-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, OQA/ufTGO9xAmMPrIql3k0XxGHjI6l3pI3YGZmkcURUSzNUETL1BfTJ3DAXs7KO0 cqaEHdua3KVs5mMUpV+2xg== 0000950123-94-001025.txt : 19940610 0000950123-94-001025.hdr.sgml : 19940610 ACCESSION NUMBER: 0000950123-94-001025 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19940609 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: STERLING BANCORP CENTRAL INDEX KEY: 0000093451 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 132565216 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: 1934 Act SEC FILE NUMBER: 005-13047 FILM NUMBER: 94533507 BUSINESS ADDRESS: STREET 1: 540 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10022-3299 BUSINESS PHONE: 2128268000 MAIL ADDRESS: STREET 1: 540 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022-3299 FORMER COMPANY: FORMER CONFORMED NAME: STANDARD PRUDENTIAL CORP /NEW/ DATE OF NAME CHANGE: 19781210 FORMER COMPANY: FORMER CONFORMED NAME: STANDARD PRUDENTIAL UNITED CORP DATE OF NAME CHANGE: 19681125 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: STERLING BANCORP CENTRAL INDEX KEY: 0000093451 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 132565216 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: 540 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10022-3299 BUSINESS PHONE: 2128268000 MAIL ADDRESS: STREET 1: 540 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022-3299 FORMER COMPANY: FORMER CONFORMED NAME: STANDARD PRUDENTIAL CORP /NEW/ DATE OF NAME CHANGE: 19781210 FORMER COMPANY: FORMER CONFORMED NAME: STANDARD PRUDENTIAL UNITED CORP DATE OF NAME CHANGE: 19681125 SC 13E4 1 SCHEDULE 13E-4, STERLING BANCORP 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13E-4 ISSUER TENDER OFFER STATEMENT (PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) Sterling Bancorp ................................................................................ (Name of Issuer) Sterling Bancorp ................................................................................ (Name of Person(s) Filing Statement) Floating Interest Rate Convertible Subordinated Debentures, Third Series, due July 1, 1996 ................................................................................ (Title of Class of Securities) 859158AD9 ................................................................................ (CUSIP Number of Class of Securities) Jerrold Gilbert, 540 Madison Avenue (Second Floor), New York, N.Y. 10022 (212) 826-8044 ................................................................................ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement) June 9, 1994 ................................................................................ (Date Tender Offer First Published, Sent or Given to Security Holders) Calculation of Filing Fee ---------------------------------------------------------- Transaction valuation* Amount of Filing Fee $11,985,000 $2,397 ---------------------------------------------------------- * Maximum Principal amount of Debentures to be exchanged [ ] Check box if any part of the fee is offset as provided by Rule Q-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing Amount Previously Paid: --------------------------------------------------------- Form or Registration Number: ---------------------------------------------------- Filing Party: ------------------------------------------------------------------- Date Filed: -------------------------- 2 ITEM 1. SECURITY AND ISSUER (a) Sterling Bancorp, 540 Madison Avenue, New York, New York 10022 (b) The issuer is offering to exchange for all of its outstanding Floating Interest Rate Convertible Subordinated Debentures, Third Series, due July 1, 1996 ("Third Series Debentures") outstanding in the principal amount of $11,985,000 on May 31, 1994, an equal principal amount of Floating Interest Rate Convertible Subordinated Debentures, Series V, due July 1, 2001 ("New Debentures"). (c) The Third Series Debentures are traded on the New York Stock Exchange, although trading in these securities is sporadic. The following table sets forth high and low prices for quarterly periods commencing April 1, 1992 and thereafter:
PERIOD HIGH LOW ------------------------------- -------- -------- Quarter Ended, June 30, 1992 $92.25 $88.50 Quarter Ended, September 30, 1992 94.00 92.00 Quarter Ended, December 31, 1992 88.50 88.00 Quarter Ended, March 31, 1993 95.25 91.25 Quarter Ended, June 30, 1993 94.00 92.50 Quarter Ended, September 30, 1993 93.50 92.75 Quarter Ended, December 31, 1993 95.75 94.25 Quarter Ended, March 31, 1994 99.75 93.88 April 1 through June 3, 1994 100.00 97.00
ITEM 2. SOURCE AND AMOUNT OF TENDER OR OTHER CONSIDERATION NOT APPLICABLE 2 3 ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS AND PROPOSALS OF THE ISSUER OR AFFILIATE. The Third Series Debentures are due July 1, 1996. The purpose of the tender offer is to refund them in whole or part through the issuance of New Debentures in exchange therefor, Third Series Debentures which are exchanged for New Debentures will be retired. Depending on the amount of Third Series Debentures remaining outstanding after the exchange offer is concluded, the Issuer will consider whether to retire the remainder at or before maturity and what, if any, other refunding steps should be taken. Except to the extent indicated in the preceding paragraph, the Issuer has no plans or proposals of the type enumerated in Item 3 of Schedule 13E-4. ITEM 4. INTEREST IN SECURITIES OF THE ISSUER There have been no transactions in the Third Series Debentures by the Issuer or any of its executive officers, directors or any associate or subsidiary thereof since April 1, 1994. Transactions by such persons since such date in the Issuer's common stock were as follows: Louis J. Cappelli, Chairman, Chief Executive Officer and a Director of the Issuer, John C. Millman, President and a Director of the Issuer, and Jerrold Gilbert, Executive Vice President, General Counsel and Secretary of the Issuer, participate through voluntary payroll deductions in the Sterling Bancorp/Sterling National Bank 401(k) Sterling Bancorp Stock Fund which made purchases as follows (the shares allocable for Messrs. Cappelli, Millman and Gilbert, respectively, are shown in parenthesis): On April 15, 1994, 400 shares (111; 87; 77) were purchased at a price of $7.125; on April 20, 1994, 300 shares (83; 65; 57) were purchased at a price of $7.125 and on April 22, 1994 200 shares (55; 43;38) were purchased at a price of $7.25. In addition, Mr. Millman purchased 200 shares on April 18, 1994 at a price of $7.00 per share, and Mr. Gilbert purchased 200 shares on May 3, 1994 at a price of $7.00 per share. 3 4 ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE ISSUERS SECURITIES. NONE ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED NONE ITEM 7. FINANCIAL INFORMATION The information contained in the Selected Financial Data and Ratios of Earnings to Fixed Charges on pages 6 and 7 of the Offering Circular filed as an Exhibit herewith is incorporated by reference herein. ITEM 8. ADDITIONAL INFORMATION Not applicable. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS (a) Offering circular for exchange offer and covering letter. (b) Letter of Transmittal SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, correct and complete. /s/ John C. Millman ------------------------- June 8, 1994 John C. Millman President 4 5 EXHIBIT INDEX ------------- (a) Offering circular for exchange offer and covering letter. (b) Letter of Transmittal EX-99.A 2 OFERING CIRCULAR AND COVER LETTER 1 [STERLING BANCORP LETTERHEAD OF LOUIS J. CAPPELLI] June 9, 1994 To: Holders of our Floating Interest Rate Convertible Subordinated Debentures, Third Series, due 1996 ("Third Series Debentures") The Company is offering you the opportunity to exchange your Third Series Debentures, which will come due on July 1, 1996 for a new series of debentures: the New Debentures are titled Floating Interest Rate Convertible Subordinated Debentures, Series V, due July 1, 2001 and are similar to your Third Series Debentures in interest rate and most other provisions, except that they permit you by exchanging to extend the maturity of your debentures and to obtain an improved conversion privilege: the New Debentures have a conversion price of $8.75 as compared to the $12.00 conversion price of the Third Series Debentures. If you elect to exchange, you will not lose any interest payment; the July 1, 1994 interest payment will be made on all Third Series Debentures and exchanging holders will also be paid interest to August 1, 1994, the date from which interest will accrue on the New Debentures. The Company's purpose in making the Exchange Offer is to refund the Third Series Debentures which will come due July 1, 1996. After the Exchange Offer is completed, the Company will consider whether to retire remaining Third Series Debentures at or before maturity. You are urged to read the enclosed Offering Circular carefully. The enclosed Letter of Transmittal is for your use in submitting your debenture certificates, to the Exchange Agent, United States Trust Company of New York. Cordially, s/ Louis Cappelli 2 OFFERING CIRCULAR STERLING BANCORP OFFER TO EXCHANGE ITS FLOATING INTEREST RATE CONVERTIBLE SUBORDINATED DEBENTURES, SERIES V, DUE 2001 FOR ANY AND ALL OF ITS FLOATING INTEREST RATE CONVERTIBLE SUBORDINATED DEBENTURES, THIRD SERIES, DUE 1996 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON JULY 29, 1994 Sterling Bancorp (the "Company") hereby offers, upon the terms and subject to the conditions set forth in this Offering Circular and in the accompanying Letter of Transmittal (which together constitute the "Exchange Offer"), to exchange $1,000 principal amount of its Floating Interest Rate Convertible Subordinated Debentures, Series V, due July 1, 2001 (the "New Debentures") for each $1,000 principal amount of its Floating Interest Rate Convertible Subordinated Debentures, Third Series, due July 1, 1996 (the "Third Series Debentures"), of which $11,985,000 in principal amount was outstanding as of May 31, 1994. The New Debentures will be convertible into the Company's Common Shares at $8.75 per share, will mature on July 1, 2001 and may not be redeemed prior to August 1, 1997, unless for a period of 30 consecutive business days the closing price of the Common Shares has been at least 140% of the conversion price and the Company gives at least 30 days' notice of its intention to redeem. In other respects the terms of the New Debentures are like those of the Third Series Debentures (which are convertible into the Company's Common Shares at $12.00 per share and mature on July 1, 1996). See "Summary Comparison of Principal Terms of Third Series Debentures and New Debentures." Upon the terms and subject to the conditions of the Exchange Offer, the Company will accept for exchange any and all Third Series Debentures properly tendered prior to 5:00 p.m., New York City time on July 29, 1994, unless extended at the option of the Company (the "Expiration Date"). Tenders of Third Series Debentures may be withdrawn at any time prior to the Expiration Date. See "The Exchange Offer-- Withdrawal Rights." The Company will deliver New Debentures as soon as practicable following the Expiration Date. The Common Shares and Third Series Debentures are traded on the New York Stock Exchange ("NYSE") and application will be made to list the New Debentures and the Common Shares issuable upon conversion of the New Debentures on the NYSE. On June 7, 1994, the closing price of the Common Shares on the NYSE was $7.00 per share. Interest on the New Debentures will accrue from August 1, 1994. Accrued interest from July 1, 1994, the day to which interest will be paid on all Third Series Debentures, to August 1, 1994 will be paid on all Third Series Debentures exchanged. The Exchange Offer is not conditioned upon any minimum principal amount of Third Series Debentures being tendered for exchange and is subject only to certain customary conditions described under "The Exchange Offer--Conditions of the Exchange Offer," certain of which may be waived by the Company. THE DATE OF THIS OFFERING CIRCULAR IS JUNE 9, 1994. 3 The Exchange Offer is being made by the Company in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), afforded by Section 3(a)(9) thereof. The Company, therefore, will not pay any commission or other remuneration to any broker, dealer, salesman, or other person for soliciting tenders of the Third Series Debentures. Regular employees of the Company and its subsidiaries, who will not receive additional compensation therefor, may solicit exchanges from holders of the Third Series Debentures. No person has been authorized to give any information or to make any representations in connection with the Exchange Offer other than those contained in this Offering Circular. If given or made, the information or representations should not be relied upon as having been authorized by the Company. The delivery of this Offering Circular shall not, under any circumstances, imply that the information herein is correct as of any time subsequent to its date. This Offering Circular does not constitute an offer to any person in any jurisdiction in which any such offer would be unlawful, and the Company will not accept tenders from holders of Third Series Debentures in any jurisdiction in which such acceptance would not be in compliance with applicable securities or blue sky laws of such jurisdiction. ADDITIONAL INFORMATION United States Trust Company of New York has agreed to provide certain services as Exchange Agent in connection with the Exchange Offer. Holders of Third Series Debentures who require assistance should contact the Company, attention Jerrold Gilbert, Secretary, at 540 Madison Avenue, New York, New York 10022, (212) 826-8044 (call collect) or the Exchange Agent at 114 West 47th Street, New York, New York 10036-1532 (attention: Corporate Trust Department), (800) 548-6565. 2 4 OFFERING SUMMARY The following is a summary of certain features of the Exchange Offer and other matters, and all statements contained herein are qualified in their entirety by reference to the more detailed information included elsewhere in this Offering Circular. THE COMPANY Sterling Bancorp (the "Company") is a bank holding company, incorporated in New York, which directly or through subsidiaries engages in commercial banking and other financial services. The Company owns virtually 100% of Sterling National Bank & Trust Company of New York (the "bank"). The Company's principal executive offices are located at 540 Madison Avenue, New York, New York 10022. Its telephone number is (212) 826-8000. PURPOSE OF THE EXCHANGE OFFER The Third Series Debentures are due July 1, 1996. The purpose of the exchange offer is to refund them in whole or part through the issuance of New Debentures in exchange therefor. Depending on the amount of Third Series Debentures remaining outstanding after the exchange offer is concluded, the Company will consider whether to retire the remainder at or before maturity and what, if any, other refunding steps should be taken. THE EXCHANGE OFFER THE OFFERING.................. The Company is offering to exchange $1,000 principal amount of its New Debentures for each $1,000 principal amount of Third Series Debentures properly tendered and accepted for exchange in the Exchange Offer. See "The Exchange Offer--Terms of the Exchange Offer." EXPIRATION DATE............... 5:00 p.m., New York City time, on July 29, 1994, unless extended by the Company. See "The Exchange Offer--Expiration Date; Extensions; Termination; Amendments." WITHDRAWAL OF TENDERS......... Tenders of Third Series Debentures may be withdrawn at any time prior to the Expiration Date. See "The Exchange Offer--Withdrawal Rights." ACCRUAL OF INTEREST ON THE NEW DEBENTURES.................. Interest on the New Debentures will accrue commencing August 1, 1994. Interest from July 1, 1994, the day to which interest will be paid on the Third Series Debentures to August 1, 1994 will be paid with regard to all Third Series Debentures exchanged. ACCEPTANCE OF THIRD SERIES AND DELIVERY OF NEW DEBENTURES.................. The Company will accept for exchange any and all Third Series Debentures which are properly tendered in the Exchange Offer prior to 5:00 p.m., New York City time, on the Expiration Date. The New Debentures to be issued pursuant to the Exchange Offer will be delivered promptly following the Expiration Date. See "The Exchange Offer-- Acceptance of Third Series Debentures for Exchange; Delivery of New Debentures." CONDITIONS OF THE EXCHANGE OFFER....................... The Company's obligation to consummate the Exchange Offer is not conditioned upon any minimum principal amount of Third Series De-
3 5 bentures being tendered for exchange. The Exchange Offer is, however, subject to certain customary conditions, certain of which may be waived by the Company. See "The Exchange Offer--Conditions of the Exchange." PROCEDURES FOR TENDERING THIRD SERIES DEBENTURES........... Each holder of Third Series Debentures wishing to accept the Exchange Offer must complete and sign the Letter of Transmittal, in accordance with the instructions contained herein and therein, and forward or hand deliver such Letter of Transmittal to the Exchange Agent at one of the addresses set forth herein and therein. Any holder of Third Series Debentures whose Third Series Debentures are registered in the name of a broker, dealer, commercial bank, trust company or nominee is urged to contact such registered holder promptly if such holder wishes to accept the Exchange Offer. Holders whose certificates representing their Third Series Debentures are not immediately available or who cannot deliver their certificates or any other required documents to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date may tender their Third Series Debentures pursuant to the guaranteed delivery procedure set forth herein. See "The Exchange Offer--Procedures for Tendering" and "--Guaranteed Delivery Procedure." CERTAIN FEDERAL INCOME TAX CONSEQUENCES................ For a discussion of certain Federal income tax consequences to exchanging holders of Third Series Debentures and to the Company, see "Certain Federal Income Tax Consequences." TRADING....................... The Company's Common Shares and the Third Series Debentures are traded on the New York Stock Exchange ("NYSE") and application will be made to list the New Debentures on the NYSE. EXCHANGE AGENT................ United States Trust Company of New York. See "The Exchange Offer --Exchange Agent." FURTHER INFORMATION........... For further information, please contact the Company, attention Jerrold Gilbert, Secretary, at (212) 826-8044 (call collect), or the Exchange Agent at (800) 548-6565.
4 6 SUMMARY COMPARISON OF PRINCIPAL TERMS OF THIRD SERIES DEBENTURES AND NEW DEBENTURES
THE THIRD SERIES DEBENTURES THE NEW DEBENTURES ------------------------------- ------------------------------- INTEREST................... Floating rate equal to one half Same. of one percent ( 1/2%) above the daily prime rate of Chemical Bank (successor to Manufacturers Hanover Trust Company which was named as the reference bank in the indenture relating to the Third Series Debentures) from time to time in effect on a trailing 30-day basis. MATURITY................... July 1, 1996 July 1, 2001. CONVERSION................. Convertible into Common Shares Convertible into Common Shares at $12 per share. The at $8.75 per share. The conversion price is subject to conversion price is subject to adjustment to prevent dilution adjustment to prevent dilution in certain events. in the same events as the Third Series. RANKING.................... Unsecured general obligations Same. New Debentures will rank of the Company subordinate to on a par (pari passu) with all existing and future Senior Third Series Debentures that Indebtedness of the Company (as remain outstanding after the defined), which totalled Exchange Offer and with the approximately $16.5 million at Company's Floating Interest April 30, 1994. Rate Convertible Subordinated Debentures, Fourth Series, due 1998, approximately $14.8 million principal amount of which was outstanding at March 31, 1994. REDEMPTION AT OPTION OF THE COMPANY.................. Redeemable at any time in whole No redemption may be made prior or in part at the option of the to August 1, 1997 unless the Company at the principal closing price of the Common amount, together with accrued Shares for a period of 30 interest. consecutive trading days has been at least 140% of the conversion price and the Company gives at least 30 days notice of its intention to redeem. Otherwise, redeemable at any time in whole or in part at the option of the Company at the principal amount, together with accrued interest.
5 7 SELECTED FINANCIAL DATA STERLING BANCORP AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, QUARTERS ENDED MARCH 31, --------------------------- --------------------------- 1993 1992 1994 1993 ------------ ------------ ------------ ------------ Total interest income................. $ 32,540,225 $ 30,571,788 $ 9,158,416 $ 7,916,257 Total interest expense................ 10,167,937 11,510,043 2,885,971 2,496,207 Net interest income................... 22,372,288 19,061,745 6,272,445 5,420,050 Provision for possible loan losses.... 690,000 1,290,000 190,000 160,000 Noninterest income.................... 3,871,276 5,249,962 997,386 876,966 Noninterest expenses.................. 19,770,442 18,659,177 5,328,703 4,755,475 Income before taxes................... 5,783,122 4,362,530 1,751,128 1,381,541 Provision for income taxes............ 2,627,725 1,785,316 840,661 639,777 Net income............................ 3,155,397 2,577,214 910,467 741,764 Average number of common shares outstanding Primary............................. 6,351,040 6,342,327 6,359,132 6,345,940 Fully diluted....................... 8,734,423 --* 8,781,961 8,666,192 Net income per average common share Primary............................. 0.50 0.41 0.14 0.12 Fully diluted....................... 0.47 --* 0.13 0.11
DECEMBER 31, MARCH 31, --------------------------- --------------------------- 1993 1992 1994 1993 ------------ ------------ ------------ ------------ Investment securities................. $286,815,791 $219,570,835 $345,372,885 $249,715,612 Loans, net of unearned discounts...... 298,750,821 288,790,639 227,202,500 226,411,576 Excess cost over equity in net assets of the banking subsidiary........... 21,158,440 21,158,440 21,158,440 21,158,440 Total assets.......................... 653,039,241 578,248,287 642,040,359 551,789,960 Noninterest-bearing deposits.......... 174,088,971 159,234,582 135,807,652 120,563,295 Interest-bearing deposits............. 298,896,955 296,924,857 277,893,051 275,104,430 Total debt............................ 117,551,364 61,650,175 164,281,417 95,541,770 Total liabilities..................... 600,159,589 528,098,282 589,232,665 501,208,686 Shareholders' equity.................. 52,856,675 50,150,005 52,777,058 50,581,274 Book value per common share........... 8.31 7.90 8.30 7.97 Tangible book value per common share............................... 4.98 4.56 4.97 4.63
*Net income per average common share assuming full dilution has not been presented because the effects would be antidilutive. 6 8 THE COMPANY Sterling Bancorp (the "Company") is a bank holding company, incorporated in New York, which directly or through subsidiaries, engages in commercial banking and other financial services. The Company owns virtually 100% of Sterling National Bank & Trust Company of New York (the "bank"). The Company is a legal entity separate and distinct from the bank and the Company's non-bank subsidiaries. While the Company generates income from its own operations, it also relies for its cash requirements on funds maintained or generated by its subsidiaries, principally the bank. Such sources have been adequate to meet the Company's cash requirements throughout its history. At April 30, 1994, the Company had approximately $11,450,000 in cash and interest bearing deposits with banks. Various legal restrictions limit the extent to which the bank can supply funds to the Company and its non-bank subsidiaries. All national banks are limited in the payment of dividends without the approval of the Comptroller of the Currency (the Comptroller) to an amount not to exceed the net profits (as defined) for that year to date combined with its retained net profits for the preceding two calendar years. The bank with the Comptroller's approval paid dividends aggregating $37,330,000 in 1992 (significantly exceeding net profits) and in 1993 paid dividends substantially equal to the bank's net profits for the year ended December 31, 1993. In addition, from time to time dividends are paid to the Company by other subsidiaries from their retained earnings without regulatory restrictions. At April 30, 1994, the Company's outstanding long-term debt, consisting principally of Convertible Subordinated Debentures (originally issued pursuant to rights offerings to shareholders of the Company), aggregated $29,263,000. To the extent Debentures are converted to common stock of the Company (as has been the case with $11,000,000 principal amount since 1982), the subordinated debt related thereto is retired and becomes part of shareholders' equity. The Company's long-term indebtedness is also met through funds generated from profits and new financing. Since becoming a public company in 1946, the Company and its predecessors have been able to obtain the financing required and have paid at maturity all outstanding long-term indebtedness. The Company expects to continue to meet its obligations in accordance with their terms. At April 30, 1994, the Company's short-term debt, consisting of commercial paper, was approximately $13,800,000. The Company had cash, interest-bearing deposits with banks and other current assets aggregating approximately $28,300,000 and back-up credit lines with banks of $15,000,000. The Company and its predecessor have issued and repaid at maturity commercial paper aggregating billions of dollars since 1955. Since 1979, the Company has had no need to use available back-up lines of credit. RATIOS OF EARNINGS TO FIXED CHARGES
QUARTER ENDED YEARS ENDED MARCH 31, DECEMBER 31, ---------------- ---------------- 1994 1993 1993 1992 ------ ------ ------ ------ Excluding Interest on Deposits.................... 2.19x 2.59x 2.42x 2.10x Including Interest on Deposits.................... 1.59x 1.53x 1.55x 1.37x
The ratios include the earnings and fixed charges of the Company and its subsidiaries. Earnings represent net income plus provision for income taxes and fixed charges. Fixed charges, excluding interest on deposits, represent all interest expense (except interest on deposits) including amortization of discounts and issuance costs plus one-third of net rental expense. Fixed charges, including interest on deposits, represent all interest expense including amortization of discounts and issuance costs plus one-third of net rental expense. RECENT TRANSACTIONS IN SECURITIES OF THE COMPANY There have been no transactions in the Third Series Debentures by the Company or any of its executive officers, directors or any associate or subsidiary thereof since April 1, 1994. Transactions by such persons since such date in the Company's Common Shares were as follows: Louis J. Cappelli, Chairman, Chief Executive Officer and a Director of the Company, John C. Millman, President and a Director of the Company, and Jerrold Gilbert, Executive Vice President, General Counsel and Secretary of the Company, participate through voluntary payroll deductions in the Sterling Bancorp/Sterling National Bank 401(k) Sterling 7 9 Bancorp Stock Fund which made purchases as follows (the shares allocable for Messrs. Cappelli, Millman and Gilbert, respectively, are shown in parentheses): On April 15, 1994, 400 shares (111; 87; 77) were purchased at a price of $7.125; on April 20, 1994, 300 shares (83; 65; 57) were purchased at a price of $7.125 and on April 22, 1994 200 shares (55; 43; 38) were purchased at a price of $7.25. In addition, Mr. Millman purchased 200 shares on April 18, 1994 at a price of $7.00 per share, and Mr. Gilbert purchased 200 shares on May 3, 1994 at a price of $7.00 per share. PRICE RANGE OF COMMON SHARES AND THIRD SERIES DEBENTURES THE COMMON SHARES The Common Shares are traded on the NYSE. The following table sets forth the range of high and low prices on the NYSE for the Common Shares for the fiscal quarters indicated.
1992 HIGH LOW ----------------------------------------------------------------------- ---- --- Second Quarter......................................................... $9 3/8 $7 1/2 Third Quarter.......................................................... 8 3/8 7 1/8 Fourth Quarter......................................................... 9 1/4 7 5/8
1993 ----------------------------------------------------------------------- First Quarter.......................................................... 9 1/8 8 1/8 Second Quarter......................................................... 8 1/2 7 1/8 Third Quarter.......................................................... 8 1/4 6 7/8 Fourth Quarter......................................................... 8 5/8 7 5/8
1994 ----------------------------------------------------------------------- First Quarter.......................................................... 7 3/4 7 Second Quarter (through June 3, 1994).................................. 7 1/8 6 3/4
On June 7, 1994 the last sale price of the Common Shares on the NYSE was $7. THE THIRD SERIES DEBENTURES The Third Series Debentures are traded on the NYSE. The following table sets forth the range of high and low sale prices on the NYSE for each $100 principal amount of Debentures, on the NYSE, for the fiscal quarters indicated.
1992 HIGH LOW ------------------------------------------------------------------- ------ ------ Second Quarter..................................................... $92.25 $88.50 Third Quarter...................................................... 94.00 92.00 Fourth Quarter..................................................... 88.50 88.00
1993 ------------------------------------------------------------------- First Quarter...................................................... 95.25 91.25 Second Quarter..................................................... 94.00 92.50 Third Quarter...................................................... 93.50 92.75 Fourth Quarter..................................................... 95.75 94.25
1994 ------------------------------------------------------------------- First Quarter...................................................... 99.75 93.88 Second Quarter (through June 3, 1994).............................. 100.00 97.00
8 10 THE EXCHANGE OFFER TERMS OF THE EXCHANGE OFFER The Company hereby offers, upon the terms and subject to the conditions set forth herein and in the accompanying Letter of Transmittal (the "Letter of Transmittal"), to exchange $1,000 principal amount of New Debentures for each $1,000 principal amount of its outstanding Third Series Debentures. The New Debentures will be issued to each tendering holder of Third Series Debentures only in integral multiples of $1,000. Interest on the New Debentures will accrue from August 1, 1994. Accrued interest from July 1, 1994, the day to which interest will be paid on all Third Series Debentures, to August 1, 1994 will be paid on all Third Series Debentures exchanged. Although the Company has no present intention to do so, if it should modify the consideration offered for the Third Series Debentures in the Exchange Offer, such modified consideration would be paid with regard to all Third Series Debentures accepted in the Exchange Offer. If the consideration is modified, the Exchange Offer will remain open at least 10 business days from the date the Company first gives notice, by public announcement or otherwise, of such modification, as required by law. As of May 31, 1994, $11,985,000 aggregate principal amount of the Third Series Debentures was outstanding. This Offering Circular, together with the Letter of Transmittal, is being sent to all holders of the Third Series Debentures. The Company has in the past purchased Third Series Debentures and it reserves the right in its sole discretion to purchase or make offers for any Third Series Debentures that remain outstanding subsequent to the Expiration Date. The terms of any such purchases or offers could differ from the terms of the Exchange Offer. Tendering holders of Third Series Debentures will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Third Series Debentures pursuant to the Exchange Offer. The Company will pay all charges and expenses, other than certain applicable taxes, in connection with the Exchange Offer. See "Payment of Expenses," below. EXPIRATION DATE; EXTENSIONS; TERMINATION; AMENDMENTS The Exchange Offer will expire at 5:00 p.m., New York City time, on July 29, 1994, subject to extension by the Company by notice to the Exchange Agent as herein provided. The Company reserves the right to so extend the Exchange Offer at its discretion, in which event the term "Expiration Date" shall mean the time and date on which the Exchange Offer as so extended shall expire. The Company will notify the Exchange Agent of any extension by oral or written notice and will make a public announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. While it does not foresee doing so, the Company reserves the right (i) to delay accepting any Third Series Debentures for exchange and to extend or to terminate the Exchange Offer and not accept for exchange any Third Series Debentures if any of the events set forth below under the caption "Conditions of the Exchange Offer" shall have occurred and shall not have been waived by the Company, by giving oral or written notice of such delay or termination to the Exchange Agent or (ii) to amend the terms of the Exchange Offer. Any such delay in acceptance for exchange, extension, termination or amendment will be followed as promptly as practicable by public announcement thereof. If the Exchange Offer is amended in a manner determined by the Company to constitute a material change, the Company will promptly disclose such amendment in a manner reasonably calculated to inform the holders of such amendment, and the Company will extend the applicable Exchange Offer for a period of five to 10 business days, depending upon the significance of the amendment and the manner of disclosure to holders of the Third Series Debentures, if the Exchange Offer would otherwise expire during such five to 10 business-day period. The rights reserved by the Company in this paragraph are in addition to the Company's rights set forth below under the caption "Conditions of the Exchange Offer." 9 11 PROCEDURES FOR TENDERING The acceptance of the Exchange Offer by a holder of the Third Series Debentures pursuant to one of the procedures set forth below will constitute an agreement between such holder and the Company in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. To be tendered effectively, the Third Series Debentures, together with the properly completed Letter of Transmittal (or facsimile thereof), executed by the registered holder thereof, and any other documents required by the Letter of Transmittal, must be received by the Exchange Agent at the address set forth below prior to 5:00 p.m., New York City time, on the Expiration Date, except as otherwise provided below under the caption "Guaranteed Delivery Procedures." LETTERS OF TRANSMITTAL AND THIRD SERIES DEBENTURES SHOULD NOT BE SENT TO THE COMPANY. Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the Third Series Debentures tendered pursuant thereto are tendered (i) by a registered holder of the Third Series Debentures who has not completed the box entitled "Special Issuance and Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantee must be by a firm that is a member of a registered national securities exchange or a member of the NASD or by a commercial bank or trust company having an office in the United States (an "Eligible Institution"). The method of delivery of Third Series Debentures and other documents to the Exchange Agent is at the election and risk of the holder. If such delivery is by mail it is suggested that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent before the Expiration Date. The Exchange Agent will make a request to establish accounts with respect to the Third Series Debentures at the Depository Trust Company ("DTC"), the Midwest Securities Transfer Company ("MSTC") and the Philadelphia Depository Trust Company ("PHILADEP" and, together with DTC and MSTC, collectively referred to herein as the "Book-Entry Transfer Facilities") for the purpose of the Exchange Offer promptly after the date of this Offering Circular, and any financial institution that is a participant in any of the Book-Entry Transfer Facilities' systems may make book-entry transfer of the Third Series Debentures by causing DTC, MSTC or PHILADEP to transfer such Third Series Debentures into the Exchange Agent's account in accordance with such Book-Entry Transfer Facility's procedure for such transfer. Although delivery of Third Series Debentures may be effected through book-entry transfer in the Exchange Agent's account at DTC, MSTC or PHILADEP, the Letter of Transmittal (or facsimile thereof), with all required signature guarantees and any other required documents, must, in any case, be transmitted to and received or confirmed by the Exchange Agent at one of its addresses set forth below prior to 5:00 p.m., New York City time, on the Expiration Date, except as provided below under the caption "Guaranteed Delivery Procedure." DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. If the Letter of Transmittal is signed by a person other than a registered holder of any certificate(s) listed, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered holder or holders appear on the certificate(s). If the Letter of Transmittal or Guaranteed Delivery Form or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Third Series Debentures will be resolved by the Company, whose determination will be final and binding. The Company reserves the absolute right to reject any or all tenders that are not in proper form or the acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to particular Third Series Debentures. 10 12 The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding. Unless waived, any irregularities in connection with tenders must be cured within such time as the Company shall determine. Neither the Company nor the Exchange Agent shall be under any duty to give notification of defects in such tenders or shall incur liabilities for failure to give such notification. Tenders of Third Series Debentures will not be deemed to have been made until such irregularities have been cured or waived. Any Third Series Debentures received by the Exchange Agent that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holder, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date. GUARANTEED DELIVERY PROCEDURE If a holder of the Third Series Debentures desires to tender his Third Series Debentures and the certificate(s) representing such Third Series Debentures are not immediately available, or time will not permit such holder's certificate(s) or any other required documents to reach the Exchange Agent before 5:00 p.m., New York City time, on the Expiration Date, a tender may be effected if: (a) The tender is made by or through an Eligible Institution; (b) Prior to 5:00 p.m., New York City time, on the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Guaranteed Delivery Form (by facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of the Third Series Debentures and the principal amount of the Third Series Debentures tendered, stating that the tender is being made thereby and guaranteeing that, within five NYSE trading days after the Expiration Date, the certificate(s) representing the Third Series Debentures, accompanied by a properly completed and duly executed Letter of Transmittal and any other documents required by the Letter of Transmittal, will be deposited by the Eligible Institution with the Exchange Agent; and (c) The certificate(s) for all tendered Third Series Debentures, or a confirmation of a book-entry transfer of such Third Series Debentures into the Exchange Agent's applicable account at a Book-Entry Transfer Facility as described above, as well as a properly completed and duly executed Letter of Transmittal and all other documents required by the Letter of Transmittal, are received by the Exchange Agent within five NYSE trading days after the Expiration Date. CONDITIONS OF THE EXCHANGE OFFER Notwithstanding any other term of the Exchange Offer, the Company will not be required to accept for exchange, or to exchange New Debentures for, any Third Series Debentures not theretofore accepted for exchange or exchanged, and may terminate or amend the Exchange Offer as provided herein before the acceptance of such Third Series Debentures, if any of the following conditions exist: (a) any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer which, in the sole judgment of the Company, might materially impair the ability of the Company to proceed with the Exchange Offer or have a material adverse effect on the contemplated benefits of the Exchange Offer to the Company; or (b) there shall have been proposed, adopted or enacted any law, statute, rule or regulation which, in the sole judgment of the Company, might materially impair the ability of the Company to proceed with the Exchange Offer or have a material adverse effect on the contemplated benefits of the Exchange Offer to the Company; or (c) the Indenture governing the New Debentures shall not have been qualified under the Trust Indenture Act of 1939, as amended. The foregoing conditions are for the sole benefit of the Company and may be asserted by the Company regardless of the circumstances giving rise to such conditions or, except for the condition set forth in clause (c) above, may be waived by the Company in whole or in part at any time and from time 11 13 to time in its sole discretion. If the Company waives or amends the foregoing conditions, the Company will, if required by applicable law, extend the Exchange Offer for a minimum of five business days from the date that the Company first gives notice, by public announcement or otherwise, of such waiver or amendment, if the Exchange Offer would otherwise expire within such five business-day period. Any determination by the Company concerning the events described above will be final and binding upon all parties. ACCEPTANCE OF THIRD SERIES DEBENTURES FOR EXCHANGE; DELIVERY OF NEW DEBENTURES Tenders will be accepted only in principal amounts of $1,000 and integral multiples thereof. Upon the terms and subject to the conditions of the Exchange Offer, promptly after the Expiration Date the Company will accept all Third Series Debentures validly tendered and not withdrawn. The Company will deliver New Debentures in exchange for Third Series Debentures promptly following acceptance of the Third Series Debentures. For purposes of the Exchange Offer, the Company shall be deemed to have accepted validly tendered Third Series Debentures when, as and if the Company has given oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering holder of Third Series Debentures for the purposes of receiving New Debentures from the Company. Under no circumstances will interest be paid by the Company by reason of any delay in making such payment or delivery. If any tendered Third Series Debentures are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, certificates for any such unaccepted Third Series Debentures will be returned, without expense, to the tendering holder thereof (or, in the case of Third Series Debentures tendered by book-entry transfer, to an account maintained at such Book-Entry Transfer Facility), as promptly as practicable after the expiration or termination of the Exchange Offer. WITHDRAWAL RIGHTS Any registered holder of Third Series Debentures who has tendered Third Series Debentures may withdraw the tender at any time prior to 5:00 p.m., New York City time, on the Expiration Date, and, unless previously accepted for exchange by the Company, after 5:00 p.m., New York City time, on August 15, 1994, by delivery of written notice of withdrawal to the Exchange Agent. To be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must (a) be timely received by the Exchange Agent at the address set forth herein, (b) specify the name of the person having tendered the Third Series Debentures to be withdrawn, (c) indicate the Third Series Debentures to which it relates (or if the tender was by book-entry transfer, information sufficient to enable the Exchange Agent to identify the Third Series Debentures so tendered) and the aggregate principal amount of Third Series Debentures to be withdrawn and (d) be (i) signed by the holder in the same manner as the original signature on the Letter of Transmittal (including a guarantee of signature, if required) or (ii) accompanied by evidence satisfactory to the Company that the holder withdrawing such tender has succeeded to beneficial ownership of such Third Series Debentures. If certificates have been delivered or otherwise identified to the Exchange Agent, the name of the registered holder and the serial numbers of the particular certificate(s) evidencing the Third Series Debentures withdrawn must also be so furnished to the Exchange Agent as aforesaid prior to the physical release of the certificates for the withdrawn Third Series Debentures. If Third Series Debentures have been tendered pursuant to the procedures for book-entry transfer as set forth herein, any notice of withdrawal must also specify the name and number of the account at DTC, MSTC or PHILADEP to be credited with the withdrawn Third Series Debentures. Withdrawals of tenders of Third Series Debentures may not be rescinded, and any Third Series Debentures withdrawn will thereafter be deemed not validly tendered for purposes of the Exchange Offer; provided, however, that withdrawn Third Series Debentures may be retendered by again following one of the procedures described herein at any time prior to 5:00 p.m., New York City time, on the Expiration Date. 12 14 All questions as to the validity (including time of receipt) of notices of withdrawal will be determined by the Company, whose determination will be final and binding. None of the Company, the Exchange Agent nor any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. EXCHANGE AGENT United States Trust Company of New York has been appointed as Exchange Agent for the Exchange Offer. Third Series Debentures, Letters of Transmittal, and any other required documents, should be sent to the Exchange Agent, at the addresses set forth on the back cover hereof. Requests for additional copies of this Offering Circular or the Letter of Transmittal or for additional information should be directed to Jerrold Gilbert, Secretary of the Company, at (212) 826-8044 (call collect). LETTERS OF TRANSMITTAL AND THIRD SERIES DEBENTURES SHOULD NOT BE SENT TO THE COMPANY. PAYMENT OF EXPENSES The Company has not retained any dealer-manager or similar agent in connection with the Exchange Offer and will not make any payments to brokers, dealers or others soliciting acceptances of the Exchange Offer. The Company, however, will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for their reasonable out-of-pocket expenses in connection therewith. The Company will also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this Offering Circular and related documents to the beneficial owners of the Third Series Debentures, and in handling or forwarding tenders for their customers. The cash expenses to be incurred in connection with the Exchange Offer, including the fees and expenses of the Exchange Agent and printing, accounting and legal fees, will be paid by the Company and, are estimated at $60,000. The Company will pay all transfer taxes, if any, applicable to the transfer and sale of Third Series Debentures to it or its order pursuant to the Exchange Offer. If, however, New Debentures and/or substitute Third Series Debentures for principal amounts not exchanged are to be delivered or paid to, or are to be registered or issued in the name of, any person other than the registered holder of the Third Series Debentures tendered hereby, or if tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer and sale of Third Series Debentures to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following discussion is a summary of certain of the more significant United States federal income tax consequences of the Exchange Offer to the Company and to holders of the Third Series Debentures who exchange their Third Series Debentures for New Debentures pursuant to the Exchange Offer. The discussion does not cover all aspects of federal income taxation that may be relevant to a particular holder in light of its particular investment circumstances or to certain types of holders of Third Series Debentures subject to special treatment under the federal income tax laws (for example, life insurance companies, tax-exempt organizations and foreign corporations and individuals who are not citizens or residents of the United States) and does not discuss any aspects of state, local or foreign taxation. The discussion with respect to exchanging holders is limited to those who have held Third Series Debentures as "capital assets" and who will hold the New Debentures as "capital assets" (generally, property held for investment) within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This discussion is based upon laws, regulations, rulings and decisions now in effect and on proposed and temporary regulations, all of which 13 15 are subject to change (possibly with retroactive effect) by legislation, administrative action or judicial decision. No ruling has been or will be requested from the Internal Revenue Service ("IRS") on any tax matters relating to the tax consequences of the Exchange Offer and no assurance can be given that the IRS will not successfully challenge certain of the conclusions set forth below. ALL HOLDERS OF THIRD SERIES DEBENTURES ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THEIR PARTICIPATION IN THE EXCHANGE OFFER. TREATMENT OF EXCHANGING HOLDERS Under certain proposed Treasury regulations issued under Section 1001 of the Code, the significant modification of a debt instrument will be treated as a taxable exchange of the original instrument for a different debt instrument. Whether a modification is significant depends on a comparison of the material terms of the original note and the modified note, such as the interest rate, maturity, timing of payments and conversion or exchange rights. It is anticipated that under these proposed Treasury regulations, the issuance of the New Debentures in exchange for the Third Series Debentures pursuant to the Exchange Offer likely would be treated as a significant modification of the Third Series Debentures, and thus as an exchange of the Third Series Debentures for the New Debentures, with the following federal income tax consequence. The exchange of Third Series Debentures for New Debentures pursuant to the Exchange Offer should constitute a tax-free reorganization under Section 368(a)(1)(E) of the Code for federal income tax purposes. Accordingly, subject to the discussion below with respect to accrued interest (and original issue discount) and excess principal amount, a holder who exchanges Third Series Debentures for New Debentures generally (i) should not recognize any gain or loss on the exchange, (ii) should have an adjusted tax basis in the New Debentures equal to the holder's adjusted tax basis in the Third Series Debentures exchanged therefor and (iii) should have a holding period in the New Debentures that includes the period during which the holder held the Third Series Debentures exchanged therefor. Under Section 354(a)(2)(B) of the Code, the nonrecognition of income rules (and related basis and holding period rules) generally applicable to reorganizations will not apply to the exchange of Third Series Debentures for New Debentures to the extent that the principal amount of the New Debentures received is deemed to exceed the principal amount of the Third Series Debentures or is "attributable to" interest or original issue discount (discussed below) on the Third Series Debentures accrued since the beginning of the holder's holding period. The Company has timely paid or will pay all interest due on the Third Series Debentures to the holders for all periods through August 1, 1994. Such amount will be taxable to exchanging holders as interest income to the extent not previously included in income as interest on the Third Series Debentures. If the principal amount of the New Debentures is deemed to exceed the principal amount of the Third Series Debentures exchanged therefor, the exchanging holders will recognize gain on the exchange to the extent of the excess. In the event that the exchange of Third Series Debentures for New Debentures pursuant to the Exchange Offer does not constitute a tax-free reorganization under the Code, a holder generally would recognize gain or loss equal to the difference between the amount realized on the exchange (less amounts deemed to be attributable to any accrued but unpaid interest on the Third Series Debentures, which amounts will be taxable as ordinary interest income) and the holder's tax basis in the Third Series Debentures surrendered in exchange therefor. Under certain Treasury regulations, as discussed below under "Original Issue Discount," the amount realized on the exchange would be equal to the "issue price" of the New Debentures received in the exchange, which should be the fair market value of such New Debentures at the time of issuance assuming that the New Debentures exchanged therefor are considered to be publicly traded under such Treasury regulations, which should be the case. A holder's tax basis in its Third Series Debentures generally would equal the cost of such Third Series Debentures to such holder. Gain or loss recognized by a holder on the exchange of Third Series Debentures for New Debentures generally would be long-term capital gain or loss if the holder has held the Third Series Debentures for more than one year at the time of the exchange. Under current law, net capital gains of individuals are, under certain circumstances, taxed at lower rates than items of ordinary income. The ability of holders to offset capital losses against ordinary income is limited. 14 16 ORIGINAL ISSUE DISCOUNT ON NEW DEBENTURES Under certain recently promulgated Treasury regulations, the New Debentures may be considered to be issued with original issue discount for United States federal income tax purposes. Holders of New Debentures issued with original issue discount will be subject to the special tax accounting rules provided by the Code. Holders of such New Debentures should be aware that, as described in greater detail below, they generally must include original issue discount in ordinary gross income for United States federal income tax purposes as it accrues, in advance of the receipt of any payments attributable to that income. A New Debenture will be considered to be issued with original issue discount if the original issue discount on such New Debenture equals or exceeds a de minimis amount, which is one-quarter of one percent of the principal amount of the New Debentures multiplied by six, the number of complete years to their maturity. The amount of original issue discount on any New Debenture will be the difference between the issue price of such New Debenture, which should be its fair market value at issuance if the New Debenture is considered to be publicly traded (which should be the case), and the stated redemption price at maturity, which in the case of a New Debenture will be the principal amount. In general, each holder of a New Debenture, whether such holder uses the cash or the accrual method of tax accounting, will be required to include in ordinary gross income the sum of the "daily portions" of original issue discount on that New Debenture for all days during the taxable year that the holder owns the New Debenture. The daily portions of original issue discount on a New Debenture are determined by allocating to each day in any accrual period a ratable portion of the original issue discount allocable to that accrual period. Accrual periods may be of any length and may vary in length over the term of a New Debenture provided that each accrual period is no longer than one year and each scheduled payment of principal or interest occurs at the end of an accrual period. In the case of an initial holder, the amount of original issue discount on a New Debenture allocable to each accrual period is determined by multiplying the "adjusted issue price" (as defined below) of the New Debenture by a fraction, the numerator of which is the annual yield to maturity of the New Debenture and the denominator of which is the number of accrual periods in a year. The "adjusted issue price" of a New Debenture at the beginning of any accrual period will be the sum of its "issue price" and the amount of original issue discount allocable to all prior accrual periods and includible in the gross income of any holder. For this purpose, all payments on a New Debenture will first be viewed as payments of previously accrued original issue discount, and then as a payment of principal. As a result of this "constant yield" method of including original issue discount in income, the amounts includible in income by a holder in respect of a New Debenture are lesser in the early years and greater in the later years than the amounts that would be includible on a straight-line basis. A subsequent holder of a New Debenture that purchases such New Debenture at a cost less than its stated principal amount also generally will be required to include in gross income the daily portions of original issue discount, calculated as described above. However, if a holder acquires that New Debenture at a lower yield to maturity than the yield of the New Debenture as determined for original issue discount purposes with respect to the initial purchaser of the New Debenture, the holder may reduce its periodic inclusions of original issue discount income to reflect such lower yield to maturity. PREMIUM AND MARKET DISCOUNT ON NEW DEBENTURES A holder of a New Debenture that purchases the New Debenture at a cost greater than its principal amount will be considered to have purchased the New Debenture at a premium, and may amortize such premium, using a constant yield method, over the remaining term of the New Debenture. With respect to a holder that does not elect to amortize bond premium, the amount of bond premium will be included in the holder's tax basis when the New Debenture matures or is disposed of by the holder. If a holder of a New Debenture purchases the New Debenture at a price that produces a yield to maturity greater than the yield to maturity at which such New Debenture first was issued, the New Debenture generally will be considered to bear "market discount" in the hands of such holder. In such case, gain realized by the holder on the sale or retirement of the New Debenture generally will be treated as ordinary income to the extent of the market discount that accrued on the New Debenture while held by such holder. In addition, the 15 17 holder could be required to defer the deduction of a portion of the interest paid on any indebtedness incurred or continued to purchase or carry the New Debenture. In general terms, market discount on a New Debenture will be treated as accruing ratably over the term of such New Debenture, or, at the election of the holder, under a constant yield method. SALE, EXCHANGE OR REDEMPTION OF NEW DEBENTURES In general, subject to the market discount rules discussed above, the sale, exchange or redemption of the New Debentures will result in capital gain or loss equal to the difference, if any, between the holder's adjusted tax basis (as adjusted for original issue discount accrued through the date of sale) in such New Debentures and the amount of cash and the fair market value of any property received. Any such capital gain or loss recognized by a holder of New Debentures will be long-term capital gain or loss if the holding period of the debt instrument exceeds one year. Otherwise, such capital gain or loss will be short-term capital gain or loss. TAX TREATMENT TO THE COMPANY A taxpayer must generally include in gross income the amount of any indebtedness discharged (in whole or in part) without consideration. For purposes of determining whether the Company must recognize income from discharge of indebtedness pursuant to the exchange contemplated by the Exchange Offer, the Company will be treated as satisfying the Third Series Debentures with an amount of money equal to the issue price of the New Debentures, which should be their fair market value. If the fair market value of the New Debentures is less than the principal amount of the Third Series Debentures exchanged therefor, then the Company will be in receipt of discharge of indebtedness income to the extent of the difference. The Company believes that the New Debentures will be treated as debt for federal income tax purposes. However, the IRS may contend that they represent an equity interest in the Company for tax purposes. If the New Debentures were treated as equity, the Company would be permanently denied deductions for interest (including original issue discount) paid or accrued on the New Debentures. DESCRIPTION OF DEBENTURES The New Debentures are to be issued under an Indenture to be dated as of August 1, 1994 between the Company and United States Trust Company of New York ("U.S. Trust"), as Trustee, ("the New Indenture"). A copy of the New Indenture has been filed as an exhibit to the Application for Qualification of the Indenture under the Trust Indenture Act of 1939, on Form T-3 filed by the Company with the Securities and Exchange Commission ("SEC"). The Third Series Debentures were also issued under an Indenture between the Company and U.S. Trust, as Trustee, (the "Third Series Indenture"). The form of the Third Series Indenture was filed as an exhibit to Registration Statement No. 2-97263, filed with the SEC in connection with the offering of the Third Series Debentures. With the exception of a limited number of changes, the New Indenture is identical to the Third Series Indenture and references below to the "Indenture" are to each of these indentures and references to "Debentures" mean each of the New and the Third Series Debentures. Set forth below is a description of the basic terms of the Debentures. The statements under this caption relating to the Debentures and the Indenture are summaries and do not purport to be complete. Such summaries make use of terms defined in the Indenture and are qualified in their entirety by express reference to the Indenture. Form. The Debentures are issuable as registered Debentures without coupons in denominations of $1,000 and integral multiples thereof. The several denominations of Debentures are interchangeable in like aggregate principal amounts, subject to the limitations and upon payment of any tax or other governmental charge as provided in the Indenture. Maturity and Interest. The principal amount of the New Debentures will be due on July 1, 2001. The Debentures will bear interest from August 1, 1994, payable semiannually on January 1 and July 1 of each year commencing January 1, 1995 to the persons in whose names the Debentures are registered at the close of business on the preceding December 15 or June 15. 16 18 For the initial interest payment to be made on January 1, 1995, interest will be determined on the basis of one-half of one percentage point ( 1/2%) above the prime rate of Chemical Bank in effect at the end of each day from July 1, 1994 through December 1, 1994. For subsequent interest payments, interest will be determined on the basis of one-half of one percentage point ( 1/2%) above the prime rate of Chemical Bank in effect at the end of each day during the respective periods, December 2 through May 31 of each year for the interest payment made on July 1, and June 1 through December 1 for the interest payment made on January 1. All interest calculations will be rounded to the nearest 0.05 of a percentage point. For example, if the prime rate of Chemical Bank on December 2, 1994 was 6 1/2%, and such rate increased to 7% on February 21, 1995 and decreased to 6 1/2% on March 13, 1995, the interest rate for the period January 1 through June 30, 1995 would be computed as follows: (7% X 81 days* + 7 1/2% X 20 days + 7% X 80 days) / 181 days** = 7.05% The interest on a $1,000 Debenture for such period would be $34.97 (the amount obtained by multiplying $1,000 by 7.05% (the rate calculated above rounded to the nearest 0.05 of a percentage point) and then multiplying this result by the fraction 181/365 (the number of days in the period divided by the number of days in the year)). If Chemical Bank shall cease to establish a reference rate comparable to that which it presently establishes, there shall be substituted thereafter for the prime rate of Chemical Bank rate a rate or formula specified by the Company which in its judgment provides a reasonable equivalent to the prime rate of Chemical Bank as presently established and which, if feasible, shall be based on a rate established by Chemical or another New York Clearing House member bank. Conversion. The New Debentures are convertible at the principal amount thereof into Common Shares of the Company at any time on or before the close of business on July 1, 2001, except that, in the event that New Debentures are called for redemption, the right to convert Debentures which are called for redemption terminates at the close of business on the date fixed for redemption. The present conversion rate is $8.75 per share. Such conversion rate is subject to adjustment in case the Company pays to the holders of Common Shares a dividend payable in Common Shares or in any other securities or assets (other than cash payable out of consolidated earnings or earned surplus); or, if it subdivides or combines its Common Shares; or if there is a split, reverse split or other reclassification of the Common Shares; or if rights or warrants are issued to all holders of Common Shares entitling them to purchase Common Shares or other securities at a price per share less than the then-current market price. No adjustment in the conversion rate is required if the Company otherwise issues, in exchange for cash, property or services, Common Shares or any security carrying rights to acquire Common Shares. No adjustment in the conversion rate is required unless such adjustment will require an increase or decrease of at least 50 cents in such rate; adjustments not made by reason of this provision will be carried forward and taken into account at the time of any subsequent adjustment. On conversion, no adjustment for accrued interest or dividends will be made. Optional Redemption. The New Debentures will be redeemable at the option of the Company, at any time on or after August 1, 1997 as a whole or from time to time in part, upon not less than 30 days' notice, at 100% of the unpaid principal amount thereof, together in each case with accrued interest to the redemption date. The New Debentures will be redeemable, in whole or in part, prior to August 1, 1997 at the option of the Company, if for a period of 30 consecutive Business Days (the "Consecutive Period") the Closing Price of the Common Shares has been at least 140% of the conversion price then in effect, at a redemption price equal to 100% of the unpaid principal amount thereof, together with accrued interest to the redemption date. - --------------- *The rate 1/2% above the prime rate of Chemical Bank multiplied by the number of days (including weekends and holidays) the 6 1/2% prime rate was in effect. **The total number of days beginning December 2, 1994 (30 days prior to the interest rate period) through May 31, 1995 (30 days prior to the interest payment date). 17 19 Redemptions shall be made by giving at least 30 days notice of the scheduled redemption date to the holders of New Debentures which are to be redeemed. Such notice shall be given within 30 days of the last day of the Consecutive Period in the case of redemptions prior to August 1, 1997. Holders of New Debentures which are intended to be redeemed by the Company shall have the continued right to convert their New Debentures to Common Shares, in whole or in part, at any time prior to the date fixed for redemption. If less than all New Debentures are to be redeemed, the Trustee shall select, in such manner in its discretion as it shall deem appropriate and fair, the New Debentures to be redeemed; provided, however, that the Trustee shall select New Debentures of denominations of $1,000 for redemption in whole only. Subordination. The indebtedness evidenced by the Debentures (including principal and interest) is subordinated in right of payment to the prior payment in full of all Senior Indebtedness of the Company. "Senior Indebtedness" is defined as (a) all indebtedness, evidenced by a note or similar instrument whether now outstanding or hereafter created, incurred, assumed, issued or guaranteed by the Company which is for borrowed money, and (b) renewals, extensions and refundings of such indebtedness, unless in any case it is provided that the particular indebtedness, renewal, extension or refunding is not Senior Indebtedness. At April 30, 1994, the approximate amount of Senior Indebtedness of the Company was $16.5 million. The New Debentures will rank pari passu with the Company's outstanding Third Series Debentures and pari passu with its Floating Interest Rate Convertible Subordinated Debentures, Fourth Series, due 1998. Such subordination will affect the Company's obligation to make repayments with respect to the Debentures in connection with dissolution, winding up, liquidation or reorganization of the Company or in the event that a default in the payment of any Senior Indebtedness beyond any applicable grace period, or other event of default with respect to Senior Indebtedness that would permit acceleration of maturity thereof, shall have occurred and be continuing, or if a payment with respect to the Debentures would result in any such event of default with respect to Senior Indebtedness, or if any payment with respect to Senior Indebtedness is then due and payable. The foregoing provisions will not change the relative rights of the holders of the Debentures and creditors of the Company other than the holders of Senior Indebtedness. By reason of such subordination, in the event of insolvency, however, the holders of the Debentures may recover less ratably than the creditors of the Company who are not holders of Senior Indebtedness. Modification and Amendment. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66 2/3% in principal amount of the Debentures at the time outstanding, to modify the Indenture or any supplemental indenture or the rights of the holders of the Debentures; provided that no such modification may (i) extend the fixed maturity of any Debentures, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or impair the conversion rights of the holders of Debentures without the consent of the holder of each Debenture so affected, or (ii) reduce the aforesaid percentage of Debentures, the consent of the holders of which is required for any such modification, without the consent of the holders of all Debentures then outstanding. Events of Default. An "Event of Default" is defined to mean: failure to pay principal when due, either at maturity, upon redemption or otherwise; failure to pay interest when due for 30 days; failure to perform any other covenant in the Indenture for 60 days after notice; any default in the conversion of the Debentures and continuance of such default for 60 days after notice of such default; certain events of bankruptcy, insolvency or reorganization of the Company; and any default under any indenture or instrument evidencing indebtedness of the Company for borrowed money if such default is not waived or cured and would permit acceleration of such indebtedness. The Indenture provides that the Trustee shall, within 90 days after the occurrence of a default, give to the holders of Debentures notice of all uncured defaults known to it (the term "default" to include the events specified above without grace periods); provided that, except in the case of default in payment of principal or interest in respect of the Debentures, the Trustee shall be protected in withholding such notice if it in good faith determines that the withholding of such notice is in the interest of the Debentureholders. The Company is required to furnish to the Trustee within 120 days after the close of each fiscal year a statement of certain officers of the Company to the effect that review of the activities of the Company has been made with a view to determining whether its obligations under the Indenture have been complied with 18 20 and as to whether such officers have obtained knowledge of any default under the Indenture during such fiscal year. Rights on Default. The Trustee or the holders of 25% of the Debentures are authorized to declare the principal of all Debentures due and payable upon the happening of any Event of Default specified in the Indenture, but the holders of a majority in principal amount of the Debentures are authorized to waive any default and rescind such declaration if the default is cured. Subject to the provisions of the Indenture relating to the duties of the Trustee, the Trustee is under no obligation to exercise any of its rights or powers under the Indenture, at the request, order or direction of any of the Debentureholders, unless 25% of the Debentureholders shall have so directed and offered to the Trustee reasonable indemnity. Subject to such provision for indemnification, the holders of a majority in principal amount of the Debentures at the time outstanding have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee. DESCRIPTION OF COMMON SHARES The Company's Common Shares, $1 par value, are entitled to one vote per share on all matters and, subject to the rights of any outstanding Preferred Shares, to such dividends as may be declared by the Board of Directors out of funds legally available therefor, and, upon liquidation of the Company, to share pro rata in its remaining net assets. Common Shares do not have cumulative voting or preemptive rights. The Company has authorized 641,288 Preferred Shares, $5 par value, which may be issued from time to time in one or more series with such dividend, voting, redemption, liquidation and other provisions as fixed by the Board of Directors. There were outstanding on May 31, 1994, 1,288 Preferred Shares, Series B and 250,000 Preferred Shares, Series D. Each Series B share is entitled to cumulative dividends at the rate of $0.10 per year, to one vote per share (voting with the Common Shares except as otherwise required by law) and to payment (preferential to the Common Shares) upon liquidation or redemption equal to accrued and unpaid dividends to the date of redemption or liquidation plus an amount which is $20 in the case of involuntary liquidation and $28 otherwise; each Series D share (all of such shares are owned by the Company's Employee Stock Ownership Trust) is entitled to dividends at the rate of $0.6125 per year, to one vote per share (voting with the Common Shares except as otherwise required by law), is convertible into one Common Share, and is entitled to a liquidation preference (together with accrued dividends) of $10. 19 21 STERLING BANCORP THE EXCHANGE AGENT: UNITED STATES TRUST COMPANY By Mail: By Facsimile: By Hand: UNITED STATES TRUST COMPANY (212) 420-6152 UNITED STATES TRUST COMPANY OF NEW YORK OF NEW YORK 770 BROADWAY, 7TH FLOOR Confirm by Telephone: 65 BEAVER STREET, GROUND FLOOR NEW YORK, NEW YORK 10003 NEW YORK, NEW YORK 10005 ATTENTION: CORPORATE TRUST ATTENTION: CORPORATE TRUST SERVICES (800) 548-6565 SERVICES
REQUESTS FOR ADDITIONAL INFORMATION SHOULD BE DIRECTED TO JERROLD GILBERT, SECRETARY, 540 MADISON AVENUE (SECOND FLOOR), NEW YORK, N.Y. 10022 AT (212) 826-8044 (CALL COLLECT) - -------------------------------------------------------------------------------- TABLE OF CONTENTS
PAGE PAGE ---- ---- Additional Information................ 2 Price Range of Common Shares and Offering Summary...................... 3 Third Series Debentures............... 8 Selected Financial Data............... 6 The Exchange Offer.................... 9 The Company........................... 7 Certain Federal Income Tax Ratios of Earnings to Fixed Charges... 7 Consequences.......................... 13 Recent Transactions in the Company's Description of Debentures............. 16 Securities.......................... 7 Description of Common Stock........... 19
- -------------------------------------------------------------------------------- EX-99.B 3 LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL FOR STERLING BANCORP OFFER TO EXCHANGE ITS FLOATING INTEREST RATE CONVERTIBLE SUBORDINATED DEBENTURES, SERIES V, DUE JULY 1, 2001 FOR ANY AND ALL OF ITS FLOATING INTEREST RATE CONVERTIBLE SUBORDINATED DEBENTURES, THIRD SERIES, DUE JULY 1, 1996 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JULY 29, 1994 UNLESS THE EXCHANGE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF OLD DEBENTURES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE EXPIRATION DATE. TO: UNITED STATES TRUST COMPANY OF NEW YORK, EXCHANGE AGENT BY MAIL: BY FACSIMILE: BY HAND: UNITED STATES TRUST COMPANY (212) 420-6152 UNITED STATES TRUST COMPANY OF NEW YORK OF NEW YORK 770 BROADWAY, 7TH FLOOR CONFIRM BY TELEPHONE: 65 BEAVER STREET, GROUND FLOOR NEW YORK, NEW YORK 10003 NEW YORK, NEW YORK 10005 ATTENTION: CORPORATE TRUST (800) 548-6565 ATTENTION: CORPORATE TRUST SERVICES SERVICES
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA TELEGRAM, TELEX OR FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW DEBENTURES FOR THEIR OLD DEBENTURES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR OLD DEBENTURES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. By execution hereof, the undersigned acknowledges receipt of the offering circular dated June 9, 1994 (the "Offering Circular"), of Sterling Bancorp, a New York corporation (the "Company"), which, together with this Letter of Transmittal and the instructions hereto (the "Letter of Transmittal"), constitute the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount of its Floating Interest Rate Convertible Subordinated Debentures, Series V, due July 1, 2001 (the "New Debentures"), for each $1,000 principal amount of its outstanding Floating Interest Rate Convertible Subordinated Debentures, Third Series, due July 1, 1996 (the "Old Debentures"), upon the terms and subject to the conditions set forth in the Prospectus. This Letter of Transmittal is to be used by Holders (as defined below) if: (i) certificates representing Old Debentures are to be physically delivered to the Exchange Agent herewith by Holders; (ii) tender of Old Debentures is to be made by book-entry transfer to the Exchange Agent's account at The Depository Trust Company ("DTC") pursuant to the procedures set forth in the Offering Circular under "The Exchange Offer -- Procedures for Tendering" by any financial institution that is a participant in DTC and whose name appears on a security position listing as the owner of Old Debentures (such participants, acting on behalf of Holders are referred to herein, together with such Holders, as "Acting Holders"); or (iii) tender of Old Debentures is to be made according to the guaranteed delivery procedures set forth in the Prospectus under "The Exchange Offer -- Guaranteed Delivery Procedure." Delivery of documents to DTC does not constitute delivery to the Exchange Agent. 2 The term "Holder" with respect to the Exchange Offer means any person: (i) in whose name Old Debentures are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered Holder; or (ii) whose Old Debentures are held of record by DTC who desires to deliver such Old Debentures by book-entry transfer at DTC. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Old Debentures must complete this letter in its entirety. All capitalized terms used herein and not defined shall have the meaning ascribed to them in the Offering Circular. The instructions included with this Letter of Transmittal must be followed. Questions and requests for assistance or for additional copies of the Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Exchange Agent. See Instruction 8 herein. HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD DEBENTURES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY. 3 List below the Old Debentures to which this Letter of Transmittal relates. If the space provided below is inadequate, list the certificate numbers and principal amounts on a separately executed schedule and affix the schedule to this Letter of Transmittal. Tenders of Old Debentures will be accepted only in principal amounts equal to $1,000 or integral multiples thereof.
- -------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF OLD DEBENTURES - -------------------------------------------------------------------------------------------------------------------- CERTIFICATE AGGREGATE NUMBER(S)* PRINCIPAL (ATTACH SIGNED AMOUNT NAME(S) AND ADDRESS(ES) OF HOLDER(S) LIST IF TENDERED (IF LESS (PLEASE FILL IN, IF BLANK) NECESSARY) THAN ALL)** - ------------------------------------------------------------------------ --------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- -------------------- --------------------- - ---------------------------------------------------------------------------------------------- --------------------- TOTAL PRINCIPAL AMOUNT OF OLD DEBENTURES TENDERED - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- * Need not be completed by Holders tendering by book-entry transfer. ** Need not be completed by Holders who wish to tender with respect to all Old Debentures listed. See Instruction 2. - --------------------------------------------------------------------------------------------------------------------
4 / / CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED BY DTC TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution: _________________________________________ DTC Book-Entry Account No.: ____________________________________________ If Holders desire to tender Old Debentures pursuant to the Exchange Offer and (i) certificates representing such Old Debentures are not lost but are not immediately available, (ii) time will not permit this Letter of Transmittal, certificates representing such Old Debentures or other required documents to reach the Exchange Agent prior to the Expiration Date or (iii) the procedures for book-entry transfer cannot be completed prior to the Expiration Date, such Holders may effect a tender of such Old Debentures in accordance with the guaranteed delivery procedures set forth in the Prospectus under "The Exchange Offer -- Guaranteed Delivery Procedures." / / CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Holder(s) of Old Debentures: __________________________________ Window Ticket No. (if any): ______________________________________________ Date of Execution of Notice of Guaranteed Delivery: ___________________________________________ Name of Eligible Institution that Guaranteed Delivery: ___________________ __________________________________________________________________________ If Delivered by Book-Entry Transfer: Name of Tendering Institution: ___________________________________________ DTC Book-Entry Account No.: ______________________________________________ 5 Subject to the terms of the Exchange Offer, the undersigned hereby tenders to the Company the principal amount of Old Debentures indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Old Debentures tendered in accordance with this Letter of Transmittal, the undersigned sells, assigns and transfers to the Company all right, title and interest in and to the Old Debentures tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Company and as Trustee under the Indenture for the Old Debentures and the New Debentures) with respect to the tendered Old Debentures with full power of substitution to deliver certificates for such Old Debentures for cancellation in accordance with the Indenture for the Old Debentures, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed irrevocable and coupled with an interest. The undersigned hereby represents and warrants that he or she has full power and authority to tender, sell, assign and transfer the Old Debentures tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are acquired by the Company. The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the assignment and transfer of the Old Debentures tendered hereby. For purposes of the Exchange Offer, the Company shall be deemed to have accepted validly tendered Old Debentures when the Company has given oral or written notice thereof to the Exchange Agent. If any tendered Old Debentures are not accepted for exchange pursuant to the Exchange Offer for any reason, certificates for any such unaccepted Old Debentures will be returned (except as noted below with respect to tenders through DTC), without expense, to the undersigned at the address shown below or at a different address shown below or at a different address as may be indicated under "Special Issuance Instructions" as promptly as practicable after the Expiration Date. All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned and every obligation under this Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, successors and assigns. The undersigned understands that tenders of Old Debentures pursuant to the procedures described under the caption "The Exchange Offer -- Procedures for Tendering" in the Offering Circular and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. 6 Unless otherwise indicated under "Special Issuance Instructions," please issue the certificates representing the New Debentures issued in exchange for the Old Debentures accepted for exchange and return any Old Debentures not tendered or not exchanged, in the name(s) of the undersigned (or in either such event in the case of Old Debentures tendered by DTC, by credit to the account at DTC). Similarly, unless otherwise indicated under "Special Delivery Instructions," please send the certificates representing the New Debentures issued in exchange for the Old Debentures accepted for exchange and any certificates for Old Debentures not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signatures, unless, in either event, tender is being made through DTC. In the event that both "Special Issuance Instructions" and "Special Delivery Instructions" are completed, please issue the certificates representing the New Debentures issued in exchange for the Old Debentures accepted for exchange and return any Old Debentures not tendered or not exchanged in the name(s) of, and send said certificates to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation pursuant to the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Old Debentures from the name of the registered holder(s) thereof if the Company does not accept for exchange any of the Old Debentures so tendered. 7 PLEASE SIGN HERE (TO BE COMPLETED BY ALL TENDERING HOLDERS OF OLD DEBENTURES REGARDLESS OF WHETHER OLD DEBENTURES ARE BEING PHYSICALLY DELIVERED HEREWITH) This Letter of Transmittal must be signed by the Holder(s) of Old Debentures exactly as their name(s) appear(s) on certificate(s) for Old Debentures or, if tendered by a participant in DTC, exactly as such participant's name appears on a security position listing as the owner of Old Debentures, or by person(s) authorized to become registered Holder(s) by endorsements and documents transmitted with this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below under "Capacity" and submit evidence satisfactory to the Company of such person's authority to so act. See Instruction 3 herein. If the signature appearing below is not of the registered Holder(s) of the Old Debentures, then the registered Holder(s) must sign a valid proxy. X ______________________________________ Date: ______________________________ X ______________________________________ Date: ______________________________ Signature(s) of Holder(s) or Authorized Signatory Name(s): _______________________________ Address: ___________________________ _______________________________ ___________________________ (Please Print) (Including Zip Code) Capacity: ______________________________ Area Code and Telephone No.: _______ Social Security No.: ___________________
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN SIGNATURE GUARANTEE (SEE INSTRUCTION 3 HEREIN) CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION - -------------------------------------------------------------------------------- (Name of Eligible Institution Guaranteeing Signatures) - -------------------------------------------------------------------------------- (Address (including zip code) and Telephone Number (including area code) of Firm) - -------------------------------------------------------------------------------- (Authorized Signature) - -------------------------------------------------------------------------------- (Printed Name) - -------------------------------------------------------------------------------- (Title) Date: -------------------- 8 - ------------------------------------------------------------------------------- SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTION 4 HEREIN) To be completed ONLY if certificates for the New Debentures issued pursuant to the Exchange Offer or for any principal amount of Old Debentures not tendered for exchange are to be issued in the name of someone other than the person or persons whose signature(s) appear(s) within this Letter of Transmittal or issued to an address different from that shown in the box entitled "Description of Old Debentures" within this Letter of Transmittal, or if Old Debentures tendered by book-entry transfer that are not accepted for purchase are to be credited to an account maintained at DTC. Name: ------------------------------------------------------------------------ (Please Print) Address: -------------------------------------------------------------------- (Please Print) ----------------------------------------------------------------------------- Zip Code ----------------------------------------------------------------------------- Taxpayer Identification or Social Security Number (See Substitute Form W-9 herein) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTION 4 HEREIN) To be completed ONLY if certificates for the New Debentures issued pursuant to the Exchange Offer or for any principal amount of Old Debentures not tendered for exchange are to be sent to someone other than the person or persons whose signature(s) appear(s) within this Letter of Transmittal or issued to an address different from that shown in the box entitled "Description of Old Debentures" within this Letter of Transmittal. Name: ------------------------------------------------------------------------ (Please Print) Address: -------------------------------------------------------------------- (Please Print) ----------------------------------------------------------------------------- Zip Code ----------------------------------------------------------------------------- Taxpayer Identification or Social Security Number (See Substitute Form W-9 herein) - ------------------------------------------------------------------------------- 9 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER AND THE SOLICITATION 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD DEBENTURES. The certificates for the tendered Old Debentures (or a confirmation of a book-entry transfer into the Exchange Agent's account at DTC of all Old Debentures delivered electronically), as well as a properly completed and duly executed copy of this Letter of Transmittal or facsimile hereof and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. The method of delivery of the tendered Old Debentures, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the Holder and, except as otherwise provided below, the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that the Holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. No Letter of Transmittal or Old Debentures should be sent to the Company. Holders who wish to tender their Old Debentures and (i) whose Old Debentures are not immediately available or (ii) who cannot deliver their Old Debentures, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date must tender their Old Debentures and follow the guaranteed delivery procedures set forth in the Offering Circular. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution; (ii) prior to the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder of the Old Debentures, the certificate number or numbers of such Old Debentures and the principal amount of Old Debentures tendered, stating that the tender is being made thereby and guaranteeing that, within five business days after the Expiration Date, this Letter of Transmittal (or facsimile hereof) together with the certificate(s) representing the Old Debentures (or a confirmation of electronic delivery of book-entry delivery into the Exchange Agent's account at DTC) and any required documents will be deposited by the Eligible Institution with the Exchange Agent; and (iii) such properly completed and executed Letter of Transmittal (or facsimile hereof), as well as all other documents required by this Letter of Transmittal and the certificate(s) representing all tendered Old Debentures in proper form for transfer (or a confirmation of electronic mail delivery of book-entry delivery into the Exchange Agent's account at DTC), must be received by the Exchange Agent within five business days after the Expiration Date, all as provided in the Prospectus under the caption "Guaranteed Delivery Procedures." Any Holder of Old Debentures who wishes to tender his Old Debentures pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration Date. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Old Debentures will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Debentures not properly tendered or any Old Debentures the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to particular Old Debentures. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Debentures must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Old Debentures, nor shall any of them incur any liability for failure to give such notification. Tenders of Old Debentures will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Debentures received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost by the Exchange Agent to the tendering Holders of Old Debentures, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the Expiration Date. 10 2. PARTIAL TENDERS. Tenders of Old Debentures will be accepted in all denominations of $1,000 and integral multiples in excess thereof. If less than the entire principal amount of any Old Debentures is tendered, the tendering Holder should fill in the principal amount tendered in the third column of the chart entitled "Description of Old Debentures." The entire principal amount of Old Debentures delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Debentures is not tendered, Old Debentures for the principal amount of Old Debentures not tendered and a certificate or certificates representing New Debentures issued in exchange of any Old Debentures accepted will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal or unless tender is made through DTC, promptly after the Old Debentures are accepted for exchange. 3. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof) is signed by the registered Holder(s) of the Old Debentures tendered hereby, the signature must correspond with the name(s) as written on the face of the Old Debentures without alteration, enlargement or any change whatsoever. If this Letter of Transmittal (or facsimile hereof) is signed by the registered Holder(s) of Old Debentures tendered and the certificate(s) for New Debentures issued in exchange therefor is to be issued (or any untendered principal amount of Old Debentures is to be reissued) to the registered Holder, such Holder need not and should not endorse any tendered Old Debentures, nor provide a separate bond power. In any other case, such holder must either properly endorse the Old Debentures tendered or transmit a properly completed separate bond power with this Letter of Transmittal, with the signatures on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal (or facsimile hereof) is signed by a person other than the registered Holder(s) of any Old Debentures listed, such Old Debentures must be endorsed or accompanied by appropriate bond powers signed as the name of the registered Holder(s) appears on the Old Debentures. If this Letter of Transmittal (or facsimile hereof) or any Old Debentures or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, or officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, evidence satisfactory to the Company of their authority so to act must be submitted with this Letter of Transmittal. Endorsements on Old Debentures or signatures on bond powers required by this Instruction 3 must be guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal (or facsimile hereof) must be guaranteed by an Eligible Institution unless the Old Debentures tendered pursuant thereto are tendered (i) by a registered Holder (including any participant in DTC whose name appears on a security position listing as the owner of Old Debentures) who has not completed the box set forth herein entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" or (ii) for the account of an Eligible Institution. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders should indicate, in the applicable spaces, the name and address to which New Debentures or substitute Old Debentures for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal (or in the case of tender of the Old Debentures through DTC, if different from DTC). In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. 11 5. TRANSFER TAXES. The Company will pay all transfer taxes, if any, applicable to the exchange of Old Debentures pursuant to the Exchange Offer. If, however, certificates representing New Debentures or Old Debentures for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered Holder of the Old Debentures tendered hereby, or if tendered Old Debentures are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Debentures pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or any other person) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. Except as provided in this Instruction 5, it will not be necessary for transfer tax stamps to be affixed to the Old Debentures listed in this Letter of Transmittal. 6. WAIVER OF CONDITIONS. The Company reserves the absolute right to amend, waive or modify specified conditions in the Exchange Offer in the case of any Old Debentures tendered. 7. MUTILATED, LOST, STOLEN OR DESTROYED OLD DEBENTURES. Any tendering Holder whose Old Debentures have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instruction. 8. REQUEST FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance and requests for additional copies of the Offering Circular or this Letter of Transmittal may be directed to the Exchange Agent at the address specified in the Offering Circular or to Jerrold Gilbert, Executive Vice President, General Counsel and Secretary, 540 Madison Avenue, New York, NY 10028, (212) 826-8044. (DO NOT WRITE IN SPACE BELOW) - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- CERTIFICATE SURRENDERED OLD DEBENTURES TENDERED OLD DEBENTURES ACCEPTED - ------------------------------ ------------------------------ ------------------------------- - ------------------------------ ------------------------------ ------------------------------- - ------------------------------ ------------------------------ ------------------------------- - ------------------------------ ------------------------------ ------------------------------- - --------------------------------------------------------------------------------------------- Delivery Prepared by Checked by Date - --------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION Under federal income tax laws, a Holder whose tendered Old Debentures are accepted pursuant to the Exchange Offer is required to provide the Exchange Agent (as payer) with such Holder's correct Taxpayer Identification Number ("TIN") or Substitute Form W-9 below or otherwise establish a basis for exemption from backup withholding. If such Holder is an individual, the TIN is his social security number. If the Exchange Agent is not provided with the correct TIN, a $50 penalty may be imposed by the Internal Revenue Service, and payments made with respect to Old Debentures purchased pursuant to the Exchange Offer may be subject to backup withholding. Certain Holders (including, among others, all corporations and certain foreign persons) are not subject to these backup withholding and reporting requirements. Exempt Holders should indicate their exempt status on Substitute Form W-9. A foreign person may qualify as an exempt recipient by submitting to the Exchange Agent a properly completed U.S. Treasury Form W-8, signed under penalties of perjury, attesting to that Holder's exempt status. A Form W-8 can be obtained from the Exchange Agent. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. 12 If backup withholding applies, the Exchange Agent is required to withhold 31% of any payments made to the Holder or other payee. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments made with respect to the Exchange Offer, the Holder is required to provide the Exchange Agent with either: (i) the Holder's correct TIN by completing the form below, certifying that the TIN provided on Substitute Form W-9 is correct (or that such Holder is awaiting a TIN) and that (A) the Holder has not been notified by the Internal Revenue Service that the Holder is subject to backup withholding as a result of failure to report all interest or dividends or (B) the Internal Revenue Service has notified the Holder that the Holder is no longer subject to backup withholding; or (ii) an adequate basis for exemption. WHAT NUMBER TO GIVE THE EXCHANGE AGENT The Holder is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the registered Holder of the Old Debentures. If the Old Debentures are held in more than one name or are held not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 13 - -------------------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT _________________________________ FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number OR ______________________________ Employer Identification Number -------------------------------------------------------------------------------------------- PART 2 -- CERTIFICATION -- Under Penalties of Perjury, I PART 3 -- PAYER'S REQUEST FOR TAXPAYER certify that: Awaiting TIN / / IDENTIFICATION NUMBER (TIN) (1) The number shown on this form is my correct Taxpayer DEPARTMENT OF THE TREASURY Identification Number (or I am waiting for a number INTERNAL REVENUE SERVICE to be issued to me) and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding or (b) I have not been notified by the Internal Revenue Service ("IRS") that I am currently subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. -------------------------------------------------------------------------------------------- CERTIFICATE INSTRUCTIONS -- You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item (2). _________________________________________ ________________________ SIGNATURE DATE - --------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO HOLDERS OF NEW DEBENTURES PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within 60 days, 31 percent of all reportable payments made to me thereafter will be withheld until I provide a number. __________________________________________ ____________________ Signature Date 14 THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: UNITED STATES TRUST COMPANY OF NEW YORK BY MAIL: BY FACSIMILE: BY HAND: UNITED STATES TRUST COMPANY (212) 420-6152 UNITED STATES TRUST COMPANY OF NEW YORK OF NEW YORK 770 BROADWAY, 7TH FLOOR CONFIRM BY TELEPHONE: 65 BEAVER STREET, GROUND FLOOR NEW YORK, NEW YORK 10003 NEW YORK, NEW YORK 10005 ATTENTION: CORPORATE TRUST (800) 548-6565 ATTENTION: CORPORATE TRUST SERVICES SERVICES
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