments postponed to
the next business day in this situation will be treated under the relevant
indenture as if they were made on the original due date. Postponement of this
kind will not result in a default under any note or the indenture, and no
interest will accrue on the postponed amount from the original due date to the
next day that is a business day. The term business day has a special meaning,
which we describe above under "--Interest Rates--Special Rate Calculation
Terms".
Paying Agent
We may appoint one or more financial institutions to act as our paying
agents, at whose designated offices notes in non-global entry form may be
surrendered for payment at their maturity. We call each of those offices a
paying agent. We may add, replace or terminate paying agents from time to time.
We may also choose to act as our own paying agent. Initially, we have appointed
Wachovia Bank, N.A., at its corporate trust office in New York City or its
headquarters in Charlotte, North Carolina, as the paying agent. We must notify
you of changes in the paying agents.
Citibank, N.A., acting through its London office (or such other agent
appointed in accordance with the Senior Indenture or the Subordinated
Indenture, as the case may be), will act as London paying agent and London
issuing agent.
In the event definitive notes are issued as described in this prospectus and
as long as the notes are listed on the Luxembourg Stock Exchange, the holders
of those notes will be able to receive payments and effect transfers at the
offices of Dexia Banque Internationale a Luxembourg, Luxembourg or its
successor as paying agent in Luxembourg relating to the notes. Each indenture
provides for the replacement of a mutilated, lost, stolen or destroyed
definitive note, so long as the applicant furnishes to Wachovia and the
relevant trustee the security or indemnity required by them to save each of
them harmless and any evidence of ownership of the note as they may require.
Dexia Banque Internationale a Luxembourg will act as a paying agent and
transfer agent in Luxembourg in relation to the notes, and as long as the notes
are listed on the Luxembourg Stock Exchange, Wachovia will maintain a paying
agent and transfer agent in Luxembourg and any change in the Luxembourg paying
agent and transfer agent will be published in Luxembourg in accordance with the
second paragraph below under "--Notices".
Unclaimed Payments
Regardless of who acts as paying agent, all money paid by us to a paying
agent that remains unclaimed at the end of two years after the amount is due to
a holder will be repaid to us. After that two-year period, the holder may look
only to us for payment and not to the relevant trustee, any other paying agent
or anyone else.
Notices
Notices to be given to holders of a global note will be given only to the
depositary, in accordance with its applicable policies as in effect from time
to time. Notices to be given to holders of notes not in global form will be
sent by mail to the respective addresses of the holders as they appear in the
relevant trustee's records, and will be deemed given when mailed.
As long as the notes are listed on the Luxembourg Stock Exchange and its
rules require, we will also give notices to holders by publication in a daily
newspaper of general circulation in Luxembourg. We expect that newspaper to be,
but it need not be, the Luxemburger Wort. If publication in Luxembourg is not
practical, we will make the publication elsewhere in Western Europe. By "daily
newspaper" we mean a newspaper that is published on each day, other than a
Saturday, Sunday or holiday, in Luxembourg or, when applicable, elsewhere in
Western Europe. You will be presumed to have received these notices on the date
we first publish them. If we are unable to give notice as described in this
paragraph because the publication of any newspaper is suspended or it is
otherwise impracticable for us to publish the notice, then we or the relevant
trustee, acting on our instructions, will give holders notice in another form.
That alternate form of notice will be sufficient notice to you.
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Neither the failure to give any notice to a particular holder, nor any
defect in a notice given to a particular holder, will affect the sufficiency of
any notice given to another holder.
Book-entry and other indirect holders should consult their banks or brokers
for information on how they will receive notices.
Trustees
Either or both of the trustees may resign or be removed with respect to one
or more series of notes and a successor trustee may be appointed to act with
respect to that series. (Section 610) In the event that two or more persons are
acting as trustee with respect to different series of notes, each such trustee
shall be a trustee of a trust under the relevant indenture separate and apart
from the trust administered by any other such trustee (Section 611), and any
action to be taken by the "trustee" may then be taken by each such trustee with
respect to, and only with respect to, the one or more series of notes for which
it is trustee.
In the normal course of business, Wachovia and its subsidiaries conduct
banking transactions with the trustees and their affiliates, and the trustees
and their affiliates conduct banking transactions with Wachovia and its
subsidiaries.
Title
Wachovia, the trustees and any of their agents may treat the registered
owner of any note as the absolute owner of that security, whether or not that
note is overdue and despite any notice to the contrary, for any purpose. See
"Global Notes".
Governing Law
The indentures and the notes will be governed by New York law.
42
GLOBAL NOTES
We will issue each note in book-entry form only. Each note issued in
book-entry form will be represented by a global note that we deposit with and
register in the name of one or more financial institutions or clearing systems,
or their nominees, which we select. A financial institution or clearing system
that we select for this purpose is called the "depositary" for that note. A
note will usually have only one depositary but it may have more.
Each series of notes will have one or more of the following as the
depositaries.
. The Depository Trust Company, New York, New York, which is known as
"DTC";
. JPMorgan Chase Bank holding the notes on behalf of Euroclear Bank
S.A./N.V., as operator of the Euroclear system, which is known as
"Euroclear";
. Citibank, N.A. holding the notes on behalf of Clearstream Banking,
societe anonyme, Luxembourg, which is known as "Clearstream"; and
. any other clearing system or financial institution named in the
applicable pricing supplement.
The depositaries named above may also be participants in one another's
system. Thus, for example, if DTC is the depositary for a global note,
investors may hold beneficial interests in that note through Euroclear or
Clearstream, as DTC participants. The depositary or depositaries for your notes
will be named in your pricing supplement; if none is named, the depositary will
be DTC.
A global note may not be transferred to or registered in the name of anyone
other than the depositary or its nominee, unless special termination situations
arise. We describe those situations below under "--Holder's Option to Obtain a
Non-Global Note; Special Situations When a Global Note Will Be Terminated". As
a result of these arrangements, the depositary, or its nominee, will be the
sole registered owner and holder of all notes represented by a global note, and
investors will be permitted to own only indirect interests in a global note.
Indirect interests must be held by means of an account with a broker, bank or
other financial institution that in turn has an account with the depositary or
with another institution that does. Thus, an investor whose note is represented
by a global note will not be a holder of the note, but only an indirect owner
of an interest in the global note.
If the pricing supplement for a particular note indicates that the note will
be issued in global form only, then the note will be represented by a global
note at all times unless and until the global note is terminated. We describe
the situations in which this can occur below under "--Holder's Option to Obtain
a Non-Global Note; Special Situations When a Global Note Will Be Terminated".
If termination occurs, we may issue the notes through another book-entry
clearing system or decide that the notes may no longer be held through any
book-entry clearing system.
DTC has informed Wachovia that it is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that DTC participants deposit
with DTC. DTC also facilitates the settlement among DTC participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in DTC participants'
accounts, thereby eliminating the need for physical movement of certificates.
DTC participants include securities brokers and dealers, banks, trust companies
and clearing corporations, and may include other organizations. DTC is owned by
a number of its direct participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, LLC and the National Association of Securities
Dealers, Inc. Indirect access to the DTC system also is available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly. The rules applicable to DTC and DTC participants are on file with
the Commission.
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Special Considerations for Global Notes
As an indirect owner, an investor's rights relating to a global note will be
governed by the account rules of the depositary and those of the investor's
financial institution or other intermediary through which it holds its interest
(e.g., Euroclear or Clearstream, if DTC is the depositary), as well as general
laws relating to note transfers. We do not recognize this type of investor or
any intermediary as a holder of notes and instead deal only with the depositary
that holds the global note.
If notes are issued only in the form of a global note, an investor should be
aware of the following:
. An investor cannot cause the notes to be registered in his or her own
name, and cannot obtain non-global certificates for his or her interest
in the notes, except in the special situations we describe below;
. An investor will be an indirect holder and must look to his or her own
bank or broker for payments on the notes and protection of his or her
legal rights relating to the note, as we describe above under
"Description of the Notes We May Offer--Legal Ownership";
. An investor may not be able to sell interests in the notes to some
insurance companies and other institutions that are required by law to
own their notes in non-book-entry form;
. An investor may not be able to pledge his or her interest in a global
note in circumstances where certificates representing the notes must be
delivered to the lender or other beneficiary of the pledge in order for
the pledge to be effective;
. The depositary's policies will govern payments, deliveries, transfers,
exchanges, notices and other matters relating to an investor's interest
in a global note, and those policies may change from time to time. We
and the relevant trustee will have no responsibility for any aspect of
the depositary's policies, actions or records or ownership interests in
a global note. We and the trustees also do not supervise the depositary
in any way;
. The depositary will require that those who purchase and sell interests
in a global note within its book-entry system use immediately available
funds and your broker or bank may require you to do so as well; and
. Financial institutions that participate in the depositary's book-entry
system and through which an investor holds its interest in the global
notes, directly or indirectly, may also have their own policies
affecting payments, deliveries, transfers, exchanges, notices and other
matters relating to the notes, and those policies may change from time
to time. For example, if you hold an interest in a global note through
Euroclear or Clearstream, when DTC is the depositary, Euroclear or
Clearstream, as applicable, will require those who purchase and sell
interests in that note through them to use immediately available funds
and comply with other policies and procedures, including deadlines for
giving instructions as to transactions that are to be effected on a
particular day. There may be more than one financial intermediary in the
chain of ownership for an investor. We do not monitor and are not
responsible for the policies or actions or records of ownership
interests of any of those intermediaries.
Holder's Option to Obtain a Non-Global Note; Special Situations When a Global
Note Will Be Terminated
If we issue any series of notes in book-entry form but we choose to give the
beneficial owners of that series the right to obtain non-global notes, any
beneficial owner entitled to obtain non-global notes may do so by following the
applicable procedures of the depositary for that series and that owner's bank,
broker or other financial institution through which that owner holds its
beneficial interest in the notes. If you are entitled to request a non-global
certificate and wish to do so, you will need to allow sufficient lead time to
enable us or our agent to prepare the requested certificate.
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In addition, in a few special situations described below, a global note will
be terminated and interests in it will be exchanged for certificates in
non-global form representing the notes it represented. After that exchange, the
choice of whether to hold the notes directly or in street name will be up to
the investor. Investors must consult their own banks or brokers to find out how
to have their interests in a global note transferred on termination to their
own names, so that they will be holders. We have described the rights of
holders and street name investors above under "Description of the Notes We May
Offer--Legal Ownership".
Unless otherwise mentioned in the relevant pricing supplement, the special
situations for termination of a global note are as follows:
. if the depositary notifies Wachovia that it is unwilling, unable or no
longer qualified to continue as depositary for that global note;
. if Wachovia executes and delivers to the relevant trustee an order
complying with the requirements of the relevant indenture that this global
note shall be so exchangeable; or
. if there has occurred and is continuing a default in the payment of any
amount due in respect of the notes or an event of default or an event
that, with the giving of notice or lapse of time, or both, would
constitute an event of default with respect to these notes.
If a global note is terminated, only the depositary, and not we or the
relevant trustee, is responsible for deciding the names of the institutions in
whose names the notes represented by the global note will be registered and,
therefore, who will be the holders of those notes.
Considerations Relating to Clearstream and Euroclear
Clearstream and Euroclear are securities clearance systems in Europe.
Clearstream and Euroclear have informed Wachovia that Clearstream and Euroclear
each hold securities for their customers and facilitate the clearance and
settlement of securities transactions by electronic book-entry transfer between
their respective account holders. Clearstream and Euroclear provide various
services including safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream and Euroclear also deal with domestic securities markets in several
countries through established depositary and custodial relationships.
Clearstream and Euroclear have established an electronic bridge between their
two systems across which their respective participants may settle trades with
each other. Clearstream and Euroclear customers are world-wide financial
institutions including underwriters, securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to Clearstream and
Euroclear is available to other institutions which clear through or maintain a
custodial relationship with an account holder of either system.
Euroclear and Clearstream may be depositaries for a global note. In
addition, if DTC is the depositary for a global note, Euroclear and Clearstream
may hold interests in the global note as participants in DTC.
As long as any global note is held by Euroclear or Clearstream, as
depositary, you may hold an interest in the global note only through an
organization that participates, directly or indirectly, in Euroclear or
Clearstream. If Euroclear or Clearstream is the depositary for a global note
and there is no depositary in the United States, you will not be able to hold
interests in that global note through any securities clearance system in the
United States.
Payments, deliveries, transfers, exchanges, notices and other matters
relating to the notes made through Euroclear or Clearstream must comply with
the rules and procedures of those systems. Those systems could change their
rules and procedures at any time. We have no control over those systems or
their participants and we take no responsibility for their activities.
Transactions between participants in Euroclear or Clearstream, on one hand, and
participants in DTC, on the other hand, when DTC is the depositary, would also
be subject to DTC's rules and procedures.
45
Special Timing Considerations for Transactions in Euroclear and Clearstream
Investors will be able to make and receive through Euroclear and Clearstream
payments, deliveries, transfers, exchanges, notices and other transactions
involving any notes held through those systems only on days when those systems
are open for business. Those systems may not be open for business on days when
banks, brokers and other institutions are open for business in the United
States.
In addition, because of time-zone differences, U.S. investors who hold their
interests in the notes through these systems and wish to transfer their
interests, or to receive or make a payment or delivery or exercise any other
right with respect to their interests, on a particular day may find that the
transaction will not be effected until the next business day in Luxembourg or
Brussels, as applicable. Thus, investors who wish to exercise rights that
expire on a particular day may need to act before the expiration date. In
addition, investors who hold their interests through both DTC and Euroclear or
Clearstream may need to make special arrangements to finance any purchases or
sales of their interest between the U.S. and European clearing systems, and
those transactions may settle later than would be the case for transactions
within one clearing system.
46
UNITED STATES TAXATION
This section describes the material United States federal income tax
consequences of owning the notes we are offering. It is the opinion of Sullivan
& Cromwell, counsel to Wachovia. It applies to you only if you hold your notes
as capital assets for tax purposes. This section does not apply to you if you
are a member of a class of holders subject to special rules, such as:
. a dealer in securities or currencies,
. a trader in securities that elects to use a mark-to-market method of
accounting for your securities holdings,
. a bank,
. a life insurance company,
. a tax-exempt organization,
. a person that owns notes that are a hedge or that are hedged against
interest rate or currency risks,
. a person that owns notes as part of a straddle or conversion transaction
for tax purposes, or
. a person whose functional currency for tax purposes is not the U.S. dollar.
This section deals only with notes that are due to mature 30 years or less from
the date on which they are issued. The United States federal income tax
consequences of owning notes that are due to mature more than 30 years from
their date of issue will be discussed in an applicable pricing supplement. This
section is based on the Internal Revenue Code of 1986, as amended, its
legislative history, existing and proposed regulations under the Internal
Revenue Code, published rulings and court decisions, all as currently in
effect. These laws are subject to change, possibly on a retroactive basis.
Please consult your own tax advisor concerning the consequences of owning
these notes in your particular circumstances under the Code and the laws of
any other taxing jurisdiction.
United States Holders
This subsection describes the tax consequences to a United States holder.
You are a United States holder if you are a beneficial owner of a note and you
are:
. a citizen or resident of the United States,
. a domestic corporation,
. an estate whose income is subject to United States federal income tax
regardless of its source, or
. a trust if a United States court can exercise primary supervision over the
trust's administration and one or more United States persons are
authorized to control all substantial decisions of the trust.
If you are not a United States holder, this subsection does not apply to you
and you should refer to "--United States Alien Holders" below.
Payments of Interest
Except as described below in the case of interest on a discount note that is
not qualified stated interest each as defined below under "-- Original Issue
Discount -- General", you will be taxed on any interest on your note, whether
payable in U.S. dollars or a foreign currency, including a composite currency
or basket of currencies
47
other than U.S. dollars, as ordinary income at the time you receive the
interest or when it accrues, depending on your method of accounting for tax
purposes.
Cash Basis Taxpayers. If you are a taxpayer that uses the cash receipts and
disbursements method of accounting for tax purposes and you receive an interest
payment that is denominated in, or determined by reference to, a foreign
currency, you must recognize income equal to the U.S. dollar value of the
interest payment, based on the exchange rate in effect on the date of receipt,
regardless of whether you actually convert the payment into U.S. dollars.
Accrual Basis Taxpayers. If you are a taxpayer that uses an accrual method
of accounting for tax purposes, you may determine the amount of income that you
recognize with respect to an interest payment denominated in, or determined by
reference to, a foreign currency by using one of two methods. Under the first
method, you will determine the amount of income accrued based on the average
exchange rate in effect during the interest accrual period or, with respect to
an accrual period that spans two taxable years, that part of the period within
the taxable year.
If you elect the second method, you would determine the amount of income
accrued on the basis of the exchange rate in effect on the last day of the
accrual period, or, in the case of an accrual period that spans two taxable
years, the exchange rate in effect on the last day of the part of the period
within the taxable year. Additionally, under this second method, if you receive
a payment of interest within five business days of the last day of your accrual
period or taxable year, you may instead translate the interest accrued into
U.S. dollars at the exchange rate in effect on the day that you actually
receive the interest payment. If you elect the second method it will apply to
all debt instruments that you hold at the beginning of the first taxable year
to which the election applies and to all debt instruments that you subsequently
acquire. You may not revoke this election without the consent of the Internal
Revenue Service.
When you actually receive an interest payment, including a payment
attributable to accrued but unpaid interest upon the sale or retirement of your
note, denominated in, or determined by reference to, a foreign currency for
which you accrued an amount of income, you will recognize ordinary income or
loss measured by the difference, if any, between the exchange rate that you
used to accrue interest income and the exchange rate in effect on the date of
receipt, regardless of whether you actually convert the payment into U.S.
dollars.
Original Issue Discount
General. If you own a note, other than a short-term note with a term of one
year or less, it will be treated as a discount note issued at an original issue
discount if the amount by which the note's stated redemption price at maturity
exceeds its issue price is more than a de minimis amount. Generally, a note's
issue price will be the first price at which a substantial amount of notes
included in the issue of which the note is a part is sold to persons other than
bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents, or wholesalers. A note's stated
redemption price at maturity is the total of all payments provided by the note
that are not payments of qualified stated interest. Generally, an interest
payment on a note is qualified stated interest if it is one of a series of
stated interest payments on a note that are unconditionally payable at least
annually at a single fixed rate, with certain exceptions for lower rates paid
during some periods, applied to the outstanding principal amount of the note.
There are special rules for variable rate notes that are discussed under
"--Variable Rate Notes".
In general, your note is not a discount note if the amount by which its
stated redemption price at maturity exceeds its issue price is less than the de
minimis amount of 1/4 of 1 percent of its stated redemption price at maturity
multiplied by the number of complete years to its maturity. Your note will have
de minimis original issue discount if the amount of the excess is less than the
de minimis amount. If your note has de minimis original issue discount, you
must include the de minimis amount in income as stated principal payments are
made on the note, unless you make the election described below under
"--Election to Treat All Interest as Original
48
Issue Discount". You can determine the includible amount with respect to each
such payment by multiplying the total amount of your note's de minimis original
issue discount by a fraction equal to:
. the amount of the principal payment made
divided by:
. the stated principal amount of the note.
Generally, if your discount note matures more than one year from its date of
issue, you must include original issue discount in income before you receive
cash attributable to that income. The amount of OID that you must include in
income is calculated using a constant-yield method, and generally you will
include increasingly greater amounts of OID in income over the life of your
note. More specifically, you can calculate the amount of OID that you must
include in income by adding the daily portions of OID with respect to your
discount note for each day during the taxable year or portion of the taxable
year that you hold your discount note. You can determine the daily portion by
allocating to each day in any accrual period a pro rata portion of the OID
allocable to that accrual period. You may select an accrual period of any
length with respect to your discount note and you may vary the length of each
accrual period over the term of your discount note. However, no accrual period
may be longer than one year and each scheduled payment of interest or principal
on the discount note must occur on either the first or final day of an accrual
period.
You can determine the amount of OID allocable to an accrual period by:
. multiplying your discount note's adjusted issue price at the beginning of
the accrual period by your note's yield to maturity, and then
. subtracting from this figure the sum of the payments of qualified stated
interest on your note allocable to the accrual period.
You must determine the discount note's yield to maturity on the basis of
compounding at the close of each accrual period and adjusting for the length of
each accrual period. Further, you determine your discount note's adjusted issue
price at the beginning of any accrual period by:
. adding your discount note's issue price and any accrued OID for each prior
accrual period, and then
. subtracting any payments previously made on your discount note that were
not qualified stated interest payments.
If an interval between payments of qualified stated interest on your
discount note contains more than one accrual period, then, when you determine
the amount of OID allocable to an accrual period, you must allocate the amount
of qualified stated interest payable at the end of the interval, including any
qualified stated interest that is payable on the first day of the accrual
period immediately following the interval, pro rata to each accrual period in
the interval based on their relative lengths. In addition, you must increase
the adjusted issue price at the beginning of each accrual period in the
interval by the amount of any qualified stated interest that has accrued prior
to the first day of the accrual period but that is not payable until the end of
the interval. You may compute the amount of OID allocable to an initial short
accrual period by using any reasonable method if all other accrual periods,
other than a final short accrual period, are of equal length.
The amount of OID allocable to the final accrual period is equal to the
difference between:
. the amount payable at the maturity of your note, other than any payment of
qualified stated interest, and
. your note's adjusted issue price as of the beginning of the final accrual
period.
Acquisition Premium. If you purchase your note for an amount that is less
than or equal to the sum of all amounts, other than qualified stated interest,
payable on your note after the purchase date but is greater than the
49
amount of your note's adjusted issue price, as determined above under
"--General", the excess is acquisition premium. If you do not make the election
described below under "--Election to Treat All Interest as Original Issue
Discount", then you must reduce the daily portions of OID by a fraction equal
to:
. the excess of your adjusted basis in the note immediately after purchase
over the adjusted issue price of the note
divided by:
. the excess of the sum of all amounts payable, other than qualified stated
interest, on the note after the purchase date over the note's adjusted
issue price.
Pre-Issuance Accrued Interest. An election may be made to decrease the
issue price of your note by the amount of pre-issuance accrued interest if:
. a portion of the initial purchase price of your note is attributable to
pre-issuance accrued interest,
. the first stated interest payment on your note is to be made within one
year of your note's issue date, and
. the payment will equal or exceed the amount of pre-issuance accrued
interest.
If this election is made, a portion of the first stated interest payment
will be treated as a return of the excluded pre-issuance accrued interest and
not as an amount payable on your note.
Notes Subject to Contingencies Including Optional Redemption. Your note is
subject to a contingency if it provides for an alternative payment schedule or
schedules applicable upon the occurrence of a contingency or contingencies,
other than a remote or incidental contingency, whether such contingency relates
to payments of interest or of principal. In such a case, you must determine the
yield and maturity of your note by assuming that the payments will be made
according to the payment schedule most likely to occur if:
. the timing and amounts of the payments that comprise each payment schedule
are known as of the issue date and
. one of such schedules is significantly more likely than not to occur.
If there is no single payment schedule that is significantly more likely than
not to occur, other than because of a mandatory sinking fund, you must include
income on your note in accordance with the general rules that govern contingent
payment obligations. These rules will be discussed in the applicable pricing
supplement.
Notwithstanding the general rules for determining yield and maturity, if
your note is subject to contingencies, and either you or we have an
unconditional option or options that, if exercised, would require payments to
be made on the note under an alternative payment schedule or schedules, then:
. in the case of an option or options that we may exercise, we will be
deemed to exercise or not exercise an option or combination of options in
the manner that minimizes the yield on your note and
. in the case of an option or options that you may exercise, you will be
deemed to exercise or not exercise an option or combination of options in
the manner that maximizes the yield on your note.
If both you and we hold options described in the preceding sentence, those
rules will apply to each option in the order in which they may be exercised.
You may determine the yield on your note for the purposes of those calculations
by using any date on which your note may be redeemed or repurchased as the
maturity date and the amount payable on the date that you chose in accordance
with the terms of your note as the principal amount payable at maturity.
If a contingency, including the exercise of an option, actually occurs or
does not occur contrary to an assumption made according to the above rules
then, except to the extent that a portion of your note is repaid as a
50
result of this change in circumstances and solely to determine the amount and
accrual of OID, you must redetermine the yield and maturity of your note by
treating your note as having been retired and reissued on the date of the
change in circumstances for an amount equal to your note's adjusted issue price
on that date.
Election to Treat All Interest as Original Issue Discount. You may elect to
include in gross income all interest that accrues on your note using the
constant-yield method described above under "--General", with the modifications
described below. For purposes of this election, interest will include stated
interest, OID, de minimis original issue discount, market discount, de minimis
market discount and unstated interest, as adjusted by any amortizable bond
premium, described below under "--Notes Purchased at a Premium," or acquisition
premium.
If you make this election for your note, then, when you apply the
constant-yield method:
. the issue price of your note will equal your cost,
. the issue date of your note will be the date you acquired it, and
. no payments on your note will be treated as payments of qualified stated
interest.
Generally, this election will apply only to the note for which you make it;
however, if the note has amortizable bond premium, you will be deemed to have
made an election to apply amortizable bond premium against interest for all
debt instruments with amortizable bond premium, other than debt instruments the
interest on which is excludible from gross income, that you hold as of the
beginning of the taxable year to which the election applies or any taxable year
thereafter. Additionally, if you make this election for a market discount note,
you will be treated as having made the election discussed below under "-- Notes
Purchased with Market Discount" to include market discount in income currently
over the life of all debt instruments that you currently own or later acquire.
You may not revoke any election to apply the constant-yield method to all
interest on a note or the deemed elections with respect to amortizable bond
premium or market discount notes without the consent of the Internal Revenue
Service.
Variable Rate Notes. Your note will be a variable rate note if:
. your note's issue price does not exceed the total noncontingent principal
payments by more than the lesser of:
1. .015 multiplied by the product of the total noncontingent principal
payments and the number of complete years to maturity from the issue
date, or
2. 15 percent of the total noncontingent principal payments; and
. your note provides for stated interest, compounded or paid at least
annually, only at:
1. one or more qualified floating rates,
2. a single fixed rate and one or more qualified floating rates,
3. a single objective rate, or
4. a single fixed rate and a single objective rate that is a qualified
inverse floating rate.
Your note will have a variable rate that is a qualified floating rate if:
. variations in the value of the rate can reasonably be expected to measure
contemporaneous variations in the cost of newly borrowed funds in the
currency in which your note is denominated; or
. the rate is equal to such a rate multiplied by either:
1. a fixed multiple that is greater than 0.65 but not more than 1.35, or
51
2. a fixed multiple greater than 0.65 but not more than 1.35, increased
or decreased by a fixed rate; and
. the value of the rate on any date during the term of your note is set no
earlier than three months prior to the first day on which that value is in
effect and no later than one year following that first day.
If your note provides for two or more qualified floating rates that are
within 0.25 percentage points of each other on the issue date or can reasonably
be expected to have approximately the same values throughout the term of the
note, the qualified floating rates together constitute a single qualified
floating rate.
Your note will not have a qualified floating rate, however, if the rate is
subject to certain restrictions (including caps, floors, governors, or other
similar restrictions) unless such restrictions are fixed throughout the term of
the note or are not reasonably expected to significantly affect the yield on
the note.
Your note will have a variable rate that is a single objective rate if:
. the rate is not a qualified floating rate,
. the rate is determined using a single, fixed formula that is based on
objective financial or economic information that is not within the control
of or unique to the circumstances of the issuer or a related party, and
. the value of the rate on any date during the term of your note is set no
earlier than three months prior to the first day on which that value is in
effect and no later than one year following that first day.
Your note will not have a variable rate that is an objective rate, however,
if it is reasonably expected that the average value of the rate during the
first half of your note's term will be either significantly less than or
significantly greater than the average value of the rate during the final half
of your note's term.
An objective rate as described above is a qualified inverse floating rate if:
. the rate is equal to a fixed rate minus a qualified floating rate, and
. the variations in the rate can reasonably be expected to inversely reflect
contemporaneous variations in the cost of newly borrowed funds.
Your note will also have a single qualified floating rate or an objective
rate if interest on your note is stated at a fixed rate for an initial period
of one year or less followed by either a qualified floating rate or an
objective rate for a subsequent period, and either:
. the fixed rate and the qualified floating rate or objective rate have
values on the issue date of the note that do not differ by more than 0.25
percentage points, or
. the value of the qualified floating rate or objective rate is intended to
approximate the fixed rate.
Commercial paper rate notes, prime rate notes, LIBOR notes, EURIBOR rate
notes, treasury rate notes, CMT rate notes, CD rate notes, and federal funds
rate notes generally will be treated as variable rate notes under these rules.
In general, if your variable rate note provides for stated interest at a
single qualified floating rate or objective rate, or one of those rates after a
single fixed rate for an initial period, all stated interest on your note is
qualified stated interest. In this case, the amount of OID, if any, is
determined by using, in the case of a qualified floating rate or qualified
inverse floating rate, the value as of the issue date of the qualified floating
rate or qualified inverse floating rate, or, for any other objective rate, a
fixed rate that reflects the yield reasonably expected for your note.
52
If your variable rate note does not provide for stated interest at a single
qualified floating rate or a single objective rate, and also does not provide
for interest payable at a fixed rate other than a single fixed rate for an
initial period, you generally must determine the interest and OID accruals on
your note by:
. determining a fixed rate substitute for each variable rate provided under
your variable rate note,
. constructing the equivalent fixed rate debt instrument, using the fixed
rate substitute described above,
. determining the amount of qualified stated interest and OID with respect
to the equivalent fixed rate debt instrument, and
. adjusting for actual variable rates during the applicable accrual period.
When you determine the fixed rate substitute for each variable rate provided
under the variable rate note, you generally will use the value of each variable
rate as of the issue date or, for an objective rate that is not a qualified
inverse floating rate, a rate that reflects the reasonably expected yield on
your note.
If your variable rate note provides for stated interest either at one or
more qualified floating rates or at a qualified inverse floating rate, and also
provides for stated interest at a single fixed rate other than at a single
fixed rate for an initial period, you generally must determine interest and OID
accruals by using the method described in the previous paragraph. However, your
variable rate note will be treated, for purposes of the first three steps of
the determination, as if your note had provided for a qualified floating rate,
or a qualified inverse floating rate, rather than the fixed rate. The qualified
floating rate, or qualified inverse floating rate, that replaces the fixed rate
must be such that the fair market value of your variable rate note as of the
issue date approximates the fair market value of an otherwise identical debt
instrument that provides for the qualified floating rate, or qualified inverse
floating rate, rather than the fixed rate.
Short-Term Notes. In general, if you are an individual or other cash basis
United States holder of a short-term note, you are not required to accrue OID,
as specially defined below for the purposes of this paragraph, for United
States federal income tax purposes unless you elect to do so (although it is
possible that you may be required to include any stated interest in income as
you receive it). If you are an accrual basis taxpayer, a taxpayer in a special
class, including, but not limited to, a regulated investment company, common
trust fund, or a certain type of pass-through entity, or a cash basis taxpayer
who so elects, you will be required to accrue OID on short-term notes on either
a straight-line basis or under the constant-yield method, based on daily
compounding. If you are not required and do not elect to include OID in income
currently, any gain you realize on the sale or retirement of your short-term
note will be ordinary income to the extent of the accrued OID, which will be
determined on a straight-line basis unless you make an election to accrue the
OID under the constant-yield method, through the date of sale or retirement.
However, if you are not required and do not elect to accrue OID on your
short-term notes, you will be required to defer deductions for interest on
borrowings allocable to your short-term notes in an amount not exceeding the
deferred income until the deferred income is realized.
When you determine the amount of OID subject to these rules, you must
include all interest payments on your short-term note, including stated
interest, in your short-term note's stated redemption price at maturity.
Foreign Currency Discount Notes. If your discount note is denominated in,
or determined by reference to, a foreign currency, you must determine OID for
any accrual period on your discount note in the foreign currency and then
translate the amount of OID into U.S. dollars in the same manner as stated
interest accrued by an accrual basis United States holder, as described under
"-- United States Holders -- Payments of Interest". You may recognize ordinary
income or loss when you receive an amount attributable to OID in connection
with a payment of interest or the sale or retirement of your note.
Notes Purchased at a Premium
If you purchase your note for an amount in excess of its principal amount,
you may elect to treat the excess as amortizable bond premium. If you make this
election, you will reduce the amount required to be included in
53
your income each year with respect to interest on your note by the amount of
amortizable bond premium allocable to that year, based on your note's yield to
maturity. If your note is denominated in, or determined by reference to, a
foreign currency, you will compute your amortizable bond premium in units of
the foreign currency and your amortizable bond premium will reduce your
interest income in units of the foreign currency. Gain or loss recognized that
is attributable to changes in exchange rates between the time your amortized
bond premium offsets interest income and the time of the acquisition of your
note is generally taxable as ordinary income or loss. If you make an election
to amortize bond premium, it will apply to all debt instruments, other than
debt instruments the interest on which is excludible from gross income, that
you hold at the beginning of the first taxable year to which the election
applies or that you thereafter acquire, and you may not revoke it without the
consent of the Internal Revenue Service. See also "-- Original Issue Discount
-- Election to Treat All Interest as Original Issue Discount".
Notes Purchased with Market Discount
You will be treated as if you purchased your note, other than a short-term
note, at a market discount, and your note will be a market discount note if:
. in the case of an initial purchaser, you purchase your note for less than
its issue price as determined above under " -- Original Issue Discount --
General", and
. the difference between the note's stated redemption price at maturity or,
in the case of a discount note, the note's revised issue price, and the
price you paid for your note is equal to or greater than 1/4 of 1 percent
of your note's stated redemption price at maturity or revised issue price,
respectively, multiplied by the number of complete years to the note's
maturity.
To determine the revised issue price of your note for these purposes, you
generally add any OID that has accrued on your note to its issue price.
If your note's stated redemption price at maturity or, in the case of a
discount note, its revised issue price, exceeds the price you paid for the note
by less than 1/4 of 1 percent multiplied by the number of complete years to the
note's maturity, the excess constitutes de minimis market discount, and the
rules discussed below are not applicable to you.
You must treat any gain you recognize on the maturity or disposition of your
market discount note as ordinary income to the extent of the accrued market
discount on your note. Alternatively, you may elect to include market discount
in income currently over the life of your note. If you make this election, it
will apply to all debt instruments with market discount that you acquire on or
after the first day of the first taxable year to which the election applies.
You may not revoke this election without the consent of the Internal Revenue
Service. If you own a market discount note and do not make this election, you
will generally be required to defer deductions for interest on borrowings
allocable to your note in an amount not exceeding the accrued market discount
on your note until the maturity or disposition of your note.
You will accrue market discount on your market discount note on a
straight-line basis unless you elect to accrue market discount using a
constant-yield method. If you make this election, it will apply only to the
note with respect to which it is made and you may not revoke it.
Purchase, Sale and Retirement of the Notes
Your tax basis in your note will generally be the U.S. dollar cost, as defined
below, of your note, adjusted by:
. adding any OID or market discount, de minimis original issue discount and
de minimis market discount previously included in income with respect to
your note, and then
. subtracting any payments on your note that are not qualified stated
interest payments and any amortizable bond premium applied to reduce
interest on your note.
If you purchase your note with foreign currency, the U.S. dollar cost of your
note will generally be the U.S. dollar value of the purchase price on the date
of purchase. However, if you are a cash basis taxpayer, or an
54
accrual basis taxpayer if you so elect, and your note is traded on an
established securities market, as defined in the applicable Treasury
regulations, the U.S. dollar cost of your note will be the U.S. dollar value of
the purchase price on the settlement date of your purchase.
You will generally recognize gain or loss on the sale or retirement of your
note equal to the difference between the amount you realize on the sale or
retirement and your tax basis in your note. If your note is sold or retired for
an amount in foreign currency, the amount you realize will be the U.S. dollar
value of such amount on:
. the date payment is received, if you are a cash basis taxpayer and the
notes are not traded on an established securities market, as defined in
the applicable Treasury regulations,
. the date of disposition, if you are an accrual basis taxpayer, or
. the settlement date for the sale, if you are a cash basis taxpayer, or an
accrual basis taxpayer that so elects, and the notes are traded on an
established securities market, as defined in the applicable Treasury
regulations.
You will recognize capital gain or loss when you sell or retire your note,
except to the extent:
. described above under "-- Original Issue Discount -- Short-Term Notes" or
"-- Notes Purchased with Market Discount",
. attributable to accrued but unpaid interest,
. the rules governing contingent payment obligations apply, or
. attributable to changes in exchange rates as described below.
Capital gain of a noncorporate United States holder is generally taxed at a
maximum rate of 20% where the property is held more than one year, and 18%
where the property is held for more than five years.
You must treat any portion of the gain or loss that you recognize on the
sale or retirement of a note as ordinary income or loss to the extent
attributable to changes in exchange rates. However, you take exchange gain or
loss into account only to the extent of the total gain or loss you realize on
the transaction.
Exchange of Amounts in Other Than U.S. Dollars
If you receive foreign currency as interest on your note or on the sale or
retirement of your note, your tax basis in the foreign currency will equal its
U.S. dollar value when the interest is received or at the time of the sale or
retirement. If you purchase foreign currency, you generally will have a tax
basis equal to the U.S. dollar value of the foreign currency on the date of
your purchase. If you sell or dispose of a foreign currency, including if you
use it to purchase notes or exchange it for U.S. dollars, any gain or loss
recognized generally will be ordinary income or loss.
Indexed Notes, Exchangeable Notes, and Contingent Payment Notes
The applicable pricing supplement will discuss any special United States
federal income tax rules with respect to notes the payments on which are
determined by reference to any index, notes that are exchangeable at our option
or the option of the holder into securities of an issuer other than Wachovia or
into other property, and other notes that are subject to the rules governing
contingent payment obligations which are not subject to the rules governing
variable rate notes.
United States Alien Holders
This subsection describes the tax consequences to a United States alien
holder. You are a United States alien holder if you are the beneficial owner of
a note and are, for United States federal income tax purposes:
. a nonresident alien individual,
. a foreign corporation,
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. a foreign partnership, or
. an estate or trust that in either case is not subject to United States
federal income tax on a net income basis on income or gain from a note.
If you are a United States holder, this subsection does not apply to you.
This discussion assumes that the note is not subject to the rules of Section
871(h)(4)(A) of the Internal Revenue Code, relating to interest payments that
are determined by reference to the income, profits, changes in the value of
property or other attributes of the debtor or a related party.
Under United States federal income and estate tax law, and subject to the
discussion of backup withholding below, if you are a United States alien holder
of a note:
. we and other U.S. payors generally will not be required to deduct United
States withholding tax from payments of principal, premium, if any, and
interest, including OID, to you if, in the case of payments of interest:
1.you do not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to
vote,
2.you are not a controlled foreign corporation that is related to the
Company through stock ownership, and
3.the U.S. payor does not have actual knowledge or reason to know that you
are a United States person and:
a.you have furnished to the U.S. payor an Internal Revenue Service Form
W-8BEN or an acceptable substitute form upon which you certify, under
penalties of perjury, that you are a non-United States person,
b.in the case of payments made outside the United States to you at an
offshore account (generally, an account maintained by you at a bank or
other financial institution at any location outside the United
States), you have furnished to the U.S. payor documentation that
establishes your identity and your status as a non-United States
person,
c.the U.S. payor has received a withholding certificate (furnished on an
appropriate Internal Revenue Service Form W-8 or an acceptable
substitute form) from a person claiming to be:
i. a withholding foreign partnership (generally a foreign partnership
that has entered into an agreement with the Internal Revenue Service
to assume primary withholding responsibility with respect to
distributions and guaranteed payments it makes to its partners),
ii. a qualified intermediary (generally a non-United States financial
institution or clearing organization or a non-United States branch or
office of a United States financial institution or clearing
organization that is a party to a withholding agreement with the
Internal Revenue Service), or
iii. a U.S. branch of a non-United States bank or of a non-United
States insurance company,
and the withholding foreign partnership, qualified intermediary or
U.S. branch has received documentation upon which it may rely to treat
the payment as made to a non-United States person in accordance with
U.S. Treasury regulations (or, in the case of a qualified
intermediary, in accordance with its agreement with the Internal
Revenue Service),
d.the U.S. payor receives a statement from a securities clearing
organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business,
56
i.certifying to the U.S. payor under penalties of perjury that an
Internal Revenue Service Form W-8BEN or an acceptable substitute form
has been received from you by it or by a similar financial
institution between it and you, and
ii.to which is attached a copy of the Internal Revenue Service Form
W-8BEN or acceptable substitute form, or
e.the U.S. payor otherwise possesses documentation upon which it may
rely to treat the payment as made to a non-United States person in
accordance with U.S. Treasury regulations; and
. no deduction for any United States federal withholding tax will be made
from any gain that you realize on the sale or exchange of your note.
Further, a note held by an individual who at death is not a citizen or resident
of the United States will not be includible in the individual's gross estate
for United States federal estate tax purposes if:
. the decedent did not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company
entitled to vote at the time of death and
. the income on the note would not have been effectively connected with a
United States trade or business of the decedent at the same time.
Backup Withholding And Information Reporting
In general, if you are a noncorporate United States holder, we and other
payors are required to report to the Internal Revenue Service all payments of
principal, any premium and interest on your note, and the accrual of OID on a
discount note. In addition, we and other payors are required to report to the
Internal Revenue Service any payment of proceeds of the sale of your note
before maturity within the United States. Additionally, backup withholding will
apply to any payments, including payments of OID, if you fail to provide an
accurate taxpayer identification number, or you are notified by the Internal
Revenue Service that you have failed to report all interest and dividends
required to be shown on your federal income tax returns.
In general, if you are a United States alien holder, payments of principal,
premium or interest, including OID, made by us and other payors to you will not
be subject to backup withholding and information reporting, provided that the
certification requirements described above under "--United States Alien
Holders" are satisfied or you otherwise establish an exemption. However, we and
other payors are required to report payments of interest on your notes on
Internal Revenue Service Form 1042-S even if the payments are not otherwise
subject to information reporting requirements. In addition, payment of the
proceeds from the sale of notes effected at a United States office of a broker
will not be subject to backup withholding and information reporting provided
that:
. the broker does not have actual knowledge or reason to know that you are a
United States person and you have furnished to the broker:
. an appropriate Internal Revenue Service Form W-8 or an acceptable
substitute form upon which you certify, under penalties of perjury, that
you are not a United States person, or
. other documentation upon which it may rely to treat the payment as made
to a non-United States person in accordance with U.S. Treasury
regulations, or
. you otherwise establish an exemption.
If you fail to establish an exemption and the broker does not possess adequate
documentation of your status as a non-United States person, the payments may be
subject to information reporting and backup withholding.
57
However, backup withholding will not apply with respect to payments made to an
offshore account maintained by you unless the broker has actual knowledge that
you are a United States person.
In general, payment of the proceeds from the sale of notes effected at a
foreign office of a broker will not be subject to information reporting or
backup withholding. However, a sale effected at a foreign office of a broker
will be subject to information reporting and backup withholding if:
. the proceeds are transferred to an account maintained by you in the United
States,
. the payment of proceeds or the confirmation of the sale is mailed to you
at a United States address, or
. the sale has some other specified connection with the United States as
provided in U.S. Treasury regulations,
unless the broker does not have actual knowledge or reason to know that you are
a United States person and the documentation requirements described above
(relating to a sale of notes effected at a United States office of a broker)
are met or you otherwise establish an exemption.
In addition, payment of the proceeds from the sale of notes effected at a
foreign office of a broker will be subject to information reporting if the
broker is:
. a United States person,
. a controlled foreign corporation for United States tax purposes,
. a foreign person 50% or more of whose gross income is effectively
connected with the conduct of a United States trade or business for a
specified three-year period, or
. a foreign partnership, if at any time during its tax year:
. one or more of its partners are "U.S. persons", as defined in U.S.
Treasury regulations, who in the aggregate hold more than 50% of the
income or capital interest in the partnership, or
. such foreign partnership is engaged in the conduct of a United States
trade or business,
unless the broker does not have actual knowledge or reason to know that you are
a United States person and the documentation requirements described above
(relating to a sale of notes effected at a United States office of a broker)
are met or you otherwise establish an exemption. Backup withholding will apply
if the sale is subject to information reporting and the broker has actual
knowledge that you are a United States person.
PROPOSED EUROPEAN UNION DIRECTIVE ON TAXATION OF SAVINGS
On July 18, 2001, the EU Commission published a proposal for a new directive
regarding the taxation of savings income. It is proposed that, subject to a
number of important conditions being met, Member States will be required to
provide to the tax authorities of another Member State details of payments of
interest or other similar income paid by a person within its jurisdiction to an
individual resident in that other Member State, subject to the right of certain
Member States to opt instead for a withholding system for a transitional period
in relation to such payments. The proposals are not yet final, and they may be
subject to further amendment and/or clarification.
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EMPLOYEE RETIREMENT INCOME SECURITY ACT
A fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employment Retirement Income Security Act of 1974, as amended
("ERISA"), should consider the fiduciary standards of ERISA in the context of
the plan's particular circumstances before authorizing an investment in the
notes. Among other factors, the fiduciary should consider whether the
investment would satisfy the prudence and diversification requirements of ERISA
and would be consistent with the documents and instruments governing the plan.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit
an employee benefit plan, as well as individual retirement accounts and Keogh
plans subject to Section 4975 of the Internal Revenue Code, from engaging in
certain transactions involving "plan assets" with persons who are "parties in
interest" under ERISA or "disqualified persons" under the Internal Revenue Code
with respect to the plan. A violation of these "prohibited transaction" rules
may result in excise tax or other liabilities under ERISA and Section 4975 of
the Internal Revenue Code for such persons, unless exemptive relief is
available under an applicable statutory or administrative exemption. Therefore,
a fiduciary of an employee benefit plan should also consider whether an
investment in the notes might constitute or give rise to a prohibited
transaction under ERISA and the Internal Revenue Code. Employee benefit plans
which are governmental plans (as defined in Section 3(32) of ERISA), certain
church plans (as defined in Section 3(33) of ERISA), and foreign plans (as
described in Section 4(b)(4) of ERISA) generally are not subject to the
requirements of ERISA or Section 4975 of the Internal Revenue Code.
Wachovia Corporation and certain of its affiliates may each be considered a
party in interest or disqualified person with respect to many employee benefit
plans. This could be the case, for example, if one of these companies is a
service provider to a plan. Special caution should be exercised, therefore,
before notes are purchased by an employee benefit plan. In particular, the
fiduciary of the plan should consider whether exemptive relief is available
under an applicable administrative exemption. The Department of Labor has
issued five prohibited transaction class exemptions that could apply to exempt
the purchase, sale and holding of notes from the prohibited transaction
provisions of ERISA and the Internal Revenue Code. Those class exemptions are
Prohibited Transaction Exemption 96-23 (for transactions determined by in-house
asset managers), Prohibited Transaction Exemption 95-60 (for certain
transactions involving insurance company general accounts), Prohibited
Transaction Exemption 91-38 (for certain transactions involving bank investment
funds), Prohibited Transaction Exemption 90-1 (for certain transactions
involving insurance company separate accounts), and Prohibited Transaction
Exemption 84-14 (for certain transactions determined by independent qualified
asset managers).
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 the purchase of notes
on behalf of or with "plan assets" of any employee benefit plan consult with
their counsel regarding the consequences under ERISA and the Internal Revenue
Code of the acquisition of the notes and the availability of exemptive relief
under Prohibited Transaction Exemption 96-23, 95-60, 91-38, 90-1 or 84-14.
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PLAN OF DISTRIBUTION
Unless otherwise indicated in any pricing supplement, the U.S. distribution
agents shall be First Union Securities, Inc., an indirect, wholly-owned
subsidiary of Wachovia; Barclays Capital Inc.; Bear, Stearns & Co. Inc.; Credit
Suisse First Boston Corporation; Goldman, Sachs & Co.; Guzman & Company; J.P.
Morgan Securities Inc.; Lehman Brothers Inc.; Merrill Lynch, Pierce, Fenner &
Smith Incorporated; Salomon Smith Barney Inc.; UBS Warburg LLC; Utendahl
Capital Partners, L.P.; and the European distribution agents shall be Wachovia
Securities International Limited, an indirect, wholly-owned subsidiary of
Wachovia; Barclays Bank PLC; Bear, Stearns International Limited; Credit Suisse
First Boston (Europe) Limited; Goldman Sachs International; Guzman & Company;
J.P. Morgan Securities Ltd.; Lehman Brothers International (Europe); Merrill
Lynch International; Salomon Brothers International Limited; UBS AG, acting
through its business group UBS Warburg and Utendahl Capital Partners, L.P.
Wachovia conducts its investment banking, institutional and capital markets
businesses through its various bank, broker-dealer and nonbank subsidiaries
(including First Union Securities, Inc.) under the trade name "Wachovia
Securities". Any reference to "Wachovia Securities" is not intended to be a
reference to Wachovia Securities, Inc., member NASD/SIPC, a separate
broker-dealer subsidiary of Wachovia and sister affiliate of First Union
Securities, Inc., which is not participating in this offering. Under the terms
of a Distribution Agreement among Wachovia and these agents, Wachovia may sell
notes to an agent, acting as principal, for resale to one or more investors or
other purchasers at varying prices related to prevailing market prices at the
time of resale, as determined by any of these agents or, if so agreed, at a
fixed offering price. A form of Distribution Agreement has been filed as an
exhibit to the registration statement for this prospectus. Unless otherwise
indicated in the relevant pricing supplement, any note sold to an agent as
principal will be purchased by that agent at a price equal to 100% of the
principal amount of that note, less a percentage not exceeding the maximum
commission applicable to any agency sale of a note of identical maturity, and,
subject to the restriction noted in the following sentence, may be resold by
that Agent to investors and other purchasers. An agent may offer the notes it
has purchased as principal to other dealers at a discount and, unless otherwise
indicated in any pricing supplement, and the discount allowed to any dealer
will not exceed the discount to be received by that agent from Wachovia. After
the initial public offering of notes to be resold to investors and other
purchasers, the public offering price (in the case of notes to be resold on a
fixed public offering price basis), the concession and the discount may be
changed.
Wachovia may also offer the notes on a continuing basis through the agents,
which have agreed to use their reasonable efforts to solicit offers to purchase
the notes, on an agency basis. When Wachovia has sold notes through an agent on
an agency basis, it will pay that agent a commission (or grant a discount) as
agreed by Wachovia and that agent in an amount from 0.125% to 1.0% of the
principal amount of each note sold through that agent. Any agent will have the
right, in its discretion reasonably exercised, without notice to Wachovia, to
reject any offer to purchase notes received by it in whole or in part.
Unless otherwise mentioned in the relevant pricing supplement, the
obligations of any agents to purchase the notes will be subject to certain
conditions precedent, and each of the agents with respect to a sale of notes
will be obligated to purchase all of its notes if any are purchased.
Wachovia has reserved the right to sell notes directly to investors on its
own behalf in those jurisdictions where it is authorized to do so. No selling
commission will be payable nor will a selling discount be allowed on any sales
made directly by Wachovia.
Wachovia has reserved the right to withdraw, cancel or modify the offer made
by this prospectus without notice and may reject orders in whole or in part
whether placed directly with Wachovia or with an agent. No termination date has
been established for the offering of the notes.
The notes are a new issue of securities with no established trading market.
Wachovia has been advised by the agents that they intend to make a market in
the notes but are not obligated to do so and may discontinue market-making at
any time without notice. The agents may from time to time purchase and sell
notes in the secondary market, but no agent is obligated to do so. We can give
no assurance that the notes offered by this prospectus will be sold or that
there will be a secondary market for the notes (or liquidity in such secondary
market, if one develops).
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We have applied to list on the Luxembourg Stock Exchange any notes issued
under this prospectus during the twelve-month period after the date of this
prospectus. We may also list any notes on any additional securities exchanges
on which we and the agents agree in relation to each issuance. We may also
issue unlisted notes.
Unless otherwise indicated in any pricing supplement, payment of the
purchase price of notes, other than notes denominated in a non-U.S. dollar
currency, will be required to be made in funds immediately available in The
City of New York. The notes will be in the Same Day Funds Settlement System at
DTC and, to the extent the secondary market trading in the notes is effected
through the facilities of such depositary, such trades will be settled in
immediately available funds. See "Global Notes" above.
In facilitating the sale of notes, agents may receive compensation from
Wachovia or from purchasers of notes for whom they may act as agents in the
form of discounts, concessions or commissions. Agents may sell notes to or
through dealers, and these dealers may receive compensation in the form of
discounts, concessions or commissions from the agents and/or commissions from
the purchasers for whom they may act as agents. Agents and dealers that
participate in the distribution of notes may be considered "underwriters", and
any discounts or commissions received by them from Wachovia and any profit on
the resale of notes by them may be considered underwriting discounts and
commissions under the Securities Act. Any such agent will be identified, and
any such compensation received from Wachovia will be described, in the pricing
supplement relating to those notes. Wachovia has agreed to indemnify the agents
against and contribute toward certain liabilities, including liabilities under
the Securities Act. Wachovia has also agreed to reimburse the agents for
certain expenses.
If Wachovia offers and sells notes directly to a purchaser or purchasers in
respect of which this prospectus is delivered, purchasers involved in the
reoffer or resale of such notes, if these purchasers may be considered
underwriters as that term is defined in the Securities Act, will be named and
the terms of their reoffers or resales will be mentioned in the relevant
pricing supplement. These purchasers may then reoffer and resell such notes to
the public or otherwise at varying prices to be determined by such purchasers
at the time of resale or as otherwise described in the relevant pricing
supplement. Purchasers of notes directly from Wachovia may be entitled under
agreements that they may enter into with Wachovia to indemnification by
Wachovia against certain liabilities, including liabilities under the
Securities Act, and may engage in transactions with or perform services for
Wachovia in the ordinary course of their business or otherwise.
The agents may engage in over-allotment, stabilizing transactions, syndicate
covering transactions and penalty bids in accordance with Regulation M under
the Securities Exchange Act of 1934. Over-allotment involves syndicate sales in
excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the notes in the open market after
the distribution has been completed in order to cover syndicate short
positions. Penalty bids permit reclaiming a selling concession from a syndicate
member when the notes originally sold by such syndicate member are purchased in
a syndicate covering transaction to cover syndicate short positions. Such
stabilizing transactions, syndicate covering transactions and penalty bids may
stabilize, maintain or otherwise affect the market price of the notes, which
may be higher than it would otherwise be in the absence of such transactions.
The agents are not required to engage in these activities, and may end any of
these activities at any time.
The participation of First Union Securities, Inc. in the offer and sale of
the notes must comply with the requirements of Rule 2720 of the National
Association of Securities Dealers, Inc. regarding underwriting securities of an
"affiliate". No NASD member participating in offers and sales will execute a
transaction in the notes in a discretionary account without the prior specific
written approval of such member's customer.
From time to time the agents engage in transactions with Wachovia in the
ordinary course of business. The agents or their affiliates may have performed
investment banking services for Wachovia in the last two years and may have
received fees for these services and may do so in the future. The agents and/or
their affiliates may be customers of (including borrowers from), engage in
transactions with, and/or perform services for the senior trustee and the
subordinated trustee, in the ordinary course of business.
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In addition to offering notes through the agents as discussed above, other
medium-term notes that have terms substantially similar to the terms of the
notes offered by this prospectus (but constituting one or more separate series
of notes for purposes of the indentures) may in the future be offered,
concurrently with the offering of the notes, on a continuing basis by Wachovia
pursuant to the Distribution Agreement and directly to investors. Any of these
notes sold pursuant to the Distribution Agreement or sold by Wachovia directly
to investors will reduce the aggregate amount of notes which may be offered by
this prospectus.
Selling Restrictions Outside the United States
Wachovia has taken no action that would permit a public offering of the
notes or possession or distribution of this prospectus or any other offering
material in any jurisdiction outside the United States where action for that
purpose is required other than as described below. Accordingly, each agent has
represented, warranted and agreed, and each other agent will be required to
represent, warrant and agree, that it will comply with all applicable laws and
regulations in force in any jurisdiction in which it purchases, offers or sells
notes or possesses or distributes this prospectus or any other offering
material and will obtain any consent, approval or permission required by it for
the purchase, offer or sale by it of notes under the laws and regulations in
force in any jurisdiction to which it is subject or in which it makes such
purchases, offers or sales and Wachovia shall have no responsibility in
relation to this.
With regard to each note, the relevant purchaser will be required to comply
with those restrictions that Wachovia and the relevant purchaser shall agree
and as shall be set out in the relevant pricing supplement.
United Kingdom
Each agent has represented and agreed, and each other agent will be required
to represent and agree, that:
. with respect to notes which have a maturity of one year or more, it has
not offered or sold and will not offer or sell any such notes to persons
in the United Kingdom prior to the expiring of a period of six months
from the issue date of such notes except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses
or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995;
. in relation to notes which have a maturity of one year or more, it has
not offered or sold and, prior to the expiry of a period of six months
from the issue date of such notes, will not offer or sell any such notes
to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses
or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995;
. in relation to any notes which must be redeemed before the first
anniversary of the date of their issue, (a) it is a person whose
ordinary activities involve it in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of its
business and (b) it has not offered or sold and will not offer or sell
any notes other than to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or who it is
reasonable to expect will acquire, hold, manage or dispose of
investments (as principal or agent) for the purposes of their businesses
where the issue of the notes would otherwise constitute a contravention
of Section 19 of the Financial Services and Markets Act 2000 (the
"FSMA") by Wachovia;
. it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to
engage in investment activity (within the meaning of Section 21 of the
FSMA) received by it in connection with the issue or sale of any notes
in circumstances in which Section 21(1) of the FSMA does not apply to
Wachovia; and
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. it has complied and will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation to such notes in,
from or otherwise involving the United Kingdom.
Japan
The notes have not been, and will not be, registered under the Securities
and Exchange Law of Japan. Accordingly, each distribution agent has represented
and agreed, and each other distribution agent or dealer will be required to
represent and agree, that, in connection with the notes, it has not, directly
or indirectly, offered, sold or delivered and will not, directly or indirectly,
offer, sell or deliver any notes in Japan or to residents of Japan or for the
benefit of any Japanese person (which term as used herein means any person
resident in Japan including any corporation or other entity organized under the
laws of Japan) or to others for re-offering, resale or delivery, directly or
indirectly, in Japan or to, or for the benefit of, any resident of Japan or to
any Japanese person except in compliance with any applicable laws and
regulations of Japan taken as a whole. Each distribution agent agrees to
provide any necessary information on notes denominated or payable in Yen to
Wachovia (which shall not include the names of clients) so that Wachovia may
make any required reports to the Ministry of Finance through its designated
agent.
In connection with an issuance of notes denominated or payable in Yen,
Wachovia will be required to comply with all applicable laws, regulations and
guidelines, as amended from time to time, of the Japanese government and
regulatory authorities.
Germany
No selling prospectus (Verkausprospekt) within the meaning of the German
Securities Prospectus Act (Wertpapier-Verkaufsprospektgesetz) of December 13,
1990 (as amended) has been and will be registered or published within the
Federal Republic of Germany. The notes have not been offered or sold and will
not be offered or sold in the Federal Republic of Germany otherwise than in
accordance with the provisions of the Securities Prospectus Act.
France
This prospectus has not been submitted to the French Commission des
operations de bourse for approval and the notes have not and will not be
offered or sold, directly or indirectly, to the public in France. Accordingly,
each distribution agent has agreed that it will only offer notes in France to
qualified investors, as defined under Article 6 of French Ordinance No. 67-833
dated September 28, 1967 (as amended); provided, in this case, that it shall
have obtained a certificate from the investor providing an acknowledgement
that: (i) the offering is a private placement in France and no prospectus has
been submitted to the Commission des operations de bourse, (ii) the investor is
an "investisseur qualifie" within the meaning of Article 6 of French Ordinance
No. 67-833 dated September 28, 1967 (as amended), (iii) the investor is
investing for his own account, and (iv) the investor will not resell the notes
in violation of French securities laws and regulations.
Switzerland
Each agent has represented and agreed, and each other agent will be required
to represent and agree, that the issue of any notes denominated in Swiss francs
or carrying a Swiss franc-related element will be effected in compliance with
the relevant regulations of the Swiss National Bank, which currently require
that such issues have a maturity of more than one year, to be effected through
a bank domiciled in Switzerland that is regulated under the Swiss Federal Law
on Banks and Savings Banks of 1934 (as amended) (which includes a branch or
subsidiary located in Switzerland of a foreign bank) or through a securities
dealer which has been licensed as a securities dealer under the Swiss Federal
Law on Stock Exchanges and Securities Trading of 1995 (except for issues of
notes denominated in Swiss francs on a syndicated basis, where only the lead
manager need be a bank domiciled in Switzerland). The relevant agent must
report certain details of the relevant transaction to the Swiss National Bank
no later than the time of delivery of the notes.
63
The Netherlands
Each agent represented and agreed, and each other agent will be required to
represent and agree, that it has not, directly or indirectly, offered or sold
and will not, directly or indirectly, offer or sell in The Netherlands any
notes with a denomination of less than (Euro)50,000 (or its foreign currency
equivalent) other than to persons who trade or invest in securities in the
conduct of a profession or business (which includes banks, stockbrokers,
insurance companies, pension funds, other institutional investors and finance
companies and treasury departments of large enterprises) unless one of the
other exemptions or exceptions to the prohibition contained in Article 3 of the
Dutch Securities Transactions Supervision Act 1995 (Wet toezicht
effectenverkeer 1995) is applicable and the conditions attached to such
exemption or exception are complied with.
VALIDITY OF THE NOTES
The validity of the notes will be passed upon for Wachovia by Ross E.
Jeffries, Jr., Esq., Senior Vice President and Assistant General Counsel of
Wachovia, and for the agents by Sullivan & Cromwell, 125 Broad Street, New
York, New York. Sullivan & Cromwell will rely upon the opinion of Mr. Jeffries
as to matters of North Carolina law, and Mr. Jeffries will rely upon the
opinion of Sullivan & Cromwell as to matters of New York law. The opinions of
Mr. Jeffries and Sullivan & Cromwell will be conditioned upon, and subject to
certain assumptions regarding, future action to be taken by Wachovia and the
trustees in connection with the issuance and sale of any particular note, the
specific terms of notes and other matters which may affect the validity of
notes but which cannot be ascertained on the date of such opinions. Mr.
Jeffries owns shares of Wachovia's common stock and holds options to purchase
additional shares of Wachovia's common stock. Sullivan & Cromwell regularly
performs legal services for Wachovia. Certain members of Sullivan & Cromwell
performing these legal services own shares of Wachovia's common stock.
EXPERTS
The consolidated balance sheets of Wachovia Corporation as of December 31,
2001 and 2000, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 2001, included in Wachovia's 2001 Annual Report to
Stockholders which is included in Wachovia's Annual Report on Form 10-K for the
year ended December 31, 2001, and incorporated by reference in this prospectus,
have been incorporated by reference in this prospectus in reliance upon the
report of KPMG LLP, independent accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The restated audited financial statements of former Wachovia Corporation at
December 31, 2000 and 1999, and for each of the three years in the period ended
December 31, 2000, included in Wachovia's Current Report on Form 8-K dated
August 30, 2001 and incorporated by reference herein, have been incorporated by
reference herein in reliance upon the report of Ernst & Young LLP, independent
auditors. The restated audited financial statements referred to above are
included in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
LISTING AND GENERAL INFORMATION
Listing and Documents Available
Application has been made to list the notes offered by this prospectus on
the Luxembourg Stock Exchange. The Luxembourg Stock Exchange has allocated to
the program the number 12695 for listing purposes. The Amended and Restated
Articles of Incorporation and the By-Laws of Wachovia and a legal notice
relating to the issuance of the notes will be deposited prior to listing with
the Registrar of the District Court in Luxembourg (Greffier en Chef du Tribunal
d'Arrondissement de et a Luxembourg), where such documents may be examined and
copies obtained upon request. Copies of the above documents together with this
prospectus, any pricing supplements, the Distribution Agreement, the indentures
and Wachovia's Annual Report on Form 10-K for the year ended December 31, 2001
as well as all other documents incorporated by reference herein (other than
64
exhibits to such documents, unless such exhibits are incorporated by reference
therein) including future Annual Reports on Form 10-K and Quarterly Reports on
Form 10-Q, so long as the notes are listed on the Luxembourg Stock Exchange,
will be made available for inspection, and may be obtained free of charge, at
the main office of the Luxembourg listing agent. The Luxembourg listing agent
will act as a contact between the Luxembourg Stock Exchange and Wachovia or the
holders of the notes. We have appointed Dexia Banque Internationale a
Luxembourg as the Luxembourg listing agent for the notes.
However, notes may be issued under the program which will not be listed on
the Luxembourg Stock Exchange or which will be listed on any other securities
exchange as Wachovia and the relevant agent(s) may agree.
Authorization
The program has been established and the notes will be issued pursuant to
authority granted by the Board of Directors of Wachovia on October 26, 2001 as
such authority may be supplemented from time to time.
Material Change
As of the date of this prospectus, other than as disclosed or contemplated
herein or in the documents incorporated by reference, to the best of Wachovia's
knowledge and belief, there has been no material adverse change in the
financial position of Wachovia on a consolidated basis since March 31, 2002.
See "Where You Can Find More Information" above.
Litigation
As of the date of this prospectus, other than as disclosed or contemplated
herein or in the documents incorporated by reference, to the best of Wachovia's
knowledge and belief, Wachovia is not a party to any legal or arbitration
proceedings (including any that are pending or threatened) which may have, or
have had, since December 31, 2001, a significant effect on Wachovia's
consolidated financial position or that are material in the context of the
program or the issue of the notes which could jeopardize Wachovia's ability to
discharge its obligation under the program or of the notes issued under the
program.
Clearance Systems
The notes have been accepted for clearance through the DTC, Euroclear and
Clearstream systems. The appropriate CUSIP, Common Code and ISIN for each
tranche of notes to be held through any of these systems will be contained in
the relevant pricing supplement.
Agents
The United States Registrar and Domestic Paying Agent for the notes will be
initially Wachovia Bank, N.A., located at its corporate trust office at 12 East
49th Street, NY4040, 37th Floor, New York, New York 10017, Attn: Corporate
Trust, or at its headquarters at One Wachovia Center, Charlotte, North
Carolina, 28288-0600, United States of America.
The London Paying Agent and London Issuing Agent for the notes will be
initially Citibank, N.A., located at P.O. Box 18055, 5 Carmelite Street,
London, EC4Y OPA.
The Luxembourg Paying Agent and Transfer Agent for the notes will be
initially Dexia Banque Internationale a Luxembourg located at 69, route d'Esch,
L-2953 Luxembourg.
The Listing Agent for the notes will be initially Dexia Banque
Internationale a Luxembourg located at 69, route d'Esch, L-2953 Luxembourg.
65
ISSUER
Wachovia Corporation
One Wachovia Center
Charlotte, North Carolina 28288-0013
United States of America
UNITED STATES EUROPEAN
DISTRIBUTION AGENTS DISTRIBUTION AGENTS
Wachovia Securities Wachovia Securities International Limited
Barclays Capital Barclays Capital
Bear, Stearns & Co. Inc. Bear, Stearns International Limited
Credit Suisse First Boston Credit Suisse First Boston
Goldman, Sachs & Co. Goldman Sachs International
Guzman & Company Guzman & Company
JPMorgan J.P. Morgan Securities Ltd.
Lehman Brothers Lehman Brothers
Merrill Lynch & Co. Merrill Lynch International
Salomon Smith Barney Schroder Salomon Smith Barney*
UBS Warburg UBS Warburg
Utendahl Capital Partners, L.P. Utendahl Capital Partners, L.P.
UNITED STATES REGISTRAR AND LONDON PAYING AGENT
DOMESTIC PAYING AGENT AND LONDON ISSUING AGENT
Wachovia Bank, N.A. Citibank, N.A.
(formerly named First Union National Bank) P.O. Box 18055
One Wachovia Center 5 Carmelite Street,
Charlotte, North Carolina 28288-0600 London EC4Y OPA
United States of America
LUXEMBOURG PAYING AGENT,
LISTING AGENT
AND TRANSFER AGENT
Dexia Banque Internationale a Luxembourg
69, route d'Esch
L-2953 Luxembourg
LEGAL ADVISORS
To the Issuer To the Distribution Agents
As to United States Law: As to United States Law:
Ross E. Jeffries, Jr., Esq. Sullivan & Cromwell
Senior Vice President and 125 Broad Street
Assistant General Counsel New York, New York 10004
Wachovia Corporation United States of America
One Wachovia Center
Charlotte, North Carolina 28288-0630
United States of America
* Schroder is a trademark of Schroders Holdings plc and is used under license
by Salomon Brothers International Limited.
--------------------------------------------------------------------------------
No dealer, salesman or other person has been authorized to give any information
or to make any representation not contained in this prospectus or any pricing
supplement and, if given or made, such information or representation must not
be relied upon as having been authorized by Wachovia or the agents. This
prospectus and any pricing supplement do not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the securities
described in the relevant pricing supplement nor do they constitute an offer to
sell or a solicitation of an offer to buy the securities in any jurisdiction to
any person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. The delivery of this prospectus and any pricing supplement at any
time does not imply that the information they contain is correct as of any time
subsequent to their respective dates.
-----------------
TABLE OF CONTENTS
Page
----
About This Prospectus.................... 1
Where You Can Find More Information...... 3
Forward-Looking Statements............... 4
Wachovia Corporation..................... 4
Risk Factors............................. 5
Use of Proceeds.......................... 8
Consolidated Earnings Ratios............. 8
Selected Consolidated Condensed Financial
Data................................... 9
Capitalization........................... 10
Regulatory Considerations................ 10
Description of the Notes We May Offer.... 11
Global Notes............................. 43
United States Taxation................... 47
Proposed European Union Directive on
Taxation of Savings.................... 58
Employee Retirement Income Security Act.. 59
Plan of Distribution..................... 60
Validity of the Notes.................... 64
Experts.................................. 64
Listing and General Information.......... 64
================================================================================
--------------------------------------------------------------------------------
$4,000,000,000
Wachovia Corporation
(Formerly named
First Union Corporation)
Senior Global
Medium-Term Notes, Series E
and
Subordinated Global
Medium-Term Notes, Series F
-----------------
WACHOVIA SECURITIES
, 2002
--------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with this offering, other than
underwriting discounts and commissions, are as follows:
Registration Statement filing fee $ 368,000
Trustees' fees and expenses...... 100,000
Legal fees and expenses.......... 125,000
Blue Sky fees and expenses....... 4,000
Accounting fees and expenses..... 15,000
Listing fees and expenses........ 75,000
Rating agency fees............... 250,000
Printing costs................... 125,000
Miscellaneous.................... 40,000
----------
Total......................... $1,102,000
==========
Item 15. Indemnification of Directors and Officers.
Sections 55-8-50 through 55-8-58 of the North Carolina Business Corporations
Act (the "NCBC Act") contain specific provisions relating to indemnification of
directors and officers of North Carolina corporations. In general, the statute
provides that (i) a corporation must indemnify a director or officer against
reasonable expenses who is wholly successful in his defense of a proceeding to
which he is a party because of his status as such, unless limited by the
articles of incorporation, and (ii) a corporation may indemnify a director or
officer if he is not wholly successful in such defense, if it is determined as
provided in the statute that the director or officer meets a certain standard
of conduct, provided when a director or officer is liable to the corporation or
liable on the basis of receiving a personal benefit, the corporation may not
indemnify him. The statute also permits a director or officer of a corporation
who is a party to a proceeding to apply to the courts for indemnification,
unless the articles of incorporation provide otherwise, and the court may order
indemnification under certain circumstances set forth in the statute. The
statute further provides that a corporation may in its articles of
incorporation or bylaws or by contract or resolution provide indemnification in
addition to that provided by the statute, subject to certain conditions set
forth in the statute.
Wachovia's bylaws provide for the indemnification of Wachovia's directors
and executive officers by Wachovia against liabilities arising out of his
status as such, excluding any liability relating to activities which were at
the time taken known or believed by such person to be clearly in conflict with
the best interests of Wachovia. Wachovia's articles of incorporation provide
for the elimination of the personal liability of each director of Wachovia, to
the fullest extent permitted by the provisions of the NCBC Act, as the same may
from time to time be in effect.
Wachovia maintains directors and officers liability insurance. In general,
the policy insures (i) Wachovia's directors and officers against loss by reason
of any of their wrongful acts, and/or (ii) Wachovia against loss arising from
claims against the directors and officers by reason of their wrongful acts, all
subject to the terms and conditions contained in the policy.
Under agreements which may be entered into by Wachovia, certain controlling
persons, directors and officers of Wachovia may be entitled to indemnification
by underwriters and agents who participate in the distribution of securities
covered by the registration statement against certain liabilities, including
liabilities under the Securities Act of 1933.
II-1
Item 16. Exhibits
Exhibit No. Exhibit
----------- -------
(1)(a) Form of Distribution Agreement.
(4)(a) Senior Indenture. (Incorporated by reference to Exhibit (4) to Wachovia's Registration Statement
No. 2-98213.)
(4)(b) Supplemental Indenture, dated as of May 17, 1986, between Wachovia and Chemical Bank, as
Trustee. (Incorporated by reference to Exhibit (4)(a)(ii) to Amendment No. 1 to Wachovia's
Registration Statement No. 33-30122.)
(4)(c) Supplemental Indenture, dated as of July 1, 1988, between Wachovia and Chemical Bank, as
Trustee. (Incorporated by reference to Exhibit (4)(a)(iii) to Amendment No. 1 to Wachovia's
Registration Statement No. 33-30122.)
(4)(d) Supplemental Indenture, dated as of August 1, 1990, between Wachovia and Chemical Bank, as
Trustee. (Incorporated by reference to Exhibit (4)(a)(iv) to Wachovia's Registration Statement
No. 33-40456.)
(4)(e) Subordinated Indenture. (Incorporated by reference to Exhibit (4)(a) to Amendment No. 1 to
Wachovia's Registration Statement No. 33-1852.)
(4)(f) Supplemental Indenture, dated as of August 1, 1990, between Wachovia and The Bank of New
York, as Trustee. (Incorporated by reference to Exhibit (4)(b)(ii) to Wachovia's Registration
Statement No. 33-40456.)
(4)(g) Supplemental Indenture, dated as of November 15, 1992, between Wachovia and The Bank of
New York, as Trustee. (Incorporated by reference to Exhibit (4) to Wachovia's Current Report on
Form 8-K dated November 17, 1992.)
(4)(h) Form of Instrument of Resignation, Appointment and Acceptance, dated as of February 7, 1996,
among Wachovia, Harris Trust and Savings Bank and The Bank of New York (formerly Irving
Trust Company). (Incorporated by reference to Exhibit (4)(a) to Wachovia's Current Report on
Form 8-K dated February 7, 1996.)
(4)(i) Supplemental Indenture, dated as of February 7, 1996, between Wachovia and Harris Trust and
Savings Bank, as Trustee. (Incorporated by reference to Exhibit (4)(b) to Wachovia's Current
Report on Form 8-K dated February 7, 1996.)
(4)(j) Form of Instrument of Resignation, Appointment and Acceptance, dated as of July 7, 2000, among
Wachovia, The Bank of New York, as successor to Harris Trust and Savings Bank and Bank One
Trust Company, N.A. (Incorporated by reference to Exhibit (4)(a) to Wachovia's Current Report
on Form 8-K dated July 7, 2000.)
(4)(k) Supplemental Indenture, dated as of July 7, 2000, between Wachovia and Bank One Trust
Company, N.A., as Trustee. (Incorporated by reference to Exhibit (4)(b) to Wachovia's Current
Report on Form 8-K dated July 7, 2000.)
(4)(l) Form of senior medium-term fixed rate note.
(4)(m) Form of senior medium-term floating rate note.
(4)(n) Form of subordinated medium-term fixed rate note.
(4)(o) Form of subordinated medium-term floating rate note.
(5) Opinion of Ross E. Jeffries, Jr., Esq. as to the validity of the securities.*
(8) Opinion of Sullivan & Cromwell re tax matters.*
(12)(a) Computations of Consolidated Ratios of Earnings to Fixed Charges. (Incorporated by reference to
Exhibit (12)(a) to Wachovia's 2001 Annual Report on Form 10-K.)
(12)(b) Computations of Consolidated Ratios of Earnings to Fixed Charges and Preferred Stock
Dividends. (Incorporated by reference to Exhibit (12)(b) to Wachovia's 2001 Annual Report on
Form 10-K.)
(23)(a) Consent of Ross E. Jeffries Jr., Esq. (Included in Exhibit (5)).*
(23)(b) Consent of Sullivan & Cromwell (Included in Exhibit (8)).*
(23)(c) Consent of KPMG LLP.
(23)(d) Consent of Ernst & Young LLP.
(24) Powers of Attorney. (Incorporated by reference to Exhibit (24) to Wachovia's Registration
Statement No. 333-72266.)
(25)(a) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Chase Manhattan
Bank (formerly Chemical Bank). (Incorporated by reference to Exhibit (25)(a) to Wachovia's
Registration Statement No. 333-72266.)
(25)(b) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Bank One Trust
Company, N.A. (Incorporated by reference to Exhibit (25)(b) to Wachovia's Registration
Statement No. 333-72266.)
--------
* Previously filed.
II-2
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of Wachovia pursuant to the foregoing provisions or otherwise
(other than insurance), Wachovia has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than insurance or the payment by Wachovia of
expenses incurred or paid by a director, officer or controlling person
of Wachovia, in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, Wachovia will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Wachovia
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Pre-Effective Amendment No. 1 to the Registration Statement (No. 333-72374) to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Charlotte, State of North Carolina, as of the 29th day of May, 2002.
WACHOVIA CORPORATION
By:__/S/__MARK C. TREANOR____
Name: Mark C. Treanor
Title: Executive Vice President,
Secretary and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to Registration Statement No. 333-72374 has been
signed by the following persons in the capacities and on the date indicated.
Signature Capacity
--------- --------
/s/ L.M. BAKER, JR.* Chairman and Director
----------------------------
L.M. Baker, Jr.
/s/ G. KENNEDY THOMPSON* President and Chief Executive Officer and Director
----------------------------
G. Kennedy Thompson
/s/ ROBERT P. KELLY* Executive Vice President and Chief Financial Officer
----------------------------
Robert P. Kelly
/s/ DAVID M. JULIAN* Senior Vice President and Corporate Controller
---------------------------- (Principal Accounting Officer)
David M. Julian
/s/ F. DUANE ACKERMAN* Director
----------------------------
F. Duane Ackerman
---------------------------- Director
John D. Baker, II
/s/ JAMES S. BALLOUN* Director
----------------------------
James S. Balloun
/s/ ROBERT J. BROWN* Director
----------------------------
Robert J. Brown
/s/ PETER C. BROWNING* Director
----------------------------
Peter C. Browning
/s/ JOHN T. CASTEEN, III* Director
----------------------------
John T. Casteen, III
/s/ WILLIAM H. GOODWIN, JR.* Director
----------------------------
William H. Goodwin, Jr.
II-4
Signature Capacity
--------- --------
/s/ ROBERT A. INGRAM* Director
--------------------------
Robert A. Ingram
/s/ RADFORD D. LOVETT* Director
--------------------------
Radford D. Lovett
/s/ MACKEY J. MCDONALD* Director
--------------------------
Mackey J. McDonald
/s/ JOSEPH NEUBAUER* Director
--------------------------
Joseph Neubauer
/s/ LLOYD U. NOLAND, III* Director
--------------------------
Lloyd U. Noland, III
/s/ RUTH G. SHAW* Director
--------------------------
Ruth G. Shaw
/s/ LANTY L. SMITH* Director
--------------------------
Lanty L. Smith
/s/ JOHN C. WHITAKER, JR.* Director
--------------------------
John C. Whitaker, Jr.
/s/ DONA DAVIS YOUNG* Director
--------------------------
Dona Davis Young
/s/ MARK C. TREANOR
*By:
--------------------------
Mark C. Treanor,
Attorney-in-Fact
Dated: May 29, 2002
II-5
EXHIBIT INDEX
Exhibit No. Exhibit
----------- -------
(1)(a) Form of Distribution Agreement.
(4)(a) Senior Indenture. (Incorporated by reference to Exhibit (4) to Wachovia's Registration Statement
No. 2-98213.)
(4)(b) Supplemental Indenture, dated as of May 17, 1986, between Wachovia and Chemical Bank, as
Trustee. (Incorporated by reference to Exhibit (4)(a)(ii) to Amendment No. 1 to Wachovia's
Registration Statement No. 33-30122.)
(4)(c) Supplemental Indenture, dated as of July 1, 1988, between Wachovia and Chemical Bank, as
Trustee. (Incorporated by reference to Exhibit (4)(a)(iii) to Amendment No. 1 to Wachovia's
Registration Statement No. 33-30122.)
(4)(d) Supplemental Indenture, dated as of August 1, 1990, between Wachovia and Chemical Bank, as
Trustee. (Incorporated by reference to Exhibit (4)(a)(iv) to Wachovia's Registration Statement
No. 33-40456.)
(4)(e) Subordinated Indenture. (Incorporated by reference to Exhibit (4)(a) to Amendment No. 1 to
Wachovia's Registration Statement No. 33-1852.)
(4)(f) Supplemental Indenture, dated as of August 1, 1990, between Wachovia and The Bank of New
York, as Trustee. (Incorporated by reference to Exhibit (4)(b)(ii) to Wachovia's Registration
Statement No. 33-40456.)
(4)(g) Supplemental Indenture, dated as of November 15, 1992, between Wachovia and The Bank of
New York, as Trustee. (Incorporated by reference to Exhibit (4) to Wachovia's Current Report on
Form 8-K dated November 17, 1992.)
(4)(h) Form of Instrument of Resignation, Appointment and Acceptance, dated as of February 7, 1996,
among Wachovia, Harris Trust and Savings Bank and The Bank of New York (formerly Irving
Trust Company). (Incorporated by reference to Exhibit (4)(a) to Wachovia's Current Report on
Form 8-K dated February 7, 1996.)
(4)(i) Supplemental Indenture, dated as of February 7, 1996, between Wachovia and Harris Trust and
Savings Bank, as Trustee. (Incorporated by reference to Exhibit (4)(b) to Wachovia's Current
Report on Form 8-K dated February 7, 1996.)
(4)(j) Form of Instrument of Resignation, Appointment and Acceptance, dated as of July 7, 2000, among
Wachovia, The Bank of New York, as successor to Harris Trust and Savings Bank and Bank One
Trust Company, N.A. (Incorporated by reference to Exhibit (4)(a) to Wachovia's Current Report
on Form 8-K dated July 7, 2000.)
(4)(k) Supplemental Indenture, dated as of July 7, 2000, between Wachovia and Bank One Trust
Company, N.A., as Trustee. (Incorporated by reference to Exhibit (4)(b) to Wachovia's Current
Report on Form 8-K dated July 7, 2000.)
(4)(l) Form of senior medium-term fixed rate note.
(4)(m) Form of senior medium-term floating rate note.
(4)(n) Form of subordinated medium-term fixed rate note.
(4)(o) Form of subordinated medium-term floating rate note.
(5) Opinion of Ross E. Jeffries, Jr., Esq. as to the validity of the securities.*
(8) Opinion of Sullivan & Cromwell re tax matters.*
(12)(a) Computations of Consolidated Ratios of Earnings to Fixed Charges. (Incorporated by reference to
Exhibit (12)(a) to Wachovia's 2001 Annual Report on Form 10-K.)
(12)(b) Computations of Consolidated Ratios of Earnings to Fixed Charges and Preferred Stock
Dividends. (Incorporated by reference to Exhibit (12)(b) to Wachovia's 2001 Annual Report on
Form 10-K.)
(23)(a) Consent of Ross E. Jeffries Jr., Esq. (Included in Exhibit (5)).*
(23)(b) Consent of Sullivan & Cromwell (Included in Exhibit (8)).*
(23)(c) Consent of KPMG LLP.
(23)(d) Consent of Ernst & Young LLP.
(24) Powers of Attorney. (Incorporated by reference to Exhibit (24) to Wachovia's Registration
Statement No. 333-72266.)
(25)(a) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Chase Manhattan
Bank (formerly Chemical Bank). (Incorporated by reference to Exhibit (25)(a) to Wachovia's
Registration Statement No. 333-72266.)
(25)(b) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Bank One Trust
Company, N.A. (Incorporated by reference to Exhibit (25)(b) to Wachovia's Registration
Statement No. 333-72266.)
--------
* Previously filed.