PNC Bank 2001 Annual Report Download - page 82

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Cash distributions on the Capital Securities are made to
the extent interest on the debentures is received by the
Trusts. In the event of certain changes or amendments to
regulatory requirements or federal tax rules, the Capital
Securities are redeemable in whole.
Trust A is a wholly owned finance subsidiary of PNC
Bank, N.A., PNC’s principal bank subsidiary, and Trusts B
and C are wholly owned finance subsidiaries of the
Corporation.
The respective parents of the Trusts have, through the
agreements governing the Capital Securities, taken together,
fully, irrevocably and unconditionally guaranteed all of the
obligations of the Trusts under the Capital Securities. For a
discussion of certain dividend restrictions, see Note 19
Regulatory Matters.
NOTE 18 SHAREHOLDERS’ EQUITY
Information related to preferred stock is as follows:
Liquidation Preferred Shares
December 31
Shares in thousands
Value per
Share 2001 2000
Authorized
$1 par value 17,172 17,224
Issued and outstanding
Series A $40 10 11
Series B 40 33
Series C 20 204 229
Series D 20 293 318
Series F 50 6
,
000
Total 510 6,561
Series A through D are cumulative and, except for Series B,
are redeemable at the option of the Corporation. Annual
dividends on Series A, B and D preferred stock total $1.80
per share and on Series C preferred stock total $1.60 per
share. Holders of Series A through D preferred stock are
entitled to a number of votes equal to the number of full
shares of common stock into which such preferred stock is
convertible. Series A through D preferred stock have the
following conversion privileges: (i) one share of Series A or
Series B is convertible into eight shares of common stock;
and (ii) 2.4 shares of Series C or Series D are convertible into
four shares of common stock.
The Series F preferred stock was nonconvertible and
nonvoting, except in limited circumstances. On March 6,
2001, the Corporation commenced a cash tender offer for its
nonconvertible Series F preferred stock. Approximately 1.9
million shares were purchased by the Corporation at a price
of $50.35 per share plus accrued and unpaid dividends on
April 5, 2001. The remainder of the outstanding shares of
Series F preferred stock was redeemed on October 4, 2001
for approximately $205 million.
During 2000, the Board of Directors adopted a
shareholder rights plan providing for issuance of share
purchase rights. Except as provided in the plan, if a person
or group becomes beneficial owner of 10% or more of
PNC’s outstanding common stock, all holders of the rights,
other than such person or group, may purchase PNC
common stock or equivalent preferred stock at half of
market value.
The Corporation has a dividend reinvestment and stock
purchase plan. Holders of preferred stock and common
stock may participate in the plan, which provides that
additional shares of common stock may be purchased at
market value with reinvested dividends and voluntary cash
payments. Common shares purchased pursuant to this plan
were: 472,015 shares in 2001, 649,334 shares in 2000 and
567,266 shares in 1999.
At December 31, 2001, the Corporation had reserved
approximately 33.8 million common shares to be issued in
connection with certain stock plans and the conversion of
certain debt and equity securities.
NOTE 19 REGULATORY MATTERS
The Corporation is subject to the regulations of certain
federal and state agencies and undergoes periodic
examinations by such regulatory authorities. Neither the
Corporation nor any of its subsidiaries is subject to written
agreements entered into with any of the agencies.
Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Corporation
must meet specific capital guidelines that involve quantitative
measures of assets, liabilities and certain off-balance-sheet
items as calculated under regulatory accounting practices.
Failure to meet minimum capital requirements can result in
certain mandatory and possibly additional discretionary
actions by regulators that, if undertaken, could have a
material effect on PNC’s financial condition and results of
operations. The Corporation’s capital amounts and
classification are also subject to qualitative judgments by
regulatory agencies about components, risk weightings and
other factors.