<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 31, 1995
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CHEMICAL BANKING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 6711 13-2624428
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
270 PARK AVENUE
NEW YORK, N.Y. 10017
(212) 270-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
WILLIAM H. MCDAVID, ESQ.
GENERAL COUNSEL
CHEMICAL BANKING CORPORATION
270 PARK AVENUE
NEW YORK, N.Y. 10017
(212) 270-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C> <C>
LEE MEYERSON, ESQ. L. EDWARD SHAW, JR., ESQ. H. RODGIN COHEN, ESQ.
SIMPSON THACHER & BARTLETT THE CHASE MANHATTAN CORPORATION SULLIVAN & CROMWELL
425 LEXINGTON AVENUE 1 CHASE MANHATTAN PLAZA 125 BROAD STREET
NEW YORK, N.Y. 10017 NEW YORK, N.Y. 10081 NEW YORK, N.Y. 10004
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
promptly as practicable after this Registration Statement is declared effective
and upon consummation of the transactions described in the enclosed Joint Proxy
Statement/Prospectus.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
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PROPOSED
MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED(2) PER UNIT PRICE FEE(3)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share
(including Junior Participating
Preferred Stock purchase rights)(4).... 210,652,405 shares Not applicable Not applicable $3,889,491.31
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</TABLE>
(1) This Registration Statement relates to securities of the Registrant issuable
to holders of Common Stock, par value $2.00 per share ("Chase Common
Stock"), of The Chase Manhattan Corporation, a Delaware corporation
("Chase"), in the proposed merger of Chase with and into the Registrant (the
"Merger").
(2) The amount of Common Stock, par value $1.00 per share, of the Registrant
("Chemical Common Stock") to be registered has been determined on the basis
of the exchange ratio in the Merger (1.04 shares of Chemical Common Stock
for each share of Chase Common Stock) and the maximum aggregate number of
shares of Chase Common Stock (202,550,389 shares) to be exchanged in the
Merger for shares of Chemical Common Stock, assuming solely for the purpose
of calculating the registration fee that (i) all currently outstanding Chase
employee stock options are exercised prior to the effective time of the
Merger (the "Effective Time"), (ii) all currently outstanding warrants for
Chase Common Stock are exercised prior to the Effective Time and (iii) all
options currently scheduled to be issued pursuant to The Chase Manhattan
1994 Long-Term Incentive Plan, The Chase Manhattan 1987 Long-Term Incentive
Plan, The Chase Manhattan 1982 Long-Term Incentive Plan and The Chase
Manhattan Stock Option Program for Employees are issued and exercised prior
to the Effective Time.
(3) The registration fee was calculated pursuant to Rule 457(f), as one
twenty-ninth of one percent of $55.6875 (the average of the high and low
prices of Chase Common Stock on the New York Stock Exchange, Inc. Composite
Transactions Tape on October 26, 1995) multiplied by 202,550,389 (the
maximum aggregate number of shares of Chase Common Stock to be converted and
cancelled in the Merger, determined solely for purposes of calculating the
registration fee using the assumptions set forth in Note (2) above).
Pursuant to Rule 457(b), the required fee is reduced by the $2,495,628.99
filing fee previously paid at the time of filing of preliminary proxy
materials in connection with this transaction on September 27, 1995.
(4) Includes associated rights (the "Rights") to purchase 1/100 of a share of
the Registrant's Junior Participating Preferred Stock. Until the occurrence
of certain prescribed events, the Rights are not exercisable, are evidenced
by the certificates representing Chemical Common Stock and will be
transferred only with such shares of Chemical Common Stock.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING THE LOCATION IN THE JOINT PROXY STATEMENT/PROSPECTUS
OF THE INFORMATION REQUIRED BY PART 1 OF FORM S-4
<TABLE>
<CAPTION>
LOCATION IN JOINT PROXY
FORM S-4 ITEM STATEMENT/PROSPECTUS
- --------------------------------------------------- ----------------------------------------
<CAPTION>
A. INFORMATION ABOUT THE TRANSACTION
<S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus..... Forepart of Registration Statement;
Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus................................. Inside Front Cover Page; Table of
Contents; Available Information;
Incorporation of Certain Documents by
Reference
3. Risk Factors, Ratio of Earnings to Fixed
Charges, and Other Information............. Summary
4. Terms of the Transaction..................... Summary; The Merger; Amendment and
Restatement of Chemical Restated
Certificate of Incorporation;
Description of Capital Stock; Comparison
of Stockholder Rights
5. Pro Forma Financial Information.............. Summary; Pro Forma Combined Financial
Data
6. Material Contacts with the Company Being Ac-
quired..................................... Summary; The Merger; Management and
Operations After the Merger
7. Additional Information Required for
Reoffering by Persons and Parties Deemed to
be Underwriters............................ Not Applicable
8. Interests of Named Experts and Counsel....... Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ Not Applicable
<CAPTION>
B. INFORMATION ABOUT THE REGISTRANT
<S> <C>
10. Information with Respect to S-3
Registrants................................ Available Information; Incorporation of
Certain Documents by Reference; Summary;
The Companies
11. Incorporation of Certain Information by
Reference.................................. Available Information; Incorporation of
Certain Documents by Reference
12. Information with Respect to S-2 or S-3
Registrants................................ Not Applicable
13. Incorporation of Certain Information by
Reference.................................. Not Applicable
14. Information with Respect to Registrants Other
Than S-2 or S-3 Registrants................ Not Applicable
<CAPTION>
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
<S> <C>
15. Information with Respect to S-3 Companies.... Available Information; Incorporation of
Certain Documents by Reference; Summary;
The Companies
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
LOCATION IN JOINT PROXY
FORM S-4 ITEM STATEMENT/PROSPECTUS
- --------------------------------------------------- ----------------------------------------
<S> <C>
16. Information with Respect to S-2 or S-3
Companies.................................. Not Applicable
17. Information with Respect to Companies Other
than S-2 or S-3 Companies.................. Not Applicable
<CAPTION>
D. VOTING AND MANAGEMENT INFORMATION
<S> <C>
18. Information if Proxies, Consents or
Authorizations are to be Solicited......... Available Information; Incorporation of
Certain Documents by Reference; Summary;
The Special Meetings; The Merger;
Amendment and Restatement of Chemical
Restated Certificate of Incorporation;
Management and Operations After the
Merger; Stockholder Proposals
19. Information if Proxies, Consents or
Authorizations are not to be Solicited, or
in an Exchange Offer....................... Not Applicable
</TABLE>
3
<PAGE> 4
CHEMICAL BANKING CORPORATION
AND
THE CHASE MANHATTAN CORPORATION
JOINT PROXY STATEMENT
CHEMICAL BANKING CORPORATION
PROSPECTUS
This Joint Proxy Statement/Prospectus ("Proxy Statement/Prospectus") is
being furnished to stockholders of Chemical Banking Corporation, a Delaware
corporation ("Chemical"), and The Chase Manhattan Corporation, a Delaware
corporation ("Chase"), in connection with the solicitation of proxies by the
respective Boards of Directors of such corporations for use at the Special
Meeting of Stockholders of Chemical (including any adjournments or postponements
thereof, the "Chemical Special Meeting") and the Special Meeting of Stockholders
of Chase (including any adjournments or postponements thereof, the "Chase
Special Meeting" and, together with the Chemical Special Meeting, the "Special
Meetings") to be held on December 11, 1995.
This Proxy Statement/Prospectus relates to the proposed merger of Chase
with and into Chemical (the "Merger"), pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995 (the "Merger Agreement"), between Chemical
and Chase. At each of the Special Meetings, common stockholders will consider
and vote on a proposal to approve and adopt the Merger Agreement. In addition,
at the Chemical Special Meeting, Chemical common stockholders will consider and
vote on a proposal to amend and restate Chemical's Restated Certificate of
Incorporation (the "Chemical Charter") to increase the number of authorized
shares of Common Stock, par value $1.00 per share, of Chemical (the "Chemical
Common Stock") from 400 million to 750 million shares and to make certain other
technical amendments.
This Proxy Statement/Prospectus also constitutes a prospectus of Chemical
with respect to up to 210,652,405 shares of Chemical Common Stock issuable to
holders of Chase's Common Stock, par value $2.00 per share (the "Chase Common
Stock"), pursuant to the Merger. The Chemical Common Stock is listed for trading
on the New York Stock Exchange, Inc. (the "NYSE"). On October 30, 1995, the last
sale price of Chemical Common Stock as reported on the NYSE Composite
Transactions Tape was $58.375.
This Proxy Statement/Prospectus and the accompanying forms of proxy are
first being mailed to stockholders of Chemical and Chase on or about November 3,
1995.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Proxy Statement/Prospectus is October 31, 1995.
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
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PAGE
----
<S> <C>
AVAILABLE INFORMATION................................................................. 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE....................................... 2
SUMMARY............................................................................... 3
The Special Meetings................................................................ 3
The Companies....................................................................... 4
The Merger.......................................................................... 5
Management and Operations After the Merger.......................................... 9
Condensed Consolidated Financial Data of Chemical Banking Corporation............... 11
Condensed Consolidated Financial Data of The Chase Manhattan Corporation............ 14
Pro Forma Condensed Combined Financial Data of Chemical Banking Corporation and The
Chase Manhattan Corporation...................................................... 17
Comparative Stock Prices............................................................ 20
Comparative Per Share Data.......................................................... 21
THE SPECIAL MEETINGS.................................................................. 22
Date, Time and Place................................................................ 22
Matters To Be Considered at the Special Meetings.................................... 22
Votes Required...................................................................... 22
Voting of Proxies................................................................... 23
Revocability of Proxies............................................................. 24
Record Date; Stock Entitled to Vote; Quorum......................................... 24
Solicitation of Proxies............................................................. 24
THE COMPANIES......................................................................... 25
Chemical Banking Corporation........................................................ 25
The Chase Manhattan Corporation..................................................... 25
THE MERGER............................................................................ 27
General............................................................................. 27
Background of the Merger............................................................ 27
Reasons for the Merger; Recommendations of the Boards of Directors.................. 29
Opinions of Financial Advisors...................................................... 30
Structure of the Merger............................................................. 39
Merger Consideration................................................................ 39
Effective Time...................................................................... 40
Conversion of Shares; Procedures for Exchange of Certificates; Fractional Shares.... 40
Representations and Warranties...................................................... 41
Conduct of Business Pending Merger.................................................. 42
Conditions to the Consummation of the Merger........................................ 43
Stock Exchange Listings............................................................. 44
Dividends........................................................................... 44
Regulatory Approvals Required....................................................... 44
Certain Federal Income Tax Consequences............................................. 46
Anticipated Accounting Treatment.................................................... 47
Termination......................................................................... 47
Amendment and Waiver................................................................ 48
Expenses............................................................................ 48
Effect on Employee Benefit and Stock Plans.......................................... 48
Effect on Chase Warrants............................................................ 51
</TABLE>
i
<PAGE> 6
<TABLE>
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PAGE
----
<S> <C>
Interests of Certain Persons in the Merger.......................................... 52
Reciprocal Stock Option Agreements.................................................. 53
Amendments to Rights Agreements..................................................... 56
Resale of Chemical Common Stock and Chemical Merger Preferred Stock................. 56
No Appraisal Rights................................................................. 56
AMENDMENT AND RESTATEMENT OF CHEMICAL RESTATED CERTIFICATE OF INCORPORATION........... 57
MANAGEMENT AND OPERATIONS AFTER THE MERGER............................................ 58
Directors After the Merger.......................................................... 58
Management After the Merger......................................................... 59
Consolidation of Operations; Anticipated Cost Savings............................... 60
PRO FORMA COMBINED FINANCIAL DATA..................................................... 61
LITIGATION RELATING TO THE MERGER..................................................... 73
DESCRIPTION OF CAPITAL STOCK.......................................................... 74
Description of Chemical Common Stock................................................ 74
Description of Chemical Existing Preferred Stock.................................... 75
Description of Depositary Shares.................................................... 78
Description of Chemical Merger Preferred Stock...................................... 79
COMPARISON OF STOCKHOLDER RIGHTS...................................................... 82
Classification of Board of Directors................................................ 82
Stockholder Vote Required for Certain Transactions.................................. 82
Special Meetings of Stockholders; Stockholder Action by Written Consent............. 83
Notice of Stockholder Nominations of Directors...................................... 84
Stockholder Proposal Procedures..................................................... 84
Rights Plans........................................................................ 85
EXPERTS............................................................................... 87
LEGAL OPINIONS........................................................................ 87
STOCKHOLDER PROPOSALS................................................................. 87
</TABLE>
ANNEXES
<TABLE>
<S> <C>
Annex I Agreement and Plan of Merger
Annex II Chemical Stock Option Agreement
Annex III Chase Stock Option Agreement
Annex IV Opinion of Morgan Stanley & Co. Incorporated
Annex V Opinion of James D. Wolfensohn Incorporated
Annex VI Opinion of Goldman, Sachs & Co.
</TABLE>
ii
<PAGE> 7
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS IN
CONNECTION WITH THE SOLICITATIONS OF PROXIES OR THE OFFERING OF SECURITIES MADE
HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY CHEMICAL OR CHASE. THIS PROXY
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, ANY SECURITIES, OR THE SOLICITATION OF A PROXY, IN ANY
JURISDICTION IN WHICH IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION OR
TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF
SECURITIES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CHEMICAL OR CHASE SINCE THE DATE
HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
AVAILABLE INFORMATION
Chemical and Chase are each subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Chemical has filed
with the Commission a Registration Statement on Form S-4 (together with any
amendments thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Chemical Common
Stock to be issued to holders of Chase Common Stock pursuant to the Merger
Agreement. The Registration Statement and the exhibits thereto, as well as the
reports, proxy statements and other information filed by Chemical and Chase with
the Commission, can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and the Commission's Regional Offices at Suite 1300, Seven World
Trade Center, New York, New York 10048, and The Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
also can be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
certain securities of Chemical and Chase are listed on the NYSE, and material
filed by Chemical and Chase can be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005. This Proxy Statement/Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits thereto, a portion of which has been omitted in accordance with the
rules and regulations of the Commission.
Statements contained in this Proxy Statement/ Prospectus, or in any
document incorporated in this Proxy Statement/Prospectus by reference, as to the
contents of any contract or other document referred to herein or therein are
qualified in all respects by reference to the copy of such contract or other
document filed as an exhibit to the Registration Statement or such other
document incorporated herein by reference.
1
<PAGE> 8
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Chemical (File No.
1-5805) and Chase (File No. 1-5945) pursuant to the Exchange Act are
incorporated by reference in this Proxy Statement/Prospectus:
1. Chemical's Annual Report on Form 10-K for the year ended December
31, 1994;
2. Chemical's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995 and June 30, 1995;
3. Chemical's Current Reports on Form 8-K dated January 3, 1995,
January 19, 1995, March 14, 1995, April 19, 1995, May 5, 1995, June 20,
1995, July 20, 1995, August 27, 1995, October 18, 1995 and October 26,
1995;
4. The descriptions of Chemical Common Stock and the rights to
purchase Junior Participating Preferred Stock, par value $1.00 per share,
of Chemical (the "Chemical Rights"), set forth in Chemical's Registration
Statements filed pursuant to Section 12 of the Exchange Act, and any
amendment or report filed for the purpose of updating any such
descriptions;
5. Chase's Annual Report on Form 10-K for the year ended December 31,
1994;
6. Chase's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995 and June 30, 1995;
7. Chase's Current Reports on Form 8-K dated January 17, 1995, January
17, 1995, January 26, 1995, April 17, 1995, April 19, 1995, May 2, 1995,
May 4, 1995, May 17, 1995, July 17, 1995, August 28, 1995 and October 16,
1995;
8. The descriptions of Chase Common Stock and the rights to purchase
Junior Participating Preferred Stock, without par value, of Chase (the
"Chase Rights"), set forth in Chase's Registration Statements filed
pursuant to Section 12 of the Exchange Act, and any amendment or report
filed for the purpose of updating any such descriptions.
Such incorporation by reference shall not be deemed to incorporate by
reference the information referred to in Item 402(a)(8) of Regulation S-K.
All documents and reports filed by Chemical or Chase pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement/Prospectus and prior to the date of the Special Meetings shall be
deemed to be incorporated by reference in this Proxy Statement/Prospectus and to
be a part hereof from the dates of filing of such documents or reports. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Proxy Statement/Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Proxy Statement/Prospectus.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
THEREIN BY REFERENCE) ARE AVAILABLE, WITHOUT CHARGE, TO ANY PERSON, INCLUDING
ANY BENEFICIAL OWNER OF STOCK OF CHEMICAL OR CHASE, TO WHOM THIS PROXY
STATEMENT/PROSPECTUS IS DELIVERED, ON WRITTEN OR ORAL REQUEST, IN THE CASE OF
DOCUMENTS RELATING TO CHEMICAL, TO CHEMICAL BANKING CORPORATION, 270 PARK
AVENUE, NEW YORK, NEW YORK 10017 (TELEPHONE NUMBER (212) 270-4040, ATTENTION:
OFFICE OF THE SECRETARY) OR, IN THE CASE OF DOCUMENTS RELATING TO CHASE, TO THE
CHASE MANHATTAN CORPORATION, 1 CHASE MANHATTAN PLAZA, NEW YORK, NEW YORK 10081
(TELEPHONE NUMBER (212) 552-6511, ATTENTION: OFFICE OF THE SECRETARY). IN ORDER
TO ENSURE DELIVERY OF THE DOCUMENTS PRIOR TO THE APPLICABLE SPECIAL MEETING,
REQUESTS SHOULD BE RECEIVED BY DECEMBER 4, 1995.
2
<PAGE> 9
SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement/Prospectus. Reference is made to, and this summary is
qualified in its entirety by, the more detailed information contained or
incorporated by reference in this Proxy Statement/Prospectus and the annexes
hereto. Stockholders are urged to read this Proxy Statement/Prospectus and the
annexes hereto in their entirety.
THE SPECIAL MEETINGS
Date, Time and Place.......... The Chemical Special Meeting will be held at
the Starlight Roof of The Waldorf-Astoria
Hotel, located at 301 Park Avenue, New York,
New York, at 10:00 a.m., New York time, on
December 11, 1995. The Chase Special Meeting
will be held in the auditorium at Chase's
headquarters building located at 1 Chase
Manhattan Plaza, New York, New York, at 1:30
p.m., New York time, on December 11, 1995.
Matters to be Considered at
the Special Meetings.......... Chemical. At the Chemical Special Meeting,
holders of Chemical Common Stock will be asked
to consider and vote upon a proposal to approve
and adopt the Merger Agreement attached as
Annex I to this Proxy Statement/Prospectus,
providing for the Merger of Chase with and into
Chemical. In addition, holders of Chemical
Common Stock will be asked to consider and vote
upon a proposal to amend and restate the
Chemical Charter to increase the number of
shares of Chemical Common Stock which Chemical
will have authority to issue from 400,000,000
to 750,000,000 shares (in order to have a
sufficient number of shares of Chemical Common
Stock to effect the Merger and for other
corporate purposes) and to make certain other
technical amendments.
Chase. At the Chase Special Meeting, holders
of Chase Common Stock will be asked to consider
and vote upon a proposal to approve and adopt
the Merger Agreement.
See "The Special Meetings -- Matters to be
Considered at the Special Meetings."
Record Date................... The record date for the Chemical Special
Meeting and the record date for the Chase
Special Meeting is the close of business in New
York on October 30, 1995 (the "Record Date").
See "The Special Meetings -- Record Date; Stock
Entitled to Vote; Quorum".
Votes Required................ Chemical. The approval and adoption of the
Merger Agreement and the approval of the
amendment and restatement of the Chemical
Charter will each require the affirmative vote
of the holders of a majority of the shares of
Chemical Common Stock outstanding on the Record
Date. THE APPROVAL OF THE MERGER AGREEMENT AND
THE AMENDMENT AND RESTATEMENT OF THE CHEMICAL
CHARTER ARE EACH CONTINGENT UPON APPROVAL OF
BOTH SUCH PROPOSALS BY THE CHEMICAL
STOCKHOLDERS. UNLESS BOTH PROPOSALS ARE
APPROVED, NEITHER WILL BE EFFECTED BY CHEMICAL
AND THE MERGER WILL NOT BE CONSUMMATED.
Holders of Chemical Common Stock as of the
Record Date are entitled to one vote per share
on each matter to be voted on at the
3
<PAGE> 10
Chemical Special Meeting. Neither of the
proposals to be considered at the Chemical
Special Meeting requires the approval of
holders of any outstanding shares of Chemical's
preferred stock.
Chase. The approval and adoption of the Merger
Agreement will require the affirmative vote of
the holders of a majority of the shares of
Chase Common Stock outstanding on the Record
Date.
Holders of Chase Common Stock as of the Record
Date are entitled to one vote per share on each
matter to be voted on at the Chase Special
Meeting. The approval and adoption of the
Merger Agreement does not require the approval
of the holders of any outstanding shares of
Chase's preferred stock.
See "The Special Meetings -- Votes Required".
Security Ownership of
Management
and Others.................. Chemical. As of October 25, 1995, directors
and executive officers of Chemical and their
affiliates beneficially owned and were entitled
to vote 552,735 shares of Chemical Common
Stock, which represented approximately 0.22% of
the shares of Chemical Common Stock outstanding
on the Record Date. Each Chemical director has
indicated his or her present intention to vote,
or cause to be voted, the Chemical Common Stock
so owned by him or her for approval and
adoption of the Merger Agreement and approval
of the amendment and restatement of the
Chemical Charter. As of October 25, 1995,
various subsidiaries of Chemical, as
fiduciaries, custodians or agents, had sole or
shared voting power with respect to 13,018,699
shares of Chemical Common Stock, which
represented approximately 5.21% of the shares
of Chemical Common Stock outstanding on the
Record Date.
Chase. As of October 25, 1995, directors and
executive officers of Chase and their
affiliates beneficially owned and were entitled
to vote 284,846 shares of Chase Common Stock,
which represented approximately 0.16% of the
shares of Chase Common Stock outstanding on the
Record Date. Each Chase director has indicated
his or her present intention to vote, or cause
to be voted, the Chase Common Stock so owned by
him or her for approval and adoption of the
Merger Agreement. As of October 25, 1995,
various subsidiaries of Chase, as fiduciaries,
custodians or agents, had sole or shared voting
power with respect to 4,136,710 shares of Chase
Common Stock, which represented approximately
2.35% of the shares of Chase Common Stock
outstanding on the Record Date.
See "The Special Meetings -- Votes Required".
THE COMPANIES
Chemical Banking
Corporation................... Chemical is a bank holding company that
conducts domestic and international financial
services businesses through various bank and
non-bank subsidiaries. Chemical's principal
bank subsidiaries are Chemical Bank, a New York
banking corporation headquartered in New York,
New York ("Chemical Bank"), and Texas Commerce
Bank National Association, a national banking
association headquartered in Houston, Texas
("Texas Commerce Bank"). As of
4
<PAGE> 11
June 30, 1995, Chemical had, on a consolidated
basis, $178.5 billion in assets, $94.9 billion
in deposits and $11.4 billion in stockholders'
equity. Chemical's principal executive offices
are located at 270 Park Avenue, New York, New
York 10017, and its telephone number is (212)
270-6000. See "The Companies -- Chemical
Banking Corporation".
The Chase Manhattan
Corporation................... Chase is a bank holding company that conducts
domestic and international financial services
businesses through various bank and non-bank
subsidiaries. Chase's principal subsidiary is
The Chase Manhattan Bank (National
Association), a national banking association
headquartered in New York, New York ("Chase
Bank"). Chase's other subsidiaries provide a
variety of financial services, including
commercial and consumer financing, investment
banking, securities trading and investment
advisory services. As of June 30, 1995, Chase
had, on a consolidated basis, $118.8 billion in
assets, $68.3 billion in deposits and $8.6
billion in stockholders' equity. Chase's
principal executive offices are located at 1
Chase Manhattan Plaza, New York, New York
10081, and its telephone number is (212)
552-2222. See "The Companies -- The Chase
Manhattan Corporation".
THE MERGER
Effect of Merger.............. At the effective time of the Merger (the
"Effective Time"), Chase will merge with and
into Chemical. Chemical will be the surviving
corporation in the Merger (the "Surviving
Corporation") and will continue its corporate
existence under Delaware law under the name
"The Chase Manhattan Corporation".
At the Effective Time, subject to certain
exceptions as described herein with respect to
shares owned by Chemical, Chase or their
respective subsidiaries, (a) each outstanding
share of Chase Common Stock will be
automatically converted into 1.04 fully paid
and nonassessable shares of Chemical Common
Stock (the "Exchange Ratio"), together with the
appropriate number of Chemical Rights attached
thereto, except that cash will be paid in lieu
of fractional shares of Chemical Common Stock,
and (b) each outstanding share of preferred
stock, without par value, of Chase (the "Chase
Preferred Stock", currently consisting of
Series G, H, I, J, K, L, M and N) will be
automatically converted into a share of a
corresponding newly established series of
preferred stock, par value $1.00 per share, of
Chemical (the "Chemical Preferred Stock"),
having substantially the same terms as the
share of Chase Preferred Stock so converted in
the Merger (the Chemical Preferred Stock to be
so issued in the Merger, collectively, the
"Chemical Merger Preferred Stock"). See "The
Merger -- Merger Consideration" and
"-- Conversion of Shares; Procedures for
Exchange of Certificates; Fractional Shares".
Reasons for the Merger;
Recommendations of the
Boards of Directors......... The Boards of Directors of Chemical and Chase
believe that the Merger will create a premier
global financial services company with the
financial and managerial resources and the
economies of
5
<PAGE> 12
scale to compete effectively in the rapidly
changing and consolidating marketplace for
banking and financial services. The Boards of
Directors of Chemical and Chase believe that
the Merger will permit each company to
strengthen its current businesses and achieve
current strategic objectives while at the same
time enabling the Surviving Corporation to take
advantage of opportunities that would not
otherwise be available to either organization
on its own, including enhancements in
profitability through the elimination of
redundancies. Although no assurances can be
given that any specific level of cost savings
will be achieved or as to the timing thereof,
the managements of Chemical and Chase have
identified potential annual pretax cost savings
of $1.5 billion (or approximately 16% of
projected combined 1995 operating expenses)
expected to be achieved within three years
following the Merger by consolidating certain
operations and eliminating redundant costs. In
connection with the Merger, it is currently
estimated that a one-time pretax restructuring
charge of $1.5 billion will be incurred upon
consummation of the Merger, principally as a
result of severance expenses to be incurred in
connection with anticipated staff reductions,
costs in connection with planned office
eliminations, and other Merger-related
expenses, including costs to eliminate
redundant back office and other operations of
Chemical and Chase. See "Management and
Operations After the Merger -- Consolidation of
Operations; Anticipated Cost Savings" and "Pro
Forma Combined Financial Data".
THE BOARD OF DIRECTORS OF CHEMICAL AND THE
BOARD OF DIRECTORS OF CHASE EACH BELIEVES THAT
THE TERMS OF THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THEIR RESPECTIVE
STOCKHOLDERS. THE CHEMICAL BOARD OF DIRECTORS
(WITH 19 DIRECTORS PRESENT AND ONE DIRECTOR
ABSENT) AND THE CHASE BOARD OF DIRECTORS (WITH
17 DIRECTORS PRESENT AND ONE DIRECTOR ABSENT)
HAVE EACH, BY UNANIMOUS VOTE OF ALL DIRECTORS
PRESENT, APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMEND
THAT THEIR RESPECTIVE STOCKHOLDERS VOTE TO
APPROVE AND ADOPT THE MERGER AGREEMENT.
IN ADDITION, THE BOARD OF DIRECTORS OF CHEMICAL
HAS, BY UNANIMOUS VOTE OF ALL DIRECTORS
PRESENT, APPROVED THE PROPOSED AMENDMENT AND
RESTATEMENT OF THE CHEMICAL CHARTER AND
RECOMMENDS THAT CHEMICAL'S STOCKHOLDERS VOTE TO
APPROVE SUCH AMENDMENT AND RESTATEMENT.
See "The Merger -- Reasons for the Merger;
Recommendations of the Boards of Directors".
Opinions of Financial
Advisors...................... Morgan Stanley & Co. Incorporated ("Morgan
Stanley") has rendered its written opinions to
the Board of Directors of Chemical that, as of
August 27, 1995 (the date the Chemical Board of
Directors approved the Merger Agreement) and as
of the date of this Proxy Statement/Prospectus,
the Exchange Ratio was fair from a financial
point of view to the holders of Chemical Common
Stock (other than Chase and its affiliates). A
copy of the opinion of Morgan Stanley dated the
date of this Proxy Statement/Prospectus is
attached hereto as Annex IV.
6
<PAGE> 13
James D. Wolfensohn Incorporated ("Wolfensohn")
has rendered its written opinions to the Board
of Directors of Chase that, as of August 27,
1995 (the date the Chase Board of Directors
approved the Merger Agreement) and as of the
date of this Proxy Statement/Prospectus, the
Exchange Ratio was fair from a financial point
of view to the holders of Chase Common Stock.
Goldman, Sachs & Co. ("Goldman Sachs") have
rendered their written opinions to the Board of
Directors of Chase that, as of August 27, 1995
and as of the date of this Proxy
Statement/Prospectus, the Exchange Ratio was
fair to the holders of Chase Common Stock.
Copies of the opinions of Wolfensohn and
Goldman Sachs each dated the date of this Proxy
Statement/Prospectus are attached hereto as
Annexes V and VI, respectively.
Chemical has agreed to pay fees to Morgan
Stanley for its services in connection with the
Merger, which fees were payable upon delivery
of its first opinion. Chase has agreed to pay
fees to Wolfensohn and Goldman Sachs for their
services in connection with the Merger, all or
a portion of which are contingent upon
consummation of the Merger.
For information on the assumptions made,
matters considered and limits of the reviews by
Morgan Stanley, Wolfensohn and Goldman Sachs,
see "The Merger -- Opinions of Financial
Advisors".
Conditions to the Merger...... The obligations of Chemical and Chase to
consummate the Merger are subject to various
conditions, including obtaining requisite
stockholder approvals; obtaining requisite
regulatory approvals from the Board of
Governors of the Federal Reserve System (the
"Federal Reserve Board"), the banking
authorities of New York State and certain other
federal, state and foreign governmental
authorities; the absence of certain burdensome
conditions imposed in connection with obtaining
such regulatory approvals; the effectiveness of
the Registration Statement of which this Proxy
Statement/Prospectus is a part; approval for
listing on the NYSE, subject to official notice
of issuance, of the shares of Chemical Common
Stock and the shares of each series of Chemical
Merger Preferred Stock to be issued pursuant to
the Merger; receipt of opinions of counsel at
the closing of the Merger in respect of certain
federal income tax consequences of the Merger;
and receipt of accountants' letters to the
effect that the Merger qualifies for "pooling
of interests" accounting treatment. See "The
Merger -- Conditions to the Consummation of the
Merger" and "-- Regulatory Approvals Required".
Termination................... The Merger Agreement may be terminated at any
time prior to the Effective Time, whether
before or after approval by the stockholders of
Chemical and Chase, (i) by mutual written
consent of Chemical and Chase, or (ii) by
either party if (a) the Federal Reserve Board
shall have denied approval of the Merger and
the other material aspects of the transactions
contemplated by the Merger Agreement, any other
governmental entity the consent of which is
necessary for the Merger shall have issued a
final order prohibiting consummation of the
transactions contemplated by the
7
<PAGE> 14
Merger Agreement, or any regulatory approval
received in connection with the Merger contains
certain burdensome conditions, (b) the Merger
shall not have been consummated on or before
September 30, 1996 or (c) any approval of
stockholders of Chase or Chemical required for
consummation of the Merger shall not have been
obtained at the applicable Special Meeting. See
"The Merger -- Termination".
Regulatory Approvals
Required...................... The Merger is subject to prior approval by the
Federal Reserve Board and the banking
authorities of New York State. Certain aspects
of the Merger will require notifications to,
and/or approvals from, certain other federal
authorities and banking authorities in certain
other states as well as in certain of the
foreign jurisdictions in which Chemical and
Chase currently operate. Chemical and Chase
have filed applications for such approvals with
the Federal Reserve Board, the banking
authorities of New York State and certain other
banking authorities prior to the date hereof
and intend to file any remaining applications
as soon as practicable following the date of
this Proxy Statement/Prospectus. See "The
Merger -- Regulatory Approvals Required."
Certain Federal Income Tax
Consequences................ The Merger is intended to be a tax-free
reorganization so that no gain or loss will be
recognized by Chemical or Chase, and no gain or
loss will be recognized by Chase stockholders,
except in respect of cash received by holders
of Chase Common Stock in lieu of fractional
shares of Chemical Common Stock. Chemical and
Chase have received the opinions, each dated
the date hereof, of Simpson Thacher & Bartlett
and Sullivan & Cromwell, respectively, to the
effect that, among other things, the Merger
will constitute a reorganization within the
meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended. Consummation
of the Merger is conditioned upon delivery of
opinions of counsel to the same effect dated as
of the closing date of the Merger. See "The
Merger -- Certain Federal Income Tax
Consequences".
Anticipated Accounting
Treatment..................... The Merger is expected to qualify as a "pooling
of interests" for accounting and financial
reporting purposes. The receipt by Chemical and
Chase of letters from Price Waterhouse LLP (the
independent auditors of each of Chemical and
Chase) confirming that the Merger will qualify
for pooling of interests accounting treatment
if consummated in accordance with the Merger
Agreement is a condition to consummation of the
Merger. See "The Merger -- Anticipated
Accounting Treatment".
Interests of Certain Persons
in the Merger................. Certain executive officers and directors of
each of Chemical and Chase are expected to
become executive officers and directors,
respectively, of the Surviving Corporation
following the Merger. Chemical and Chase have
also agreed to take certain actions to
harmonize the existing employment and severance
arrangements of certain officers of Chemical
and Chase and to indemnify, and maintain
directors' and officers' insurance covering,
the Chase directors and officers following the
Merger. See "The Merger --
8
<PAGE> 15
Effect on Employee Benefit and Stock Plans",
"-- Interests of Certain Persons in the Merger"
and "Management and Operations After the
Merger".
Reciprocal Stock Option
Agreements.................... Concurrently with and as a condition to
entering into the Merger Agreement, Chemical
and Chase entered into (i) a Stock Option
Agreement, dated as of August 27, 1995, between
Chemical as issuer and Chase as grantee (the
"Chemical Stock Option Agreement"), pursuant to
which Chemical has granted to Chase the option
to purchase up to 50,170,882 shares of Chemical
Common Stock (or such greater number of shares
of Chemical Common Stock as shall represent
19.9% of the then outstanding Chemical Common
Stock) at a price of $53.50 per share, and (ii)
a Stock Option Agreement, dated as of August
27, 1995, between Chase as issuer and Chemical
as grantee (the "Chase Stock Option Agreement"
and, together with the Chemical Stock Option
Agreement, the "Stock Option Agreements"),
pursuant to which Chase has granted to Chemical
the option to purchase up to 34,551,183 shares
of Chase Common Stock (or such greater number
of shares of Chase Common Stock as shall
represent 19.9% of the then outstanding Chase
Common Stock) at a price of $51.875 per share.
The options may only be exercised upon the
occurrence of certain events, which generally
relate to an acquisition of control of, or a
significant equity interest in or significant
assets of, the issuer of the option by a third
party, or certain proposals or offers with
respect thereto. None of such events has
occurred as of the date hereof. Upon the
occurrence of certain events (none of which has
occurred), the Stock Option Agreements provide
the grantee with the right or obligation,
depending upon the particular circumstance, to
require the issuer to repurchase the option and
all shares previously purchased upon exercise
thereof. See "The Merger -- Reciprocal Stock
Option Agreements".
No Appraisal Rights........... No holder of Chemical Common Stock or Chemical
Preferred Stock, or of Chase Common Stock or
Chase Preferred Stock, will have any appraisal
rights under Delaware law in connection with,
or as a result of, the matters to be acted upon
at the Chemical Special Meeting or the Chase
Special Meeting. See "The Merger -- No
Appraisal Rights".
MANAGEMENT AND OPERATIONS
AFTER THE MERGER
Directors After the Merger.... As of the Effective Time, the Board of
Directors of the Surviving Corporation is
expected to consist of 35 directors, including
all of the current outside directors of
Chemical and Chase (subject, in each case, to
normal scheduled retirements) and the five
members of the Office of the Chairman of the
Surviving Corporation named below. The Merger
Agreement provides that if, prior to the
Effective Time, any of the persons named by
either Chemical or Chase to serve on the Board
of Directors of the Surviving Corporation as of
the Effective Time declines or is unable to
serve as a director, the party that designated
such individual may name a replacement to
become a director, which replacement must be
9
<PAGE> 16
reasonably acceptable to the other party. See
"Management and Operations After the
Merger -- Directors After the Merger".
Executive Management
After the Merger............ Walter V. Shipley, currently the Chairman and
Chief Executive Officer of Chemical, will be
Chairman and Chief Executive Officer of the
Surviving Corporation as of the Effective Time,
and Thomas G. Labrecque, currently the Chairman
and Chief Executive Officer of Chase, will
become President and Chief Operating Officer of
the Surviving Corporation as of the Effective
Time. In addition to Messrs. Shipley and
Labrecque, the Office of the Chairman of the
Surviving Corporation will consist of Edward D.
Miller, who is currently President of Chemical
and will become Senior Vice Chairman of the
Surviving Corporation, William B. Harrison,
Jr., who is currently a Vice Chairman of
Chemical and will be a Vice Chairman of the
Surviving Corporation, and E. Michel Kruse, who
is currently a Vice Chairman of the Board of
Chase and will become a Vice Chairman of the
Surviving Corporation. All members of the
Office of the Chairman of the Surviving
Corporation will be directors of the Surviving
Corporation. See "Management and Operations
After the Merger -- Management After the
Merger".
Comparison of Stockholder
Rights...................... The rights of stockholders of Chase currently
are determined by reference to the Delaware
General Corporation Law (the "DGCL"), Chase's
Charter and Chase's By-laws. At the Effective
Time, stockholders of Chase will become
stockholders of the Surviving Corporation.
Their rights as stockholders will then be
determined by reference to the DGCL, Chemical's
Charter (as amended and restated as described
herein) and Chemical's By-laws. See
"Description of Capital Stock" and "Comparison
of Stockholder Rights".
10
<PAGE> 17
CONDENSED CONSOLIDATED FINANCIAL DATA OF
CHEMICAL BANKING CORPORATION
(IN MILLIONS, EXCEPT RATIO AND PER SHARE DATA)
The following table sets forth certain condensed consolidated historical
financial data of Chemical and is based on the consolidated financial statements
of Chemical, including the respective notes thereto, which are incorporated by
reference in this Proxy Statement/Prospectus, and should be read in conjunction
therewith. See "Incorporation of Certain Documents by Reference". On December
31, 1991, Manufacturers Hanover Corporation ("MHC") merged with and into
Chemical. The merger was accounted for as a pooling of interests and,
accordingly, all amounts include the consolidated results of MHC. Interim
unaudited data for the six months ended June 30, 1995 and 1994 reflect, in the
opinion of management of Chemical, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of such data. Results
for the six months ended June 30, 1995 are not necessarily indicative of results
which may be expected for any other interim period or for the year as a whole.
<TABLE>
<CAPTION>
AS OF OR FOR THE SIX
MONTHS
ENDED JUNE 30, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CONDENSED STATEMENT OF INCOME:
Net Interest Income........... $ 2,318 $ 2,328 $ 4,674 $ 4,636 $ 4,598 $ 4,080 $ 3,539
Provision for Credit Losses... 240 365 550 1,259 1,365 1,345 1,161
Noninterest Revenue........... 1,831(a) 1,798(g) 3,597(g,i) 4,024(l) 3,026 2,862 2,792(q)
Noninterest Expense........... 2,494 2,605(h) 5,509(h) 5,293(m) 4,930 5,307(p) 4,641(r)
-------- -------- -------- -------- -------- -------- --------
Income Before Income Tax
Expense and Effect of
Accounting Changes.......... 1,415 1,156 2,212 2,108 1,329 290 529
Income Tax Expense............ 566 480 918 539(j) 243 136 89
-------- -------- -------- -------- -------- -------- --------
Income Before Effect of
Accounting Changes.......... 849 676 1,294 1,569 1,086 154 440
Net Effect of Changes in
Accounting Principles....... (11)(b) -- -- 35(n) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Income.................... $ 838 $ 676 $ 1,294 $ 1,604 $ 1,086 $ 154 $ 440
======== ======== ======== ======== ======== ======== ========
PER COMMON SHARE:
Primary:
Income Before Effect of
Accounting Changes........ $ 3.21 $ 2.39 $ 4.60 $ 5.57 $ 3.85 $ .11 $ 1.82
Net Effect of Changes in
Accounting Principles..... (.04)(b) -- -- .14(n) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Income.................. $ 3.17 $ 2.39 $ 4.60 $ 5.71 $ 3.85 $ .11 $ 1.82
======== ======== ======== ======== ======== ======== ========
Assuming Full Dilution:
Income Before Effect of Ac-
counting Changes.......... $ 3.12 $ 2.36 $ 4.54 $ 5.48 $ 3.81 $ .11 $ 1.82
Net Effect of Changes in Ac-
counting Principles....... (.04)(b) -- -- .14(n) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Income.................. $ 3.08 $ 2.36 $ 4.54 $ 5.62 $ 3.81 $ .11 $ 1.82
======== ======== ======== ======== ======== ======== ========
Cash Dividends Per Common
Share....................... $ .94 $ .76 $ 1.64 $ 1.37 $ 1.20 $ 1.05 $ 2.29
Cash Dividends Per Class B
Common Share................ $ -- $ -- $ -- $ -- $ --(o) $ .29 $ .64
Book Value at Period End...... $ 40.62 $ 37.17 $ 37.88 $ 37.60 $ 32.43 $ 31.02 $ 32.80
Common Shares Outstanding:
Average Common and Common
Equivalent Shares......... 246.8 255.2 251.3 253.9 242.9 183.8 177.2
Average Common Shares
Assuming Full Dilution.... 255.8 263.0 258.9 261.6 251.6 183.8 177.2
Common Shares at Period
End....................... 249.4 250.9 244.5 252.9 246.8 182.5 177.3
</TABLE>
11
<PAGE> 18
<TABLE>
<CAPTION>
AS OF OR FOR THE SIX
MONTHS
ENDED JUNE 30, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE SHEET
AVERAGES:
Loans......................... $ 79,911 $ 74,312 $ 75,234 $ 78,739 $ 82,173 $ 84,520 $ 84,727
Securities.................... 27,838 26,500 26,207 23,654 21,674 19,703 18,176
Total Assets.................. 177,941 164,109 166,679(k) 144,881 139,329 141,225 145,806
Deposits...................... 95,650 95,527 94,763 95,656 92,750 91,103 92,795
Long-Term Debt................ 7,697 8,434 8,419 8,053 6,220 5,880 5,925
Total Stockholders' Equity.... 10,904 11,103 10,962 10,583 9,324 7,615 7,412
PERFORMANCE RATIOS:(s)
Return on Average:
Total Assets................ .96%(c) .83%(c) .78%(k) 1.08% .78% .11% .30%
Common Stockholders'
Equity.................... 16.85%(c) 13.07%(c) 12.32% 16.26% 12.36% .33% 5.38%
Total Stockholders'
Equity.................... 15.70%(c) 12.28%(c) 11.80% 14.83% 11.65% 2.02% 5.94%
Common Dividend Payout Ratio.. 29% 31% 35% 24% 32% 1,280%(p) 146%
Efficiency Ratio(d)........... 62% 62% 63% 58% 61% 65% 70%
Net Yield on Interest-Earning
Assets...................... 3.42%(c) 3.64%(c) 3.61% 3.73% 3.82% 3.30% 2.81%
ASSET QUALITY RATIOS:
Allowance for Credit Losses to
Total Loans................. 2.87% 3.58% 3.15% 4.01% 3.69% 3.89% 4.94%
Allowance for Credit Losses to
Nonperforming Loans......... 228%(e) 152% 267% 117% 63% 71% 73%
Net Charge-Offs to Average
Loans....................... .73%(c) 1.93%(c) 1.46% 1.63% 1.96% 2.73% 2.66%
Nonperforming Loans to Total
Loans....................... 1.26% 2.35% 1.18% 3.44% 5.87% 5.49% 6.80%
Nonperforming Assets to Total
Loans and Assets Acquired as
Loan Satisfactions.......... 1.32% 3.31% 1.44% 4.62% 7.31% 7.18% 7.74%
CAPITAL RATIOS:
Common Stockholders' Equity to
Assets...................... 5.67% 5.52% 5.40% 6.34% 5.73% 4.10% 4.29%
Total Stockholders' Equity to
Assets...................... 6.37% 6.62% 6.25% 7.45% 7.05% 5.24% 5.31%
Tier 1 Leverage(f)............ 6.06% 6.78% 6.26% 7.16% 6.88% 4.74% 4.86%
Tier 1 Risk-Based
Capital(f).................. 7.76% 8.50% 8.02% 7.93% 7.20% 5.01% 5.10%
Total Risk-Based Capital(f)... 11.40% 12.41% 11.97% 11.86% 11.29% 8.90% 9.23%
</TABLE>
- ---------------
Notes:
(a) Includes an $85 million gain from the sale of Chemical's investment in Far
East Bank and Trust Company ("Far East Bank").
(b) In the first quarter of 1995, Chemical adopted Statement of Financial
Accounting Standards ("SFAS") No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions," related to the accounting for
other postretirement benefits for its employees in overseas locations and,
as a result, recorded a $17 million charge ($11 million after-tax).
(c) Annualized.
(d) The computation of the efficiency ratio (noninterest expense as a percentage
of the total of net interest income and noninterest revenue) excludes
restructuring charges, foreclosed property expense, net gains on emerging
markets-related bond sales and the gain related to the sale of Chemical's
investment in Far East Bank.
(e) Effective January 1, 1995, Chemical adopted SFAS 114, "Accounting by
Creditors for Impairment of a Loan," and as a result, $122 million of assets
for which Chemical did not have possession were reclassified from assets
acquired as loan satisfactions to nonperforming loans.
(f) Risk-based capital and leverage ratios for June 30, 1995, June 30, 1994 and
for year-end 1992 through 1994, exclude the assets and off-balance sheet
financial instruments of Chemical Securities Inc.,
12
<PAGE> 19
Chemical's U.S. underwriting and dealing subsidiary, as well as Chemical's
investment in such subsidiary.
(g) Includes $127 million in net gains from the sale of emerging markets
past-due interest bonds for the full year of 1994. (For the first six months
of 1994, such net gains were $45 million.)
(h) The full year 1994 results include a $260 million restructuring charge taken
in connection with the "actions to improve earnings per share" program,
which was designed to produce earnings per share growth, as well as an
improved efficiency ratio and a greater return on common stockholders'
equity. Also included is a $48 million restructuring charge related to the
closing of 50 New York State branches. (Noninterest expense for the six
months ended June 1994 also includes the $48 million charge.)
(i) Included in trading revenue is a $70 million loss from unauthorized foreign
exchange transactions.
(j) Chemical recognized its remaining federal income tax benefits in accordance
with SFAS 109, "Accounting for Income Taxes," in the third quarter of 1993.
As a result, Chemical's earnings, beginning in the fourth quarter of 1993,
were reported on a fully-taxed basis.
(k) On January 1, 1994, Chemical adopted FASB Interpretation No. 39, "Offsetting
of Amounts Related to Certain Contracts" ("FASI 39"), which increased
consolidated total assets and consolidated total liabilities by
approximately $16.0 billion at December 31, 1994, and consolidated total
average assets and consolidated total average liabilities by approximately
$16.1 billion for the year 1994. Excluding the impact of FASI 39, the return
on average assets for 1994 was .86%.
(l) Includes $306 million of net gains from the sale of emerging markets-related
past-due interest bonds.
(m) Includes an $115 million charge related to the final assessment of costs
associated with the merger with MHC and a $43 million charge associated with
the acquisition of certain assets and liabilities of four former banks of
First City Bancorporation of Texas, Inc. by Texas Commerce Equity Holdings,
Inc.
(n) On January 1, 1993, Chemical adopted SFAS 106 for other postretirement
benefits provided to domestic employees. Chemical elected to expense the
entire unrecognized accumulated obligation at the date of adoption via a
one-time charge of $415 million. Additionally, on January 1, 1993, Chemical
adopted SFAS 109, which resulted in an income tax benefit of $450 million.
The net favorable impact of the adoption of these two accounting standards
was $35 million.
(o) In March 1992, all outstanding shares of Chemical Class B Common Stock were
converted into Chemical Common Stock.
(p) Includes the impact of a $625 million restructuring charge incurred in
connection with the merger with MHC.
(q) Includes an $115 million gain on the sale of Chemical's investment in
Florida National Banks of Florida, Inc.
(r) Includes an $152 million restructuring charge.
(s) Performance ratios are calculated based on income before effect of
accounting changes.
13
<PAGE> 20
CONDENSED CONSOLIDATED FINANCIAL DATA OF
THE CHASE MANHATTAN CORPORATION
(IN MILLIONS, EXCEPT RATIO AND PER SHARE DATA)
The following table sets forth certain condensed consolidated historical
financial data of Chase and is based on the consolidated financial statements of
Chase, including the respective notes thereto, which are incorporated by
reference in this Proxy Statement/Prospectus and should be read in conjunction
therewith. See "Incorporation of Certain Documents by Reference". Interim
unaudited data for the six months ended June 30, 1995 and 1994 reflect, in the
opinion of management of Chase, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of such data. Results
for the six months ended June 30, 1995 are not necessarily indicative of results
which may be expected for any other interim period or for the year as a whole.
<TABLE>
<CAPTION>
AS OF OR
FOR THE SIX MONTHS
ENDED JUNE 30, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CONDENSED STATEMENT OF
INCOME:
Net Interest Income..... $ 1,767 $ 1,869 $ 3,689 $ 3,863(g) $ 3,564 $ 3,345 $ 3,188
Provision for Credit
Losses................ 140 310 500 995 1,220 1,085 1,300
Provision for Loans Held
for Accelerated
Disposition........... -- -- -- 566 -- -- --
Noninterest Revenue..... 1,422 1,655(a) 3,053(a) 2,949(h) 2,349 2,167 2,075(k)
Noninterest Expense..... 2,182 2,131 4,472(b) 4,520(i) 3,868 3,783 4,094(k)
-------- -------- -------- -------- -------- -------- --------
Income (Loss) Before In-
come Tax Expense and
Effect of Accounting
Change................ 867 1,083 1,770 731 825 644 (131)
Income Tax Expense...... 326 412 565 265 186 124 203
-------- -------- -------- -------- -------- -------- --------
Income (Loss) Before Ef-
fect of Accounting
Change................ 541 671 1,205 466 639 520 (334)
Effect of Change in Ac-
counting Principle.... -- -- -- 500(j) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Income (Loss)....... $ 541 $ 671 $ 1,205 $ 966 $ 639 $ 520 $ (334)
======== ======== ======== ======== ======== ======== ========
PER COMMON SHARE:
Primary:
Income (Loss) Before
Effect of Accounting
Change.............. $ 2.67 $ 3.27 $ 5.87 $ 1.89 $ 3.46 $ 3.12 $ (3.31)
Effect of Change in
Accounting
Principle........... -- -- -- 2.90(j) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Income (Loss)..... $ 2.67 $ 3.27 $ 5.87 $ 4.79 $ 3.46 $ 3.12 $ (3.31)
======== ======== ======== ======== ======== ======== ========
Assuming Full Dilution:
Income (Loss) Before
Effect of Accounting
Change.............. $ 2.64 $ 3.24 $ 5.84 $ 1.88 $ 3.41 $ 3.08 $ (3.31)
Effect of Change in
Accounting
Principle........... -- -- -- 2.89(j) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Income (Loss)..... $ 2.64 $ 3.24 $ 5.84 $ 4.77 $ 3.41 $ 3.08 $ (3.31)
======== ======== ======== ======== ======== ======== ========
Cash Dividends Per
Common Share.......... $ .85 $ .66 $ 1.46 $ 1.20 $ 1.20 $ 1.20 $ 2.16
Book Value at Period
End................... $ 41.09 $ 37.64 $ 39.28 $ 36.48 $ 32.25 $ 30.62 $ 29.54
Common Shares
Outstanding:
Average Common and
Common Equivalent
Shares.............. 179.5 185.6 183.6 172.3 148.7 134.8 125.9
Average Common Shares
Assuming Full
Dilution............ 181.6 187.3 184.6 173.2 150.6 136.1 126.0
Common Shares at
Period End ......... 174.5 185.1 177.2 184.3 156.1 139.9 131.7
</TABLE>
14
<PAGE> 21
<TABLE>
<CAPTION>
AS OF OR
FOR THE SIX MONTHS
ENDED JUNE 30, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE SHEET
AVERAGES:
Loans................... $ 63,472 $ 60,925 $ 60,763 $ 61,506 $ 64,598 $ 70,949 $ 76,965
Securities.............. 7,263 7,978 7,689 6,764 5,474 5,898 7,461
Total Assets............ 126,002 118,046 118,798(c) 102,677 100,352 100,806 106,468
Deposits................ 71,983 72,334 71,940 70,671 68,179 71,190 71,458
Long-Term Debt.......... 5,338 5,461 5,209 6,365 6,839 6,789 7,961
Total Stockholders'
Equity................ 8,395 8,214 8,269 7,227 5,932 4,982 4,998
PERFORMANCE RATIOS:(L)
Return on Average:
Total Assets.......... .87%(d) 1.15%(d) 1.01%(c) .45% .64% .52% N/M
Common Stockholders'
Equity.............. 13.83%(d) 18.11%(d) 15.79% 5.76% 11.14% 10.49% N/M
Total Stockholders'
Equity.............. 13.01%(d) 16.48%(d) 14.57% 6.45% 10.71% 10.36% N/M
Common Dividend Payout
Ratio................. 31% 20% 25% 63% 34% 38% N/M
Efficiency Ratio(e)..... 69% 59% 66% 60% 63% 66% 77%
Net Yield on
Interest-Earning
Assets................ 3.53%(d) 3.98%(d) 3.89% 4.33% 4.09% 3.85% 3.46%
ASSET QUALITY RATIOS:
Allowance for Credit
Losses to Total
Loans................. 2.20% 2.37% 2.24% 2.36% 3.06% 2.89% 3.80%
Allowance for Credit
Losses to
Nonperforming Loans... 226% 166% 214% 135% 49% 45% 62%
Net Charge-Offs to
Average Loans......... .44%(d) 1.00%(d) .85% 2.17% 1.96% 2.72% 2.28%
Nonperforming Loans to
Total Loans........... .98% 1.43% 1.05% 1.74% 6.30% 6.42% 6.14%
Nonperforming Assets to
Total Loans and Other
Real Estate Owned..... 1.28% 2.39% 1.45% 3.19% 7.99% 7.66% 7.17%
CAPITAL RATIOS:
Common Stockholders'
Equity to Assets...... 6.04% 6.08% 6.10% 6.58% 5.25% 4.36% 3.97%
Total Stockholders'
Equity to Assets...... 7.22% 7.51% 7.33% 7.95% 6.79% 5.42% 4.83%
Tier 1 Leverage(f)...... 7.19% 7.47% 7.37% 7.81% 6.66% 5.28% 4.40%
Tier 1 Risk-Based
Capital (f)........... 8.22% 8.71% 8.30% 8.44% 6.76% 5.32% 4.32%
Total Risk-Based
Capital(f)............ 12.99% 13.32% 12.78% 13.22% 11.12% 9.74% 8.33%
</TABLE>
- ---------------
Notes:
(a) Full year 1994 includes a net pre-tax gain of $104 million from repayments
and sales of assets held for accelerated disposition. (For the first six
months of 1994 such gains were $68 million).
(b) Includes charges of $105 million for a voluntary retirement program and $52
million related to other productivity initiatives, including exiting from
certain consumer activities overseas, regionalizing overseas branch
operations and streamlining the domestic infrastructure.
(c) On January 1, 1994, Chase adopted FASI 39, which increased consolidated
total assets and consolidated total liabilities by approximately $8.0
billion at December 31, 1994, and consolidated total average assets and
consolidated total average liabilities by approximately $10.0 billion for
the year 1994. Excluding the impact of FASI 39, the return on average
assets for 1994 was 1.10%.
(d) Annualized.
(e) The computation of the efficiency ratio (noninterest expense as a percentage
of the total of net interest income and noninterest revenue) excludes
foreclosed property expense. The 1993 ratio also excludes the provision for
other real estate held for accelerated disposition and net gains on
emerging markets bond sales.
15
<PAGE> 22
(f) Risk-based capital and leverage ratios exclude the assets and off-balance
sheet financial instruments of Chase Securities Inc., Chase's U.S.
underwriting and dealing subsidiary, as well as Chase's investment in such
subsidiary.
(g) Net interest income in 1993 includes $163 million from the sale of Brazilian
and Argentine past-due interest bonds.
(h) Includes a net gain of $291 million from repayments and sales of assets held
for accelerated disposition and $147 million of accelerated mortgage
servicing writedowns.
(i) Includes a provision of $318 million for other real estate held for
accelerated disposition and a $45 million restructuring charge for
business-related investments.
(j) On January 1, 1993, Chase adopted SFAS 109, "Accounting for Income Taxes,"
which resulted in an income tax benefit of $500 million.
(k) Includes a $350 million restructuring charge, principally representing the
cost of voluntary separation programs and other restructuring actions, of
which $130 million is included in noninterest revenue and $220 million is
included in noninterest expense.
(l) Performance ratios are calculated based on income before effect of
accounting change.
N/M -- As a result of a net loss, these ratios are not meaningful.
16
<PAGE> 23
PRO FORMA CONDENSED COMBINED FINANCIAL DATA OF
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
(IN MILLIONS, EXCEPT RATIO DATA)
The following table sets forth certain unaudited pro forma condensed
combined financial data for Chemical and Chase giving effect to the Merger,
which will be accounted for as a pooling of interests, as if the Merger had
occurred as of the beginning of the periods indicated herein, after giving
effect to the pro forma adjustments described in the Notes to the Unaudited Pro
Forma Combined Financial Statements. For a description of pooling of interests
accounting with respect to the Merger, see "The Merger -- Anticipated Accounting
Treatment". The information set forth below should be read in conjunction with
the historical consolidated financial statements of Chemical and Chase,
including the respective notes thereto, which are incorporated by reference in
this Proxy Statement/Prospectus, and in conjunction with the consolidated
historical financial data for Chemical and Chase and the other pro forma
financial information, including the notes thereto, appearing elsewhere in this
Proxy Statement/Prospectus. See "Incorporation of Certain Documents by
Reference" and "Pro Forma Combined Financial Data". The effect of the estimated
$1.5 billion restructuring charge ($925 million net of tax) expected to be taken
in connection with the Merger has been reflected in the pro forma combined
balance sheet; however, since the proposed restructuring charge is nonrecurring,
it has not been reflected in the pro forma combined statement of income. The pro
forma financial data do not give effect to the anticipated cost savings in
connection with the Merger. See "Management and Operations After the
Merger-Consolidation of Operations; Anticipated Cost Savings". The pro forma
financial data are not necessarily indicative of the results that actually would
have occurred had the Merger been consummated on the dates indicated or that may
be obtained in the future.
<TABLE>
<CAPTION>
AS OF OR FOR THE SIX
MONTHS AS OF OR FOR THE YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
--------------------- ----------------------------------
1995 1994 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
CONDENSED STATEMENT OF INCOME:
Net Interest Income........................... $ 4,085 $ 4,197 $ 8,363 $ 8,336 $ 8,162
Provision for Credit Losses................... 380 675 1,050 2,254 2,585
Provision for Loans Held for Accelerated
Disposition................................. -- -- -- 566 --
Noninterest Revenue........................... 3,253(a) 3,453(f) 6,650(f,h) 7,136(l) 5,375
Noninterest Expense........................... 4,694 4,742(g) 10,002(g,i) 9,828(m) 8,801
-------- -------- -------- -------- --------
Income Before Income Tax Expense and Effect of
Accounting Changes.......................... 2,264 2,233 3,961 2,824 2,151
Income Tax Expense............................ 885 890 1,475 798(j) 428
-------- -------- -------- -------- --------
Income Before Effect of Accounting Changes.... $ 1,379 $ 1,343 $ 2,486 $ 2,026 $ 1,723
-------- -------- -------- -------- --------
SELECTED BALANCE SHEET AVERAGES:
Loans......................................... $143,781 $136,060 $136,672 $140,245 $146,771
Securities.................................... 34,580 33,589 33,149 30,418 27,148
Total Assets.................................. 303,943 282,155 285,477(k) 247,558 239,681
Deposits...................................... 167,633 167,861 166,703 166,327 160,929
Long-Term Debt................................ 13,035 13,895 13,628 14,418 13,059
Total Stockholders' Equity(b)................. 19,299 19,317 19,231 17,810 15,256
PERFORMANCE RATIOS:
Return on Average:
Total Assets................................ .91%(c) .96%(c) .87%(k) .82% .72%
Common Stockholders' Equity................. 15.44%(c) 15.13%(c) 13.70% 12.06% 11.88%
Total Stockholders' Equity.................. 14.41%(c) 14.02%(c) 12.93% 11.38% 11.29%
Common Dividend Payout Ratio.................. 30% 26% 30% 32% 33%
Efficiency Ratio(d)........................... 65% 60% 64% 59% 62%
Net Yield on Interest-Earning Assets.......... 3.47%(c) 3.79%(c) 3.73% 3.90% 3.93%
</TABLE>
17
<PAGE> 24
<TABLE>
<CAPTION>
AS OF OR FOR THE
SIX MONTHS AS OF OR FOR THE YEAR
ENDED JUNE 30, ENDED DECEMBER 31,
---------------- --------------------------
1995 1994 1994 1993 1992
----- ------ ----- ----- ------
<S> <C> <C> <C> <C> <C>
ASSET QUALITY RATIOS:
Allowance for Credit Losses to Total Loans................ 2.57% 3.03% 2.74% 3.24% 3.42%
Allowance for Credit Losses to Nonperforming Loans........ 206% 157% 245% 122% 56%
Net Charge-Offs to Average Loans.......................... .60%(c) 1.50%(c) 1.18% 1.87% 1.96%
Nonperforming Loans to Total Loans........................ 1.25% 1.93% 1.12% 2.66% 6.06%
Nonperforming Assets to Total Loans and Assets Acquired as
Loan Satisfactions...................................... 1.34% 2.94% 1.49% 4.05% 7.66%
CAPITAL RATIOS:
Common Stockholders' Equity to Assets..................... 5.55% 5.75% 5.68% 6.44% 5.54%
Total Stockholders' Equity to Assets...................... 6.45% 6.98% 6.68% 7.65% 6.95%
Tier 1 Leverage(e)........................................ 6.10% 7.06% 6.71% 7.42% 6.79%
Tier 1 Risk-Based Capital(e).............................. 7.45% 8.59% 8.14% 8.14% 7.02%
Total Risk-Based Capital(e)............................... 11.58% 12.80% 12.32% 12.43% 11.22%
</TABLE>
- ---------------
NOTES:
(a) Includes an $85 million gain from the sale of Chemical's investment in Far
East Bank.
(b) The pro forma financial information presented does not give effect to the
planned net repurchase of up to a maximum of 9 million shares in the
aggregate of Chemical Common Stock and Chase Common Stock (after giving
effect to the issuance of shares by both Chemical and Chase subsequent to
June 30, 1995, under various employee benefit plans) prior to the
consummation of the Merger pursuant to their respective previously announced
buyback programs.
(c) Annualized.
(d) The computation of the efficiency ratio (noninterest expense as a percentage
of the total of net interest income and noninterest revenue) excludes
restructuring charges, foreclosed property expense and net gains on emerging
markets-related bond sales and the gain related to the sale of Chemical's
investment in Far East Bank as well as the provision for other real estate
held for accelerated disposition.
(e) Risk-based capital and leverage ratios exclude the assets and off-balance
sheet financial instruments of each of Chemical and Chase's U.S.
underwriting and dealing subsidiaries as well as their respective investment
in such subsidiaries.
(f) The full year 1994 results include $127 million in net gains from the sale
of emerging markets-related past-due interest bonds (for the first six
months of 1994, such gains were $45 million) and a net gain of $104 million
from payments and sales of assets held for accelerated disposition (for the
first six months of 1994 such gains were $68 million).
(g) Includes a $48 million restructuring charge related to the closing of 50 New
York State branches.
(h) Included in trading revenue is a $70 million loss from unauthorized foreign
exchange transactions.
(i) Includes a $260 million restructuring charge taken in connection with
Chemical's "actions to improve earnings per share" program. Also includes
charges taken by Chase of $105 million for a voluntary retirement program
and $52 million related to other productivity initiatives, including exiting
from certain consumer activities overseas, regionalizing overseas branch
operations and streamlining its domestic infrastructure.
(j) Chemical recognized its remaining federal income tax benefits in accordance
with SFAS 109 in the third quarter of 1993. As a result, Chemical's
earnings, beginning in the fourth quarter of 1993, were reported on a
fully-taxed basis.
(k) On January 1, 1994, both Chemical and Chase adopted FASI 39, which increased
pro forma consolidated total assets and pro forma consolidated total
liabilities by approximately $24.0 billion at December 31, 1994, and pro
forma consolidated total average assets and pro forma consolidated total
average liabilities
18
<PAGE> 25
by $26.1 billion for the year 1994. Excluding the impact of FASI 39, the
pro forma return on average assets for 1994 was .96%.
(l) Includes $469 million of net gains from the sale of emerging markets-related
past-due interest bonds, a net gain of $291 million from repayments and
sales of assets held for accelerated disposition and $147 million of
accelerated mortgage servicing writedowns.
(m) Includes a provision of $318 million for other real estate held for
accelerated disposition, a $115 million charge related to the final
assessment of costs associated with Chemical's merger with MHC, a $43
million charge associated with the acquisition of certain assets of the
First City Banks by Texas Commerce Equity Holdings, Inc. and a $45 million
restructuring charge for business related investments.
19
<PAGE> 26
COMPARATIVE STOCK PRICES
Chemical Common Stock and Chase Common Stock are each listed on the NYSE as
well as on certain foreign exchanges. See "The Merger -- Stock Exchange
Listings". The following table sets forth, for the periods indicated, the high
and low sale prices per share of Chemical Common Stock and Chase Common Stock as
reported on the NYSE Composite Transactions Tape.
<TABLE>
<CAPTION>
CHEMICAL CHASE
COMMON STOCK COMMON STOCK
------------- -------------
CALENDAR QUARTER HIGH LOW HIGH LOW
- -------------------------------------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
1993
First Quarter...................................... $44 1/8 $ 37 $35 5/8 $27 3/8
Second Quarter..................................... 44 1/8 35 38 28 3/8
Third Quarter...................................... 45 3/8 38 3/4 37 7/8 31 3/8
Fourth Quarter..................................... 46 3/8 36 38 31 1/8
1994
First Quarter...................................... 42 1/8 34 1/2 36 5/8 30 3/8
Second Quarter..................................... 40 7/8 33 7/8 40 31 1/4
Third Quarter...................................... 40 34 7/8 38 7/8 34 5/8
Fourth Quarter..................................... 38 5/8 33 5/8 37 33 1/2
1995
First Quarter...................................... 40 7/8 35 3/4 36 3/8 32 5/8
Second Quarter..................................... 48 3/4 37 1/2 49 1/8 35 5/8
Third Quarter...................................... 61 5/8 46 1/4 61 1/2 46 7/16
Fourth Quarter (through October 30)................ 64 3/4 55 66 5/8 56 3/8
</TABLE>
On August 25, 1995, the last trading day before the public announcement of
the Merger Agreement, the closing sale prices of Chemical Common Stock and Chase
Common Stock as reported on the NYSE Composite Transactions Tape were $54.375
per share and $53 per share, respectively. The pro forma equivalent per share
value of the Chase Common Stock on August 25, 1995 was $56.55 per share. The pro
forma equivalent per share value of Chase Common Stock on any date equals the
closing sale price of Chemical Common Stock on such date, as reported on the
NYSE Composite Transaction Tape, multiplied by the Exchange Ratio.
On October 30, 1995, the closing sale prices of Chemical Common Stock and
Chase Common Stock as reported on the NYSE Composite Transactions Tape were
$58.375 per share and $58.50 per share ($60.71 on a pro forma equivalent per
share basis), respectively.
Stockholders are urged to obtain current quotations for the market prices
of Chemical Common Stock and Chase Common Stock.
No assurance can be given as to the market price of Chemical Common Stock
or Chase Common Stock at the Effective Time. Because the Exchange Ratio is fixed
in the Merger Agreement and neither Chemical nor Chase has the right to
terminate the Merger Agreement based on changes in the market price of either
party's stock, the market value of the shares of Chemical Common Stock that
holders of Chase Common Stock receive in the Merger may vary significantly from
the prices shown above.
20
<PAGE> 27
COMPARATIVE PER SHARE DATA
(UNAUDITED)
The following table sets forth for Chemical Common Stock and Chase Common
Stock certain historical, pro forma and pro forma equivalent per share financial
information for the six months ended June 30, 1995 and 1994 and for each of the
three years ending December 31, 1994. The information presented herein should be
read in conjunction with the unaudited Pro Forma Combined Financial Data,
including the Notes thereto, appearing elsewhere in this Proxy
Statement/Prospectus.
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS FOR THE YEAR ENDED DECEMBER
ENDED JUNE 30, 31,
----------------- ----------------------------
1995 1994 1994 1993 1992
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
CHEMICAL COMMON STOCK:
Income Before Effect of Accounting Changes:
Primary:
Historical............................. $ 3.21 $ 2.39 $ 4.60 $ 5.57 $ 3.85
Pro Forma Combined..................... $ 2.91 $ 2.71 $ 5.02 $ 4.00 $ 3.65
Assuming Full Dilution:
Historical............................. $ 3.12 $ 2.36 $ 4.54 $ 5.48 $ 3.81
Pro Forma Combined..................... $ 2.85 $ 2.67 $ 4.97 $ 3.96 $ 3.61
Cash Dividends Per Common Share:
Historical.................................. $ .94 $ .76 $ 1.64 $ 1.37 $ 1.20
Pro Forma Combined(a)....................... $ .94 $ .76 $ 1.64 $ 1.37 $ 1.20
Book Value Per Share at Period End:
Historical.................................. $40.62 $37.17 $37.88 $37.60 $32.43
Pro Forma Combined.......................... $37.76 $37.83
CHASE COMMON STOCK:
Income Before Effect of Accounting Changes:
Primary:
Historical............................. $ 2.67 $ 3.27 $ 5.87 $ 1.89 $ 3.46
Pro Forma Equivalent(b)................ $ 3.03 $ 2.82 $ 5.22 $ 4.16 $ 3.80
Assuming Full Dilution:
Historical............................. $ 2.64 $ 3.24 $ 5.84 $ 1.88 $ 3.41
Pro Forma Equivalent(b)................ $ 2.96 $ 2.78 $ 5.17 $ 4.12 $ 3.75
Cash Dividends Per Common Share:
Historical.................................. $ .85 $ .66 $ 1.46 $ 1.20 $ 1.20
Pro Forma Equivalent(b)..................... $ .98 $ .79 $ 1.71 $ 1.42 $ 1.25
Book Value Per Share at Period End:
Historical.................................. $41.09 $37.64 $39.28 $36.48 $32.25
Pro Forma Equivalent(b)..................... $39.27 $39.34
</TABLE>
- ---------------
(a) The Chemical pro forma combined dividends per share amounts represent
historical dividends per share.
(b) The Chase pro forma equivalent per share amounts are calculated by
multiplying the Chemical pro forma combined per share amounts by the
Exchange Ratio of 1.04.
21
<PAGE> 28
THE SPECIAL MEETINGS
DATE, TIME AND PLACE
Chemical. The Chemical Special Meeting will be held at the Starlight Roof
of The Waldorf-Astoria Hotel, located at 301 Park Avenue, New York, New York, at
10:00 a.m. New York time, on December 11, 1995.
Chase. The Chase Special Meeting will be held in the auditorium at Chase's
headquarters building located at 1 Chase Manhattan Plaza, New York, New York, at
1:30 p.m. New York time, on December 11, 1995.
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETINGS
Chemical. At the Chemical Special Meeting, holders of Chemical Common
Stock will be asked to consider and vote upon the approval and adoption of the
Merger Agreement. In addition, holders of Chemical Common Stock will be asked to
consider and vote upon a proposed amendment and restatement of the Chemical
Charter which would increase the number of authorized shares of Chemical Common
Stock from 400 million to 750 million shares (in order to have a sufficient
number of shares of Chemical Common Stock to effect the Merger and for other
corporate purposes) and make certain other technical amendments. Stockholders
may also consider and vote upon such other matters as may properly be brought
before the Chemical Special Meeting. As described below, holders of Chemical
Preferred Stock are not entitled to vote on any of the foregoing matters.
THE BOARD OF DIRECTORS OF CHEMICAL HAS (WITH 19 DIRECTORS PRESENT AND ONE
DIRECTOR ABSENT), BY UNANIMOUS VOTE OF ALL DIRECTORS PRESENT, APPROVED THE
MERGER AGREEMENT AND RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT. THE BOARD OF DIRECTORS HAS ALSO, BY UNANIMOUS VOTE OF ALL DIRECTORS
PRESENT, APPROVED, AND RECOMMENDS A VOTE FOR APPROVAL OF, THE AMENDMENT AND
RESTATEMENT OF THE CHEMICAL CHARTER.
Chase. At the Chase Special Meeting, holders of Chase Common Stock will be
asked to consider and vote upon the approval and adoption of the Merger
Agreement and such other matters as may properly be brought before the Chase
Special Meeting. As described below, holders of Chase Preferred Stock are not
entitled to vote on any such matters.
THE BOARD OF DIRECTORS OF CHASE (WITH 17 DIRECTORS PRESENT AND ONE DIRECTOR
ABSENT) HAS, BY UNANIMOUS VOTE OF ALL DIRECTORS PRESENT, APPROVED THE MERGER
AGREEMENT AND RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT.
VOTES REQUIRED
Chemical. The approval and adoption of the Merger Agreement and the
approval of the amendment and restatement of the Chemical Charter will each
require the affirmative vote of the holders of record of a majority of the
shares of Chemical Common Stock outstanding on the Record Date. The approval of
the Merger Agreement and the amendment and restatement of the Chemical Charter
are each contingent upon approval of both such proposals by the Chemical
stockholders. Unless both proposals are approved, neither will be effected by
Chemical and the Merger will not be consummated. THEREFORE, A VOTE AGAINST THE
PROPOSAL TO AMEND AND RESTATE THE CHEMICAL CHARTER WILL HAVE THE SAME EFFECT AS
A VOTE AGAINST THE MERGER.
Holders of record of Chemical Common Stock on the Record Date are each
entitled to one vote per share on each matter to be voted on at the Chemical
Special Meeting. Holders of Chemical Preferred Stock are not entitled to vote on
the approval and adoption of the Merger Agreement or approval of the amendment
and restatement of the Chemical Charter.
As of October 25, 1995, directors and executive officers of Chemical and
their affiliates beneficially owned and were entitled to vote 552,735 shares of
Chemical Common Stock, which represented approximately 0.22% of the shares of
Chemical Common Stock outstanding on the Record Date. Each Chemical
22
<PAGE> 29
director has indicated his or her present intention to vote the Chemical Common
Stock so owned by him or her for approval of the Merger Agreement and the
amendment and restatement of the Chemical Charter. As of October 25, 1995,
Chemical and its subsidiaries, as fiduciaries, custodians or agents, had sole or
shared voting power with respect to 13,018,699 shares of Chemical Common Stock,
representing approximately 5.21% of the shares of Chemical Common Stock
outstanding on the Record Date. None of Chase's directors or executive officers
beneficially owned any shares of Chemical Common Stock on the Record Date. As of
October 25, 1995, various subsidiaries of Chase, as fiduciaries, custodians or
agents, had sole or shared voting power with respect to 23,981 shares of
Chemical Common Stock, representing approximately 0.01% of the shares of
Chemical Common Stock outstanding on the Record Date.
Chase. The approval and adoption of the Merger Agreement will require the
affirmative vote of the holders of record of a majority of the shares of Chase
Common Stock outstanding on the Record Date.
Holders of record of Chase Common Stock as of the Record Date are each
entitled to one vote per share on each matter to be considered at the Chase
Special Meeting. Holders of Chase Preferred Stock are not entitled to vote on
the approval and adoption of the Merger Agreement.
As of October 25, 1995, directors and executive officers of Chase and their
affiliates beneficially owned and were entitled to vote 284,846 shares of Chase
Common Stock, which represented approximately 0.16% of the shares of Chase
Common Stock outstanding on the Record Date. Each Chase director has indicated
his or her present intention to vote the Chase Common Stock so owned by him or
her for approval and adoption of the Merger Agreement. As of October 25, 1995,
various subsidiaries of Chase, as fiduciaries, custodians or agents, had sole or
shared voting power with respect to 4,136,710 shares of Chase Common Stock,
representing approximately 2.35% of the shares of Chase Common Stock outstanding
on the Record Date. In addition, as of the Record Date one of Chemical's
directors beneficially owned and was entitled to vote 5,000 shares of Chase
Common Stock, which he has indicated he currently intends to vote for approval
and adoption of the Merger Agreement. As of October 25, 1995, various
subsidiaries of Chemical, as fiduciaries, custodians or agents, had sole or
shared voting power with respect to 39,278 shares of Chase Common Stock, or
0.02% of the shares of Chase Common Stock outstanding on the Record Date.
VOTING OF PROXIES
Shares represented by all properly executed proxies received in time for
the Special Meetings will be voted at such Special Meetings in the manner
specified by the holders thereof. Proxies which do not contain voting
instructions will be voted in favor of the Merger Agreement and, in the case of
proxies for Chemical Common Stock, in favor of the amendment and restatement of
the Chemical Charter.
Chemical and Chase each intend to count shares of Chemical Common Stock or
Chase Common Stock, as the case may be, present in person at the Special
Meetings but not voting, and shares of Chemical Common Stock or Chase Common
Stock, as the case may be, for which they have received proxies but with respect
to which holders of shares have abstained on any matter, as present at the
Special Meetings for purposes of determining the presence or absence of a quorum
for the transaction of business.
For voting purposes at the Special Meetings, only shares affirmatively
voted in favor of a proposal will be counted as favorable votes for such
proposal. The failure to submit a proxy (or to vote in person) or the abstention
from voting with respect to any proposal will have the same effect as a vote
against such proposal. In addition, under the applicable rules of the NYSE,
brokers who hold shares in street name for customers who are the beneficial
owners of such shares are prohibited from giving a proxy to vote such customers'
shares with respect to the approval and adoption of the Merger Agreement or
approval of the amendment and restatement of the Chemical Charter in the absence
of specific instructions from such customers ("broker nonvotes"). Accordingly,
broker nonvotes will also have the same effect as votes against such proposals.
It is not expected that any matter other than those referred to herein will
be brought before either of the Special Meetings. If, however, other matters are
properly presented for a vote, the persons named as proxies will vote in
accordance with their judgment with respect to such matters.
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The persons named as proxies by a Chase or Chemical stockholder may propose
and vote for one or more adjournments of the applicable Special Meeting to
permit further solicitations of proxies in favor of any proposal; provided,
however, that no proxy which is voted against the approval of the Merger
Agreement will be voted in favor of any such adjournment.
REVOCABILITY OF PROXIES
The grant of a proxy on the enclosed Chemical or Chase form does not
preclude a stockholder from voting in person. A stockholder may revoke a proxy
at any time prior to its exercise by filing with the Secretary of Chemical (in
the case of a Chemical stockholder) or the Secretary of Chase (in the case of a
Chase stockholder) a duly executed revocation of proxy, by submitting a duly
executed proxy bearing a later date or by appearing at the applicable Special
Meeting and voting in person at such Special Meeting. Attendance at the relevant
Special Meeting will not, in and of itself, constitute revocation of a proxy.
RECORD DATE; STOCK ENTITLED TO VOTE; QUORUM
Chemical. Only holders of record of Chemical Common Stock and Chemical
Preferred Stock on the Record Date will be entitled to notice of, and only
holders of record of Chemical Common Stock on the Record Date will be entitled
to vote at, the Chemical Special Meeting. On the Record Date, 249,904,977 shares
of Chemical Common Stock were issued and outstanding and held by approximately
57,402 holders of record.
A majority of the shares of Chemical Common Stock outstanding on the Record
Date must be represented in person or by proxy at the Chemical Special Meeting
in order for a quorum to be present for purposes of voting on approval of the
Merger Agreement and the amendment and restatement of the Chemical Charter.
Chase. Only holders of record of Chase Common Stock and Chase Preferred
Stock on the Record Date will be entitled to notice of, and only holders of
record of Chase Common Stock on the Record Date will be entitled to vote at, the
Chase Special Meeting. On the Record Date, 176,032,446 shares of Chase Common
Stock were issued and outstanding and held by approximately 46,365 holders of
record.
A majority of the shares of Chase Common Stock outstanding on the Record
Date must be represented in person or by proxy at the Chase Special Meeting in
order for a quorum to be present for purposes of voting on approval of the
Merger Agreement.
SOLICITATION OF PROXIES
Each of Chemical and Chase will bear the cost of the solicitation of
proxies from its own stockholders, except that Chemical and Chase will share
equally the cost of printing this Proxy Statement/Prospectus. In addition to
solicitation by mail, the directors, officers and employees of each company and
its subsidiaries may solicit proxies from stockholders of such company by
telephone or telegram or in person. Arrangements will also be made with
brokerage houses and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of stock held of
record by such persons, and Chemical and Chase will reimburse such custodians,
nominees and fiduciaries for their reasonable out-of-pocket expenses in
connection therewith.
Chemical Mellon Shareholder Services, L.L.C. will assist in the
solicitation of proxies by Chemical for a fee of $18,500, plus reasonable
out-of-pocket costs and expenses. Morrow & Co. will assist in the solicitation
of proxies by Chase. The fees of such firm are not expected to exceed $15,000,
plus reasonable out-of-pocket costs and expenses.
STOCKHOLDERS SHOULD NOT SEND STOCK CERTIFICATES WITH THEIR PROXY CARDS.
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THE COMPANIES
CHEMICAL BANKING CORPORATION
General. Chemical is a bank holding company organized under the laws of
Delaware in 1968 and registered under the Bank Holding Company Act of 1956, as
amended (the "BHCA"). Chemical conducts domestic and international financial
services businesses through various bank and non-bank subsidiaries. The
principal bank subsidiaries of Chemical are Chemical Bank, a New York banking
corporation headquartered in New York, New York, and Texas Commerce Bank, a
national banking association headquartered in Houston, Texas.
At June 30, 1995, on a consolidated basis, Chemical had total assets of
approximately $178.5 billion, total deposits of approximately $94.9 billion and
stockholders' equity of approximately $11.4 billion. As of that date, Chemical
ranked as the fourth largest bank holding company in the United States in terms
of total assets, and Chemical Bank ranked as the third largest commercial bank
in the United States in terms of total assets and deposits. At June 30, 1995, on
a consolidated basis, Chemical Bank had total assets of approximately $138.2
billion, total loans of approximately $67.9 billion and total deposits of
approximately $76.3 billion. As of such date, Texas Commerce Bank was the second
largest commercial bank in Texas in terms of total assets. Chemical owns a 40%
interest in The CIT Group Holdings, Inc. ("CIT"), which engages in diversified
financial services activities, including asset-based financing and leasing,
sales financing and factoring.
Business. The activities of Chemical and its subsidiaries are internally
organized, for management information purposes, into various lines of business.
The number and composition of these lines of business are subject to change from
time to time to reflect changes in Chemical's management organization. As of
June 30, 1995, Chemical was organized into the following three principal lines
of business.
Global Bank. The Global Bank was organized into three principal management
units at June 30, 1995: Global Banking & Investment Banking (client management,
loan syndications and portfolio investments; high yield finance, venture
capital; mergers and acquisitions and other advisory services); Global Markets
(foreign exchange dealing; derivatives trading and structuring, risk management
and sales; securities structuring, underwriting, trading and sales; and
management of Chemical's funding and securities investment activities); and
Other International (all wholesale banking; investment banking; markets and
other activities outside of the United States and the major cross-border
financial centers). Also included were Chemical's "terminal businesses" which
represented discontinued portfolios, especially refinancing country debt.
Regional Bank. At June 30, 1995, the Regional Bank included Metropolitan
Banking (consumer banking and commercial and professional banking); Retail Card
Services; Mortgage Bank; National Consumer Finance (home secured lending,
student lending, and other consumer lending); Middle Market (regional commercial
banking); Private Banking; Chemical New Jersey Holdings, Inc.; and Geoserve
(cash management, funds transfer, trade, corporate trust and securities services
worldwide).
Texas Commerce Bank. Texas Commerce Bank is the primary bank for more
large corporations and middle market companies than any other bank in Texas. As
of June 30, 1995, Texas Commerce Bank had $21 billion in total assets with 120
locations statewide.
The principal executive offices of Chemical are located at 270 Park Avenue,
New York, New York 10017, and its telephone number is (212) 270-6000.
THE CHASE MANHATTAN CORPORATION
General. Chase is a bank holding company organized under the laws of
Delaware and registered under the BHCA. At June 30, 1995, Chase was the sixth
largest bank holding company in the United States in terms of total assets, with
total assets on a consolidated basis of approximately $118.8 billion, total
deposits on a consolidated basis of approximately $68.3 billion and total
stockholders' equity on a consolidated basis of approximately $8.6 billion.
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Chase's principal bank subsidiary is Chase Bank, a national banking
association headquartered in New York, New York. At June 30, 1995, Chase Bank
was the fifth largest commercial bank in the United States in terms of deposits.
Business. Chase is a global financial services company that serves
customers through two core franchises: global financial services and U.S. retail
financial services.
Global Financial Services. Global Financial Services ("GFS") serves the
needs of Chase's wholesale clients as they raise, invest, move and manage their
financial resources around the world. GFS clients are diverse in geographic
location, capital markets access and scope of international business. Chase
maintains a presence in key financial centers, including New York, London,
Tokyo, Hong Kong and other major markets in North America, Asia, Europe, the
Middle East and Latin America. Its banking network, spanning 50 countries,
enables Chase to identify users and sources of capital on a global basis, and to
serve the cross-border requirements of customers through integrated delivery
across all its businesses.
Retail Businesses. Chase's U.S. retail businesses provide branch banking
with a focus on the New York tri-state area, as well as consumer credit products
and other financial services to retail customers nationwide. Tri-state regional
banking provides a full range of commercial and consumer banking products to
consumers, small businesses and middle market companies located in the New York,
New Jersey and Connecticut marketplace. Consumer credit products include credit
cards, mortgages, auto finance, home equity loans, insurance and investment
products.
The principal executive offices of Chase are located at 1 Chase Manhattan
Plaza, New York, New York 10081, and its telephone number is (212) 552-2222.
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THE MERGER
GENERAL
The Boards of Directors of Chemical and Chase have approved the Merger
Agreement, which provides for the Merger at the Effective Time, with Chemical as
the Surviving Corporation. This section of the Proxy Statement/Prospectus
describes certain aspects of the proposed Merger, including the principal terms
of the Merger Agreement and the Stock Option Agreements. A copy of the Merger
Agreement is attached to this Proxy Statement/Prospectus as Annex I and is
incorporated herein by reference. The description set forth below of the terms
of the Merger Agreement is qualified in its entirety by reference thereto. All
stockholders of Chemical and Chase are urged to read the Merger Agreement in its
entirety.
BACKGROUND OF THE MERGER
The past decade has been a period of rapid change in the banking industry,
characterized by accelerating consolidation, intensifying competition from
domestic and foreign banks and from nonbank financial services organizations,
and increasing requirements for investments in technology in order to meet
customer needs on an efficient, competitive basis. During this period, the
managements of both Chemical and Chase have carefully reviewed their strategic
alternatives and taken various steps to maintain and enhance their long-term
profitability in the face of changing industry conditions.
Chemical's principal strategic objectives have been to enhance earnings by
increasing scale and market position, achieve cost savings and eliminate
redundancies in primary lines of business, build and maintain capital strength
and strengthen global trading and banking capabilities. As a key step toward
achieving these objectives, in December 1991 Chemical merged with MHC in a
strategic business combination that provided substantial cost savings and the
opportunity to raise significant amounts of new capital while at the same time
greatly enhancing Chemical's market position both globally and in the greater
New York metropolitan area.
Over the next several years Chemical focused on the process of integrating
the operations of the two companies and achieving the planned synergies and cost
savings of the merger. Upon the successful completion of this process, Chemical
undertook a business-by-business evaluation of its principal franchises and
designed a new series of initiatives intended to build on the benefits obtained
from the MHC merger by further improving efficiencies and producing
significantly higher earnings per share. These initiatives served as the basis
of Chemical's "actions to improve earnings per share" program, announced in
December 1994. This program included steps to reduce Chemical's cost base, to
focus investment spending in products and franchises with attractive
opportunities for higher revenue growth, and to divest or close various
operations and businesses that were not producing adequate returns or were no
longer central to its focused strategy, while maintaining Chemical's commitment
to a disciplined and strategic use of its capital.
Chemical's management and Board have recognized for some time, however,
that Chemical's efforts to achieve and maintain market leadership positions in
key business lines, benefit from the increased economies of scale that are
becoming critical in many product lines (such as credit cards and mortgage
servicing), and achieve further significant reductions in operating cost levels,
could be substantially enhanced by another strategic business combination with a
major bank holding company having a similar strategic focus and corresponding or
complementary product lines. Accordingly, Chemical's management has, since the
successful integration of Chemical and MHC's operations, periodically reviewed
the possibility of strategic combinations with other large domestic and foreign
banking institutions, including Chase, and discussed the results of these
analyses with Chemical's Board of Directors on a regular basis. Prior to the
commencement of discussions with Chase in July 1995, however, none of the
available opportunities for a business combination with another major banking
institution met the strategic and financial criteria set by Chemical's
management and Board, including the key criterion that any major business
combination should avoid significant dilution to Chemical's stockholders.
Chase's major initiatives in recent years have included a thorough review
of its basic strategies, building capital and reserves, improving earnings and
credit quality, enhancing its systems to measure and control the various risks
inherent in its businesses and focusing on its competitive strengths by
allocating its resources to
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businesses in which it is a leader. In implementing those initiatives, Chase,
among other things, completed a major public offering of equity securities in
1993, made acquisitions in businesses in which it had strong capabilities and
where it believed economies of scale could be realized (such as its acquisitions
of mortgage companies and the securities processing businesses of U.S. Trust
Corporation) and disposed of selected businesses and assets (including
commercial banking units in Ohio and Arizona, most of its commercial real estate
loan portfolio and retail products in developed non-U.S. markets).
In early 1995 Chase management undertook a series of actions that were
intended to increase revenues, make better use of capital and improve
productivity through expense reductions. These efforts were reflected in the
integration of several business units in order to seamlessly meet the multiple
financial needs of customers, increased securitization activities and the FOCUS
expense-reduction program that Chase announced on May 5, 1995.
At the same time, Chase continued to review, as it had for several years,
alternatives for achieving significantly improved levels of performance. This
review included an analysis of the benefits and feasibility of several
alternatives including continuing on an accelerated basis its existing
strategies, a series of acquisitions of small and medium-sized banking
institutions, strategic alliances with other financial services companies in
anticipation of changes in the laws governing the powers of bank holding
companies, and a merger with another large bank holding company with similar
strategies. As part of this process Chase reviewed each of its core businesses
and confirmed its basic strategies. Management also reached the conclusion,
which was endorsed by the Chase Board of Directors over the course of several
meetings, that the possibility of a merger with another large bank holding
company having a similar strategic vision and management culture should be
pursued in order to benefit Chase stockholders by creating a world class
financial institution with a broad customer base which would enjoy strong market
positions and economies of scale in important lines of business. The effect that
the accelerating pace of consolidation within the banking industry might have on
the availability of suitable merger partners for Chase was a factor that was
considered in determining the time frame for such a transaction.
At the regular Chase Board of Directors meeting of June 21, 1995, Chase's
Chairman reviewed various strategic options and possible business combinations
with Chase's Board of Directors. Mr. Labrecque also reported on separate
discussions he had had recently with the representatives of several companies
(including Chemical) regarding evolving conditions in the financial services
industry and the companies' strategic objectives. Following this meeting, Chase
had preliminary discussions with another major bank holding company about a
possible merger, but these discussions were terminated when it was determined
that their strategies differed in significant ways and that a merger between
them would therefore not present sufficient opportunities to maximize synergies
and achieve the strategic objectives for Chase referred to above.
On July 14 and again on July 17, 1995, Mr. Shipley and Mr. Labrecque met
and discussed various developments in the financial services industry as well as
developments affecting their respective companies. During the course of these
meetings, they also discussed the possibility of a strategic business
combination between the companies and concluded that further discussions would
be appropriate in light of the unique potential benefits of such a transaction
to both companies and their respective stockholders.
On July 18, 1995, at the regular Chemical Board of Directors meeting, Mr.
Shipley reported the results of his discussions with Mr. Labrecque to the Board
and recommended that further discussions relating to a possible strategic
combination of the two companies be pursued, which the Chemical Board then
authorized. The next day, at the regular Chase Board of Directors meeting, Mr.
Labrecque made a similar report to the Chase Board, which then authorized
Chase's management to undertake such discussions with Chemical.
Over the next five weeks, there were a number of meetings between the two
Chairmen and among other senior officers of the two companies and counsel for
both parties. Chase retained Wolfensohn and Goldman Sachs and Chemical retained
Morgan Stanley, in each case to provide financial advice and assistance in
connection with the proposed merger, including performing valuation and
financial analyses of the combination. During this period, the terms of the
Merger, including the Exchange Ratio, were determined through arm's-length
negotiations between Chemical and Chase. Also during this period both Mr.
Shipley and
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Mr. Labrecque stayed in contact with individual members of their respective
boards to brief them on the status and progress of discussions and to obtain the
directors' views on various matters.
At a special meeting of Chase's Board of Directors held on August 25, 1995,
and at separate special meetings of the Chase and Chemical Boards of Directors
convened on August 27, 1995, the Boards of Directors of Chemical and Chase
received detailed descriptions and analyses of the Merger by their respective
managements and financial and legal advisors. At the August 27 board meetings,
after consideration of the various factors and for the reasons described below,
the Boards of Directors of Chemical and Chase each approved, in each case by the
unanimous vote of all directors present at the meetings, the Merger Agreement
and related transactions.
REASONS FOR THE MERGER; RECOMMENDATIONS OF THE BOARDS OF DIRECTORS
The Boards of Directors of Chemical and Chase believe that the Merger will
create a premier global financial services company with the financial and
managerial resources to compete effectively in the rapidly changing and
consolidating marketplace for banking and financial services.
Each Board of Directors determined that the Merger represents a unique
strategic fit between two financially sound institutions with similar business
strategies and complementary product capabilities and market coverage. The
Boards of Directors of Chemical and Chase believe that the combined company will
be a stronger financial services company than either is individually with
product and geographic diversity and market leadership positions in most of its
major business lines, including corporate banking, global finance, foreign
exchange trading, various national consumer businesses and retail and
middle-market wholesale banking in the highly competitive banking market in the
tri-state region of New York, New Jersey and Connecticut. The Boards of
Directors of Chemical and Chase believe that the combined entity will have
greater financial strength, operational efficiencies and earnings power than
either Chemical or Chase would have on its own.
In addition, the Boards of Directors of both Chemical and Chase concluded
that because of the high degree of geographic and operational overlap between
the two companies and the similarity of their strategic focus, the Merger
presented significant opportunities for synergies and cost savings. Although no
assurances can be given that any specific level of cost savings will be achieved
or as to the timing thereof, the managements of Chemical and Chase have
identified potential annual pre-tax cost savings of $1.5 billion (or
approximately 16% of projected combined 1995 operating expenses) expected to be
achieved within three years following the Merger by consolidating certain
operations and eliminating redundant costs. The managements of the two companies
have also set performance goals for the Surviving Corporation for the three
years following the Merger, in light of the projected synergies and cost savings
anticipated to be realized as a result of the Merger. There can, however, be no
assurance that the Surviving Corporation will be able to achieve these
performance goals within the time periods contemplated or otherwise. See
"Management and Operations After the Merger -- Consolidation of Operations;
Anticipated Cost Savings" and "Pro Forma Combined Financial Data".
In reaching its conclusions, each Board of Directors considered, among
other things, (i) information concerning the financial performance and
condition, business operations, capital levels, asset quality and prospects of
each of Chemical and Chase and their projected future results and prospects as
separate entities and on a combined basis, (ii) current industry, economic and
market conditions and trends, including the likelihood of continuing
consolidation and increasing competition in the banking and financial services
industries (and corresponding decrease in the number of suitable merger partners
for either Chemical or Chase), the growing importance of financial resources and
market position and economies of scale to a banking institution's ability to
compete successfully in this changing environment, and the increasing costs of
technology, (iii) the structure of the transaction, (iv) the possibility of
achieving significant cost savings, operating efficiencies and synergies as a
result of the Merger that would not be available to either company on its own,
(v) the terms of the Merger Agreement, the Stock Option Agreements and other
documents executed in connection with the Merger, (vi) the opinions of its
financial advisors described below as to the fairness from a financial point of
view of the Exchange Ratio (which was determined through arm's-length
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negotiations between Chemical and Chase), (vii) the likelihood of obtaining
required regulatory approval, (viii) the changing legal environment for banking
and financial services and (ix) the impact of the Merger on the depositors,
employees, customers and communities served by each company. In reaching their
respective decisions to approve the Merger Agreement and recommend the Merger to
stockholders, neither the Chemical Board of Directors nor the Chase Board of
Directors assigned any relative or specific weights to the various factors
considered and individual directors may have given differing weights to
different factors.
THE BOARDS OF DIRECTORS OF CHEMICAL AND CHASE BELIEVE THAT THE TERMS OF THE
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THEIR RESPECTIVE STOCKHOLDERS.
THE CHEMICAL BOARD OF DIRECTORS AND THE CHASE BOARD OF DIRECTORS HAVE EACH, BY
UNANIMOUS VOTE OF ALL DIRECTORS PRESENT, APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMEND THAT THEIR RESPECTIVE
STOCKHOLDERS APPROVE AND ADOPT THE MERGER AGREEMENT.
OPINIONS OF FINANCIAL ADVISORS
Chemical. Morgan Stanley has delivered its written opinions to the Board
of Directors of Chemical that, as of August 27, 1995 and the date of this Proxy
Statement/Prospectus, the Exchange Ratio was fair from a financial point of view
to the holders of Chemical Common Stock (other than Chase and its affiliates).
No limitations were imposed by the Chemical Board of Directors upon Morgan
Stanley with respect to the investigations made or procedures followed by it in
rendering its opinions.
THE FULL TEXT OF THE OPINION OF MORGAN STANLEY DATED AS OF THE DATE OF THIS
PROXY STATEMENT/PROSPECTUS, WHICH SETS FORTH ASSUMPTIONS MADE, MATTERS
CONSIDERED AND LIMITS ON THE REVIEW UNDERTAKEN, IS ATTACHED AS ANNEX IV TO THIS
PROXY STATEMENT/PROSPECTUS. CHEMICAL STOCKHOLDERS ARE URGED TO READ THIS OPINION
IN ITS ENTIRETY. MORGAN STANLEY'S OPINION IS DIRECTED ONLY TO THE EXCHANGE RATIO
AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY CHEMICAL STOCKHOLDER AS TO HOW
SUCH STOCKHOLDER SHOULD VOTE AT THE CHEMICAL SPECIAL MEETING. THE SUMMARY OF THE
OPINION OF MORGAN STANLEY SET FORTH IN THIS PROXY STATEMENT/PROSPECTUS IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.
In connection with rendering its opinion dated August 27, 1995, Morgan
Stanley, among other things: (i) analyzed certain publicly available financial
statements and other information of Chase and Chemical, respectively; (ii)
analyzed certain internal financial statements and other financial and operating
data concerning Chase prepared by the management of Chase; (iii) analyzed
certain financial projections prepared by the management of Chase; (iv)
discussed the past and current operations and financial condition and the
prospects of Chase with senior executives of Chase; (v) analyzed certain
internal financial statements and other financial operating data concerning
Chemical prepared by the management of Chemical; (vi) analyzed certain financial
projections prepared by the management of Chemical; (vii) discussed the past and
current operations and financial condition and the prospects of Chemical with
senior executives of Chemical, and analyzed the pro forma impact of the Merger
on Chemical's earnings per share, consolidated capitalization and financial
ratios; (viii) reviewed the reported prices and trading activity for the Chase
Common Stock and the Chemical Common Stock; (ix) compared the financial
performance of Chase and Chemical and the prices and trading activity of the
Chase Common Stock and the Chemical Common Stock with that of certain other
comparable publicly traded companies and their securities; (x) discussed with
independent auditors of Chase their review of the financial and accounting
affairs of Chase and with the independent auditors of Chemical their review of
the financial and accounting affairs of Chemical; (xi) discussed the strategic
objectives of the Merger and the plan for the combined company with senior
executives of Chemical and Chase; (xii) analyzed certain pro forma financial
projections for the combined company prepared by Chemical and Chase; (xiii)
reviewed and discussed with senior managements of Chemical and Chase certain
estimates of the cost savings projected by Chemical and Chase for the combined
company and compared such amounts to those estimated in certain precedent
transactions; (xiv) reviewed the financial terms, to the extent publicly
available, of certain comparable precedent transactions; (xv) participated in
discussions and negotiations among representatives of Chemical and Chase and
their financial and legal advisors; (xvi) reviewed the draft Merger Agreement
and certain related documents; and (xvii) performed such other analyses as it
deemed appropriate.
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Morgan Stanley assumed and relied upon without independent verification the
accuracy and completeness of the information reviewed by it for the purposes of
its opinion. With respect to the financial projections, including the estimates
of cost savings expected to result from the Merger, Morgan Stanley assumed that
they were reasonably prepared on bases reflecting the best currently available
estimates and judgments of the future financial performance of Chemical and
Chase. Morgan Stanley did not make any independent valuation or appraisal of the
assets or liabilities of Chase or Chemical, nor was it furnished with any such
appraisals. In addition, Morgan Stanley did not examine any individual loan
credit files of Chase or Chemical. Morgan Stanley's opinion was based on
economic, market and other conditions as in effect on, and the information made
available to it as of, the date of its opinion.
The projections furnished to Morgan Stanley for each of Chemical and Chase
were prepared by the respective managements of each company. As a matter of
policy, neither Chemical nor Chase publicly discloses internal management
projections of the type provided to Morgan Stanley in connection with its
analysis of the Merger, and such projections were not prepared with a view
toward public disclosure. These projections were based on numerous variables and
assumptions which are inherently uncertain and which may not be within the
control of management, including, without limitation, factors related to general
economic and competitive conditions and prevailing interest rates. Accordingly,
actual results could vary significantly from those set forth in such
projections.
The following is a summary of the report presented by Morgan Stanley to the
Chemical Board of Directors on August 27, 1995 in connection with its August 27,
1995 opinion:
Pro Forma Merger Analysis. The effects of the Merger on Chemical and
Chase were analyzed both qualitatively and quantitatively. Qualitative
attributes of the Merger included achieving scale in major business lines,
complementary and overlapping franchises in terms of geographic location,
products and customers, and efficiency gains and revenue enhancements that
would have a positive impact on earnings per share and return on equity.
Morgan Stanley analyzed the financial impact of the Merger on the
holders of Chemical Common Stock, using for these purposes financial
projections prepared by management of Chemical for Chemical and by
management of Chase for Chase for each fiscal year in the three-year period
ending December 31, 1998 and using projections prepared by the managements
of Chemical and Chase as to the timing and amount of cost savings (see
"Management and Operations After the Merger -- Consolidation of Operations;
Anticipated Cost Savings"). This analysis showed that, after giving effect
to the Merger, before the impact of one-time Merger-related charges and any
share repurchases of either Chemical Common Stock or Chase Common Stock,
current holders of Chemical Common Stock would realize increases in fully
diluted earnings per share of approximately 1% in 1996, more than 10% in
1997 and more than 20% in 1998, in each case as compared to Chemical on a
stand-alone basis. Morgan Stanley also analyzed the changes in return on
equity from Chemical on a stand-alone basis, noting that such return on
equity would increase by more than 20% in the three years following the
Merger.
Morgan Stanley also performed a dividend discount analysis to
determine a range of present values per share of Chemical Common Stock both
on a stand-alone basis and after giving effect to the Merger and the
projected cost savings from the Merger. Using projections prepared by
Chemical's and Chase's management for the combined companies after the
Merger and the methodology and assumptions described below under
"Stand-Alone Valuation of Chase -- Dividend Discount Analysis", Morgan
Stanley calculated that the Merger would result in an 18% increase in the
net present value of the Chemical Common Stock compared to Chemical on a
stand-alone basis.
The potential value from realization of future cost savings from the
Merger was estimated by Morgan Stanley using a present value calculation.
For purposes of the analysis, Morgan Stanley assumed, based on estimates
provided by Chemical's and Chase's management (see "Management and
Operations After the Merger -- Consolidation of Operations; Anticipated
Cost Savings"), that the Surviving Corporation would realize net cost
savings of $600 million in the first year following the Merger, $1.05
billion in the second year following the Merger and $1.5 billion in the
third year following the Merger and each year thereafter, representing
approximately 34% of Chase's estimated 1995 pre-tax
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noninterest expense and 16% of the Surviving Corporation's projected
pre-tax noninterest expense. Based on a discount rate of 15.5%, a
restructuring charge incurred in the first year following the Merger equal
to the fully phased-in annual cost savings and a 9.5x price/earnings
terminal multiple in the year 2000, Morgan Stanley calculated that the net
present value for the projected cost savings was $5.3 billion in the
aggregate.
Morgan Stanley analyzed the projected cost savings in certain
previously announced or consummated combinations involving large, publicly
traded bank holding companies. Morgan Stanley observed that in these
transactions, announced projections of fully phased-in cost savings ranged
from approximately 31% to 43% (with an average of 36%) of the noninterest
expense base of the bank holding company with the lower noninterest expense
base, in the case of transactions considered to be "in-market" transactions
by Morgan Stanley, and from 11% to 20% (with an average of 15%) in the case
of transactions considered to be "contiguous market" transactions by Morgan
Stanley. For this analysis, Morgan Stanley analyzed the following in-market
transactions: PNC Financial Corp./Midlantic Corporation, Fleet Financial
Group, Inc./Shawmut National Corporation, Comerica, Inc./Manufacturers
National Corporation, Chemical Banking Corporation/Manufacturers Hanover
Corporation, CoreStates Financial Corp./First Pennsylvania Corp., MNC
Financial, Inc./Equitable Bancorporation, Bank of New York/Irving Bank
Corp., Hartford National Corporation/Shawmut National Corporation and Wells
Fargo & Company/Crocker National Corp. Contiguous market transactions
analyzed by Morgan Stanley were the following: First Chicago
Corporation/NBD Bancorp, Inc., First Union Corporation/First Fidelity
Bancorporation, KeyCorp/Society Corporation and NCNB/C&S/Sovran
Corporation. Projected cost savings rather than actual cost savings were
used by Morgan Stanley for purposes of this analysis because information
regarding projected cost savings is the only information publicly available
regarding such savings.
Summary Contribution Analysis. Morgan Stanley computed the
contribution to the combined entity's pro forma financial results
attributable to each of Chemical and Chase. The computation showed, among
other things, that Chemical and Chase would contribute to the combined
entity approximately 59% and 41%, respectively, of book value as of June
30, 1995, 62% and 38%, respectively, of earnings for the six months ended
June 30, 1995, and 59% and 41%, respectively, of projected 1996 earnings
using managements' earnings estimates. Morgan Stanley calculated that the
Exchange Ratio would result in an allocation between the holders of
Chemical Common Stock and Chase Common Stock of pro forma ownership of the
combined entity equal to 57% and 43%, respectively.
Stand-Alone Valuation of Chase. As part of its financial analysis,
Morgan Stanley evaluated Chase on a stand-alone basis, as described below:
Comparable Company Analysis. Comparable company analysis analyzes a
company's operating performance relative to a group of publicly traded
peers. Based on relative performance and outlook for a company versus its
peers, this analysis enables an implied unaffected market trading value to
be determined. Morgan Stanley analyzed the operating performance of Chase
relative to (i) a group of five publicly traded bank holding companies:
Citicorp, BankAmerica Corporation, J.P. Morgan & Co. Inc., Bankers Trust
New York Corporation, and NationsBank Corporation (the "Peer Group"); and
(ii) 35 regional bank holding companies whose results are regularly
analyzed and published by Morgan Stanley (the "Morgan Stanley Bank Index"
and together with the Peer Group, the "Comparables"). Historical financial
information used in connection with the ratios provided below with respect
to the Comparables is as of June 30, 1995.
Morgan Stanley analyzed the relative performance and value of Chase by
comparing certain market trading statistics for Chase with the Comparables.
Market trading information used in the ratios provided below is as of
August 25, 1995. The market trading information used in the valuation
analysis was market price to book value (which was 1.3x in the case of
Chase, 1.4x in the case of the median of the Peer Group, 1.8x and 1.2x in
the case of the high and low, respectively, of the Peer Group, and 1.7x in
the case of the mean average of the Morgan Stanley Bank Index); market
price to estimated earnings per share for 1995 (which was 9.7x in the case
of Chase, 10.3x in the case of the median of the Peer Group, 29.9x and
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9.0x in the case of the high and low, respectively, of the Peer Group, and
10.5x in the case of the mean average of the Morgan Stanley Bank Index);
market price to estimated earnings per share for 1996 (which was 8.2x, in
the case of Chase, 9.1x in the case of the median of the Peer Group, 10.4x
and 8.0x in the case of the high and low, respectively, of the Peer Group,
and 9.5x in the case of the mean average of the Morgan Stanley Bank Index).
Earnings per share estimates for Chase and the Peer Group were based on
First Call estimates as of August 25, 1995. Earnings per share estimates
for the Morgan Stanley Bank Index were based on the most recent available
Institutional Brokers Estimate System ("IBES") estimates. IBES and First
Call are data services that monitor and publish compilations of earnings
estimates produced by selected research analysts regarding companies of
interest to institutional investors. The implied range of values for Chase
Common Stock derived from the analysis of the Comparables' market price to
book value and market price to 1995 and 1996 earnings per share estimates
ranged from approximately $46 to $52.
No company used in the comparable company analysis is identical to
Chase. Accordingly, an analysis of the results of the foregoing necessarily
involves complex considerations and judgments concerning differences in
financial and operating characteristics of Chase and other factors that
could affect the public trading value of the companies to which it is being
compared. Mathematical analysis (such as determining the median or the mean
average) is not in and of itself a meaningful method of using comparable
company data.
Dividend Discount Analysis. Morgan Stanley performed dividend
discount analyses to determine two ranges of present values per share of
Chase Common Stock: first, assuming Chase were to continue to operate as a
stand-alone entity but without giving effect to projected expense
reductions from Chase's "FOCUS" expense reduction program and, second,
assuming Chase were to continue to operate as a stand-alone entity and also
giving effect to projected annual pre-tax expense reductions of $400
million as a result of Chase's "FOCUS" program. The ranges were determined
by adding (i) the present value of the estimated future dividend stream
that Chase could generate over the five-year period beginning in 1995 and
ending in 2000 and (ii) the present value of the "terminal value" of Chase
Common Stock at the end of 2000. To determine a projected dividend stream,
Morgan Stanley assumed a dividend payout ratio of 35% of Chase's projected
net income. The earnings projections which formed the basis for the
dividends were adapted from Chase's management's projections for 1995
through 2000, both before and after giving effect to projected expense
reductions as a result of the FOCUS program. The terminal value of Chase
Common Stock at the end of the five-year period was determined by applying
two price-to-earnings multiples (9x and 10x) to year 2000 earnings (both
before and after giving effect to expense reductions from the FOCUS
program) using discount rates of 15% and 16%, which Morgan Stanley viewed
as the appropriate discount rate range for a company with Chase's risk
characteristics. Without giving effect to projected expense reductions from
the FOCUS program, for the 9.0x case, the fully diluted stand-alone value
of Chase Common Stock ranged from approximately $43 per share to
approximately $45 per share, and for the 10.0x case, the fully diluted
stand-alone value of Chase Common Stock ranged from approximately $47 per
share to approximately $49 per share. After giving effect to projected
expense reductions from the FOCUS program, for the 9.0x case, the fully
diluted stand-alone value of Chase Common Stock ranged from approximately
$50 per share to approximately $52 per share, and for the 10.0x case, the
fully diluted stand-alone value of Chase Common Stock ranged from
approximately $54 per share to $57 per share.
Historical Exchange Ratio and Stock Price Study. Morgan Stanley
compared the historical price-to-earnings ratios of Chemical and Chase
during the period from January 19, 1994 through August 22, 1995 and the
historical price-to-book value ratios of Chemical and Chase during the
period from January 1, 1994 through August 14, 1995. In addition, Morgan
Stanley reviewed the historical market price movement of Chemical Common
Stock and Chase Common Stock from January 1, 1994 to August 25, 1995 and
the relationship between movements of such stocks and movements in a
composite index comprised of the following six bank holding companies which
Morgan Stanley judged to be comparable: Citicorp, BankAmerica Corporation,
J.P. Morgan & Co., Inc., Bankers Trust New York Corporation, First Chicago
Corporation and NationsBank Corporation. Morgan Stanley also analyzed the
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ratio of closing prices per share of Chemical Common Stock and Chase Common
Stock during the period from August 1, 1994 through August 25, 1995. Morgan
Stanley observed that such exchange ratio had averaged approximately .97
during such period (with a high of 1.07 and a low of approximately .84) and
had averaged 1.00 over the prior six months and .94 during the period from
August 1, 1994 to the announcement on April 5, 1995 of the purchase by
Heine Securities Corporation of 6.1% of the outstanding Chase Common Stock.
In connection with its opinion dated as of the date of this Proxy
Statement/Prospectus, Morgan Stanley confirmed the appropriateness of its
reliance on the analyses used to render its August 27, 1995 opinion by
performing procedures to update certain of such analyses and by reviewing the
assumptions on which such analyses were based and the factors considered in
connection therewith.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to a partial analysis or summary description. Morgan
Stanley believes that its analyses must be considered as a whole and that
selecting portions of its analyses, without considering the analyses taken as a
whole, would create an incomplete view of the process underlying the analyses
set forth in its opinions. In addition, Morgan Stanley considered the results of
all such analyses and did not assign relative weights to any of the analyses, so
that the ranges of valuations resulting from any particular analysis described
above should not be taken to be Morgan Stanley's view of the actual value of
Chemical, Chase or the combined entity.
In performing its analyses, Morgan Stanley made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of Chemical or Chase. The
analyses performed by Morgan Stanley are not necessarily indicative of actual
values, which may be significantly more or less favorable than suggested by such
analyses. Such analyses were prepared solely as a part of Morgan Stanley's
August 27, 1995 opinion. The analyses do not purport to be appraisals or to
reflect the prices at which a company might actually be sold.
The Chemical Board of Directors retained Morgan Stanley based upon its
experience and expertise. Morgan Stanley is an internationally recognized
investment banking and advisory firm. Morgan Stanley, as part of its investment
banking business, is continuously engaged in the valuation of businesses and
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for corporate and other
purposes. In the course of its market making and other trading activities,
Morgan Stanley may, from time to time, have a long or short position in, and may
buy and sell, securities of Chemical and Chase. In the past, Morgan Stanley and
its affiliates have provided financial advisory and financing services to
Chemical and to Chase and have received customary fees for the rendering of
these services.
Chemical agreed to pay Morgan Stanley a fee of $3 million, which was
payable upon delivery of its August 27, 1995 opinion. In addition, Chemical has
agreed to reimburse Morgan Stanley for its reasonable out-of-pocket expenses
incurred in connection with the services provided by Morgan Stanley and to
indemnify and hold harmless Morgan Stanley and certain related parties to the
full extent lawful from and against certain liabilities and expenses, including
certain liabilities under the federal securities laws, incurred in connection
with its engagement.
Chase. Chase has retained Wolfensohn and Goldman Sachs to act as its
financial advisors in connection with the Merger. On August 27, 1995 and on the
date hereof, Wolfensohn and Goldman Sachs delivered written opinions to the
Chase Board of Directors. The opinions of Wolfensohn, as investment bankers,
state that, as of the dates of such opinions, the Exchange Ratio pursuant to the
Merger Agreement is fair from a financial point of view to the holders of Chase
Common Stock. The opinions of Goldman Sachs state that, as of the date of such
opinions, the Exchange Ratio pursuant to the Merger Agreement is fair to the
holders of Chase Common Stock.
THE FULL TEXTS OF THE WRITTEN OPINIONS OF GOLDMAN SACHS AND WOLFENSOHN TO
THE CHASE BOARD OF DIRECTORS DATED AS OF THE DATE OF THIS PROXY
STATEMENT/PROSPECTUS, WHICH SET FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED
AND LIMITS OF THE REVIEW UNDERTAKEN IN CONNECTION WITH THE OPINIONS, ARE
ATTACHED HERETO AS ANNEXES V AND VI, RESPECTIVELY, AND ARE INCORPORATED HEREIN
BY REFERENCE. HOLDERS OF SHARES OF CHASE
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COMMON STOCK ARE URGED TO, AND SHOULD, READ SUCH OPINIONS IN THEIR ENTIRETY. THE
OPINIONS OF GOLDMAN SACHS AND WOLFENSOHN DO NOT CONSTITUTE A RECOMMENDATION TO
ANY HOLDER OF CHASE COMMON STOCK AS TO HOW TO VOTE AT THE CHASE SPECIAL MEETING.
THE SUMMARY OF THE OPINIONS OF GOLDMAN SACHS AND WOLFENSOHN SET FORTH HEREIN IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXTS OF THE OPINIONS
ATTACHED AS ANNEXES V AND VI HERETO.
In connection with rendering their opinions dated August 27, 1995,
Wolfensohn and Goldman Sachs reviewed, among other things, the Merger Agreement;
Annual Reports to stockholders and Annual Reports on Form 10-K of Chase and
Chemical for the five years ended December 31, 1994; certain interim reports to
stockholders and Quarterly Reports on Form 10-Q of Chase and Chemical; certain
other communications from Chase and Chemical to their respective stockholders;
and certain internal financial analyses and forecasts for Chase and Chemical
prepared by their respective managements, including analyses and forecasts of
certain cost savings, operating efficiencies, revenue effects and financial
synergies (collectively, the "Synergies") expected by Chase and Chemical to be
achieved as a result of the Merger. Wolfensohn and Goldman Sachs have also
reviewed and considered in their analyses information prepared by members of
senior managements of Chase and Chemical relating to the relative contributions
of Chase and Chemical to the Surviving Corporation and the estimated pro forma
impact of the Merger on earnings per share, consolidated capitalization and
certain other financial ratios for the Surviving Corporation as compared to
Chase and Chemical. Wolfensohn and Goldman Sachs also held discussions with
members of the senior managements of Chase and Chemical regarding the past and
current business operations, regulatory relationships, financial conditions and
future prospects of their respective companies, senior managements' assessment
of the strategic fit and implications of the Merger, and the Synergies. In
addition, Wolfensohn and Goldman Sachs reviewed the reported price and trading
activity for the Chase Common Stock and the Chemical Common Stock, compared
certain financial and stock market information for Chase and Chemical with
similar information for certain other companies having certain similar
characteristics or operating in similar lines of business to Chase and Chemical,
the securities of which are publicly traded, reviewed the financial terms, to
the extent publicly available, of certain recent business combinations in the
commercial banking industry and performed such other studies and analyses as
Wolfensohn and Goldman Sachs, respectively, considered appropriate.
Goldman Sachs and Wolfensohn each relied without independent verification
upon the accuracy and completeness of all of the financial and other information
reviewed by them or conveyed to them in discussions with senior managements of
Chase and Chemical for purposes of their opinions. In that regard, Goldman Sachs
and Wolfensohn have assumed that the financial forecasts (and the assumptions
and bases therefor), including the Synergies, have been reasonably prepared on a
basis reflecting the best currently available judgments and estimates of Chase
and Chemical and that such Synergies will be realized in the amounts and at the
times contemplated thereby, and in rendering their opinion they express no view
as to the reasonableness of such forecasts or the assumptions on which they are
based. Goldman Sachs and Wolfensohn are not experts in the evaluation of loan
portfolios for the purposes of assessing the adequacy of the allowances for
losses with respect thereto and have assumed that such allowances for each of
Chase and Chemical are in the aggregate adequate to cover all such losses.
Goldman Sachs and Wolfensohn also assumed without independent analysis that the
obligations of Chase and Chemical pursuant to derivatives, swaps, foreign
exchange financial instruments and off-balance-sheet lending-related financial
instruments will not have an adverse effect which would be relevant to their
analysis. In addition, Goldman Sachs and Wolfensohn have not reviewed individual
credit files or conducted a physical inspection of any properties or assets and
have not made an independent evaluation or appraisal of the assets and
liabilities of Chase or Chemical or any of their subsidiaries and Goldman Sachs
and Wolfensohn have not been furnished with any such evaluation or appraisal.
Goldman Sachs and Wolfensohn have further assumed that obtaining any necessary
regulatory approvals or third party consents for the Merger or otherwise will
not have a materially adverse effect on the Surviving Corporation. The opinions
of Goldman Sachs and Wolfensohn as to the fairness of the Exchange Ratio address
the ownership position in the Surviving Corporation to be received by the
holders of Chase Common Stock pursuant to the Exchange Ratio on the terms set
forth in the Merger Agreement and do not address the future trading or
acquisition value for the stock of the Surviving Corporation. In addition, their
opinions do not address the relative merits of the Merger and alternative
business strategies. In that regard, Goldman Sachs and Wolfensohn were not
requested to, and did not, solicit third party indications of interest in
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acquiring all or part of Chase or in engaging in a business combination or any
other strategic transaction with Chase. Goldman Sachs and Wolfensohn have
assumed that the Merger will be accounted for as a pooling of interests under
generally accepted accounting principles and that the holders of shares of Chase
Common Stock will not recognize gain or loss for tax purposes as a result of the
Merger.
In connection with their opinions, Goldman Sachs and Wolfensohn performed
certain financial analyses, which were reviewed with the Chase Board of
Directors on August 25, 1995 and August 27, 1995. The following is a summary of
these analyses.
Historical Exchange Ratio Analysis. Goldman Sachs and Wolfensohn
reviewed the ratio of the Chase Common Stock weekly closing trading prices
to the Chemical Common Stock weekly closing trading prices from August 27,
1993 through August 23, 1995. This ratio ranged from approximately 0.82x to
1.06x. A review of the ratio of the Chase Common Stock monthly closing
trading prices to the Chemical Common Stock monthly closing trading prices
for the months ending August 31, 1990 through August 23, 1995 indicated a
range from approximately 0.69x to 1.06x. (The ratio of the closing market
prices of Chase Common Stock to Chemical Common Stock on August 25, 1995 of
$53.00 and $54.375, respectively, was approximately 0.97x.)
Selected Companies Analysis. Wolfensohn and Goldman Sachs reviewed
and compared certain financial and stock market information of Chase and
Chemical with that of a group of large commercial banks comprised of
Citicorp, BankAmerica Corp., J.P. Morgan & Co. Inc., First Chicago
Corporation, NBD Bancorp, Inc., Bankers Trust New York Corporation,
NationsBank Corporation, and Bank of New York Company, Inc. (the "Bank
Companies"). This analysis indicated that (i) the price earnings multiples,
based on latest twelve months earnings per share, were approximately 9.8x
for Chase and 8.7x for Chemical as compared to a mean of 13.9x and a median
of 9.7x for the Bank Companies (with a range from 9.4x to 31.7x), (ii) the
price earnings multiples, based on estimates by the Institutional Brokers
Estimate System, a data service that compiles estimates of securities
research analysts ("IBES"), of 1995 earnings per share were approximately
9.4x for Chase and 8.6x for Chemical as compared to a mean of 11.9x and a
median of 9.7x for the Bank Companies (with a range from 8.6x to 24.2x),
(iii) the price earnings multiples, based on IBES estimates of 1996
earnings per share, were approximately 8.0x for Chase and 7.6x for Chemical
as compared to a mean of 8.9x and a median of 8.8x for the Bank Companies
(with a range from 7.9x to 10.5x), (iv) the multiples of market price to
book value per share were approximately 1.3x for both Chase and Chemical as
compared to a mean and median of 1.4x for the Bank Companies (with a range
from 1.1x to 1.8x), (v) the multiples of market price to tangible book
value per share were 1.5x for Chase and 1.6x for Chemical as compared to a
mean and median of 1.6x for the Bank Companies (with a range from 1.1x to
1.9x), and (vi) dividend yields were 2.9% for Chase and 3.2% for Chemical
as compared to a mean of 3.6% and a median 3.2% for the Bank Companies
(with a range from 1.1% to 5.9%). (Unless otherwise indicated, the
financial data employed in the foregoing analysis were at or for the twelve
months ended June 30, 1995.)
Contribution Analysis. Goldman Sachs and Wolfensohn analyzed and
compared the respective contribution of each of Chase and Chemical to the
Surviving Corporation based on a comparison of certain stock market and
financial information for each company as a separate entity on a
stand-alone basis. This analysis did not take into account any Synergies.
This analysis indicated that Chase would contribute to the Surviving
Corporation approximately (i) 34.4% based upon net income for 1993, 44.7%
based upon net income for 1994, and 38.9% based upon latest twelve months'
net income, (ii) as of June 30, 1995, 39.9% based upon total assets, 42.6%
based upon risk-adjusted assets, 43.1% based upon total loans, 41.8% based
upon total deposits, 41.4% based upon common equity, 43.0% based upon total
stockholders' equity, 41.4% based upon tangible common equity, 43.2% based
upon tangible total equity, and 43.3% based upon Tier 1 capital, and (iii)
41.5% based upon fully diluted market capitalization as of August 25, 1995.
The relative contributions of Chase and Chemical based upon projected
earnings also were analyzed. The Exchange Ratio would result in holders of
Chase Common Stock owning approximately 43% of the common stock of the
Surviving Corporation immediately after consummation of the Merger.
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Selected Transactions Analysis. Wolfensohn and Goldman Sachs reviewed
and analyzed certain financial, operating and stock market information
relating to six selected merger transactions involving large commercial
banking organizations. These transactions were the mergers of NBD Bancorp,
Inc. and First Chicago Corporation (first announced on July 12, 1995), BB&T
Financial Corporation and Southern National Corporation (first announced on
August 1, 1994), KeyCorp and Society Corporation (first announced on
October 4, 1993), Comerica, Inc. and Manufacturers National Corporation
(first announced on October 28, 1991), Chemical Banking Corporation and
Manufacturers Hanover Corporation (first announced on July 15, 1991) and
Sovran Financial Corporation and Citizens and Southern Corporation (first
announced on September 26, 1989). This analysis indicated that the exchange
ratio received by stockholders of the smaller company represented (i) a
percentage above market value ranging from approximately negative 3% to
positive 17% based on closing stock prices one day prior to the public
announcement of the transaction (with no percentage above market value
being paid in three of the six transactions), (ii) a multiple of latest
twelve months earnings per share ranging from approximately 9.1x to 19.1x
(with only one transaction with a multiple in excess of 10.7x), and (iii) a
multiple of tangible book value ranging from .8x to 2.3x. Based upon
currently outstanding shares and the August 25, 1995 market prices for
Chase Common Stock and Chemical Common Stock, the Exchange Ratio represents
(i) a percentage above the market value of Chase Common Stock of
approximately 7%, (ii) a multiple to the latest twelve months earnings per
share of Chase of approximately 10.7x, and (iii) a multiple to Chase's
tangible book value of approximately 1.7x.
Pro Forma Combination Analysis. Goldman Sachs and Wolfensohn analyzed
the pro forma impact of the Merger on the earnings per share of Chase
Common Stock. Based upon IBES estimates, assuming the Merger will be
accounted for as a pooling of interests for 1996, and taking into account
the realization of the Synergies at the times projected by the managements
of Chase and Chemical, the Merger will be accretive to holders of Chase
Common Stock by 11.2% (before restructuring charges). The pro forma impact
on earnings per share based upon projected earnings were also analyzed and
were found to be accretive.
Pro Forma Dividend Analysis. Based upon the current annual dividends
per share of $1.80 and $2.00 on Chase Common Stock and Chemical Common
Stock, respectively, and assuming the current dividend rate on Chemical
Common Stock will be maintained following the Merger (see "-- Dividends"),
holders of Chase Common Stock will realize a 15.6% increase in dividends
(from $1.80 to $2.08 for each share of Chase Common Stock owned immediately
prior to the Merger).
Anticipated Cost Savings. Cost savings estimated by managements of
Chase and Chemical to result from the Merger, which when fully phased-in
would approximate 16% of projected combined 1995 noninterest expenses (see
"Management and Operations After the Merger; Consolidation of Operations;
Anticipated Cost Savings"), were compared to cost savings projected in
selected in-market transactions (which when fully phased-in, as announced,
ranged from 5% to 19% of the combined noninterest expense base of the
merging bank holding companies). These transactions consisted of the
pending mergers of PNC Bank Corp. and Midlantic Corp., and Fleet Financial
Group Inc. and Shawmut National Corp., and the completed mergers of BB&T
Financial Corp. and Southern National Corp., Marshall & Ilsley Corp. and
Valley Bancorp., Bank of Boston Corp. and Multibank Financial Corp., Bank
of Boston Corp. and Society for Savings Bancorp., Integra Financial Corp.
and Equimark Corp., Barnett Banks Inc. and First Florida Banks Inc., Banc
One Corp. and Team Bancshares Inc., KeyCorp and Puget Sound Bancorp.,
Comerica, Inc. and Manufacturers National Corp., Society Corp. and
Ameritrust Corp., First of America Bank Corp. and Security Bancorp. Inc.,
BankAmerica Corp. and Security Pacific Corp., Chemical Banking Corp. and
Manufacturers Hanover Corp., CoreStates Financial Corp. and First
Pennsylvania Corp., MNC Financial Corp. and Equitable Bancorp, Boatmen's
Bancshares Inc. and Centerre Bancorp., Bank of New York Company Inc. and
Irving Bank Corp., and Wells Fargo & Co. and Crocker National Corp.
Projected cost savings rather than actual cost savings were used by
Goldman, Sachs and Wolfensohn for purposes of this analysis because
information regarding projected cost savings is the only information
publicly available regarding such savings.
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In connection with their opinions dated as of the date of this Proxy
Statement/Prospectus, Wolfensohn and Goldman Sachs reviewed the analyses used to
render their August 27, 1995 opinions to the Chase Board of Directors by
performing procedures to update certain of such analyses and by reviewing the
assumptions upon which such analyses were based and the factors considered in
connection therewith.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without considering
the analyses as a whole, could create an incomplete view of the processes
underlying the opinions of Goldman Sachs and Wolfensohn. In arriving at their
fairness determination, Goldman Sachs and Wolfensohn considered the results of
all such analyses and did not assign relative weights to any of the analyses.
The analyses were prepared solely for the purpose of Wolfensohn and Goldman
Sachs providing their opinions to the Chase Board of Directors as to the
fairness of the Exchange Ratio to holders of Chase Common Stock and do not
purport to be appraisals or necessarily reflect the prices at which businesses
or securities actually may be sold, which are inherently subject to uncertainty.
Any estimates incorporated in the analyses performed by Wolfensohn and Goldman
Sachs are not necessarily indicative of actual past or future values or results,
which may be significantly more or less favorable than any such estimates. No
public company utilized as a comparison is identical to Chase, Chemical or the
business segment for which a comparison is being made, and none of the
comparable acquisition transactions or other business combinations utilized as a
comparison is identical to the transactions contemplated by the Merger
Agreement. Accordingly, an analysis of publicly traded comparable companies and
comparable business combinations resulting from the transactions is not
mathematical; rather it involves complex considerations and judgments concerning
differences in financial and operating characteristics of the comparable
companies and other factors that could affect the public trading value of the
comparable companies to which they are being compared. In connection with the
analyses, Wolfensohn and Goldman Sachs made, and were provided estimates and
forecasts by Chase and Chemical management based upon, numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of Chase and Chemical.
Similarly, analyses based upon forecasts of future results are not necessarily
indicative of actual future results, which may be significantly more or less
favorable than suggested by such analyses. Because such analyses are inherently
subject to uncertainty, being based upon numerous factors or events beyond the
control of Chase and Chemical or their respective advisors, none of Chase,
Chemical, Goldman Sachs, Wolfensohn or any other person assumes responsibility
if future results or actual values are materially different from these forecasts
or assumptions. The opinions of Wolfensohn and Goldman Sachs necessarily were
based on the economic, market and other conditions as in effect on, and the
information made available to them as of, the dates of their opinions. The
foregoing summary is qualified by reference to the written opinions of
Wolfensohn and Goldman Sachs set forth in Annexes V and VI to this Proxy
Statement/Prospectus.
As described above, the opinions and presentation of Goldman Sachs and
Wolfensohn to the Chase Board of Directors were only one of a number of factors
taken into consideration by the Chase Board of Directors in making its
determination to approve the Merger Agreement. In addition, the terms of the
Merger were determined through negotiations between Chase and Chemical and were
approved by the Chase Board of Directors. Although Wolfensohn and Goldman Sachs
provided advice to Chase during the course of these negotiations, the decision
to enter into the Merger Agreement and to accept the Exchange Ratio was solely
that of the Chase Board of Directors.
Goldman Sachs, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements,
and valuations for estate, corporate and other purposes. Goldman Sachs is
familiar with Chase, having provided financial advisory and investment banking
services to Chase for a number of years, including having acted as underwriter
of offerings by Chase of its common stock, preferred stock and debt securities,
having acted as financial advisor to Chase and as principal in connection with
asset dispositions and having acted as financial advisor to Chase regarding a
review of its strategic alternatives, and having acted as financial advisor in
connection with, and having participated in certain of the negotiations leading
to, the Merger Agreement.
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Goldman Sachs also has provided certain investment banking services to Chemical
from time to time, including having acted as financial advisor to Chemical in
its merger with Manufacturers Hanover Corporation in 1991 and currently acting
as financial advisor to Chemical with regard to Chemical's ownership interest in
The CIT Group Holdings, Inc., and may provide investment banking services to
Chemical in the future. In addition, Goldman Sachs is a full service securities
firm and in the course of its trading activities it may from time to time effect
transactions, for its own account or the account of customers, and hold long or
short positions in securities or options on securities of Chase and Chemical.
Wolfensohn is experienced in providing advice in connection with mergers
and acquisitions and related transactions. Wolfensohn is familiar with Chase,
having provided financial advisory and investment banking services to Chase for
a number of years, including having acted as financial advisor to Chase
regarding a review of its strategic alternatives, and having acted as financial
advisor in connection with, and having participated in certain of the
negotiations leading to, the Merger Agreement. Wolfensohn receives fees for the
rendering of these financial advisory and investment banking services.
Chase selected Wolfensohn and Goldman Sachs as its financial advisors
because each is an internationally recognized investment banking firm that has
substantial experience in transactions similar to the Merger and has familiarity
with Chase and the industry in which it operates.
Pursuant to letter agreements (the "Engagement Letters"), Chase engaged
Wolfensohn and Goldman Sachs to act as its financial advisors with respect to a
possible business combination with Chemical. Pursuant to the terms of the
Engagement Letters, Chase has agreed to pay Wolfensohn a total of $4,000,000
consisting of (i) $1,000,000 upon execution of the Merger Agreement or delivery
of an opinion and (ii) an additional $3,000,000 upon consummation of the Merger,
and to pay Goldman Sachs $4,000,000 upon consummation of the Merger. In
addition, Chase has agreed to reimburse each of Wolfensohn and Goldman Sachs for
their reasonable out-of-pocket expenses, including the fees and disbursements of
their attorneys, plus any sales, use or similar taxes arising in connection with
their engagement and to indemnify each of them and certain related persons
against certain liabilities, including certain liabilities under the federal
securities laws, arising out of its engagement.
STRUCTURE OF THE MERGER
Subject to the terms and conditions of the Merger Agreement and in
accordance with the DGCL, at the Effective Time, Chase will merge with and into
Chemical. Chemical will be the Surviving Corporation in the Merger, and will
continue its corporate existence under Delaware law under the name "The Chase
Manhattan Corporation". At the Effective Time, the separate corporate existence
of Chase will terminate. The Chemical Charter, as in effect immediately prior to
the Effective Time (and as amended and restated as described herein), will be
the Certificate of Incorporation of the Surviving Corporation, and the By-laws
of Chemical, as in effect immediately prior to the Effective Time, will be the
By-laws of the Surviving Corporation.
MERGER CONSIDERATION
Upon consummation of the Merger, except as described below, (a) each
outstanding share of Chase Common Stock, other than shares held in Chase's
treasury or held by Chemical or any wholly-owned subsidiary of Chemical or Chase
(except in both cases for shares held in trust, managed, custodial or nominee
accounts and the like, or held by mutual funds for which a subsidiary of
Chemical or Chase acts as investment advisor that, in any such case, are
beneficially owned by third parties ("Trust Account Shares") and shares acquired
in respect of debts previously contracted ("DPC Shares")), will be automatically
converted (except that cash will be paid in lieu of fractional shares as
described under "-- Conversion of Shares; Procedures for Exchange of
Certificates; Fractional Shares" below) into 1.04 fully paid and nonassessable
shares of Chemical Common Stock, together with the appropriate number of
Chemical Rights attached thereto, and (b) with the exception of shares held in
Chase's treasury or held by Chemical or any wholly-owned subsidiary of Chemical
or Chase (other than Trust Account Shares and DPC Shares), each outstanding
share of Chase Preferred Stock (which currently consists of (i) Chase Preferred
Stock, 10-1/2% Series G (the "Chase 10-1/2% Preferred Stock"), (ii) Chase
Preferred Stock, 9.76% Series H (the "Chase 9.76% Preferred Stock"),
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(iii) Chase Preferred Stock, 10.84% Series I (the "Chase 10.84% Preferred
Stock"), (iv) Chase Preferred Stock, 9.08% Series J (the "Chase 9.08% Preferred
Stock"), (v) Chase Preferred Stock, 8 1/2% Series K (the "Chase 8 1/2% Preferred
Stock"), (vi) Chase Preferred Stock, 8.32% Series L (the "Chase 8.32% Preferred
Stock"), (vii) Chase Preferred Stock, 8.40% Series M (the "Chase 8.40% Preferred
Stock"), and (viii) Chase Preferred Stock, Adjustable Rate Series N (the "Chase
Adjustable Rate Preferred Stock")) shall be converted into one share of a newly
established series of Chemical Merger Preferred Stock having substantially the
same terms as the share of Chase Preferred Stock being so converted. See
"Description of Capital Stock -- Description of Chemical Merger Preferred
Stock".
Any shares of Chase Common Stock or Chase Preferred Stock owned immediately
prior to the Effective Time by Chemical, Chase or their wholly-owned
subsidiaries (other than Trust Account Shares and DPC Shares) will be cancelled.
All shares of Chemical Common Stock and Chemical Preferred Stock owned
immediately prior to the Effective Time by Chase (other than Trust Account
Shares and DPC Shares) will become treasury stock.
The terms of the Chemical Merger Preferred Stock are more fully described
under "Description of Chemical Capital Stock" below.
The Exchange Ratio was determined through arm's-length negotiations between
Chemical and Chase.
EFFECTIVE TIME
The Effective Time will be the time of the filing of a Certificate of
Merger with the Secretary of State of the State of Delaware or such later time
as is specified in such Certificate of Merger. The filing of the Certificate of
Merger will occur on the first day which is (i) the last business day of a month
and (ii) at least two business days after satisfaction or waiver (subject to
applicable law) of the conditions to consummation of the Merger set forth in the
Merger Agreement (excluding conditions that, by their terms, cannot be satisfied
until the date of closing) unless another date is agreed to in writing by Chase
and Chemical. The Merger Agreement may be terminated by either party if, among
other reasons, the Merger shall not have been consummated on or before September
30, 1996. See "-- Conditions to the Consummation of the Merger" and
"-- Termination" below.
CONVERSION OF SHARES; PROCEDURES FOR EXCHANGE OF CERTIFICATES; FRACTIONAL SHARES
The conversion of Chase Common Stock into Chemical Common Stock and Chase
Preferred Stock into Chemical Merger Preferred Stock will occur automatically at
the Effective Time.
As soon as practicable after the Effective Time, Chemical Bank or another
affiliate of Chemical, or another bank or trust company mutually designated by
Chemical and Chase, in its capacity as Exchange Agent (the "Exchange Agent"),
will send a transmittal form to each former Chase stockholder. The transmittal
form will contain instructions with respect to the surrender of certificates
previously representing Chase Common Stock or Chase Preferred Stock to be
exchanged for Chemical Common Stock (together with the attached Chemical Rights)
or Chemical Merger Preferred Stock, as the case may be.
CHASE STOCKHOLDERS SHOULD NOT FORWARD CHASE STOCK CERTIFICATES TO THE
EXCHANGE AGENT UNTIL THEY HAVE RECEIVED TRANSMITTAL FORMS. CHASE STOCKHOLDERS
SHOULD NOT RETURN STOCK CERTIFICATES WITH THE ENCLOSED PROXY.
After the Effective Time, each certificate that previously represented
shares of Chase Common Stock or Chase Preferred Stock will represent only the
Chemical Common Stock (together with the attached Chemical Rights) or Chemical
Merger Preferred Stock into which such shares were converted in the Merger and
the right to receive cash in lieu of fractional shares of Chemical Common Stock
as described below.
Holders of certificates previously representing Chase Common Stock or Chase
Preferred Stock will not be paid dividends or distributions declared or made
after the 30th day following the Effective Time on the Chemical Common Stock or
the Chemical Merger Preferred Stock into which such shares have been
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converted, and will not be paid cash in lieu of fractional shares of Chemical
Common Stock, until such certificates are surrendered to the Exchange Agent for
exchange. When such certificates are surrendered, any unpaid dividends and any
cash in lieu of fractional shares of Chemical Common Stock payable as described
below will be paid without interest.
Former holders of record immediately prior to the Effective Time of shares
of Chase Common Stock and Chase Preferred Stock will be entitled, at and after
the Effective Time, to vote the number of shares of Chemical Common Stock and
Chemical Merger Preferred Stock into which their shares of Chase Common Stock
and Chase Preferred Stock were converted in the Merger, regardless of whether
the certificates formerly representing such shares of Chase Common Stock or
Chase Preferred Stock shall have been surrendered in exchange for certificates
evidencing Chemical Common Stock (together with the attached Chemical Rights) or
Chemical Merger Preferred Stock, as the case may be.
All shares of Chemical Common Stock or Chemical Merger Preferred Stock
issued upon conversion of shares of Chase Common Stock or Chase Preferred Stock,
as the case may be (including any cash issued in lieu of any fractional shares
of Chemical Common Stock), shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Chase Common Stock or
Chase Preferred Stock, subject, however, to Chemical's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which may have been declared or made by Chase on such shares of
Chase Common Stock or Chase Preferred Stock in accordance with the Merger
Agreement on or prior to the Effective Time and which remain unpaid at the
Effective Time.
No fractional shares of Chemical Common Stock will be issued to any Chase
stockholder upon surrender of certificates previously representing Chase Common
Stock. For each fractional share that would otherwise be issued, Chemical will
pay by check an amount equal to either (as elected by Chemical prior to the
Effective Time) (i) a pro rata portion of the proceeds of the sale by the
Exchange Agent of shares of Chemical Common Stock representing the aggregate of
all such fractional shares, such sale to be executed by the Exchange Agent as
soon as practicable after the Effective Time as, in the Exchange Agent's
reasonable judgment, is consistent with obtaining the best execution of such
sale at then prevailing prices on the NYSE or (ii) the product obtained by
multiplying the fractional share interest to which such holder would otherwise
be entitled by the closing price for a share of Chemical Common Stock on the
NYSE Composite Transactions Tape on the business day immediately preceding the
Effective Time.
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains customary mutual representations and
warranties relating to, among other things, (a) corporate organization and
similar corporate matters; (b) the capital structures of each of Chase and
Chemical; (c) authorization, execution, delivery, performance and enforceability
of the Merger Agreement and related matters; (d) documents filed by each of
Chemical and Chase with the Commission and the accuracy of information contained
therein; (e) the accuracy of information supplied by each of Chemical and Chase
in connection with the Registration Statement and this Proxy
Statement/Prospectus; (f) compliance with applicable laws; (g) the absence of
material litigation; (h) filing of tax returns and payment of taxes; (i) certain
contracts relating to certain employment, consulting and benefits matters; (j)
retirement and other employee plans and matters relating to the Employee
Retirement Income Security Act of 1974, as amended; (k) subsidiaries; (l)
certain bank regulatory matters; (m) absence of certain material changes or
events since June 30, 1995; (n) the inapplicability of Section 203 of the DGCL
and of Section 8.01 of Chase's Certificate of Incorporation, as amended (the
"Chase Charter"), relating to business combinations with interested
stockholders, to the Merger Agreement and related agreements and transactions;
(o) required stockholder votes; (p) the absence of actions that would prevent
using the "pooling of interests" method to account for the Merger; (q) the
inapplicability of certain provisions of the Chemical Rights Agreement and the
Chase Rights Agreement (each as defined in "Comparison of Stockholder Rights --
Rights Plans") to the Merger Agreement and certain related agreements and
transactions; (r) title to properties; (s) ownership by Chase of Chemical Common
Stock, and by Chemical of Chase Common Stock; and (t) brokers' and finders'
fees.
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CONDUCT OF BUSINESS PENDING MERGER
Pursuant to the Merger Agreement, Chemical and Chase have each agreed to
carry on their respective businesses in the usual, regular and ordinary course
in substantially the same manner as conducted prior to the execution of the
Merger Agreement. In addition, Chemical and Chase have each agreed that, among
other things, neither it nor any of its subsidiaries may, without the written
consent of the other:
(i) enter into any new material line of business;
(ii) change its lending, investment, liability management and other
material banking policies in any material respect (except as required by
law or by policies imposed by a bank regulator);
(iii) incur or commit to any capital expenditures or any obligations
or liabilities in connection therewith, except in the ordinary course of
business consistent with past practice;
(iv) declare or pay any dividends on shares of capital stock (other
than regular quarterly cash dividends not in excess of $0.45 per share of
Chase Common Stock, $0.50 per share of Chemical Common Stock, regular
quarterly cash dividends as provided by and in accordance with the present
terms of the Chase Preferred Stock and the Chemical Preferred Stock and
dividends by a wholly owned subsidiary), or split, combine or reclassify
any of its capital stock or issue any securities in lieu of shares of its
capital stock or repurchase, redeem or otherwise acquire any shares of its
capital stock or redeem the Chase Rights or the Chemical Rights;
(v) issue any shares of capital stock, other than issuances upon the
exercise of Chase Warrants (as defined under "Effect on Chase Warrants"),
pursuant to Chemical's dividend reinvestment plan or Chemical or Chase
stock-based employee benefit plans in effect on August 27, 1995, by a
wholly owned subsidiary to its parent, upon the exercise of Chase Rights or
Chemical Rights, pursuant to Chase's agreement to acquire U.S. Trust
Corporation and pursuant to the reinvestment of dividends payable August
15, 1995 pursuant to Chase's dividend reinvestment plan (which plan has
been terminated);
(vi) amend its Certificate of Incorporation or By-laws (except
pursuant to the proposed amendment and restatement of the Chemical Charter
as described herein or to file certificates of designations for each series
of Chemical Merger Preferred Stock);
(vii) amend the Chase Rights Agreement or the Chemical Rights
Agreement (other than amendments contemplated by the Merger Agreement) in a
manner adverse to the other party;
(viii) make any acquisition or enter into any merger, except as
disclosed prior to the date of the Merger Agreement, pursuant to the Stock
Option Agreements, or pursuant to certain other limited exceptions;
(ix) dispose of any material assets, except through internal
reorganizations involving existing subsidiaries other than Chemical Bank or
Chase Bank, as disclosed prior to the date of the Merger Agreement, as
required by law to consummate the transactions contemplated by the Merger
Agreement, or in the ordinary course of business;
(x) incur any long term indebtedness other than in connection with the
refinancing of existing debt or intercompany indebtedness or in the
ordinary course of business;
(xi) take any intentional action reasonably expected to have a
material adverse effect on such party or the Surviving Corporation or to
result in any of the conditions to the Merger not being satisfied or to
adversely affect the parties' ability to obtain any required regulatory
approvals without imposition of a burdensome condition;
(xii) except as disclosed in documents filed with the Commission,
change its method of accounting or its fiscal year;
(xiii) without limiting each of Chemical's and Chase's rights under
the Stock Option Agreements, intentionally take any action which would
disqualify the Merger as a "pooling of interests" for accounting purposes
or as a tax-free "reorganization" for tax purposes;
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(xiv) with certain limited exceptions, enter into, amend or terminate
any employee benefit plan or employment agreement unless contemplated by
the Employee Benefits Agreement (as defined under "Effect on Employee
Benefit and Stock Plans" below); or
(xv) solicit or encourage, or take any other action to facilitate, any
inquiries or the making of any proposal which constitutes, or may
reasonably be expected to lead to, any "takeover proposal" (as defined in
the Merger Agreement).
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Each party's obligation to effect the Merger is subject to various
conditions which include, in addition to other customary closing conditions, the
following:
(i) the Merger Agreement shall have been approved and adopted, and the
amendment and restatement of the Chemical Charter described herein shall
have been approved, by the holders of Chemical Common Stock, and the Merger
Agreement shall have been approved and adopted by the holders of Chase
Common Stock;
(ii) the shares of Chemical Common Stock and of each series of
Chemical Merger Preferred Stock issuable to Chase stockholders in
connection with the Merger and such other shares of Chemical Common Stock
required to be reserved for issuance in connection with the Merger shall be
authorized for listing on the NYSE upon official notice of issuance;
(iii) all necessary governmental approvals for the Merger shall have
been obtained, including that of the Federal Reserve Board and the banking
authorities of the State of New York, and any waiting periods imposed by
any governmental entity with respect to the Merger shall have expired;
(iv) there shall not be any injunction or restraining order preventing
the consummation of the Merger in effect, nor shall the Merger be illegal
under any applicable law;
(v) Chemical and Chase shall each have received letters dated the
closing date specified in the Merger Agreement (the "Closing Date") from
Price Waterhouse LLP (the independent auditors of each of Chemical and
Chase) to the effect that the Merger qualifies for "pooling of interests"
accounting treatment, and such letters shall not have been withdrawn; and
(vi) in approving the Merger, no governmental authority shall have
imposed a burdensome condition or restriction upon the Surviving
Corporation or its subsidiaries which would reasonably be expected to
either (i) have a material adverse effect on the Surviving Corporation
after the Effective Time or (ii) prevent the parties from realizing the
major portion of the economic benefits of the Merger and the transactions
contemplated thereby (including the contemplated merger of Chemical Bank
and Chase Bank) that they anticipated receiving at the time of the
execution of the Merger Agreement.
In addition, each party's obligation to effect the Merger is subject to the
following additional conditions (any of which may be waived by such party):
(i) the representations and warranties of the other party to the
Merger Agreement shall be true and correct as of the date of the Merger
Agreement and (except to the extent such representations and warranties
speak as of an earlier date) as of the Closing Date, subject to such
exceptions as do not have and would not reasonably be expected to have a
material adverse effect on such party or the Surviving Corporation
following the Effective Time; the other party shall have performed in all
material respects all obligations required to be performed by it under the
Merger Agreement and the Employee Benefits Agreement (as defined below
under "-- Effect on Employee Benefit and Stock Plans"), and such party
shall have obtained all necessary consents to the Merger (other than
consents from governmental entities and other than those which, if not
obtained, would not have a material adverse effect on the Surviving
Corporation following the Effective Time);
(ii) no triggering event under the Chemical Rights Agreement or the
Chase Rights Agreement shall have occurred nor shall the Chemical Rights or
the Chase Rights have become nonredeemable for
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any reason nor shall the Chase Rights become exercisable for shares of
Chemical Common Stock upon consummation of the Merger; and
(iii) such party shall have received an opinion of its counsel dated
the Closing Date that (i) the Merger will be treated for federal income tax
purposes as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) Chemical and
Chase will each be a party to that reorganization within the meaning of
Section 368(b) of the Code, (iii) no income, gain or loss will be
recognized for federal income tax purposes by either party as a result of
the consummation of the Merger and (iv) no income, gain or loss will be
recognized for federal income tax purposes by stockholders of Chase upon
the exchange in the Merger of shares of Chase for shares of Chemical
(except to the extent of any cash received in lieu of fractional shares)
(see "-- Certain Federal Income Tax Consequences").
Chase's obligation to effect the Merger is also subject to the satisfaction or
waiver of the condition that Chemical has taken all corporate action, subject
only to the filing of the Certificate of Merger and the certificates of
designations with respect to each series of Chemical Merger Preferred Stock, in
accordance with the DGCL, so that, when issued, the shares of Chemical Common
Stock and Chemical Merger Preferred Stock to be issued pursuant to the Merger
Agreement shall have been duly authorized, validly issued, fully paid and
nonassessable.
STOCK EXCHANGE LISTINGS
It is a condition to the Merger that the shares of Chemical Common Stock
and the shares of each series of Chemical Merger Preferred Stock to be issued in
the Merger be authorized for listing on the NYSE upon official notice of
issuance. It is anticipated that an application will also be filed to list the
shares of Chemical Common Stock to be issued in the Merger on The International
Stock Exchange of the United Kingdom and the Republic of Ireland Limited (the
"ISE"), but such listing is not a condition to the Merger. The Chase Common
Stock is currently listed on the Dusseldorf, Paris and Frankfurt stock exchanges
in addition to the NYSE and the ISE; however, the Chemical Common Stock is not
listed on such exchanges and Chemical does not intend to apply for a listing on
such exchanges in connection with the Merger.
DIVIDENDS
Each of Chemical and Chase expects to continue to declare until the
Effective Time their respective regularly scheduled dividends. The Merger
Agreement requires each of Chemical and Chase to coordinate with the other the
payment of dividends, and the designation of record and payment dates, relating
to Chemical Common Stock and Chase Common Stock with the intent that holders of
Chemical Common Stock and Chase Common Stock shall not receive two dividends, or
fail to receive one dividend, for any calendar quarter.
Chemical and Chase currently expect that the Board of Directors of the
Surviving Corporation will continue to declare Chemical's regular quarterly cash
dividends on the Chemical Common Stock following the Merger. Currently, the
dividends on the Chemical Common Stock are $0.50 per share per quarter, or $2.00
per share per year. Stockholders should note that future dividends will be
determined by the Board of Directors of the Surviving Corporation in light of
the earnings and financial condition of the Surviving Corporation and its
subsidiaries and other factors, including applicable governmental regulations
and policies.
REGULATORY APPROVALS REQUIRED
The Merger and the contemplated merger of Chemical Bank and Chase Bank (the
"Bank Merger") are subject to the prior approval of the Federal Reserve Board
and the banking authorities of the State of New York. Aspects of the Merger will
require notifications to, and/or approvals from, certain other federal
authorities and banking authorities in certain other states as well as in
certain of the foreign jurisdictions where Chemical and Chase currently operate.
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The Merger is subject to approval by the Federal Reserve Board under
Sections 3 and 4 of the BHCA, and the Bank Merger is subject to approval by the
Federal Reserve Board under Section 18(c) of the Federal Deposit Insurance Act
(the "Bank Merger Act"). Under Section 3 of the BHCA and under the Bank Merger
Act, the Federal Reserve Board must withhold approval of the Merger or the Bank
Merger, as the case may be, if it finds that the transaction would result in a
monopoly or be in furtherance of any combination or conspiracy to monopolize or
attempt to monopolize the business of banking in any part of the United States.
In addition, the Federal Reserve Board may not approve the Merger or the Bank
Merger, as the case may be, if it finds that the effect thereof may be
substantially to lessen competition or to tend to create a monopoly or would in
any other manner be in restraint of trade, unless it finds that any such
anti-competitive effects of the Merger or the Bank Merger are clearly outweighed
in the public interest by the probable effects of the Merger or the Bank Merger
in meeting the convenience and needs of the communities to be served. In each
case, the Federal Reserve Board will also take into consideration the financial
and managerial resources and future prospects of the banking subsidiaries
following the transactions. The Federal Reserve Board has indicated that it will
not approve a significant acquisition unless the resulting institution has
sufficient capitalization, taking into account, among other things, asset
quality.
In addition, under the Community Reinvestment Act of 1977, as amended (the
"CRA"), the Federal Reserve Board must take into account the record of
performance of each of Chemical and Chase in meeting the credit needs of the
entire community, including low and moderate income neighborhoods, served by
each company. As part of the review process, the Federal Reserve Board
frequently receives, in merger transactions, protests from community groups and
others. All of the banking subsidiaries of Chemical and Chase have received
either an "outstanding" or a "satisfactory" CRA rating in their most recent CRA
examinations by their respective federal regulators.
Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Interstate Act"), certain sections of which became effective
September 29, 1995, the Federal Reserve Board generally may not approve an
application if the applicant (including all insured depository institutions
which are affiliates of the applicant), upon consummation of the acquisition,
would control more than 10% of the total deposits of all insured depository
institutions in the United States or 30% or more of the total amount of deposits
of all insured depository institutions in a particular state. Chemical does not
believe that after the Merger it would control deposits in excess of either
limitation.
The Federal Reserve Board will furnish notice and a copy of the application
for approval of the Merger to the Office of the Comptroller of the Currency (the
"OCC"), the Federal Deposit Insurance Corporation (the "FDIC") and the
appropriate state regulatory authorities. These agencies have 30 days to submit
their views and recommendations to the Federal Reserve Board. The Federal
Reserve Board is required to hold a public hearing in the event it receives a
written recommendation of disapproval of the application from any of these
agencies within such 30-day period. Furthermore, the BHCA and Federal Reserve
Board regulations require publication of notice of, and the opportunity for
public comment on, the application submitted by Chemical for approval of the
Merger and authorize the Federal Reserve Board to hold a public hearing or
meeting in connection therewith if the Federal Reserve Board determines that
such a hearing or meeting would be appropriate. Any such hearing, meeting or
comments provided by third parties could prolong the period during which the
application is subject to review by the Federal Reserve Board.
Under Section 3 of the BHCA, the Merger and the Bank Merger may not be
consummated for 30 days from the date of approval by the Federal Reserve Board,
during which time the Merger could be challenged by the Department of Justice on
antitrust grounds. With the approval of the Federal Reserve Board and the
Department of Justice, however, this waiting period may be reduced to no less
than 15 days. The commencement of an antitrust action by the Justice Department
would stay the effectiveness of Federal Reserve Board approval of the Merger
unless a court specifically ordered otherwise. In reviewing the Merger, the
Justice Department could analyze the Merger's effect on competition differently
than the Federal Reserve Board, and thus it is possible that the Justice
Department could reach a different conclusion than the Federal Reserve Board
regarding the Merger's competitive effects.
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Under Section 4 of the BHCA and related regulations, the Federal Reserve
Board must consider whether the performance of Chemical's and Chase's nonbanking
activities on a combined basis can reasonably be expected to produce benefits to
the public (such as greater convenience, increased competition and gains in
efficiency) that outweigh possible adverse effects (such as undue concentration
of resources, decreased or unfair competition, conflicts of interest and unsound
banking practices). This consideration includes an evaluation of the financial
and managerial resources of Chemical and Chase and the effect of the proposed
transaction on those resources.
The Merger and Bank Merger will be subject to the prior approval of the
Superintendent of Banks and the Banking Board of the State of New York. The
factors that the Superintendent of Banks and the Banking Board will consider in
determining whether to grant their approval include the competitive effects of
the Merger and the Bank Merger, the principles of sound banking and the public
interest and the needs of the communities served by Chemical Bank and Chase
Bank.
In addition, the Merger will require certain approvals in Delaware,
Maryland and certain of the other states and foreign jurisdictions where
Chemical and Chase are engaged in business. Chemical and Chase do not currently
anticipate any significant difficulties in obtaining such approvals or any
material impact on the operations of the combined entity if any such approvals
are not obtained.
Chemical's and Chase's rights to exercise their respective options under
the Stock Option Agreements are also subject to the prior approval of the
Federal Reserve Board, to the extent that the exercise of such respective
options would result in Chemical or Chase, as the case may be, owning more than
5% of the outstanding shares of Chase Common Stock or Chemical Common Stock,
respectively. In considering whether to approve Chemical's or Chase's right to
exercise its option, the Federal Reserve Board would generally apply the same
statutory criteria it would apply to its consideration of approval of the
Merger.
Chemical and Chase have filed applications for approval of the Merger with
the Federal Reserve Board, the banking authorities of New York State and certain
other banking authorities prior to the date hereof and intend to file any
remaining applications as soon as practicable following the date of this Proxy
Statement/ Prospectus.
There can be no assurance as to whether or when any of the above-described
regulatory approvals required for consummation of the Merger will be obtained or
as to any conditions that may be imposed in connection with the granting of such
approvals. See "-- Conditions to the Consummation of the Merger".
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following describes the principal federal income tax consequences of
the Merger under the Code, assuming that the Merger is consummated as
contemplated herein. This discussion is based on current laws and
interpretations thereof, which are subject to change. The discussion assumes
that the Chase stock exchanged by each holder in the Merger is held as a capital
asset and does not take account of rules that may apply to holders of Chase
stock ("Chase Stockholders") that are subject to special treatment under the
Code (including, without limitation, insurance companies, dealers in securities,
certain retirement plans, financial institutions, tax exempt organizations,
stockholders who acquired shares pursuant to the exercise of an employee stock
option or otherwise as compensation or foreign persons). Also, the discussion
does not address state, local or foreign tax consequences. Consequently each
Chase Stockholder should consult its own tax advisor as to the specific tax
consequences of the Merger to that stockholder.
Tax Opinions. The obligations of Chemical and of Chase to consummate the
Merger are subject to the receipt of the opinions of tax counsel outlined below,
unless waived. Neither Chemical nor Chase has requested or will request an
advance ruling from the Internal Revenue Service (the "IRS") as to the tax
consequences of the Merger.
As of the date of this Proxy Statement/Prospectus, Simpson Thacher &
Bartlett, counsel to Chemical, and Sullivan & Cromwell, special counsel to
Chase, have advised Chemical and Chase, respectively, that in their opinion,
based on certain customary representations and assumptions referred to in such
opinions, (i) the Merger will be treated for federal income tax purposes as a
"reorganization" within the meaning of
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Section 368(a) of the Code, (ii) Chemical and Chase will each be a party to the
reorganization within the meaning of Section 368(b) of the Code, (iii) no
income, gain or loss will be recognized for federal income tax purposes by
either Chase or Chemical as a result of the consummation of the Merger and (iv)
no income, gain or loss will be recognized for federal income tax purposes by
Chase Stockholders upon the exchange in the Merger of shares of Chase for shares
of Chemical (except to the extent of any cash received in lieu of fractional
shares). In addition, consummation of the Merger is conditioned upon the receipt
by Chemical and Chase of the opinions described above dated as of the Closing
Date. In connection with clause (iv) of the foregoing, counsel have not opined
and are not required to opine as to the federal income tax treatment of any real
property transfer or gains taxes paid by Chemical pursuant to Section 5.9 of the
Merger Agreement. See "--Other Tax Considerations" below.
Cash Received in Lieu of Fractional Shares. A Chase Stockholder who
receives cash in the Merger in lieu of a fractional share interest in Chemical
Common Stock will be treated for federal income tax purposes as receiving such
fractional share interest and then redeeming it for cash. Such a Chase
Stockholder will recognize gain or loss as of the Effective Time in an amount
equal to the difference between the amount of cash received and the portion of
the stockholder's adjusted tax basis in the shares of Chase Common Stock
allocable to the fractional share interest. Any gain or loss will be capital
gain or loss if the stockholder holds the Chase Common Stock as a capital asset
at the Effective Time and will be long-term capital gain or loss if the holding
period for the fractional share interest deemed to be received and then redeemed
is more than one year.
Tax Basis and Holding Period of Chemical Stock. The tax basis of the
shares of Chemical stock received by the Chase Stockholders will be the same as
the tax basis of their Chase stock exchanged therefor (reduced by any amount
allocable to a fractional share interest for which cash is received). The
holding period of the Chemical stock in the hands of the Chase Stockholders will
include the holding period of their Chase stock exchanged therefor, provided
such Chase stock is held as a capital asset at the Effective Time.
Other Tax Considerations. As a result of the Merger, New York State Real
Property Transfer Gains Tax and Real Estate Transfer Tax and New York City Real
Property Transfer Tax will be due in respect of real property and leasehold
interests currently owned by Chase. It is possible that the IRS may take the
position that payment of such taxes by Chemical pursuant to Section 5.9 of the
Merger Agreement is on behalf of the Chase Stockholders, in which case the Chase
Stockholders would be required to recognize gain with respect to such payment.
Chemical intends to take the position that its payment of the real property
transfer or gains taxes will not require the Chase Stockholders to recognize
gain. Chase Stockholders should consult their own tax advisors as to the
consequences of the payment of such taxes by Chemical.
ANTICIPATED ACCOUNTING TREATMENT
The Merger is expected to qualify as a "pooling of interests" for
accounting and financial reporting purposes. Under this method of accounting,
the recorded assets and liabilities of Chemical and Chase will be carried
forward to the Surviving Corporation at their recorded amounts after addressing
any conformity issues; income of the Surviving Corporation will include income
of Chemical and Chase for the entire fiscal year in which the combination occurs
after addressing any conformity issues; and the reported income of the separate
companies for prior periods will be combined and restated as income of the
Surviving Corporation after addressing any conformity issues.
The Merger Agreement provides that a condition to the consummation of the
Merger is the receipt of letters from Price Waterhouse LLP (the independent
auditors of each of Chemical and Chase) to the effect that the Merger qualifies
for "pooling of interests" accounting treatment.
TERMINATION
The Merger Agreement may be terminated at any time prior to the Effective
Time, by action taken or authorized by the Board of Directors of the terminating
party or parties, whether before or after approval and adoption of the Merger
Agreement by the stockholders of Chase or Chemical: (a) by mutual consent of
Chemical and Chase in a written instrument; (b) by either Chemical or Chase upon
written notice to the
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other party if the Federal Reserve Board shall have issued an order denying
approval of the Merger and the other material aspects of the transactions
contemplated by the Merger Agreement (including, without limitation, the Bank
Merger) or if any governmental entity of competent jurisdiction shall have
issued a final permanent order enjoining or otherwise prohibiting the
consummation of the transactions contemplated by the Merger Agreement or
imposing a burdensome condition, and in any such case the time for appeal or
petition for reconsideration of such order shall have expired without such
appeal or petition being granted; (c) by either Chemical or Chase if the Merger
shall not have been consummated on or before September 30, 1996; or (d) by
either Chemical or Chase if any approval of the stockholders of Chase or of
Chemical required for the consummation of the Merger shall not have been
obtained by reason of the failure to obtain the required vote at a duly held
meeting of stockholders or at any adjournment thereof.
In the event of termination of the Merger Agreement by either Chase or
Chemical, the Merger Agreement will become void and there will be no liability
or obligation on the part of Chemical or Chase or their respective officers or
directors other than under certain specified provisions of the Merger Agreement
dealing with broker's and finder's fees and indemnification therefor,
confidentiality agreements and expenses, and other than any liabilities or
damages incurred as a result of the willful breach by a party of any of its
representations, warranties, covenants or agreements set forth in the Merger
Agreement.
AMENDMENT AND WAIVER
Subject to applicable law, (a) the Merger Agreement may be amended by an
instrument in writing signed on behalf of each party at any time by action taken
or authorized by the respective Boards of Directors of Chemical and Chase
(except that after the Merger Agreement shall have been approved and adopted by
the stockholders of either Chemical or Chase, no amendment may be entered into
which requires further approval by such stockholders unless such further
approval is obtained) and (b) at any time prior to the Effective Time, the
parties may, by action taken or authorized by their respective Boards of
Directors and by written instrument signed on behalf of each party, (i) extend
the time for performance of the obligations of the other party to the Merger
Agreement, (ii) waive inaccuracies in representations and warranties contained
in the Merger Agreement or in any document delivered pursuant thereto and (iii)
waive compliance with any agreements or conditions for their respective benefit
contained in the Merger Agreement.
Pursuant to Section 251(d) of the DGCL, no amendment to the Merger
Agreement made subsequent to the approval and adoption of the Merger Agreement
by the stockholders of Chemical or Chase may alter or change the amount or kind
of shares, securities, cash, property and/or rights to be received by such
stockholders in the Merger, alter or change any term of the Certificate of
Incorporation of the Surviving Corporation to be effected by the Merger or alter
or change any terms and conditions of the Merger Agreement if such alteration or
change would adversely affect the holders of any class or series of stock of
Chemical or Chase, respectively.
EXPENSES
Whether or not the Merger is consummated, all costs and expenses incurred
in connection with the Merger Agreement, the Stock Option Agreements and the
transactions contemplated thereby shall be paid by the party incurring such
expense, except as otherwise provided in the Stock Option Agreements and except
that (a) if the Merger is consummated, Chemical shall pay, or cause to be paid,
any and all property or transfer taxes imposed on Chase or its subsidiaries and
any real property transfer or gains tax imposed on any holder of shares of
capital stock of Chase resulting from the Merger and (b) Chemical and Chase
shall share equally the expenses incurred in connection with filing, printing
and mailing this Proxy Statement/Prospectus.
EFFECT ON EMPLOYEE BENEFIT AND STOCK PLANS
In connection with entering into the Merger Agreement, Chemical and Chase
have entered into an Employee Benefits Agreement, dated as of August 27, 1995
(the "Employee Benefits Agreement"), pursuant to which the parties have agreed
to take certain actions to harmonize the change in control or merger-related
provisions of their respective employee benefits arrangements. The intent of the
Employee Benefits Agreement
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is, where appropriate, to treat Chemical and Chase employees in a consistent
manner and, as contemplated by Chase's existing plans, to avoid immediate
vesting and payment of awards or benefits upon stockholder approval of the
Merger. The following summary of the Employee Benefits Agreement is qualified in
its entirety by reference to the Employee Benefits Agreement, which is an
exhibit to the Registration Statement of which this Proxy Statement/Prospectus
is a part. Chemical and Chase are continuing to discuss the transition from
separate employee benefit plans to common plans and have not finally determined
the manner in which the goal of creating common plans will be accomplished.
Pursuant to the Merger Agreement, Chemical and Chase have agreed that,
except as set forth below and unless otherwise agreed, the retirement and
certain other employee benefit plans of Chemical and Chase will remain in effect
after the Effective Time with respect to employees covered by such plans at such
time, except that interests under any Chase benefit plan that are based on Chase
Common Stock would be based on Chemical Common Stock. Chemical and Chase have
also agreed to negotiate in good faith to formulate benefit plans for the
Surviving Corporation after the Effective Time that, to the extent permitted by
applicable law, provide benefits for services after the Effective Time on a
basis that does not discriminate between employees who were covered by the
benefit plans of Chemical and employees who were covered by the benefit plans of
Chase.
Summary of the Employee Benefits Agreement. As contemplated by the
Employee Benefits Agreement, approximately 30 executive officers of Chase and
Chase Bank who are parties to individual termination agreements have agreed to
amend those agreements. In addition, Chase's Chairman and Chief Executive
Officer, Thomas G. Labrecque, has agreed that his termination agreement will not
apply in respect of the Merger and that it will terminate at the Effective Time.
Prior to the contemplated amendments, the agreements provided that in the event
of a termination of employment by the employer without "cause" or by the
executive for "good reason" (each as defined therein) following a "change in
control" (which would include the transactions contemplated by the Merger
Agreement), the officers would receive a cash payment equal to a multiple of two
(or, in the case of the Chief Executive Officer and the three Vice Chairmen of
the Board, three) times the sum of the officer's (i) current annual rate of
salary plus (ii) bonus based on the officer's average bonus for the past five
years (expressed as a percentage of salary, multiplied by the officer's current
annual rate of salary) as well as continued coverage under Chase welfare benefit
plans for the period of years equal to the specified multiple. Under the amended
agreements, for purposes of any change of control arising out of the Merger, the
definition of "good reason" has been revised to exclude certain changes in the
employment relationship. Accordingly, fewer events will permit an executive to
terminate his or her employment for "good reason" and receive severance pay.
After the amendments, "good reason" includes those instances in which (i) the
officer suffers a substantial diminution in the overall importance of the
officer's role with the combined entity, (ii) the officer's salary is reduced or
the officer does not receive current or deferred compensation when due, (iii)
the officer is not included in compensation and benefit plans on a basis
reasonably comparable to those afforded to the officer's peers, (iv) the officer
does not receive a bonus that properly reflects the officer's performance, or
(v) the officer is relocated (other than to New York or, for an officer working
outside the U.S., to another non-U.S. location) more than 50 miles from the
officer's current location. Chemical had no termination arrangements comparable
to those provided to the Chase executives. However, approximately 40 Chemical
executives at the level of Executive Vice-President and above (with the
exception of Chemical's Chairman and Chief Executive Officer, Walter V. Shipley)
have been or will be offered individual agreements which are substantially
equivalent to the agreements covering Chase executives (as amended) except that
(i) these Chemical agreements only apply in the case of the Merger, and not to
any other transaction, and (ii) they differ from the Chase agreements where
necessary to reflect Chemical's existing compensation and benefits programs. Mr.
Shipley will not have a termination agreement with Chemical.
As required by the Employee Benefits Agreement, Chase has amended its
Special Severance Plan for certain executive officers (i) to provide that the
Plan will apply to terminations occurring after the signing of the Merger
Agreement; and (ii) to provide for a narrowing of the circumstances under which
severance and other benefits will be paid in the case of a termination for "good
reason." Generally the definition of "good reason" as amended is similar to that
described above, except that a substantial diminution in the overall
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importance of the executive's role with the combined entity will not constitute
"good reason" in the event of a voluntary termination of employment and there is
no protection in the event of a change in location of employment. Prior to the
amendment, the Plan, which covers approximately 120 Senior Vice Presidents and
officers of equivalent grade, provided that up to two years of severance
payments and benefit continuation would be provided in the event a Plan
participant was terminated by the employer without "cause" or resigned for "good
reason" (as defined in the Plan) following a change in control. Under the
amendment the amount of severance payable under the Plan has been adjusted to
simplify the schedule of payments thereunder which will generally result in
higher severance payments for those employees with less than 25 years of
service. Chemical will adopt a special severance plan, substantially in the same
form as the Chase Special Severance Plan, for approximately 385 key management
personnel holding comparable positions to those held by Chase Senior Vice
Presidents.
Both Chemical and Chase Bank maintain general severance programs for
employees who are not covered by individual termination agreements or by any
special severance plan. Under the Employee Benefits Agreement, these general
severance programs have been amended to provide the same formula for severance
payments to all employees whose positions are eliminated during the period
commencing with the signing of the Merger Agreement and ending two years after
the Effective Time.
As required by the Employee Benefits Agreement, Chase has amended its
1982/1987 and 1994 Long-Term Incentive Plans so that all options and other
equity rights granted under such plans will be treated as follows: (i) the
Merger will not accelerate the exercisability of options or the vesting of any
such equity grants, as provided under the pre-amendment plans, but (ii) such
exercisability or vesting will, however, accelerate in the event of an
involuntary termination of the employee, unless such termination is by the
employer for "cause" or by the employee without "good reason" (both as defined
in the Plans), after stockholder approval of the Merger, and any such option and
related equity rights will remain exercisable for 24 months after any such
termination of employment unless they otherwise expire within such 24-month
period. The definitions of "cause" and "good reason" for purposes of these Plans
are taken from the applicable individual termination agreement, in the case of
executive officers having such agreements, or from the Special Severance Plan,
in the case of Senior Vice Presidents and officers of equivalent grade
participating in such Plan. For all other Plan participants, the definition of
"good reason" has been amended to delete any reference to the participant's job
status or responsibilities, in conformity with the changes described above.
In addition, Chase will administer its Stock Option Program for Employees
to limit the number of shares that can be sold upon the exercise of options to
200,000 shares per day. All options under the Program will become exercisable
upon stockholder approval of the Merger Agreement. Chemical's comparable plan
has a limit of 300,000 shares per day.
As required by the Employee Benefits Agreement, Chase Bank has eliminated
the immediate vesting and payout features in its supplemental benefit plans that
would otherwise have been triggered by the Merger, but will vest the benefits of
an employee who would otherwise be eligible for such benefits upon the
termination of the employee's employment for any reason after stockholder
approval of the Merger Agreement, unless such termination is for "cause" or by
the employee other than for "good reason". The definition of "good reason" has
been conformed to the definition of good reason described above for purposes of
the long-term incentive plans. Chemical employees participating in its
supplemental plan, which currently has no change in control provisions, will be
treated in a similar manner, consistent with Chemical's past practice under
these plans.
As required by the Employee Benefits Agreement, Chase Bank has amended its
qualified retirement plans to provide that accelerated vesting of accrued
benefits thereunder due to stockholder approval of the Merger Agreement will be
limited to those employees who have completed at least three years of service as
of August 31, 1995. Chemical will amend its qualified retirement plans to
provide a similar result. Prior to the amendments, the Chase qualified
retirement plans provided that all unvested accrued benefits would vest upon a
change in control (including stockholder approval of the Merger Agreement)
occurring on or before December 31, 1995. The Chemical plans had no similar
provisions.
Chase's Three-Year Incentive Arrangement for Certain Executive Officers
creates an incentive pool that provides additional compensation if the price of
Chase Common Stock reached certain levels (which targets
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have been reached). Prior to the amendment discussed below, upon a change in
control (including stockholder approval of the Merger) participants were
entitled to immediate payout of the maximum amounts payable under the
arrangement. As contemplated by the Employee Benefits Agreement, Chase has
amended the arrangement so that the Chase Compensation Committee will have the
discretion to lower any award amount under the arrangement (if such adjustment
is warranted) payable upon stockholder approval of the Merger.
Under the Chase Bank Special Management Incentive Plan for 1994-1996 (which
is generally intended to parallel the Three-Year Incentive Arrangement for
Certain Executive Officers), 50% of the pool thereunder was to be paid if a
target price of $52 per share of Chase Common Stock was reached and the
remaining 50% was to be paid if a $60 target price was reached, with payments
made at the end of the applicable three-year period. In accordance with the
Employee Benefits Agreement, Chase Bank has paid out half of the maximum award
pool as a result of the Chase Common Stock having reached the $52 target. The
Chase Bank Compensation Committee has determined the amounts payable with
respect to the achievement of the $60 target, which also has been reached. Such
amounts will be paid to participants in January 1997. If a covered executive is
terminated without "cause" or resigns for "good reason" before January 1997, the
participant will be entitled to a payout in January 1997 of the amount payable
for the $60 target. The definitions of "cause" and "good reason" will be taken
from the executive's individual termination agreement. Chemical has no
comparable plan. However, Chemical employees who hold performance accelerated
restricted stock will be treated in the same manner.
Pursuant to the Employee Benefits Agreement, Chase Bank has amended its
annual Management Incentive Plan so that stockholder approval of the Merger
Agreement has no effect on awards thereunder that have been deferred. The effect
of stockholder approval prior to such amendment would have been that any
deferred awards under the plan would be paid out.
Other Chase and Chase Bank incentive plans have been similarly amended to
state that the Merger will not result in immediate payment of awards deferred
thereunder. All such deferred awards will be paid out upon the employee's
termination of employment thereunder.
Conversion of Certain Stock-Based Awards. At the Effective Time, each
outstanding option to purchase shares of Chase Common Stock (a "Chase Stock
Option") and each outstanding stock appreciation right (a "Chase SAR") or
restricted stock unit (a "Chase Unit") issued pursuant to any incentive or stock
option program of Chase (the "Chase Plan"), whether vested or unvested, will be
assumed by Chemical. Each Chase Stock Option will be deemed to constitute an
option to acquire, on the same terms and conditions as were applicable under
such Chase Stock Option, the same number of shares of Chemical Common Stock as
the holder of such Chase Stock Option would have been entitled to receive
pursuant to the Merger had such holder exercised such option in full immediately
prior to the Effective Time, rounded, if necessary, up or down, to the nearest
whole share, at a price per share equal to (i) the aggregate exercise price of
the shares of Chase Common Stock otherwise purchasable pursuant to such Chase
Stock Option divided by (ii) the number of full shares of Chemical Common Stock
deemed purchasable pursuant to such Chase Stock Option; provided, however, that
in the case of any such option that qualifies as an "incentive stock option"
under Section 422 of the Code, the option price, the number of shares
purchasable pursuant to such option and the terms and conditions of exercise of
such option will be determined in order to comply with Section 424(a) of the
Code. Each holder of a Chase SAR will be entitled to that number of stock
appreciation rights of Chemical determined in the same manner as set forth above
with respect to Chase Stock Options assumed by Chemical. Each holder of a Chase
Unit will be entitled to that number of restricted stock units of Chemical
determined by multiplying the number of Chase Units held by such holder
immediately prior to the Effective Time by 1.04.
EFFECT ON CHASE WARRANTS
At and after the Effective Time, each holder of a warrant to purchase Chase
Common Stock issued pursuant to the Warrant Agreement, dated as of July 24, 1992
(the "Chase Warrant Agreement"), between Chase and Mellon Securities Trust
Company, as Warrant Agent (a "Chase Warrant"), will be entitled to
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exercise such Chase Warrant for the number of shares of Chemical Common Stock
that would have been issuable to such holder had such holder exercised such
Chase Warrant immediately prior to the Effective Time. Accordingly, at and after
the Effective Time, each such Chase Warrant will represent the right to acquire
upon exercise thereof 1.04 fully paid and nonassessable shares of Chemical
Common Stock at an exercise price of $34.6125 per Chase Warrant, subject to
certain antidilution adjustments described in the Chase Warrant Agreement.
Chemical has agreed to execute and deliver such instruments as may be required
pursuant to the Chase Warrant Agreement for the due assumption by the Surviving
Corporation of the Chase Warrants.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of the Boards of Directors and management of Chemical and
Chase may be deemed to have certain interests in the Merger in addition to their
interests generally as stockholders of Chemical or Chase, as the case may be.
All of such additional interests are described below, to the extent material,
and except as described below such persons have, to the best knowledge of
Chemical and Chase, no material interests in the Merger apart from those of
stockholders generally. The Chemical Board of Directors and the Chase Board of
Directors were each aware of these interests of their respective directors and
officers and considered them, among other matters, in approving the Merger
Agreement and the transactions contemplated thereby.
Indemnification and Board Membership. The Merger Agreement provides that
the Surviving Corporation will maintain all rights of indemnification existing
in favor of the directors, officers and employees of Chase to the full extent
that Chase would have been permitted under Delaware law and the Chase Charter
and By-laws to indemnify such persons and will cause to be maintained for six
years after the Effective Time directors' and officers' liability insurance on
terms no less advantageous than those contained in policies maintained by Chase;
provided that if the annual premium payments for such insurance exceed 250% of
the annual premiums paid as of the date of the Merger Agreement by Chase the
Surviving Corporation is required to maintain the maximum coverage available at
an annual premium equal to 250% of Chase's annual premium.
The Board of Directors of the Surviving Corporation as of the Effective
Time is expected to consist of persons currently serving as outside directors of
Chemical and Chase (subject, in each case, to normal scheduled retirements) and
the five members of the Office of the Chairman of the Surviving Corporation, and
certain officers of Chemical and Chase will become officers of the Surviving
Corporation as of the Effective Time. See "Management and Operations After the
Merger".
Termination Agreements. Prior to the execution of the Merger Agreement,
approximately 30 executive officers of Chase and Chase Bank, including Chase's
Chief Executive Officer and the four other most highly paid executives, were
parties to termination agreements. As described in the section above entitled
"--Summary of the Employee Benefits Agreement," such executives have amended
their termination agreements as contemplated by the Employee Benefits Agreement.
In addition, Chase's Chairman and Chief Executive Officer, Thomas G. Labrecque,
has agreed that his termination agreement will not apply in respect of the
Merger and that it will terminate at the Effective Time.
Prior to the contemplated amendments these agreements provided that the
officer agreed to remain in the employ of Chase and its subsidiaries after a
potential change in control until the earliest of (i) a date which is 12 months
from the potential change in control, (ii) the date of a change in control,
(iii) termination by the executive for "good reason" (as defined therein) or due
to death, disability or retirement or (iv) termination of the executive's
employment by Chase for any reason. They also provided generally that if the
officer's employment were terminated under certain limited circumstances before
a change in control or within 24 months after a change in control by the
employer without "cause" (as defined therein) or by the executive for "good
reason", the officer (a) would receive a single sum payment equal to two or
three times, depending on the officer's position, the sum of (i) such officer's
current annual base salary and (ii) an amount equal to such current annual base
salary multiplied by such officer's average percentage annual bonus paid or
payable over the preceding five years (expressed as a percentage of annual base
salary) and (b) subject to certain
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limitations would continue to participate in Chase's life, disability, accident
and health insurance plans for up to 24 or 36 months, depending on the officer's
position, after such officer's termination. The agreements were generally to
continue in effect until December 31, 1995, and were to be automatically renewed
thereafter for additional one year periods unless at least three months prior
notice of termination was given. The agreements also provided that if an
officer's change-in-control benefits, less the 20% excise tax imposed under
Section 4999 of the Code, would exceed the maximum amount which could be paid to
the officer without such excise tax being imposed, Chase would pay the officer
an additional amount so that the net amount retained by the officer would equal
the full amount of the officer's change in control benefits. In all other
situations, the officer's change in control benefits were to be limited to the
amount which could be paid without incurring such excise tax.
As described in the section entitled " -- Effect on Employee Benefit and
Stock Plans -- Summary of the Employee Benefits Agreement" above, the amended
agreements provide that, upon the occurrence of stockholder approval of the
Merger, the circumstances under which an executive will receive severance pay
and other benefits in the event of a termination of employment for "good reason"
exclude certain changes in the employment relationship. See " -- Effect on
Employee Benefit and Stock Plans -- Summary of the Employee Benefits Agreement"
for a description of the five events constituting "good reason" under the
amended agreements.
Chemical had no comparable termination arrangements. However, approximately
40 Chemical executives at the level of Executive Vice-President and above (with
the exception of Chemical's Chairman and Chief Executive Officer, Walter V.
Shipley) have been or will be offered individual agreements which are
substantially equivalent to the agreements covering Chase executives (as
modified) except that (i) these agreements only apply in the case of the Merger,
and not to any other transaction, and (ii) they differ from the Chase agreements
where necessary to reflect Chemical's existing compensation and benefits
programs. Mr. Shipley will not have a termination agreement with Chemical.
Prior to the execution of the Merger Agreement, Chase's retirement plan and
fee deferral plan for its Board of Directors provided that in the event of a
change in control, all benefits became vested (to the extent not already vested)
and immediately payable. These change of control provisions have been amended so
that the Merger has no effect on either the amount or timing of benefits payable
under the retirement plan or the deferred balances paid under the fee deferral
plan. Certain directors of Chase who are also executive officers participate in
the Chase Bank supplemental retirement plans in their capacities as executive
officers. If certain of such executive officers leave the employ of Chase upon
or after the Merger, amounts payable to such executive officers under such plans
will be calculated as if such executive officers had achieved retirement or
early retirement age, as applicable.
For a discussion of other rights which senior executives of Chase or
Chemical may have which would be triggered by the Merger or by a termination
within some period of time before or after the Merger, see the section entitled
" -- Effect on Employee Benefit and Stock Plans" above.
RECIPROCAL STOCK OPTION AGREEMENTS
General. Concurrently with the execution and delivery of the Merger
Agreement, and as a condition and inducement thereto, Chemical and Chase entered
into (i) the Chemical Stock Option Agreement pursuant to which Chemical granted
Chase an option to purchase up to 50,170,882 shares of the outstanding Chemical
Common Stock (or such greater number of shares of Chemical Common Stock as shall
represent 19.9% of the then outstanding Chemical Common Stock) at a price per
share of $53.50 and (ii) the Chase Stock Option Agreement pursuant to which
Chase granted Chemical an option to purchase up to 34,551,183 shares of the
outstanding Chase Common Stock (or such greater number of shares of Chase Common
Stock as shall represent 19.9% of the then outstanding Chase Common Stock) at a
price per share of $51.875.
The following is a summary of certain provisions of the Chemical Stock
Option Agreement and the Chase Stock Option Agreement, which are attached as
Annexes II and III, respectively, to this Proxy Statement/Prospectus and are
incorporated herein by reference. The following summary is qualified in its
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entirety by reference to the Stock Option Agreements. The terms of the Stock
Option Agreements are identical in all material respects other than with respect
to the shares which may be purchased pursuant thereto and the exercise prices.
Exercise of the Options. The options are exercisable only upon the
occurrence of one of the following events (each a "Purchase Event"):
(a) any person (other than the grantee of the relevant option (as the
case may be, the "grantee") or any of its subsidiaries) shall have
commenced or filed a registration statement under the Securities Act with
respect to a tender offer or exchange offer for shares of the common stock
of the issuer of the relevant option (as the case may be, the "issuer")
such that, upon consummation of such offer, such person would have
beneficial ownership (as defined under the Exchange Act) of 15% or more of
the outstanding common stock of the issuer;
(b) the issuer or any of its subsidiaries shall have proposed or
entered into an agreement with any person (other than the grantee or any of
its subsidiaries), to (i) effect a merger, consolidation or similar
transaction involving the issuer or any of its significant subsidiaries,
(ii) sell, lease or otherwise dispose of 20% or more of the consolidated
assets of the issuer and its subsidiaries, or (iii) issue, sell or
otherwise dispose of (including by merger, consolidation, share exchange or
similar transaction) securities representing 15% or more of the voting
power of the issuer or any of its significant subsidiaries (any of the
foregoing an "Acquisition Transaction");
(c) any person (other than the grantee or its subsidiaries) or "group"
(as defined under the Exchange Act) shall have acquired beneficial
ownership (as defined in the Exchange Act) or the right to acquire
beneficial ownership of 15% or more of the outstanding common stock of the
issuer; or
(d) the holders of common stock of the issuer shall not have approved
the Merger Agreement at the meeting of such stockholders held for the
purpose of voting on the Merger Agreement, such meeting shall not have been
held or shall have been cancelled prior to termination of the Merger
Agreement or the Board of Directors of the issuer shall have withdrawn or
modified in a manner adverse to the grantee the recommendation of such
Board of Directors with respect to the Merger Agreement, in each case after
any person (other than the grantee or any subsidiary of the grantee) shall
have (A) publicly announced a proposal, or publicly disclosed an intention
to make a proposal, to engage in an Acquisition Transaction or (B) filed an
application (or given a notice), whether in draft or final form, under the
BHCA or the Change in Bank Control Act of 1978 for approval to engage in an
Acquisition Transaction.
The right to purchase shares under each Stock Option Agreement will expire upon
the earliest to occur of (x) the Effective Time, (y) 18 months after the first
occurrence of a Purchase Event, and (z) termination of the Merger Agreement
prior to the occurrence of a Purchase Event.
The consummation of a purchase or a repurchase pursuant to the Stock Option
Agreements may be subject to, among other things, obtaining any required
regulatory approvals. The prior approval of the Federal Reserve Board is
required for the acquisition by the grantee of control of more than 5% (or, in
the case of a transferee grantee that is not a bank holding company, 10%) of the
issuer's outstanding common stock. Following occurrence of a Purchase Event, the
grantee will have the ability to assign its rights under the Stock Option
Agreement with respect to which it is grantee.
Adjustment of Number of Shares. The number and type of securities subject
to the options and the purchase price of the shares will be adjusted for any
change in the issuer's common stock by reason of a stock dividend, stock split,
recapitalization, combination, exchange of shares or similar transaction, such
that the grantee will receive (upon exercise of the option) the same number and
type of securities as if the option had been exercised immediately prior to the
occurrence of such event (or the record date therefor). The number of shares of
common stock subject to each option will also be adjusted in the event the
issuer issues additional shares of common stock, such that the number of shares
of common stock subject to the option represents 19.9% of the issuer's common
stock then outstanding, without giving effect to shares subject to or issued
pursuant to the option.
54
<PAGE> 61
Substitute Option. In the event the issuer enters into any agreement to
(A) merge or consolidate with any person other than the grantee or one of its
subsidiaries such that the issuer is not the surviving corporation, the issuer's
common stock is exchanged for any other securities or other property or the
outstanding shares of the issuer's common stock prior to such merger or
consolidation represent less than 50% of the issuer's common stock following
such merger or consolidation, or (B) sell or otherwise transfer all or
substantially all of its assets to a person other than the grantee or one of its
subsidiaries, the option will be converted into an option (the "Substitute
Option") to purchase securities of either the acquiring person, a person that
controls the acquiring person or the issuer (if the issuer is the surviving
entity), in all cases at the option of the grantee. The Substitute Option would
be subject to immediate exercise by the grantee and repurchase by the issuer at
the request of the grantee, at prices, and subject to conditions, specified in
the respective Stock Option Agreements.
Repurchase at the Option of the Grantee. The grantee has the right to
require the issuer to repurchase the option and any shares acquired by exercise
of the option during the 18-month period following the occurrence of a Purchase
Event of a type specified in clause (b) or (c) under " -- Exercise of the
Options" above (each a "Repurchase Event"), or during the 30 business days
following the failure to obtain necessary regulatory approval of the purchase of
shares pursuant to the option. Such repurchase will be at an aggregate price
(the "Repurchase Price") equal to the sum of (i) the aggregate exercise price
paid by the grantee for any shares of the issuer's common stock acquired
pursuant to the option with respect to which grantee then has beneficial
ownership; (ii) the excess, if any, of (x) the Applicable Price (as defined
below) for each share of the issuer's common stock over (y) the purchase price
(subject to adjustment), multiplied by the number of shares of the issuer's
common stock with respect to which the option has not been exercised; (iii) the
excess, if any, of the Applicable Price over the purchase price paid by the
grantee for each share of the issuer's common stock with respect to which the
option has been exercised and with respect to which the grantee then has
beneficial ownership, multiplied by the number of such shares; and (iv) the
amount of the documented reasonable out-of-pocket expenses incurred by the
grantee in connection with the Merger Agreement and the Stock Option Agreements
and the transactions contemplated thereby, including reasonable accounting,
investment banking and legal fees. For purposes of the Stock Option Agreements,
"Applicable Price" means the highest of (x) the highest price per share at which
a tender offer or exchange offer has been made for shares of the issuer's common
stock, (y) the price per share paid by a third party for shares of the issuer's
common stock in connection with a merger or other business combination and (z)
the highest closing sale price per share quoted on the NYSE during the 60 days
prior to the grantee's exercise of its right to require the issuer to repurchase
the option or the shares acquired by exercise thereof.
Mandatory Repurchase. If any third party which caused a Purchase Event to
occur under the option enters into an agreement or understanding with the
grantee with respect to the grantee's exercise or nonexercise of the option or
its repurchase rights described above, the grantee is required to sell and the
issuer is required to repurchase the option and all shares of common stock
(other than any shares sold by the grantee in accordance with the procedures
described under "-- Right of First Refusal" below) for a price equal to the
Repurchase Price; provided that the parties shall not be obligated to effect the
mandatory repurchase if the issuer's Board of Directors determines, after
consultation with counsel, that the mandatory repurchase would cause the members
of the Board of Directors to breach their fiduciary duties. If within the
18-month period following a mandatory repurchase an event occurs which would
have permitted the grantee to exercise its optional repurchase rights in the
absence of such mandatory repurchase, the issuer is required to make an
additional payment equal to the excess of the higher amount that the grantee
would have been entitled to receive had it exercised its optional repurchase
rights at the time of such later event over the amount previously paid to
grantee.
Registration Rights. The grantee has certain rights to require
registration of any shares purchased pursuant to the option under the securities
laws if necessary for the grantee to be able to sell such shares.
Right of First Refusal. In the event the grantee proposes to sell to a
third party any shares acquired by exercise of the option, the issuer has the
right, at any time prior to the later of 24 months after the first exercise of
the option and the termination of the option, to purchase such shares at the
price and on the terms at which the grantee proposed to sell such shares to such
third party.
55
<PAGE> 62
Effect of Stock Option Agreements. The Stock Option Agreements are
intended to increase the likelihood that the Merger will be consummated on the
terms set forth in the Merger Agreement. Consequently, certain aspects of the
Stock Option Agreements may have the effect of discouraging persons who might
now or prior to the Effective Time be interested in acquiring all of or a
significant interest in either Chemical or Chase from considering or proposing
such an acquisition, even if such persons were prepared to offer higher
consideration per share for Chase Common Stock than that implicit in the
Exchange Ratio or a higher price per share for Chemical Common Stock than the
market price.
AMENDMENTS TO RIGHTS AGREEMENTS
Chemical has amended the Chemical Rights Agreement (as defined under
"Comparison of Stockholder Rights -- Rights Plans") to provide that neither the
approval, execution or delivery of the Merger Agreement or the Chemical Stock
Option Agreement nor the consummation of the transactions contemplated by the
Merger Agreement or the Chemical Stock Option Agreement will cause the rights
issued thereunder to become exercisable. See "Comparison of Stockholder
Rights -- Rights Plans".
Chase has amended the Chase Rights Agreement (as defined under "Comparison
of Stockholder Rights -- Rights Plans") to provide that neither the approval,
execution or delivery of the Merger Agreement or the Chase Stock Option
Agreement nor the consummation of the transactions contemplated by the Merger
Agreement or the Chase Stock Option Agreement will cause the rights issued
thereunder to become exercisable. See "Comparison of Stockholder
Rights -- Rights Plans".
RESALE OF CHEMICAL COMMON STOCK AND CHEMICAL MERGER PREFERRED STOCK
The Chemical Common Stock (together with the attached Chemical Rights) and
Chemical Merger Preferred Stock issued pursuant to the Merger will not be
subject to any restrictions on transfer arising under the Securities Act, except
for shares issued to any Chase stockholder (including any director or executive
officer of Chemical who may be a Chase stockholder) who may be deemed to be an
"affiliate" of Chemical or Chase for purposes of Rule 145 under the Securities
Act. It is expected that each such affiliate will enter into an agreement with
Chemical providing that such affiliate will not transfer any Chemical Common
Stock or Chemical Merger Preferred Stock received in the Merger except in
compliance with the Securities Act and will make no disposition of any Chemical
or Chase stock (or any interest therein) during the period commencing 30 days
prior to the Effective Time through the date on which financial results covering
at least 30 days of combined operations of Chemical and Chase after the Merger
have been published. This Proxy Statement/Prospectus does not cover resales of
Chemical Common Stock or Chemical Merger Preferred Stock received by any person
who may be deemed to be such an affiliate of Chemical or Chase.
NO APPRAISAL RIGHTS
No holder of Chemical Common Stock or Chemical Preferred Stock or of Chase
Common Stock or Chase Preferred Stock will be entitled to appraisal rights under
the DGCL in connection with, or as a result of, the matters to be acted upon at
the Special Meetings.
56
<PAGE> 63
AMENDMENT AND RESTATEMENT OF CHEMICAL
RESTATED CERTIFICATE OF INCORPORATION
At the Chemical Special Meeting, the Board of Directors of Chemical will
submit for consideration by the Chemical stockholders a proposal to amend and
restate the Chemical Charter to increase the number of authorized shares of
Chemical Common Stock from 400,000,000 to 750,000,000 shares and to make certain
other technical amendments, as described below. The approval of the Merger
Agreement and the amendment and restatement of the Chemical Charter are each
contingent upon approval of both such proposals by stockholders. Therefore, a
vote against the proposal to amend and restate the Chemical Charter will have
the same effect as a vote against the Merger. The affirmative vote of the
holders of a majority of the outstanding shares of Chemical Common Stock is
required to approve the amendment and restatement of the Chemical Charter.
The Chemical Charter currently provides for authorized capital stock of
Chemical consisting of 400,000,000 shares of Chemical Common Stock, 34,700,000
shares of Chemical Class B Common Stock and 200,000,000 shares of Chemical
Preferred Stock. On the Record Date, the number of shares of Chemical Common
Stock either issued and outstanding or reserved for issuance totaled
approximately 315,752,593 shares. Chemical expects to issue approximately
195,484,714 shares of Chemical Common Stock to holders of Chase Common Stock in
the Merger and an additional 15,167,691 shares to holders of Chase Options,
Chase Units and Chase Warrants upon exercise of those instruments. Accordingly,
the 400,000,000 shares of Chemical Common Stock authorized by the Chemical
Charter is not sufficient to consummate the Merger. Therefore, the Board of
Directors deems it advisable that the authorized shares of Chemical Common Stock
be increased to 750,000,000 shares in order to have a sufficient number of
shares to consummate the Merger and for issuance from time to time after the
Merger.
The Board of Directors of Chemical believes that the continued availability
of shares of Chemical Common Stock is advisable not only to effect the Merger
but to provide Chemical with the flexibility to take advantage of opportunities
to issue Chemical Common Stock to obtain capital, as consideration for possible
acquisitions or for other corporate purposes.
Chemical currently has no plans, understandings, agreements or arrangements
concerning the issuance of additional shares of Chemical Common Stock, except
for the shares to be issued in the Merger and shares reserved or to be reserved
for issuance by Chemical as described herein. If any plans, understandings,
arrangements or agreements are made concerning the issuance of any such shares,
holders of the then outstanding shares of Chemical's capital stock may or may
not be given the opportunity to vote thereon, depending upon the nature of any
such transaction, the law applicable thereto, the policy of the NYSE and the
judgment of Chemical's Board of Directors regarding the submission thereof to
Chemical's stockholders.
It is not presently contemplated that such additional shares of Chemical
Common Stock would be issued for the purpose of making the acquisition by an
unwanted suitor of a controlling interest in Chemical more difficult,
time-consuming or costly. However, it should be noted that shares of Chemical
Common Stock could be issued for that purpose and to that effect, and the Board
of Directors reserves its right (if consistent with its fiduciary
responsibilities) to issue Chemical Common Stock for such purposes. For a
description of certain antitakeover effects of the Chemical Rights which are
attached to the existing Chemical Common Stock and will be attached to any
additional shares of Chemical Common Stock when issued, see "Comparison of
Stockholder Rights -- Rights Plans -- Chemical Rights".
The Merger Agreement provides that the Certificate of Incorporation of the
Surviving Corporation will be the Chemical Charter and that the name of the
Surviving Corporation will be "The Chase Manhattan Corporation". Accordingly,
the Chemical Charter must be amended to change the name of the corporation
appearing therein to "The Chase Manhattan Corporation" as provided in the Merger
Agreement.
The Chemical Charter currently provides for 34,700,000 shares of Class B
Common Stock. Certain shares of Class B Common Stock were issued in connection
with the acquisition by Chemical of Texas Commerce Bank in 1987 and all the
shares of Class B Common Stock so issued have since been converted to Chemical
Common Stock in accordance with their terms. Pursuant to Article Fourth, Part
II, clause (e)(5) of the Chemical Charter, the Class B Common Stock may not be
reissued. Therefore, the proposed Amended and Restated Chemical Charter reflects
the elimination of all provisions with respect to the Class B Common Stock.
THE CHEMICAL BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT AND
RESTATEMENT OF THE CHEMICAL CHARTER AS DESCRIBED ABOVE.
57
<PAGE> 64
MANAGEMENT AND OPERATIONS AFTER THE MERGER
DIRECTORS AFTER THE MERGER
As of the Effective Time, the Board of Directors of the Surviving
Corporation is expected to consist of 35 directors, including all of the current
outside directors of both Chemical and Chase (subject, in each case, to normal
scheduled retirements) and the five members of the Office of the Chairman of the
Surviving Corporation. The directors of the Surviving Corporation will be
elected annually. The Merger Agreement provides that if, prior to the Effective
Time, any of the persons named by either Chemical or Chase to serve on the Board
of Directors of the Surviving Corporation as of the Effective Time declines or
is unable to serve as a director, Chemical or Chase, as the case may be, may
name a replacement to become a director, which replacement must be reasonably
acceptable to the other party.
Set forth below is certain information about each person who currently is
expected to be a member of the Board of Directors of the Surviving Corporation
as of the Effective Time (subject to regularly scheduled retirements).
<TABLE>
<CAPTION>
YEAR BECAME A DIRECTOR
OF CHEMICAL(1) OR
NAME CHASE, AS APPLICABLE
----------------------------------------- --------------------------
<S> <C>
Frank A. Bennack, Jr..................... 1981 (Chemical)
Michel C. Bergerac....................... 1978 (Chemical)
Susan V. Berresford(2)................... 1995 (Chase)
Randolph W. Bromery...................... 1988 (Chemical)
M. Anthony Burns......................... 1990 (Chase)
Charles W. Duncan, Jr.................... 1987 (Chemical)
James L. Ferguson........................ 1975 (Chase)
H. Laurance Fuller....................... 1985 (Chase)
Melvin R. Goodes......................... 1986 (Chemical)
William H. Gray, III..................... 1992 (Chase)
George V. Grune.......................... 1986 (Chemical)
William B. Harrison, Jr.................. 1991 (Chemical)
Harold S. Hook........................... 1987 (Chemical)
Helene L. Kaplan......................... 1987 (Chemical)
David T. Kearns.......................... 1982-1991, 1993 (Chase)
E. Michel Kruse.......................... 1995 (Chase)
Thomas G. Labrecque...................... 1980 (Chase)
Delano E. Lewis.......................... 1993 (Chase)
J. Bruce Llewellyn....................... 1989 (Chemical)
Paul W. MacAvoy.......................... 1992 (Chase)
John P. Mascotte......................... 1983 (Chemical)
John H. McArthur......................... 1980 (Chase)
John F. McGillicuddy..................... 1970 (Chemical)
David T. McLaughlin...................... 1980 (Chase)
Edward D. Miller......................... 1988 (Chemical)
Edmund T. Pratt, Jr...................... 1974 (Chase)
Henry B. Schacht......................... 1982 (Chase)
Walter V. Shipley........................ 1982 (Chemical)
Andrew C. Sigler......................... 1979 (Chemical)
Michael I. Sovern........................ 1981 (Chemical)
John R. Stafford......................... 1982 (Chemical)
W. Bruce Thomas.......................... 1977 (Chemical)
Donald H. Trautlein...................... 1981 (Chase)
Marina v.N. Whitman...................... 1973 (Chemical)
Richard D. Wood.......................... 1974 (Chemical)
</TABLE>
- ---------------
(1) For each person who was a director of MHC prior to its merger with Chemical
in 1991, the year indicated is the year in which each such person became a
director of MHC.
(2) Ms. Berresford was appointed as a director of Chase in May, 1995. She is
currently an Executive Vice President and Chief Operating Officer of the
Ford Foundation. She has been designated the Ford Foundation's next
President and will assume those responsibilities in March 1996. Ms.
Berresford has held a variety of positions since joining the Ford Foundation
in 1970.
58
<PAGE> 65
MANAGEMENT AFTER THE MERGER
The Board of Directors of Chemical has agreed in the Merger Agreement to
take appropriate action so that as of the Effective Time, Mr. Shipley will be
Chairman and Chief Executive Officer of the Surviving Corporation and Mr.
Labrecque will become President and Chief Operating Officer of the Surviving
Corporation.
In addition, the Board of Directors of Chemical has agreed in the Merger
Agreement to take appropriate action so that as of the Effective Time the
following persons will hold the offices of the Surviving Corporation having the
functions set forth below:
Edward D. Miller: Senior Vice Chairman, with responsibility for regional
banking, nationwide consumer services and technology.
William B. Harrison, Jr.: Vice Chairman, with responsibility for global
wholesale banking, including private banking.
E. Michel Kruse: Vice Chairman, with responsibility for market and
credit risk management, finance, and information and transaction
services.
The Office of the Chairman of the Surviving Corporation will consist of
Messrs. Shipley, Labrecque, Miller, Harrison and Kruse. All members of the
Office of the Chairman will also be directors of the Surviving Corporation.
In addition, the Board of Directors of Chemical has, pursuant to the Merger
Agreement, agreed to take appropriate action such that, as of the Effective
Time, the following persons will hold senior positions in the Surviving
Corporation and/or subsidiaries thereof with the responsibilities set forth
below:
<TABLE>
<CAPTION>
NAME RESPONSIBILITIES
----------------------------------- --------------------------------------------
<S> <C>
Donald L. Boudreau................. Retail credit products
A. Wright Elliott.................. Marketing resources and corporate
communications
John J. Farrell.................... Human resources
Michael Hegarty.................... Deposit and investment products
Donald H. Layton................... Global capital markets and trading
James B. Lee, Jr................... Global investment banking
Arjun K. Mathrani.................. Global client management
Richard J. Matteis................. Information and transaction services
William H. McDavid................. General counsel
William J. Moran................... General auditor
Denis J. O'Leary................... Chief information officer
Marc J. Shapiro.................... Texas Commerce Bank
Joseph G. Sponholz................. Chief administrative officer
Peter J. Tobin..................... Chief financial officer
William H. Turner.................. Middle market banking and community
development
Michael Urkowitz................... Consumer product integration
James W. Zeigon.................... Global asset management and private banking
</TABLE>
As of the date hereof, neither Chemical nor Chase is aware of any material
relationship between Chemical or its directors or executive officers and Chase
or its directors or executive officers, except as contemplated by the Merger
Agreement or as described herein or in the documents incorporated by reference
herein. In the ordinary course of business and from time to time, Chemical may
do business with Chase, Chemical may enter into banking transactions with
certain of Chase's directors, executive officers and their affiliates, Chase may
do business with Chemical, and Chase may enter into banking transactions with
certain of Chemical's directors, officers and their affiliates.
59
<PAGE> 66
CONSOLIDATION OF OPERATIONS; ANTICIPATED COST SAVINGS
Although no assurance can be given either that any specific level of cost
savings will be achieved or as to the timing thereof, Chemical and Chase
currently expect to achieve substantial savings in the base of operating costs
by consolidating certain operations and eliminating redundant expenses. Such
savings are expected to be realized over time as such consolidation is
completed. Annual savings are expected to amount to approximately $600 million
in the first year following consummation of the Merger, approximately $1.05
billion in the second year, and approximately $1.5 billion in each year
thereafter. Such savings are expected to be realized primarily through
reductions in staff, the consolidation and elimination of certain branches and
office facilities and the consolidation of certain data processing and other
back office operations. It is expected that a one-time, pre-tax restructuring
charge of $1.5 billion will be incurred upon consummation of the Merger,
principally as a result of severance expenses to be incurred in connection with
anticipated staff reductions (approximately $550 million), costs in connection
with planned office eliminations (approximately $550 million) and other
Merger-related expenses, including costs to eliminate redundant back office and
other operations of Chemical and Chase (including equipment write-offs) and
other expenses related directly to the Merger (approximately $400 million). See
"Pro Forma Combined Financial Data".
Chemical and Chase expect to reduce their combined work force, which is
currently comprised of approximately 75,000 employees located in 39 states and
51 countries, by 12,000 employees. Chemical and Chase also expect that the
combined entity will realize savings through consolidation of offices and
operations centers and the elimination of approximately 100 existing branches in
New York State located near other existing Chemical or Chase branches and
through the consolidation of various businesses and operations of the banking
and non-banking subsidiaries of Chemical and Chase.
Of the projected annual expense savings of $1.5 billion expected to be
realized from the Merger, approximately $775 million is expected to be derived
from the consolidation of the global wholesale banking businesses of Chemical
and Chase, approximately $550 million is expected to be derived from the
consolidation of regional and nationwide consumer services businesses of
Chemical and Chase and approximately $175 million is expected to be derived from
the consolidation of Chemical and Chase's corporate operations.
For the year ended December 31, 1994 and the six months ended June 30,
1995, the pro forma combined efficiency ratio of Chemical and Chase was 64% and
65%, respectively. The computation of the efficiency ratio (noninterest expense
as a percentage of the total of net interest income and noninterest revenue)
excludes restructuring charges, foreclosed property expense and net gains on
emerging markets-related bond sales and the gain related to the sale of
Chemical's investment in Far East Bank. The pro forma combined return on average
common stockholders' equity of Chemical and Chase was 13.70% for the year ended
December 31, 1994 and 15.44% for the six months ended June 30, 1995. See
"Summary -- Pro Forma Condensed Combined Financial Data of Chemical Banking
Corporation and The Chase Manhattan Corporation". As a result of the projected
synergies and cost savings anticipated to be realized as a result of the Merger,
the managements of the two companies have outlined the following performance
goals for the Surviving Corporation: increases in annual earnings per share of
the Surviving Corporation of more than 10% per year over the three-year period,
and an efficiency ratio in the low 50% range and a return on average common
stockholders' equity of the Surviving Corporation of 18% or better by the end of
the third year following the Merger. There can be no assurance, however, that
such performance goals can be achieved within such three-year period or
otherwise.
60
<PAGE> 67
PRO FORMA COMBINED FINANCIAL DATA
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME SUMMARY
(IN MILLIONS, EXCEPT PER SHARE DATA)
The following unaudited pro forma combined statement of income summary
combines the historical consolidated statements of income of Chemical and Chase
giving effect to the Merger, which will be accounted for as a pooling of
interests, as if the Merger had occurred on the dates indicated herein, after
giving effect to the pro forma adjustments described in the notes to the pro
forma combined financial statements. For a description of the pooling of
interests accounting with respect to the Merger, see "The Merger -- Anticipated
Accounting Treatment". The information set forth below should be read in
conjunction with the historical consolidated financial statements of Chemical
and Chase, including the respective notes thereto, which are incorporated by
reference in this Proxy Statement/Prospectus (see "Incorporation of Certain
Documents by Reference"), and in conjunction with the condensed consolidated
historical and other pro forma financial information, including the notes
thereto, appearing elsewhere in this Proxy Statement/ Prospectus. The effect of
the estimated $1.5 billion restructuring charge ($925 million net of tax)
expected to be taken in connection with the Merger has been reflected in the pro
forma combined balance sheet; however, since the proposed restructuring charge
is nonrecurring, it has not been reflected in the pro forma combined statements
of income. The pro forma financial data do not give effect to the anticipated
cost savings in connection with the Merger. The pro forma financial data are not
necessarily indicative of the results that actually would have occurred had the
Merger been consummated on the dates indicated or that may be obtained in the
future.
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE YEAR
ENDED JUNE 30, ENDED DECEMBER 31,
--------------- ---------------------------
1995 1994 1994 1993 1992
------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans.............................................. $6,340 $5,386 $11,055 $11,252 $12,633
Securities......................................... 1,234 1,247 2,329 2,412 2,332
Trading Assets..................................... 616 575 1,142 691 735
Federal Funds Sold and Securities Purchased Under
Resale Agreements................................ 950 1,036 1,827 1,368 1,120
Deposits With Banks................................ 443 451 869 985 1,033
------ ------ ------- ------- -------
Total Interest Income............................ 9,583 8,695 17,222 16,708 17,853
------ ------ ------- ------- -------
INTEREST EXPENSE
Deposits........................................... 3,096 2,241 4,704 4,255 5,803
Short-Term and Other Borrowings.................... 1,930 1,837 3,307 3,092 2,805
Long-Term Debt..................................... 472 420 848 1,025 1,083
------ ------ ------- ------- -------
Total Interest Expense........................... 5,498 4,498 8,859 8,372 9,691
------ ------ ------- ------- -------
NET INTEREST INCOME................................ 4,085 4,197 8,363 8,336 8,162
Provision for Credit Losses........................ 380 675 1,050 2,254 2,585
Provision for Loans Held for Accelerated
Disposition...................................... -- -- -- 566 --
------ ------ ------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT
LOSSES AND PROVISION FOR LOANS HELD FOR
ACCELERATED DISPOSITION.......................... 3,705 3,522 7,313 5,516 5,577
</TABLE>
61
<PAGE> 68
PRO FORMA COMBINED FINANCIAL DATA
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME SUMMARY -- (CONTINUED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE YEAR
ENDED JUNE 30, ENDED DECEMBER 31,
--------------- -------------------------
1995 1994 1994 1993 1992
------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C>
NONINTEREST REVENUE
Trust and Investment Management Fees............... 450 500 988 871 768
Corporate Finance and Syndication Fees............. 393 290 638 532 465
Service Charges on Deposit Accounts................ 211 198 408 397 366
Fees for Other Financial Services.................. 1,068 1,044 2,116 2,008 1,954
Trading Revenue.................................... 406 719 1,196 1,789 1,321
Securities Gains................................... 54 60 65 189 66
Other Revenue...................................... 671 642 1,239 1,350 435
------ ------ ------- ------ ------
Total Noninterest Revenue........................ 3,253 3,453 6,650 7,136 5,375
------ ------ ------- ------ ------
NONINTEREST EXPENSE
Salaries........................................... 2,004 1,893 3,978 3,660 3,482
Employee Benefits.................................. 508 461 929 869 783
Occupancy Expense.................................. 446 485 968 991 949
Equipment Expense.................................. 391 333 724 664 604
Foreclosed Property Expense........................ (53) 97 50 509 413
Provision for Other Real Estate Held for
Accelerated Disposition.......................... -- -- -- 318 --
Restructuring Charge............................... 15 48 465 203 --
Other Expense...................................... 1,383 1,425 2,888 2,614 2,570
------ ------ ------- ------ ------
Total Noninterest Expense........................ 4,694 4,742 10,002 9,828 8,801
------ ------ ------- ------ ------
Income Before Income Tax Expense and Effect of
Accounting Changes............................... 2,264 2,233 3,961 2,824 2,151
Income Tax Expense................................. 885 890 1,475 798 428
------ ------ ------- ------ ------
INCOME BEFORE EFFECT OF ACCOUNTING CHANGES......... $1,379 $1,343 $ 2,486 $2,026 $1,723
------ ------ ------- ------ ------
Income Applicable to Common Stock.................. $1,262 $1,213 $ 2,221 $1,731 $1,449
------ ------ ------- ------ ------
Income Per Share (Before Accounting Changes):
Primary.......................................... $ 2.91 $ 2.71 $ 5.02 $ 4.00 $ 3.65
Assuming Full Dilution........................... $ 2.85 $ 2.67 $ 4.97 $ 3.96 $ 3.61
Average Common Shares Outstanding:
Primary.......................................... 433.5 448.2 442.2 433.1 397.5
Assuming Full Dilution........................... 444.7 457.8 450.9 441.7 408.2
</TABLE>
See the additional Unaudited Pro Forma Combined Financial Statements and Notes
thereto below
62
<PAGE> 69
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(IN MILLIONS)
The following unaudited pro forma combined balance sheet combines the
historical consolidated balance sheets of Chemical and Chase giving effect to
the Merger, which will be accounted for as a pooling of interests, as if the
Merger had been effective on June 30, 1995. For a description of the pooling of
interests accounting with respect to the Merger, see "The Merger -- Anticipated
Accounting Treatment". The information set forth below should be read in
conjunction with the historical consolidated financial statements of Chemical
and Chase, including their respective notes thereto, which are incorporated by
reference in this Proxy Statement/Prospectus (see "Incorporation of Certain
Documents by Reference"), and in conjunction with the condensed consolidated
historical and other pro forma financial information, including the notes
thereto, appearing elsewhere in this Proxy Statement/Prospectus. The effect of
the estimated $1.5 billion restructuring charge ($925 million net of tax)
expected to be taken in connection with the Merger has been reflected in the pro
forma combined balance sheet; however, since the proposed restructuring charge
is nonrecurring, it has not been reflected in the pro forma combined statement
of income. The pro forma financial data do not give effect to the anticipated
cost savings in connection with the Merger. The pro forma financial data are not
necessarily indicative of the actual financial position that would have occurred
had the Merger been consummated on June 30, 1995 or that may be obtained in the
future.
<TABLE>
<CAPTION>
AT JUNE 30, 1995
-----------------------------------------------------
CHEMICAL CHASE PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
(a, p)
<S> <C> <C> <C> <C>
ASSETS
Cash and Due from Banks........................ $ 7,756 $ 4,309 $ -- $ 12,065
Deposits with Banks............................ 2,903 6,623 -- 9,526
Federal Funds Sold and Securities Purchased
Under Resale Agreements...................... 12,883 8,722 -- 21,605
Trading Assets:
Debt and Equity Instruments.................. 12,059 7,257 -- 19,316
Risk Management Instruments.................. 18,412 9,442 -- 27,854
Securities: (b)
Held-to-Maturity............................. 8,287 2,004 -- 10,291
Available-for-Sale........................... 19,965 5,106 (416)(c) 24,655
Loans.......................................... 84,675 64,239 416(c) 149,503
173(d)
Allowance for Credit Losses.................... (2,430) (1,416) -- (3,846)
Premises and Equipment......................... 2,138 1,940 (104)(q) 3,974
Due from Customers on Acceptances.............. 1,156 960 -- 2,116
Accrued Interest Receivable.................... 1,197 1,195 -- 2,392
Assets Acquired as Loan Satisfactions.......... 54 -- 93(d) 147
Assets Held for Accelerated Disposition........ 240 -- -- 240
Other Assets................................... 9,236 8,375 (266)(d) 17,709
364(j)
-------- -------- -------- --------
TOTAL ASSETS................................. $ 178,531 $ 118,756 $ 260 $ 297,547
======== ======== ======== ========
</TABLE>
63
<PAGE> 70
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET -- (CONTINUED)
(IN MILLIONS)
<TABLE>
<CAPTION>
AT JUNE 30, 1995
-----------------------------------------------------
CHEMICAL CHASE PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
(a, p)
<S> <C> <C> <C> <C>
LIABILITIES
Deposits:
Domestic Noninterest-Bearing................. $ 21,387 $ 11,293 $ -- $ 32,680
Domestic Interest-Bearing.................... 45,860 20,897 -- 66,757
Foreign...................................... 27,642 36,092 -- 63,734
-------- -------- -------- --------
Total Deposits............................ 94,889 68,282 -- 163,171
Federal Funds Purchased and Securities Sold
Under Repurchase Agreements.................. 23,557 12,519 -- 36,076
Other Borrowed Funds........................... 15,780 4,060 (6,930)(e) 12,910
Acceptances Outstanding........................ 1,162 967 -- 2,129
Trading Liabilities............................ 20,353 11,787 6,930(e) 39,070
Accounts Payable, Accrued Expenses and Other
Liabilities.................................. 4,208 7,004 146(f) 12,243
925(g)
(40)(q)
Long-Term Debt................................. 7,202 5,568 -- 12,770
-------- -------- -------- --------
TOTAL LIABILITIES............................ 167,151 110,187 1,031 278,369
STOCKHOLDERS' EQUITY
Preferred Stock................................ 1,250 1,400 -- 2,650
Common Stock................................... 255 374 (199)(h) 443
13(j)
Capital Surplus................................ 6,476 3,982 (111)(h) 10,698
351(j)
Retained Earnings.............................. 3,826 3,309 (146)(f) 5,821
(925)(g)
(179)(h)
(64)(q)
Net Unrealized Loss on Securities
Available-for-Sale, Net of Taxes............. (216) (7) -- (223)
Treasury Stock, at Cost........................ (211) (489) 489(h) (211)
-------- -------- -------- --------
TOTAL STOCKHOLDERS' EQUITY................... 11,380 8,569 (771) 19,178
-------- -------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY... $ 178,531 $ 118,756 $ 260 $ 297,547
======== ======== ======== ========
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
64
<PAGE> 71
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
The following unaudited pro forma combined statements of income combine the
consolidated statements of income of Chemical and Chase giving effect to the
Merger, which will be accounted for as a pooling of interests, as if the Merger
had been effective as of the beginning of the periods indicated after giving
effect to the pro forma adjustments described in the notes to the pro forma
combined financial statements. For a description of the pooling of interests
accounting with respect to the Merger, see "The Merger -- Anticipated Accounting
Treatment". The information set forth below should be read in conjunction with
the historical consolidated financial statements of Chemical and Chase,
including their respective notes thereto, which are incorporated by reference in
this Proxy Statement/Prospectus (see "Incorporation of Certain Documents by
Reference"), and in conjunction with the condensed consolidated historical and
other pro forma financial information, including the notes thereto, appearing
elsewhere in this Proxy Statement/Prospectus. The effect of the estimated $1.5
billion restructuring charge ($925 million net of tax) expected to be taken in
connection with the Merger has been reflected in the pro forma combined balance
sheet; however, since the proposed restructuring charge is nonrecurring, it has
not been reflected in the pro forma combined statement of income. The pro forma
financial data do not give effect to the anticipated cost savings in connection
with the Merger. The pro forma financial data are not necessarily indicative of
the results that actually would have occurred had the Merger been consummated on
the dates indicated or that may be obtained in the future.
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1995
-------------------------------------------------------
CHEMICAL CHASE PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ---------- ----------
(a, p)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans........................................... $3,431 $2,883 $ 26(c) $6,340
Securities...................................... 1,018 242 (26)(c) 1,234
Trading Assets.................................. 404 212 -- 616
Federal Funds Sold and Securities
Purchased Under Resale Agreements............. 431 519 -- 950
Deposits With Banks............................. 149 294 -- 443
------ ------ --- ------
Total Interest Income......................... 5,433 4,150 -- 9,583
------ ------ --- ------
INTEREST EXPENSE
Deposits........................................ 1,782 1,314 -- 3,096
Short-term and Other Borrowings................. 1,055 875 -- 1,930
Long-Term Debt.................................. 278 194 -- 472
------ ------ --- ------
Total Interest Expense........................ 3,115 2,383 -- 5,498
------ ------ --- ------
NET INTEREST INCOME............................. 2,318 1,767 -- 4,085
Provision for Credit Losses..................... 240 140 -- 380
------ ------ --- ------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES................................. 2,078 1,627 -- 3,705
</TABLE>
65
<PAGE> 72
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME -- (CONTINUED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1995
-------------------------------------------------------
CHEMICAL CHASE PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ---------- ----------
(a, p)
<S> <C> <C> <C> <C>
NONINTEREST REVENUE
Trust and Investment Management Fees............ 188 262 -- 450
Corporate Finance and Syndication Fees.......... 248 145 -- 393
Service Charges on Deposit Accounts............. 150 -- 61(k) 211
Fees for Other Financial Services............... 584 545 (61)(k) 1,068
Trading Revenue................................. 227 179 -- 406
Securities Gains................................ 51 26 (23)(c) 54
Other Revenue................................... 383 265 23(c) 671
------ ------ --- ------
Total Noninterest Revenue..................... 1,831 1,422 -- 3,253
------ ------ --- ------
NONINTEREST EXPENSE
Salaries........................................ 1,103 904 (3)(1) 2,004
Employee Benefits............................... 224 291 (7)(f) 508
Occupancy Expense............................... 264 182 -- 446
Equipment Expense............................... 198 168 25(q) 391
Foreclosed Property Expense..................... (21) -- (32)(m) (53)
Restructuring Charge............................ -- -- 15(l) 15
Other Expense................................... 726 637 (12)(1) 1,383
32(m)
------ ------ --- ------
Total Noninterest Expense..................... 2,494 2,182 18 4,694
------ ------ --- ------
Income Before Income Tax Expense and
Effect of Accounting Changes.................. 1,415 867 (18) 2,264
Income Tax Expense.............................. 566 326 (7) 885
------ ------ --- ------
INCOME BEFORE EFFECT OF ACCOUNTING CHANGES...... $ 849 $ 541 $(11) $1,379
------ ------ --- ------
Income Applicable to Common Stock............... $ 793 $ 480 $(11) $1,262
------ ------ --- ------
Income Per Share (Before Accounting Changes):
Primary....................................... $ 3.21 $ 2.67 $ 2.91
Assuming Full Dilution........................ $ 3.12 $ 2.64 $ 2.85
Average Common Shares Outstanding:
Primary....................................... 246.8 179.5 433.5(h)
Assuming Full Dilution........................ 255.8 181.6 444.7(h)
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
66
<PAGE> 73
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME -- (CONTINUED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1994
-------------------------------------------------
CHEMICAL CHASE PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
(a, p)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans................................................. $2,682 $2,677 $ 27(c) $ 5,386
Securities............................................ 848 426 (27)(c) 1,247
Trading Assets........................................ 364 211 -- 575
Federal Funds Sold and Securities Purchased Under
Resale Agreements................................... 221 815 -- 1,036
Deposits With Banks................................... 194 257 -- 451
------ ------ ---- ------
Total Interest Income............................... 4,309 4,386 -- 8,695
------ ------ ---- ------
INTEREST EXPENSE
Deposits.............................................. 1,063 1,178 -- 2,241
Short-Term and Other Borrowings....................... 651 1,186 -- 1,837
Long-Term Debt........................................ 267 153 -- 420
------ ------ ---- ------
Total Interest Expense.............................. 1,981 2,517 -- 4,498
------ ------ ---- ------
NET INTEREST INCOME................................... 2,328 1,869 -- 4,197
Provision for Credit Losses........................... 365 310 -- 675
------ ------ ---- ------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT
LOSSES.............................................. 1,963 1,559 -- 3,522
NONINTEREST REVENUE
Trust and Investment Management Fees.................. 218 282 -- 500
Corporate Finance and Syndication Fees................ 175 115 -- 290
Service Charges on Deposit Accounts................... 144 -- 54(k) 198
Fees for Other Financial Services..................... 569 529 (54)(k) 1,044
Trading Revenue....................................... 388 331 -- 719
Securities Gains...................................... 59 80 (79)(c) 60
Other Revenue......................................... 245 318 79(c) 642
------ ------ ---- ------
Total Noninterest Revenue........................... 1,798 1,655 -- 3,453
------ ------ ---- ------
NONINTEREST EXPENSE
Salaries.............................................. 1,060 833 -- 1,893
Employee Benefits..................................... 221 247 (7)(f) 461
Occupancy Expense..................................... 286 199 -- 485
Equipment Expense..................................... 175 145 13(q) 333
Foreclosed Property Expense........................... 37 -- 60(m) 97
Restructuring Charge.................................. 48 -- -- 48
Other Expense......................................... 778 707 (60)(m) 1,425
------ ------ ---- ------
Total Noninterest Expense........................... 2,605 2,131 6 4,742
------ ------ ---- ------
Income Before Income Tax Expense...................... 1,156 1,083 (6) 2,233
Income Tax Expense.................................... 480 412 (2) 890
------ ------ ---- ------
NET INCOME............................................ $ 676 $ 671 $ (4) $ 1,343
------ ------ ---- ------
Income Applicable to Common Stock..................... $ 611 $ 606 $ (4) $ 1,213
------ ------ ---- ------
Income Per Share:
Primary............................................. $ 2.39 $ 3.27 $ 2.71
Assuming Full Dilution.............................. $ 2.36 $ 3.24 $ 2.67
Average Common Shares Outstanding:
Primary............................................. 255.2 185.6 448.2(h)
Assuming Full Dilution.............................. 263.0 187.3 457.8(h)
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
67
<PAGE> 74
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME -- (CONTINUED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1994
---------------------------------------------------
CHEMICAL CHASE PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
(a, p)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans............................................... $5,730 $5,270 $ 55(c) $11,055
Securities.......................................... 1,715 669 (55)(c) 2,329
Trading Assets...................................... 722 420 -- 1,142
Federal Funds Sold and Securities Purchased Under
Resale Agreements................................. 550 1,277 -- 1,827
Deposits With Banks................................. 371 498 -- 869
----- ----- ---- ------
Total Interest Income............................. 9,088 8,134 -- 17,222
----- ----- ---- ------
INTEREST EXPENSE
Deposits............................................ 2,378 2,326 -- 4,704
Short-Term and Other Borrowings..................... 1,500 1,807 -- 3,307
Long-Term Debt...................................... 536 312 -- 848
----- ----- ---- ------
Total Interest Expense............................ 4,414 4,445 -- 8,859
----- ----- ---- ------
NET INTEREST INCOME................................. 4,674 3,689 -- 8,363
Provision for Credit Losses......................... 550 500 -- 1,050
----- ----- ---- ------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT
LOSSES............................................ 4,124 3,189 -- 7,313
NONINTEREST REVENUE
Trust and Investment Management Fees................ 421 567 -- 988
Corporate Finance and Syndication Fees.............. 405 233 -- 638
Service Charges on Deposit Accounts................. 300 -- 108(k) 408
Fees for Other Financial Services................... 1,148 1,076 (108)(k) 2,116
Trading Revenue..................................... 645 551 -- 1,196
Securities Gains.................................... 66 105 (106)(c) 65
Other Revenue....................................... 612 521 106(c) 1,239
----- ----- ---- ------
Total Noninterest Revenue......................... 3,597 3,053 -- 6,650
----- ----- ---- ------
NONINTEREST EXPENSE
Salaries............................................ 2,205 1,773 -- 3,978
Employee Benefits................................... 439 649 (145)(l) 929
(14)(f)
Occupancy Expense................................... 573 395 -- 968
Equipment Expense................................... 382 307 35(q) 724
Foreclosed Property Expense......................... 41 -- 9(m) 50
Restructuring Charge................................ 308 -- 157(l) 465
Other Expense....................................... 1,561 1,348 (12)(l) 2,888
(9)(m)
----- ----- ---- ------
Total Noninterest Expense......................... 5,509 4,472 21 10,002
----- ----- ---- ------
Income Before Income Tax Expense.................... 2,212 1,770 (21) 3,961
Income Tax Expense.................................. 918 565 (8) 1,475
----- ----- ---- ------
NET INCOME.......................................... $1,294 $1,205 $ (13) $ 2,486
----- ----- ---- ------
Income Applicable to Common Stock................... $1,156 $1,078 $ (13) $ 2,221
----- ----- ---- ------
Income Per Share:
Primary........................................... $ 4.60 $ 5.87 $ 5.02
Assuming Full Dilution............................ $ 4.54 $ 5.84 $ 4.97
Average Common Shares Outstanding:
Primary........................................... 251.3 183.6 442.2(h)
Assuming Full Dilution............................ 258.9 184.6 450.9(h)
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
68
<PAGE> 75
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME -- (CONTINUED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1993
-----------------------------------------------------
CHEMICAL CHASE PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ----------- ----------
(a, p)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans..................................................... $5,620 $5,795 $(163)(n) $ 11,252
Securities................................................ 1,727 685 -- 2,412
Trading Assets............................................ 449 242 -- 691
Federal Funds Sold and Securities Purchased Under Resale
Agreements.............................................. 339 1,029 -- 1,368
Deposits With Banks....................................... 268 717 -- 985
---------- ---------- ----------- ----------
Total Interest Income................................... 8,403 8,468 (163) 16,708
---------- ---------- ----------- ----------
INTEREST EXPENSE
Deposits.................................................. 2,241 2,014 -- 4,255
Short-Term and Other Borrowings........................... 992 2,100 -- 3,092
Long-Term Debt............................................ 534 491 -- 1,025
---------- ---------- ----------- ----------
Total Interest Expense.................................. 3,767 4,605 -- 8,372
---------- ---------- ----------- ----------
NET INTEREST INCOME....................................... 4,636 3,863 (163) 8,336
Provision for Credit Losses............................... 1,259 995 -- 2,254
Provision for Loans Held for Accelerated Disposition...... -- 566 -- 566
---------- ---------- ----------- ----------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES AND
PROVISION FOR LOANS HELD FOR ACCELERATED DEPOSITION..... 3,377 2,302 (163) 5,516
NONINTEREST REVENUE
Trust and Investment Management Fees...................... 406 465 -- 871
Corporate Finance and Syndication Fees.................... 338 194 -- 532
Service Charges on Deposit Accounts....................... 288 -- 109(k) 397
Fees for Other Financial Services......................... 1,067 903 (109)(k) 2,008
147(o)
Trading Revenue........................................... 1,073 716 -- 1,789
Securities Gains.......................................... 142 47 -- 189
Other Revenue............................................. 710 624 163(n) 1,350
(147)(o)
---------- ---------- ----------- ----------
Total Noninterest Revenue............................... 4,024 2,949 163 7,136
---------- ---------- ----------- ----------
NONINTEREST EXPENSE
Salaries.................................................. 2,070 1,590 -- 3,660
Employee Benefits......................................... 396 487 (14)(f) 869
Occupancy Expense......................................... 587 404 -- 991
Equipment Expense......................................... 337 298 29(q) 664
Foreclosed Property Expense............................... 287 -- 222(m) 509
Provision for Other Real Estate Held for Accelerated
Disposition............................................. -- 318 -- 318
Restructuring Charge...................................... 158 -- 45(l) 203
Other Expense............................................. 1,458 1,423 (45)(l) 2,614
(222)(m)
---------- ---------- ----------- ----------
Total Noninterest Expense............................... 5,293 4,520 15 9,828
---------- ---------- ----------- ----------
Income Before Income Tax Expense and Effect of Accounting
Changes................................................. 2,108 731 (15) 2,824
Income Tax Expense........................................ 539 265 (6) 798
---------- ---------- ----------- ----------
INCOME BEFORE EFFECT OF ACCOUNTING CHANGES................ $1,569 $ 466 $ (9) $ 2,026
---------- ---------- ----------- ----------
Income Applicable to Common Stock......................... $1,414 $ 326 $ (9) $ 1,731
---------- ---------- ----------- ----------
Income Per Share (Before Accounting Changes):
Primary................................................. $ 5.57 $ 1.89 $ 4.00
Assuming Full Dilution.................................. $ 5.48 $ 1.88 $ 3.96
Average Common Shares Outstanding:
Primary................................................. 253.9 172.3 433.1(h)
Assuming Full Dilution.................................. 261.6 173.2 441.7(h)
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
69
<PAGE> 76
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME -- (CONTINUED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1992
-----------------------------------------------------
CHEMICAL CHASE PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
(a, p)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans........................................... $6,353 $6,280 $ -- $12,633
Securities...................................... 1,753 579 -- 2,332
Trading Assets.................................. 419 316 -- 735
Federal Funds Sold and Securities Purchased
Under Resale Agreements....................... 349 771 -- 1,120
Deposits With Banks............................. 274 759 -- 1,033
------ ------ ----- -------
Total Interest Income......................... 9,148 8,705 -- 17,853
------ ------ ----- -------
INTEREST EXPENSE
Deposits........................................ 2,868 2,935 -- 5,803
Short-Term and Other Borrowings................. 1,228 1,577 -- 2,805
Long-Term Debt.................................. 454 629 -- 1,083
------ ------ ----- -------
Total Interest Expense........................ 4,550 5,141 -- 9,691
------ ------ ----- -------
NET INTEREST INCOME............................. 4,598 3,564 -- 8,162
Provision for Credit Losses..................... 1,365 1,220 -- 2,585
------ ------ ----- -------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT
LOSSES........................................ 3,233 2,344 -- 5,577
NONINTEREST REVENUE
Trust and Investment Management Fees............ 361 407 -- 768
Corporate Finance and Syndication Fees.......... 265 200 -- 465
Service Charges on Deposit Accounts............. 264 -- 102(k) 366
Fees for Other Financial Services............... 1,040 975 (102)(k) 1,954
41(o)
Trading Revenue................................. 853 468 -- 1,321
Securities Gains................................ 53 13 -- 66
Other Revenue................................... 190 286 (41)(o) 435
------ ------ ----- -------
Total Noninterest Revenue..................... 3,026 2,349 -- 5,375
------ ------ ----- -------
NONINTEREST EXPENSE
Salaries........................................ 1,977 1,505 -- 3,482
Employee Benefits............................... 372 411 -- 783
Occupancy Expense............................... 566 383 -- 949
Equipment Expense............................... 316 285 3(q) 604
Foreclosed Property Expense..................... 283 -- 130(m) 413
Other Expense................................... 1,416 1,284 (130)(m) 2,570
------ ------ ----- -------
Total Noninterest Expense..................... 4,930 3,868 3 8,801
------ ------ ----- -------
Income Before Income Tax Expense................ 1,329 825 (3) 2,151
Income Tax Expense.............................. 243 186 (1) 428
------ ------ ----- -------
NET INCOME...................................... $1,086 $ 639 $ (2) $ 1,723
------ ------ ----- -------
Income Applicable to Common Stock............... $ 936 $ 515 $ (2) $ 1,449
------ ------ ----- -------
Income Per Share:
Primary....................................... $ 3.85 $ 3.46 $ 3.65
Assuming Full Dilution........................ $ 3.81 $ 3.41 $ 3.61
Average Common Shares Outstanding:
Primary....................................... 242.9 148.7 397.5(h)
Assuming Full Dilution........................ 251.6 150.6 408.2(h)
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
70
<PAGE> 77
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(a) Chemical and Chase are in the process of reviewing their accounting policies
and as a result of this review, it may be necessary to restate either
Chemical's or Chase's financial statements to conform to those accounting
policies that are determined to be most appropriate by the Surviving
Corporation. While some restatements of prior periods have been included in
the pro forma combined financial statements included in this Proxy
Statement/Prospectus, further restatements may be necessary upon the
completion of this review process.
(b) Chemical and Chase intend to review their combined securities portfolio to
determine the classification of such securities as either
available-for-sale or held-to-maturity in connection with the combined
company's anticipated interest rate risk position. As a result of this
review, certain reclassifications of the combined company's securities
might take place. No such adjustments have been made to existing securities
classifications in the pro forma condensed combined balance sheet. Any such
reclassifications will be accounted for in accordance with SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities."
(c) Chase's historical financial data includes within available-for-sale
securities certain securities issued by foreign governments (such as
Mexico) to financial institutions as part of a debt renegotiation (i.e.,
"Brady Bonds"). To conform to Chemical's classification, Chase's historical
financial data have been reclassified on a pro forma basis to reflect such
securities as a component of loans. Both Chemical and Chase have accounted
for Brady Bonds in accordance with the provisions of SFAS 115.
Chase's historical financial data reflect sales of Brady Bonds as a
component of securities gains and interest income from Brady Bonds as a
component of interest income from securities. To conform to Chemical's
classification, Chase's historical financial data have been reclassified on
a pro forma basis to reflect sales of Brady Bonds as a component of other
revenue and interest income from Brady Bonds as a component of interest
income from loans.
(d) Chase's historical financial data reflect assets acquired as loan
satisfactions as a component of other assets. Effective January 1, 1995,
Chase adopted SFAS 114, "Accounting by Creditors for Impairment of a Loan,"
and prospectively classified in substance foreclosures (ISFs) as
nonperforming loans (the ISF balance as of the January 1, 1995 adoption
remained in other assets). To conform to Chemical's classification, Chase's
June 30, 1995 historical financial data have been reclassified on a pro
forma basis to reflect the remaining $173 million balance of ISFs as
nonperforming loans. To conform to Chemical's classification, Chase's
historical financial data have been reclassified on a pro forma basis to
reflect assets acquired as loan satisfactions (excluding ISFs) as a
separate balance sheet caption.
(e) Chemical's historical financial data reflect securities sold but not yet
purchased as a component of other borrowed funds. To conform to Chase's
classification, Chemical's historical financial data have been reclassified
on a pro forma basis to reflect its securities sold but not yet purchased
as a component of trading liabilities.
(f) Chase elected at the time of its adoption of SFAS No. 106 (effective January
1, 1993) to amortize the transition liability for accumulated
postretirement benefits over 20 years, while Chemical upon its adoption of
SFAS No. 106 (effective January 1, 1993) elected to expense its entire
transition liability. To conform with Chemical's adoption of SFAS No. 106,
Chase's historical financial data have been adjusted on a pro forma basis
to reverse the amortization of Chase's transition liability reflected as a
component of OPEB expense under SFAS 106. Chase's transition liability of
approximately $270 million ($167 million after-tax), net of the $35 million
($21 million after-tax) reversal of amortization expense, has been
reflected in retained earnings on the pro forma consolidated balance sheet.
Both the pre-tax and tax effect are included in the caption "Accounts
Payable, Accrued Expenses and Other Liabilities" on the pro forma balance
sheet.
(g) In connection with the Merger, it is expected that a one-time restructuring
charge of approximately $1.5 billion ($925 million after-tax) will be
incurred at the time of the consummation of the Merger. The restructuring
charge is the result of severance expenses to be incurred in connection
with anticipated staff reductions, costs incurred in connection with
planned office eliminations and other merger-related
71
<PAGE> 78
expenses, including costs to eliminate redundant back office and other
operations of Chemical and Chase. The restructuring charge is assumed to
have the following components for the purpose of the pro forma financial
statements:
<TABLE>
<CAPTION>
(IN MILLIONS)
<S> <C>
Severance........................................ $ 550
Real Estate Costs................................ 550
Other............................................ 400
------
$ 1,500
------
</TABLE>
The effect of the proposed restructuring charge has been reflected in the
pro forma combined balance sheet; however, since the proposed restructuring
charge is nonrecurring, it has not been reflected in the pro forma combined
statement of income. Both the pre-tax and tax effect are included in the
caption "Accounts Payable, Accrued Expenses and Other Liabilities" on the
pro forma balance sheet.
(h) It is assumed that the Merger will be accounted for on a pooling of
interests accounting basis and, accordingly, the related pro forma
adjustments to the common stock, capital surplus and retained earnings
accounts at June 30, 1995 reflect (i) an exchange of 188.4 million shares
of Chemical Common Stock (using the Exchange Ratio of 1.04) for the 174.5
million outstanding shares of Chase Common Stock at June 30, 1995 plus 6.6
million shares of Chase Common Stock issued to acquire the securities
processing businesses of U.S. Trust Corporation (as discussed further in
note (j) below); (ii) the exchange of each outstanding share of Chase
Preferred Stock into one share of Chemical Merger Preferred Stock; and
(iii) the cancellation and retirement of all remaining shares of Chase
Common Stock held in Chase's treasury.
For the income per share calculations, the pro forma combined average
common shares outstanding (primary and assuming full dilution) reflects the
exchange of Chemical Common Stock (using the Exchange Ratio of 1.04) for
the outstanding shares of Chase Common Stock.
(i) The pro forma financial information presented does not give effect to the
planned net repurchase of up to a maximum of 9 million shares in the
aggregate of Chemical Common Stock and Chase Common Stock (after giving
effect to the issuance of shares by both Chemical and Chase subsequent to
June 30, 1995, under various employee benefit plans) prior to the
consummation of the Merger pursuant to their respective previously
announced buyback programs.
(j) On September 2, 1995, Chase acquired the securities processing businesses of
U.S. Trust Corporation which will be merged into Chase and accounted for
under the purchase method. Although when compared with Chase's historical
financial statements, the securities processing businesses of U.S. Trust
Corporation do not qualify as a "significant subsidiary", a pro forma
adjustment has been made since Chase's investment in the securities
processing businesses of U.S. Trust Corporation involved the issuance of
6.6 million shares of Chase Common Stock (which had a fair value on the
date of issuance of $364 million). The net assets acquired (which are
largely intangible assets) are disclosed net in other assets on the pro
forma combined balance sheet.
Chemical's disposition of approximately 60% of Chemical Bank New Jersey,
National Association in the 1995 fourth quarter is not considered
significant to the pro forma combined financial statements and, therefore,
its impact is not included in these statements.
(k) Chase's historical financial data reflect service charges on deposit
accounts as a component of fees for other financial services. To conform to
Chemical's classification, such charges have been reclassified under a
separate caption.
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<PAGE> 79
(l) Chase's historical financial statements reflect the components of
restructuring charges within various noninterest expense categories. To
conform to Chemical's classification, all such charges have been
reclassified to restructuring charge. The following costs have been
reclassified:
<TABLE>
<CAPTION>
SIX MONTHS FULL YEAR FULL YEAR
ENDED JUNE 1995 1994 1993
--------------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
Salaries..................................... $ 3 $ -- $--
Employee Benefits............................ -- 145 --
Other Expense................................ 12 12 45
--- ---- ---
Costs reclassified to Restructuring Charge... $15 $ 157 $45
=== ==== ===
</TABLE>
(m) Chase's historical financial data reflect foreclosed property expense as a
component of other expense. To conform to Chemical's classification,
Chase's historical financial data have been reclassified on a pro forma
basis to reflect foreclosed property expense as a separate income statement
caption.
(n) Chase's historical financial data reflect the sale of Brazilian and
Argentine past due interest (PDI) bonds as a component of net interest
income. To conform to Chemical's classification, Chase's historical
financial data have been reclassified on a pro forma basis to reflect these
bond sales as a component of other revenue.
(o) Chase's historical financial data reflect accelerated mortgage servicing
writedowns as a component of fees for other financial services. To conform
to Chemical's classification, Chase's historical financial data have been
reclassified on a pro forma basis to reflect such writedowns as a component
of other revenue.
(p) Transactions between Chemical and Chase are not material in relation to the
pro forma combined financial statements and therefore intercompany balances
have not been eliminated from the pro forma combined amounts.
(q) Chase's historical financial data reflect the capitalization of computer
software costs. To conform to Chemical's accounting policy, Chase's
historical financial data have been adjusted on a pro forma basis to
immediately recognize as expense those computer software costs that are
capitalized.
The pro forma adjustment to the balance sheet reflects the unamortized
capitalized computer software costs of $104 million ($64 million net of
tax) as of June 30, 1995. The pro forma adjustment to the statement of
income for each period reflects the net impact of (i) charging to expense
computer software costs that were capitalized during each respective period
less (ii) the elimination of the previously recorded amortization of
capitalized computer software costs.
LITIGATION RELATING TO THE MERGER
On August 28, 1995, three complaints were filed in the Court of Chancery
for New Castle County, Delaware, in actions entitled Simon v. Chase Manhattan
Corporation, et al., Civil Action No. 14505, Rampel & Rampel, P.A. Profit
Sharing Plan v. Chase Manhattan Corp., et. al., Civil Action No. 14506 and
Goldstein v. Chase Manhattan Corp., et al., Civil Action No. 14508. The
complaints, each of which purports to initiate a class action on behalf of all
Chase stockholders, name Chase, Chemical and certain current and former
directors of Chase as defendants. The complaints allege that the Merger will
entail breaches of fiduciary duties owed by the director defendants to Chase
stockholders, alleging among other things that the consideration provided in the
Merger by Chemical is inadequate and that the Merger is unfair to Chase
stockholders and a product of Chase directors' acting out of self-interest. The
complaints also allege that Chemical aided and abetted the Chase directors'
alleged breach of fiduciary duties. The complaints seek, among other relief, an
injunction preventing consummation of the Merger and damages in unspecified
amounts. Chemical and Chase believe the actions to be without merit and intend
to contest them vigorously.
On October 16, 1995, a complaint was filed in the United States District
Court for the Southern District of New York in an action entitled Lambert v.
Tobin and Chemical Banking Corporation. The complaint,
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<PAGE> 80
which seeks to initiate a class action on behalf of persons who sold shares of
Chemical Common Stock during the period from July 18, 1995 through August 25,
1995, names Chemical and its Chief Financial Officer as defendants and alleges,
among other things, that during such period, defendants had a duty to disclose
the existence of merger negotiations and that the defendants made materially
false and misleading statements regarding the possibility of a merger with
Chase. Chemical believes the action to be without merit and intends to contest
it vigorously.
DESCRIPTION OF CAPITAL STOCK
The following summary does not purport to be complete and is subject in all
respects to the applicable provisions of the DGCL, the Chemical Charter,
including the certificates of designations pursuant to which each series of
preferred stock outstanding as of the date of this Proxy Statement/Prospectus
(the "Chemical Existing Preferred Stock") were issued and the terms of the
Chemical Rights Agreement (as defined below under "Comparison of Stockholder
Rights -- Rights Plans -- Chemical Rights"). The Chemical Charter is included as
an exhibit to the Registration Statement of which this Proxy
Statement/Prospectus forms a part.
THE FOLLOWING DESCRIPTIONS OF THE CHEMICAL CAPITAL SECURITIES SHOULD BE
READ CAREFULLY BY CHASE STOCKHOLDERS SINCE, AT THE EFFECTIVE TIME, EACH ISSUED
AND OUTSTANDING SHARE OF CHASE COMMON STOCK WILL BE CONVERTED INTO 1.04 FULLY
PAID AND NONASSESSABLE SHARES OF CHEMICAL COMMON STOCK (INCLUDING THE
APPROPRIATE NUMBER OF ATTACHED CHEMICAL RIGHTS).
DESCRIPTION OF CHEMICAL COMMON STOCK
General. Chemical is currently authorized to issue up to 400,000,000
shares of Chemical Common Stock. Prior to the consummation of the Merger, and
subject to receipt of the approval of holders of record of Chemical Common Stock
sought herein, the Chemical Charter will be amended to, among other things,
increase the number of authorized shares of Chemical Common Stock to
750,000,000. See "Amendment and Restatement of Chemical Restated Certificate of
Incorporation". As of the Record Date, Chemical had outstanding 249,904,977
shares of Chemical Common Stock and 5,025,927 shares held in its treasury. As of
the Record Date, approximately 15,676,734 shares of Chemical Common Stock were
reserved for issuance upon exercise of outstanding stock options, under various
employee or non-employee director incentive, compensation and stock purchase
plans and under Chemical's Dividend Reinvestment Plan, and 50,170,882 shares
were reserved for issuance upon exercise of the option granted under the Chase
Stock Option Agreement.
Dividend Rights. Holders of Chemical Common Stock are entitled to receive
dividends when, as and if declared by the Board of Directors of Chemical, out of
funds legally available therefor, provided that, so long as any shares of
Chemical Preferred Stock are outstanding, no dividends (other than dividends
payable in Chemical Common Stock) or other distributions (including redemptions
and purchases) may be made with respect to the Chemical Common Stock unless full
cumulative dividends on the shares of Chemical Preferred Stock have been paid.
Voting Rights. Subject to the rights, if any, of the holders of any series
of Chemical Preferred Stock, all voting rights are vested in the holders of
shares of Chemical Common Stock, each share being entitled to one vote on each
matter presented for a vote, including the election of directors. Holders of
shares of Chemical Common Stock have noncumulative voting rights, which means
that the holders of more than 50% of the shares voting for the election of
directors can elect 100% of the directors, and, in such event, the holders of
the remaining shares voting for the election of directors will not be able to
elect any directors.
Rights Upon Liquidation. In the event of the liquidation, dissolution or
winding up of Chemical, whether voluntary or involuntary, after there have been
paid or set aside for the holders of all series of Chemical Preferred Stock the
full preferential amounts to which such holders are entitled, the holders of
Chemical Common Stock will be entitled to share equally and ratably in any
assets remaining after the payment of all debts and liabilities.
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<PAGE> 81
Miscellaneous. The issued and outstanding shares of Chemical Common Stock
are fully paid and nonassessable. Holders of shares of Chemical Common Stock are
not entitled to preemptive rights. Shares of Chemical Common Stock are not
convertible into shares of any other class of capital stock. Chemical Bank is
the transfer agent, registrar and dividend disbursement agent for the Chemical
Common Stock.
Chemical Rights. For a description of the Chemical Rights which are
attached to each outstanding share of Chemical Common Stock, see "Comparison of
Stockholder Rights -- Rights Plans -- Chemical Rights".
DESCRIPTION OF CHEMICAL EXISTING PREFERRED STOCK
The following description of the terms of the Chemical Existing Preferred
Stock does not purport to be complete and is subject to and qualified in its
entirety by reference to the certificates of designations relating to the
Chemical Existing Preferred Stock which are annexed to the Chemical Charter
included as an exhibit to the Registration Statement of which this Proxy
Statement/Prospectus forms a part.
General. Under the Chemical Charter, the Board of Directors of Chemical is
authorized, without further stockholder action, to provide for the issuance of
up to 200,000,000 shares of Chemical Preferred Stock, in one or more series,
with such voting powers and with such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions, as shall be set forth in resolutions providing for the issue
thereof adopted by Chemical's Board of Directors or a duly authorized committee
thereof. Chemical may amend from time to time the Chemical Charter to increase
the number of authorized shares of Chemical Preferred Stock in the manner
provided in the Chemical Charter and the DGCL.
As of the Record Date, Chemical had outstanding six series of Chemical
Existing Preferred Stock as follows: (i) 4,000,000 shares of 10.96% Preferred
Stock (the "10.96% Preferred"); (ii) 14,000,000 shares of 8 3/8% Preferred Stock
(the "8 3/8% Preferred"); (iii) 2,000,000 shares of 7.92% Cumulative Preferred
Stock (the "7.92% Preferred"); (iv) 2,000,000 shares of 7.58% Cumulative
Preferred Stock (the "7.58% Preferred"), (v) 2,000,000 shares of 7 1/2%
Cumulative Preferred Stock (the "7 1/2% Preferred") and (vi) 2,000,000 shares of
Adjustable Rate Cumulative Preferred Stock, Series L (the "Series L Preferred").
In addition, as of the Record Date, 4,000,000 shares of Chemical Preferred
Stock, designated as Junior Participating Preferred Stock, were reserved for
issuance pursuant to the Chemical Rights Agreement described below under
"Comparison of Stockholder Rights -- Rights Plans -- Chemical Rights".
Each outstanding share of Chemical Existing Preferred Stock is fully paid
and nonassessable. Each series of the Chemical Existing Preferred Stock ranks on
a parity as to dividends and distributions in the event of a liquidation with
each other series of the Chemical Existing Preferred Stock and all such series
have a preference over the Chemical Common Stock with respect to the payment of
dividends and the distribution of assets in the event of the liquidation or
dissolution of Chemical.
Dividend Rights. Holders of the Chemical Existing Preferred Stock of each
series are entitled to receive, when, as and if declared by the Chemical Board
of Directors, out of assets of Chemical legally available therefor, cumulative
cash dividends. The amounts of the cumulative dividends on the Series L
Preferred vary with the interest rates on certain U.S. Government obligations.
Dividends on the 10.96% Preferred, 8 3/8% Preferred, 7.92% Preferred, 7.58%
Preferred and 7 1/2% Preferred are fixed at their respective rates. Each such
dividend is payable to the holders of record as they appear on the stock books
of Chemical (or, if applicable, the records of the Depositary referred to below
under "Depositary Shares") on such record dates as are fixed by the Board of
Directors or a duly authorized committee thereof.
No full dividends will be declared or paid or set apart for payment on the
Chemical Existing Preferred Stock of any series for any period unless full
dividends have been or contemporaneously are declared and paid, or declared and
a sum sufficient for the payment thereof set apart for such payment, on each
other series of Chemical Existing Preferred Stock for the then-current dividend
payment period and all other dividend payment periods terminating on or before
the date of payment of such full dividends. When dividends are not paid in full
upon the Chemical Existing Preferred Stock, all dividends will be declared pro
rata so that the
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<PAGE> 82
amount of dividends declared per share on each series of the Chemical Existing
Preferred Stock bears the same ratio that accrued dividends per share on each
such series bear to each other. Except as provided in the preceding sentence,
unless full, cumulative dividends on all outstanding shares of any series of the
Chemical Existing Preferred Stock have been paid, no dividends (other than in
shares of Chemical Common Stock or another stock ranking junior to the Chemical
Existing Preferred Stock as to dividends and upon liquidation) will be declared
or paid or set aside for payment or other distributions made upon the Chemical
Common Stock or any other stock of Chemical ranking junior to or on a parity
with the Chemical Existing Preferred Stock as to dividends or upon liquidation,
nor will any Chemical Common Stock or any other stock of Chemical ranking junior
to or on a parity with the Chemical Existing Preferred Stock as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by Chemical (except by
conversion into or exchange for stock of Chemical ranking junior to such series
of Chemical Existing Preferred Stock as to dividends and upon liquidation). No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments which may be in arrears.
The amount of dividends payable for each dividend period is computed by
annualizing the applicable dividend rate and dividing by the number of dividend
periods in a year, except that the amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period is computed on
the basis of 30-day months, a 360-day year and the actual number of days elapsed
in the period.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of Chemical, the holders of each series
of Chemical Existing Preferred Stock will be entitled to receive out of assets
of Chemical available for distribution to stockholders, before any distribution
of assets is made to holders of Chemical Common Stock or any other class of
stock ranking junior to such series of Chemical Existing Preferred Stock upon
liquidation, liquidating distributions as follows: (i) the holders of 7.92%
Preferred, 7.58% Preferred, 7 1/2% Preferred and Series L Preferred are each
entitled to receive a distribution of $100 per share plus, in each case, accrued
and unpaid dividends, if any; and (ii) the holders of 10.96% Preferred and
8 3/8% Preferred are each entitled to receive a distribution of $25 per share
plus, in each case, accrued and unpaid dividends, if any.
If, upon any voluntary or involuntary liquidation, dissolution or winding
up of Chemical, the amounts payable with respect to Chemical Existing Preferred
Stock of any series and any other shares of stock of Chemical ranking as to any
such distribution on a parity with such series of Chemical Existing Preferred
Stock are not paid in full, the holders of Chemical Existing Preferred Stock of
such series and of such other shares will share ratably in any such distribution
of assets of Chemical in proportion to the full respective preferential amounts
to which they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of such series of Chemical
Existing Preferred Stock will have no right or claim to any of the remaining
assets of Chemical. Neither the sale of all or substantially all the property or
business of Chemical nor the merger or consolidation of Chemical into or with
any other corporation shall be deemed to be a dissolution, liquidation or
winding up, voluntary or involuntary, of Chemical entitling any holders of any
series of Chemical Existing Preferred Stock to any of the liquidation rights
described above.
Redemption. The series of Chemical Existing Preferred Stock are redeemable
at the option of Chemical in each case at a redemption price equal to their
respective liquidation values, plus accrued and unpaid dividends thereon, if
any, to the date fixed for redemption, as follows:
<TABLE>
<CAPTION>
SERIES OF CHEMICAL REDEEMABLE
EXISTING PREFERRED STOCK ON OR AFTER
------------------------------------------------------------ ----------------
<S> <C>
10.96% Preferred............................................ June 30, 2000
8 3/8% Preferred............................................ June 1, 1997
7.92% Preferred............................................. October 1, 1997
7.58% Preferred............................................. April 1, 1998
7 1/2% Preferred............................................ June 1, 1998
Series L Preferred.......................................... June 30, 1999
</TABLE>
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If fewer than all the outstanding shares of any series of Chemical Existing
Preferred Stock are to be redeemed, the selection of the shares to be redeemed
shall be determined by lot or pro rata as may be determined by the Board of
Directors of Chemical or a duly authorized committee thereof, or by any other
method which may be determined by the Board of Directors or such committee to be
equitable. From and after the date of redemption (unless default shall be made
by Chemical in providing for the payment of the redemption price), dividends
shall cease to accrue on the shares of Chemical Existing Preferred Stock called
for redemption and all rights of the holders thereof (except the right to
receive the redemption price) shall cease.
In the event that full dividends, including accumulations on any series of
Chemical Existing Preferred Stock, have not been paid, such series of Chemical
Existing Preferred Stock may not be redeemed in part and Chemical may not
purchase or acquire any shares of such series of Chemical Existing Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of such series of Chemical Existing Preferred Stock.
Conversion Rights; Preemptive Rights. No series of Chemical Existing
Preferred Stock is convertible into shares of Chemical Common Stock or another
series of Chemical Existing Preferred Stock. No series of Chemical Existing
Preferred Stock is subject to preemptive rights.
Voting Rights. Except as indicated below or except as expressly required
by applicable law, the holders of the Chemical Existing Preferred Stock are not
entitled to vote. The 10.96% Preferred, 8 3/8% Preferred and Series L Preferred
are not represented by Depositary Shares and are thus entitled to one vote per
share on matters on which holders of such series of Chemical Existing Preferred
Stock are entitled to vote. The shares of 7.92% Preferred, 7.58% Preferred and
7.50% Preferred are each represented by Depositary Shares representing .25 of a
share; such Depositary Shares are entitled to .25 votes per Depositary Share
rather than one vote. Since each full share of any series of Chemical Existing
Preferred Stock is entitled to one vote, the voting power of the 7.92%
Preferred, the 7.58% Preferred and the 7.50% Preferred, on matters on which
holders of such series and holders of other series of Chemical Existing
Preferred Stock are entitled to vote as a single class, depends on the number of
shares of the 7.92% Preferred, the 7.58% Preferred and the 7.50% Preferred, not
the aggregate liquidation preference or initial offering price of the shares of
such series of Chemical Existing Preferred Stock.
If at the time of any annual meeting of Chemical's stockholders the
equivalent of six quarterly dividends payable on any series of Chemical Existing
Preferred Stock are in default, the number of directors of Chemical will be
increased by two and the holders of all outstanding series of Chemical Existing
Preferred Stock, voting as a single class without regard to series, will be
entitled to elect those additional two directors at each such annual meeting.
Each director elected by the holders of shares of Chemical Existing Preferred
Stock shall continue to serve as such director for the full term for which he or
she shall have been elected, notwithstanding that prior to the end of such term
such default shall cease to exist.
The affirmative vote or consent of the holders of at least two-thirds of
the outstanding shares of any series of Chemical Existing Preferred Stock,
voting as a separate class, is required for any amendment of the Chemical
Charter (or any certificate amendatory thereof or supplemental thereto relating
to any series of Chemical Existing Preferred Stock) which would adversely affect
the powers, preferences, privileges or rights of such series of Chemical
Existing Preferred Stock. The affirmative vote or consent of the holders of
shares representing at least two-thirds of the voting power of the outstanding
shares of any series of Chemical Existing Preferred Stock and any other series
of Chemical Preferred Stock ranking on a parity with such series of Chemical
Existing Preferred Stock as to dividends or upon liquidation, voting as a single
class without regard to series, is required to authorize, effect or validate (i)
the creation, authorization or issuance of, (ii) the reclassification of any
authorized stock of Chemical into, or (iii) the creation, authorization or
issuance of any obligation or security convertible into or evidencing the right
to purchase, any additional class or series of stock ranking prior to such
series of Chemical Existing Preferred Stock as to dividends or upon liquidation.
Transfer Agent and Registrar. Chemical Bank is the transfer agent,
registrar and dividend disbursement agent for the Chemical Existing Preferred
Stock and any Depositary Shares representing an interest therein.
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<PAGE> 84
The registrar for shares of Chemical Existing Preferred Stock will send notices
to stockholders of any meetings at which holders of Chemical Existing Preferred
Stock have the right to elect directors of Chemical or to vote on any other
matter.
DESCRIPTION OF DEPOSITARY SHARES
General. Chemical has issued receipts for Depositary Shares for the 7.92%
Preferred, 7.58% Preferred and 7 1/2% Preferred, each of which represents 0.25
of a share of such series of Chemical Existing Preferred Stock as described
below. The shares of each series represented by Depositary Shares are deposited
under Deposit Agreements, dated as of September 17, 1992, March 23, 1993 and May
24, 1993, respectively (with respect to each series, the "Deposit Agreement"),
between Chemical and Morgan Guaranty Trust Company of New York (the
"Depositary"). Subject to the terms of each Deposit Agreement, each owner of a
Depositary Share is entitled, in proportion to the applicable fraction of a
share of Chemical Existing Preferred Stock represented by such Depositary Share,
to all the rights and preferences of Chemical Existing Preferred Stock
represented thereby (including dividend, voting, redemption and liquidation
rights). The Depositary Shares are evidenced by depositary receipts issued
pursuant to each Deposit Agreement ("Depositary Receipts").
Dividends and Other Distributions. The Depositary distributes all cash
dividends or other cash distributions received in respect of Chemical Existing
Preferred Stock to the record holders of Depositary Shares relating to such
Chemical Existing Preferred Stock in proportion to the number of such Depositary
Shares owned by such holders. In the event of a distribution other than in cash,
the Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto, unless the Depositary determines that it is
not feasible to make such distribution, in which case the Depositary may, with
the approval of Chemical, sell such property and distribute the net proceeds
from such sale to such holders.
Redemption of Depositary Shares. If a series of Chemical Existing
Preferred Stock represented by Depositary Shares is redeemed, the Depositary
Shares will be redeemed from the proceeds received by the Depositary from
Chemical resulting from the redemption, in whole or in part, of such series of
Chemical Existing Preferred Stock held by the Depositary. The redemption price
per Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of Chemical Existing
Preferred Stock. Whenever Chemical redeems shares of Chemical Existing Preferred
Stock held by the Depositary, the Depositary will redeem as of the same
redemption date the number of Depositary Shares representing the shares of
Chemical Existing Preferred Stock so redeemed. If fewer than all the Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed will be selected
by lot or pro rata as may be determined by the Depositary.
Voting the Preferred Stock. Upon receipt of notice of any meeting at which
the holders of the Chemical Existing Preferred Stock are entitled to vote, the
Depositary is required to mail the information contained in such notice of
meeting to the record holders of the Depositary Shares relating to such Chemical
Existing Preferred Stock. Each record holder of such Depositary Shares on the
record date (which is the same date as the record date for the Chemical Existing
Preferred Stock) is entitled to instruct the Depositary as to the exercise of
the voting rights pertaining to the amount of the Chemical Existing Preferred
Stock represented by such holder's Depositary Shares. The Depositary will
endeavor, insofar as practicable, to vote the amount of Chemical Existing
Preferred Stock represented by such Depositary Shares in accordance with such
instructions, and Chemical has agreed to take all action which may be deemed
necessary by the Depositary in order to enable the Depositary to do so. The
Depositary will abstain from voting shares of the Chemical Existing Preferred
Stock to the extent it does not receive specific instructions from the holders
of Depositary Shares representing such Chemical Existing Preferred Stock.
Amendment and Termination of the Depositary Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of any
Deposit Agreement may at any time be amended by agreement between Chemical and
the Depositary. However, any amendment which materially and adversely alters the
rights of the holders of Depositary Shares will not be effective unless such
amendment has been approved by the holders of at least a majority of the
Depositary Shares then outstanding with respect to the
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<PAGE> 85
Deposit Agreement. Any Deposit Agreement may be terminated by Chemical or the
Depositary only if (i) all outstanding Depositary Shares with respect thereto
have been redeemed or (ii) there has been a final distribution in respect of the
Chemical Existing Preferred Stock in connection with any liquidation,
dissolution or winding up of Chemical and such distribution has been distributed
to the holders of Depositary Receipts thereunder.
Charges of Depositary. Chemical is required to pay all transfer and other
taxes and governmental charges arising solely from the existence of the
depositary arrangements. Chemical is also required to pay charges of the
Depositary in connection with the initial deposit of the Chemical Existing
Preferred Stock and any redemption of the Chemical Existing Preferred Stock.
Holders of Depositary Receipts will pay other transfer and other taxes and
governmental charges and such other charges, including a fee for the withdrawal
of shares of Chemical Existing Preferred Stock upon surrender of Depositary
Receipts, as are expressly provided in the respective Deposit Agreement for
their accounts.
Miscellaneous. The Depositary will forward to holders of Depositary
Receipts all reports and communications from Chemical which are delivered to the
Depositary and which Chemical is required to furnish to the holders of the
Chemical Existing Preferred Stock.
Neither the Depositary nor Chemical will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of Chemical and the
Depositary under the Deposit Agreement are limited to performance in good faith
of their duties thereunder and they are not obligated to prosecute or defend any
legal proceeding in respect of any Depositary Shares or Chemical Existing
Preferred Stock unless satisfactory indemnity is furnished. Chemical and the
Depositary may rely upon written advice of counsel or accountants, or upon
information provided by persons presenting Chemical Existing Preferred Stock for
deposit, holders of Depositary Receipts or other persons believed to be
competent and on documents believed to be genuine.
Resignation and Removal of Depositary. The Depositary may resign at any
time by delivering to Chemical notice of its election to do so, and Chemical may
at any time remove the Depositary, any such resignation or removal to take
effect upon the appointment of a successor Depositary and its acceptance of such
appointment. Such successor Depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
DESCRIPTION OF CHEMICAL MERGER PREFERRED STOCK
The following description of the terms of the Chemical Merger Preferred
Stock is subject to and qualified in its entirety by reference to the proposed
forms of the Certificates of Designations relating to the Chemical Merger
Preferred Stock which are included as exhibits to the Registration Statement of
which this Proxy Statement/Prospectus forms a part. Such certificates will be
filed by Chemical with the Delaware Secretary of State at or prior to the
Effective Time to establish each series of Chemical Merger Preferred Stock as a
series of Chemical Preferred Stock.
General. Chemical's Board of Directors has authorized the creation of the
following series of Chemical Merger Preferred Stock in accordance with the terms
of the Merger Agreement: (i) up to 5,600,000 shares of 10 1/2% Preferred Stock
of Chemical (the "10 1/2% Merger Preferred") issuable upon conversion of the
Chase 10 1/2% Preferred Stock in the Merger, (ii) up to 4,000,000 shares of
9.76% Preferred Stock of Chemical (the "9.76% Merger Preferred") issuable upon
conversion of the Chase 9.76% Preferred Stock in the Merger, (iii) up to
8,000,000 shares of 10.84% Preferred Stock of Chemical (the "10.84% Merger
Preferred") issuable upon conversion of the Chase 10.84% Preferred Stock in the
Merger, (iv) up to 6,000,000 shares of 9.08% Preferred Stock of Chemical (the
"9.08% Merger Preferred") issuable upon conversion of the Chase 9.08% Preferred
Stock in the Merger, (v) up to 6,800,000 shares of 8 1/2% Preferred Stock of
Chemical (the "8 1/2% Merger Preferred) issuable upon conversion of the Chase
8 1/2% Preferred Stock in the Merger, (vi) up to 9,600,000 shares of 8.32%
Preferred Stock of Chemical (the "8.32% Merger Preferred") issuable upon
conversion of the Chase 8.32% Preferred Stock in the Merger, (vii) up to
6,900,000 shares of 8.40% Preferred Stock of Chemical (the "8.40% Merger
Preferred") issuable upon conversion of the Chase 8.40% Preferred
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Stock in the Merger and (viii) up to 9,100,000 shares of Adjustable Rate
Preferred Stock, Series N, of Chemical (the "Adjustable Rate Merger Preferred")
issuable upon conversion of the Chase Adjustable Rate Preferred Stock in the
Merger.
Each share of Chemical Merger Preferred Stock will, when issued, be fully
paid and nonassessable. Each series of the Chemical Merger Preferred Stock will
rank on a parity with each series of Chemical Existing Preferred Stock as to
dividends and distributions in the event of a liquidation.
Dividend Rights. Holders of Chemical Merger Preferred Stock of each series
will be entitled to receive cumulative dividends, when and as declared by the
Board of Directors of the Surviving Corporation. The dividend rate for the
Adjustable Rate Merger Preferred shall be established quarterly at an annual
rate of 85% of the highest of (a) the three-month U.S. Treasury bill rate, (b)
the U.S. Treasury ten-year constant maturity rate and (c) the U.S. Treasury
thirty-year constant maturity rate, in each case as described in the terms of
Adjustable Rate Merger Preferred (as set forth in the certificate of
designations for the Adjustable Rate Merger Preferred attached as an exhibit to
the Registration Statement of which this Proxy Statement/Prospectus is a part).
Dividends per share on the 10 1/2% Merger Preferred, 9.76% Merger Preferred,
10.84% Merger Preferred, 9.08% Merger Preferred, 8 1/2% Merger Preferred, 8.32%
Merger Preferred and 8.40% Merger Preferred, will be fixed at $2.625, $2.440,
$2.710, $2.270, $2.125, $2.080 and $2.100 per annum, respectively.
Each such dividend will be payable to the holders of record as they appear
on the stock books of the Surviving Corporation on such record dates as will be
fixed by the Board of Directors of the Surviving Corporation.
Unless (i) full cumulative dividends have been paid or declared and set
apart for payment upon all outstanding shares of Chemical Merger Preferred Stock
and any other Chemical Preferred Stock not ranking as to dividends or
distributions of assets junior to the Chemical Merger Preferred Stock
(collectively "Senior Preferred Stock") and (ii) the Surviving Corporation shall
not be in default or in arrears with respect to any sinking or other analogous
fund or any call for tenders obligation or other agreement for the purchase,
redemption or other retirement of Senior Preferred Stock, the Surviving
Corporation shall not declare any dividends on the Chemical Common Stock or any
other stock of the Surviving Corporation ranking as to dividends or
distributions of assets junior to the Chemical Merger Preferred Stock (the
Chemical Common Stock and such other stock, "Junior Stock"), or make any payment
on account of, or set apart money for, a sinking or other analogous fund for the
purchase, redemption or other retirement of any shares of Junior Stock, or make
any distribution in respect thereof, whether in cash or property or in
obligations or stock of the Surviving Corporation, other than Junior Stock.
In making any dividend payment on account of arrears, with respect to a
series of Chemical Merger Preferred Stock, the Surviving Corporation will make
payments ratably upon all outstanding shares of Chemical Merger Preferred Stock
and other Chemical Preferred Stock ranking on a parity as to dividends in
proportion to the respective amounts of dividends in arrears upon all such
outstanding shares of Chemical Merger Preferred Stock and other Chemical
Preferred Stock to the date of such dividend payment.
The amount of dividends payable for each dividend period will be computed
by annualizing the applicable dividend rate and dividing by the number of
dividend periods in a year, except that the amount of dividends payable for any
period less than a full quarter shall be computed on the basis of a 360-day year
and the actual number of days elapsed in the period.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Surviving Corporation, the holders
of each series of Chemical Merger Preferred Stock will be entitled to receive
out of assets of the Surviving Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of Chemical
Common Stock or of any other shares of stock of Chemical ranking as to such a
distribution junior to the Chemical Merger Preferred Stock, an amount equal to
$25 per share plus an amount equal to any accrued and unpaid dividends thereon
to the date fixed for payment of such distribution.
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If, upon any voluntary or involuntary liquidation, dissolution or winding
up of the Surviving Corporation, the amounts payable with respect to the
Chemical Merger Preferred Stock, and any other shares of stock of the Surviving
Corporation ranking as to any such distribution on a parity with such series of
the Chemical Merger Preferred Stock, are not paid in full, the holders of the
Chemical Merger Preferred Stock and of such other shares will share ratably in
any such distribution of assets of the Surviving Corporation in proportion to
the full respective preferential amounts to which they are entitled. After
payment of the full amount of the liquidating distribution to which they are
entitled, the holders of Chemical Merger Preferred Stock shall be entitled to no
further participation in any distribution of assets of the Surviving
Corporation.
The consolidation or merger of the Surviving Corporation with or into any
other corporation, or the sale of substantially all the assets of the Surviving
Corporation in consideration for the issuance of equity securities of another
corporation, shall not be regarded as a liquidation, dissolution or winding up
of the Surviving Corporation, with respect to a series of Chemical Merger
Preferred Stock, only if such consolidation, merger or sale of assets shall not
in any way impair the voting power, preferences or special rights of such series
of Chemical Merger Preferred Stock.
Redemption. The series of Chemical Merger Preferred Stock will be
redeemable, at the option of the Surviving Corporation, for a redemption price
per share of $25 per share, plus accrued and unpaid dividends thereon, if any,
to the date fixed for redemption, as follows:
<TABLE>
<CAPTION>
SERIES OF CHEMICAL MERGER REDEEMABLE
PREFERRED STOCK ON OR AFTER
--------------------------------------------------------- -------------------
<S> <C>
10 1/2% Merger Preferred................................. September 30, 1998
9.76% Merger Preferred................................... September 30, 1999
10.84% Merger Preferred.................................. June 30, 2001
9.08% Merger Preferred,.................................. March 31, 1997
8 1/2% Merger Preferred.................................. June 30, 1997
8.32% Merger Preferred................................... September 30, 1997
8.40% Merger Preferred................................... March 31, 1998
Adjustable Rate Merger Preferred......................... June 30, 1999
</TABLE>
If fewer than all of the outstanding shares of any series of Chemical
Merger Preferred Stock are to be redeemed, the selection of the shares to be
redeemed by the Surviving Corporation shall be determined by lot or pro rata, or
by any other method which may be determined by the Surviving Corporation in its
sole discretion to be equitable. From and after the date of redemption (unless
default shall be made by the Surviving Corporation in providing for the payment
of the redemption price), dividends shall cease to accrue on the shares of
Chemical Merger Preferred Stock called for redemption, and all rights of the
holders thereof (except the right to receive the redemption price) shall cease.
In the event that full cumulative dividends have not been paid or declared
and set apart for payment on a series of Chemical Merger Preferred Stock, such
series may not be redeemed in part and the Surviving Corporation may not
purchase or acquire any shares of such series otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of such series.
Conversion and Exchange Rights; Preemptive Rights. No series of Chemical
Merger Preferred Stock will be convertible into or exchangeable for shares of
any other class or series of capital stock of the Surviving Corporation. The
Chemical Merger Preferred Stock will have no preemptive rights.
Voting Rights. Except as indicated below or except as expressly required
by applicable law, the holders of the Chemical Merger Preferred Stock will not
be entitled to vote. The voting rights currently provided for in the terms of
the Chase Preferred Stock have been modified in the Chemical Merger Preferred
Stock to provide that each share of Chemical Merger Preferred Stock shall be
entitled to one vote per share (rather than 1/40th of one vote per $25.00
liquidation value, as currently provided) in order to avoid any dilution of the
voting power of the holders of Chase Preferred Stock as a result of the Merger.
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If at the time of any annual meeting of the Surviving Corporation's
stockholders the equivalent of six quarterly dividends payable on any series of
Chemical Merger Preferred Stock are in default, the number of directors of the
Surviving Corporation will be increased by two and the holders of all
outstanding series of Chemical Preferred Stock (including the Chemical Merger
Preferred Stock), voting as a single class without regard to series, will be
entitled to elect those additional two directors at each such annual meeting.
Each director elected by the holders of shares of Chemical Preferred Stock
(including the Chemical Merger Preferred Stock) shall continue to serve as such
director for the full term for which he or she shall have been elected,
notwithstanding that prior to the end of such term such default shall cease to
exist. The holders of shares of a series of Chemical Merger Preferred Stock will
be entitled to cast one vote per share in such election.
The affirmative vote or consent of the holders of at least two-thirds of
the outstanding shares of each series of Chemical Preferred Stock (including
Chemical Merger Preferred Stock), voting as a separate class (with holders of
Chemical Merger Preferred Stock being entitled to cast one vote per share), will
be required (a) to create any class or series of stock which shall have
preference as to dividends or distribution of assets over any outstanding series
of Chemical Preferred Stock other than a series which shall not have any right
to object to such creation or (b) alter or change the provisions of the Chemical
Charter so as to adversely affect the voting powers, preferences or special
rights of the holders of a series of Chemical Preferred Stock; provided that
such amendment need only be approved by at least two-thirds of the holders of
shares of the series of Chemical Preferred Stock adversely affected thereby.
Transfer Agent and Registrar. Chemical Bank will be the transfer agent,
registrar and dividend disbursement agent for the Chemical Merger Preferred
Stock. The registrar for shares of Chemical Merger Preferred Stock will send
notices to stockholders of any meetings at which holders of Chemical Merger
Preferred Stock have the right to elect directors of the Surviving Corporation
or to vote on any other matter.
COMPARISON OF STOCKHOLDER RIGHTS
The following is a summary of material differences between the rights of
holders of Chemical Common Stock and the rights of holders of Chase Common
Stock. As each of Chemical and Chase is organized under the laws of Delaware,
these differences arise from various provisions of the Chemical Charter and the
Chase Charter, the By-laws of each of Chemical and Chase and the Chemical Rights
and Chase Rights.
The Chemical Charter and Chemical By-laws will be the Certificate of
Incorporation and By-laws of the Surviving Corporation. Consequently, after the
Effective Time, the rights of stockholders of the Surviving Corporation
(including those who prior to the Effective Time were stockholders of Chase)
will be determined by reference to the Chemical Charter and Chemical By-laws.
CLASSIFICATION OF BOARD OF DIRECTORS
The Chase Charter and Chase's By-laws provide for the classification of the
Board of Directors of Chase into three classes, with directors serving staggered
three-year terms.
The Chemical Charter and Chemical's By-laws do not (and will not at the
Effective Time) provide for the classification of the Board of Directors of
Chemical, which consists of a single class of directors who are elected
annually.
STOCKHOLDER VOTE REQUIRED FOR CERTAIN TRANSACTIONS
Certain Business Combinations. The Chase Charter generally provides that
the affirmative vote of the holders of at least 75% of the voting power of the
then outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors ("Chase Voting Stock"), voting together
as a single class, shall be required to approve certain types of business
combinations or other transactions between Chase or any subsidiary of Chase and
an Interested Stockholder (as defined below) or corporate affiliate thereof.
Such voting rights shall not apply if the business combination or other
transaction (i) has been approved by a
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majority of the Disinterested Directors (as defined below) of Chase (as was done
for the Merger) or (ii) meets certain fair price and procedural requirements.
An "Interested Stockholder" is defined in the Chase Charter as any person
who is (1) the beneficial owner, directly or indirectly, of more than 10% of the
voting power the outstanding Chase Voting Stock, (2) an affiliate of Chase who
at any time within the previous five years was the beneficial owner, directly or
indirectly, of 10% or more of the voting power of the then outstanding Chase
Voting Stock or (3) an assignee of or successor to (other than by means of a
public offering) any shares of Chase Voting Stock which were beneficially owned
by an Interested Stockholder within the past five years. A "Disinterested
Director" is defined in the Chase Charter as any member of Chase's Board of
Directors who is unaffiliated with the Interested Stockholder and who was a
member of the Chase Board of Directors prior to the date the Interested
Stockholder became such, and any successor of a Disinterested Director who is
unaffiliated with the Interested Stockholder and is recommended by a majority of
the Disinterested Directors then on the Chase Board of Directors.
The Chemical Charter and Chemical's By-laws do not (and will not at the
Effective Time) contain any supermajority voting provisions or any other
provisions relating to the approval of business combinations and other
transactions by holders of Chemical Common Stock.
Removal of Directors. The Chase Charter generally provides that, subject
to the rights of the holders of Chase Preferred Stock, directors may be removed
from office only for cause and only by the affirmative vote of the holders of
(i) 75% of the voting power of the then outstanding shares of Chase Voting
Stock, voting together as a single class, or (ii) a majority of the Board of
Directors. The Chase Charter does not define the term "cause." No decrease in
the number of directors constituting the Chase Board of Directors shall shorten
the term of an incumbent director.
The Chemical Charter and Chemical's By-laws do not (and will not at the
Effective Time) contain limitations on the rights of stockholders to remove
directors. Under the DGCL, directors may be removed at any time, with or without
cause, by the holders of a majority of the shares then entitled to vote at an
election of directors (or, where the holders of any class or series are entitled
to elect any directors as a class or series, the vote of the holders of the
majority of shares of such class or series then entitled to vote at an election
of directors).
Amendments of Certificate of Incorporation. Under the Chase Charter, the
alteration, amendment, repeal or adoption of any provision inconsistent with the
provisions of the Chase Charter relating to the business combination provisions
described above, the classification of the Board of Directors, the removal of
directors or the filling of vacancies on the Board of Directors and the special
meeting and consent provisions described below will require the affirmative vote
of the holders of at least 75% of the voting power of the Chase Voting Stock.
Under the DGCL, all other amendments to the Chase Charter must be approved by
the affirmative vote of holders of a majority of the voting power of the
outstanding shares of capital stock of Chase entitled to vote generally in the
election of directors, unless a class vote is required under the DGCL.
The Chemical Charter does not (and will not at the Effective Time) contain
any supermajority voting provisions. Under the DGCL, all amendments to the
Chemical Charter must be approved by the affirmative vote of holders of a
majority of the shares of capital stock of Chemical entitled to vote generally
in the election of directors, unless a class vote is required under the DGCL.
For a description of the voting rights of Chemical Preferred Stock or
Chemical Merger Preferred Stock with respect to amendments adversely affecting
such preferred stock, see "Description of Capital Stock -- Description of
Chemical Existing Preferred Stock -- Voting Rights" and "-- Description of
Chemical Merger Preferred Stock -- Voting Rights".
SPECIAL MEETINGS OF STOCKHOLDERS; STOCKHOLDER ACTION BY WRITTEN CONSENT
Chase's By-laws provide that a special meeting of stockholders may be
called by the Board of Directors, the Chairman of the Board or the President of
Chase. The Chase Charter and By-laws prohibit action by written consent in lieu
of a meeting by holders of Chase Common Stock.
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Chemical's By-laws provide that a special meeting of stockholders may be
called by the Board of Directors, the Chairman of the Board, the President or a
Vice Chairman of the Board or as otherwise permitted by the DGCL. The Chemical
Charter prohibits action by written consent in lieu of a meeting by holders of
Chemical Common Stock.
Each of the Chemical Charter and the Chase Charter provide that holders of
shares of any class or series of capital stock other than common stock may act
by written consent of such holders representing not less than a majority of the
voting power of all the capital stock of such class or series entitled to vote
upon such action if a meeting were held, so long as such vote meets statutory
requirements. The By-laws of each of Chemical and Chase each provide that
stockholders are not permitted to call a special meeting of stockholders or to
require that the Board of Directors call such a special meeting.
NOTICE OF STOCKHOLDER NOMINATIONS OF DIRECTORS
Subject to the rights of the holders of Chase Preferred Stock, Chase's
By-laws require that written notice of a stockholder's intent to make a
nomination at a meeting of stockholders must be delivered to the Secretary of
Chase (i) with respect to an election to be held at an annual meeting of
stockholders, not less than 90 days nor more than 120 days prior to the date one
year after the date of the immediately preceding annual meeting (unless such
meeting is not held within 30 days before or after such anniversary date in
which case such notice is due within 10 days after mailing of notice regarding,
or public disclosure of, the annual meeting), and (ii) with respect to an
election to be held at a special meeting of stockholders for the election of
directors, not more than 10 days following the date notice of such special
meeting is given to stockholders. The notice must contain (a) the name and
address of the stockholder who intends to make the nomination and the person or
persons to be nominated; (b) a representation that the stockholder is a holder
of record of Chase capital stock entitled to vote at the meeting and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a statement that each person to be nominated is
willing to be nominated; (d) such other information regarding each nominee
proposed by such stockholder as would have been required to be included in a
proxy statement filed pursuant to the proxy rules of the Commission had each
proposed nominee been nominated, or intended to be nominated, by the Board of
Directors of Chase; and (e) a description of all arrangements or understandings
between the stockholder and each nominee and any other person (naming such
person) pursuant to which any such nomination is to be made by the stockholder.
The Chemical Charter and By-laws do not (and will not at the Effective
Time) set forth procedures regarding stockholder nomination of directors.
STOCKHOLDER PROPOSAL PROCEDURES
Chase's By-laws provide that, subject to applicable law, any stockholder
who wants to present a proposal for action by the stockholders at a meeting
shall (i) submit such proposal to Chase in compliance with Rule 14a-8 under the
Exchange Act or (ii) in the case of annual meetings of stockholders, deliver a
written notice to the Secretary of Chase, not less than 90 days nor more than
120 days prior to the date one year after the date of the immediately preceding
annual meeting (unless such meeting is not held within 30 days before or after
such anniversary date in which case such notice is due within 10 days after
mailing of notice regarding or public disclosure of the annual meeting). Each
such notice shall set forth (i) the name and address of the stockholder who
intends to present the proposal at the meeting, (ii) a representation that the
stockholder is a holder of record of the capital stock of Chase entitled to vote
at the meeting and intends to appear in person or by proxy at the meeting to
present the proposal specified in the notice, (iii) a description of all
arrangements or understandings between the stockholder and any other person
(naming such person) pursuant to which the proposal is made by the stockholder;
and (iv) such other information regarding the proposal as would be required to
be included in a proxy statement filed pursuant to the proxy rules of the
Commission had the proposal been proposed, by the Chase Board of Directors.
The Chemical Charter and By-laws do not (and will not at the Effective
Time) contain restrictions regarding stockholder proposals.
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RIGHTS PLANS
Chemical Rights. Chemical has adopted a Chemical stockholders' rights plan
which is intended to protect stockholders in the event of unsolicited offers or
attempts to acquire Chemical, including offers that do not treat all
stockholders equally, acquisitions in the open market of shares constituting
control without offering fair value to all stockholders and other coercive or
unfair takeover tactics that could impair the Chemical Board of Directors'
ability to represent stockholders' interests fully. Pursuant to Chemical's
stockholders' rights plan, the Board of Directors of Chemical declared a
dividend distribution of one Chemical Right for each outstanding share of
Chemical Common Stock to stockholders of record at the close of business on
April 24, 1989 (the "Chemical Record Date"), and authorized the issuance of one
Chemical Right (as adjusted pursuant to the Chemical Rights Agreement, as
described below) for each share of Chemical Common Stock issued between the
Chemical Record Date and the Chemical Distribution Date (as described below).
Each Chemical Right entitles the registered holder to purchase from Chemical a
unit consisting of one one-hundredth of a share (a "Chemical Unit") of
Chemical's Junior Participating Preferred Stock at a price of $150 per Chemical
Unit, subject to adjustment. The description and terms of the Chemical Rights
are set forth in the Rights Agreement, dated as of April 13, 1989 and amended on
July 15, 1991 and August 27, 1995 (as so amended, the "Chemical Rights
Agreement") between Chemical and Chemical Bank, as Chemical Rights Agent. One
Chemical Right will be distributed with each share of Chemical Common Stock
issued by Chemical, including shares of Chemical Common Stock issued to holders
of Chase Common Stock in the Merger and upon exercise of Chase Options, Chase
Units and Chase Warrants.
The Chemical Rights have certain anti-takeover effects. The Chemical Rights
may cause substantial dilution to a person that attempts to acquire Chemical
without the approval of the Board of Directors of Chemical unless the offer is
conditioned on a substantial number of Chemical Rights being acquired. The
Chemical Rights, however, should not affect offers for all outstanding shares of
Chemical Common Stock at a fair price and otherwise in the best interests of
Chemical and its stockholders as determined by the Board of Directors, since the
Board of Directors of Chemical may, at its option, redeem all, but not fewer
than all, the then outstanding Chemical Rights. The Chemical Rights should not
interfere with any merger (such as the Merger) or other business combination
approved by the Board of Directors of Chemical since the Chemical Board of
Directors may, at its option, at any time until 10 days following the Chemical
Stock Acquisition Date (as described below), redeem all but not less than all of
the then outstanding Chemical Rights.
Initially, the Chemical Rights are and will be attached to all certificates
representing Chemical Common Stock (including shares issued in the Merger) at
the time outstanding. The Chemical Rights will separate from the Chemical Common
Stock on the Chemical Distribution Date, which is defined as (i) 10 days after
the public announcement (the date of such public announcement, the "Chemical
Stock Acquisition Date") that a person (a "Chemical Acquiring Person") has
acquired 20% or more of the Chemical Common Stock or voting power of Chemical,
(ii) 10 business days following commencement of a tender offer or exchange offer
for 25% or more of the Chemical Common Stock or voting power of Chemical or
(iii) 10 business days after an owner of 10% or more the Chemical Common Stock
or voting power of Chemical is determined by the unaffiliated "Continuing
Directors" (as defined in the Chemical Rights Agreement) to be an "Adverse
Person". An Adverse Person is one who intends to have Chemical repurchase such
person's ownership interest, who intends to pressure Chemical into action for
the financial gain of such person or whose ownership is likely to cause a
material adverse impact on Chemical (including, but not limited to, impairment
of Chemical's (i) relationships with customers, (ii) ability to maintain its
capital position, (iii) ability to meet the convenience and needs of the
communities it serves, (iv) business reputation or (v) ability to deal with
governmental agencies) to the detriment of Chemical stockholders.
If a "Chemical Flip-in Event" occurs, the holder of a Chemical Right is
entitled to receive Chemical Common Stock or other property of Chemical valued
at two times the exercise price of the Chemical Right. A Chemical Flip-in Event
occurs if a person acquires 20% or more of the Chemical Common Stock or voting
power of Chemical (except certain offers to acquire all of the Chemical Common
Stock deemed by the Continuing Directors to be fair and in the best interests of
Chemical) or if a person is determined to be an Adverse Person.
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If a "Chemical Triggering Event" occurs, the holder of a Chemical Right is
entitled to receive common stock of a company that has acquired Chemical valued
at two times the exercise price of the Chemical Right. A Chemical Triggering
Event occurs if Chemical is acquired in a merger or other business combination
in which Chemical is not the survivor or if 50% or more of Chemical's assets or
earning power is sold or transferred.
Following the occurrence of a Chemical Flip-in Event or a Chemical
Triggering Event, all Chemical Rights that are beneficially owned by a Chemical
Acquiring Person or an Adverse Person or any transferee thereof will be null and
void.
To avoid the consequences of a Chemical Flip-in Event, Chemical may redeem
the Chemical Rights in whole, but not in part, at a redemption price of $0.01
per Chemical Right.
Chemical and the Chemical Rights Agent have executed and delivered
Amendment No. 2 to the Chemical Rights Agreement, dated as of August 27, 1995
("Chemical Amendment No. 2"). Chemical Amendment No. 2 provides that neither
Chase nor any affiliate or associate of Chase shall be deemed to be a Chemical
Acquiring Person or an Adverse Person solely by virtue of their acquisition of
beneficial ownership of shares of Chemical Common Stock by reason of the
approval, execution or delivery of the Merger Agreement or the Chemical Stock
Option Agreement or by the consummation of any transaction contemplated by the
Merger Agreement or the Chemical Stock Option Agreement. By exempting Chase from
the definitions of Chemical Acquiring Person and Adverse Person, Amendment No. 2
in effect provides that neither the approval, execution or delivery of the
Merger Agreement or the Chemical Stock Option Agreement nor the consummation of
any transaction contemplated by the Merger Agreement or the Chemical Stock
Option Agreement shall be deemed to cause a Chemical Distribution Date, Chemical
Stock Acquisition Date, Chemical Triggering Event or Chemical Flip-In Event to
occur.
The description of the Chemical Rights Agreement and Chemical Amendment No.
2 specifying the terms of the Chemical Rights are incorporated herein by
reference. See "Incorporation of Certain Documents By Reference". The foregoing
description of the Chemical Rights is qualified in its entirety by reference to
the Chemical Rights Agreement and Chemical Amendment No. 2.
Chase Rights. Chase has also adopted a stockholders' rights plan which is
substantially identical to the Chemical stockholders' rights plan, except that
the Chase stockholders' rights plan does not contain any provisions pursuant to
which Chase's Board of Directors may designate a potential acquiror as an
"Adverse Person". Each share of Chemical Common Stock issued in the Merger will
have attached thereto one Chemical Right. Following the Effective Time, the
rights of former holders of Chase Common Stock (which were accompanied by
attached rights to purchase junior participating preferred stock of Chase (the
"Chase Rights") will be determined solely by reference to the Chemical Rights
Agreement.
Chase and the rights agent with respect to the Chase Rights have executed
and delivered an Amendment, dated as of August 27, 1995 (the "Chase Amendment"),
to the Rights Agreement, dated as of February 15, 1989 ("Chase Rights
Agreement"), between Chase and Mellon Bank, N.A., as successor Rights Agent to
Chase Bank. The Chase Amendment provides that neither Chemical nor any affiliate
or associate of Chemical shall be deemed to be an "Acquiring Person" under the
Chase Rights Agreement solely by virtue of its acquisition of beneficial
ownership of shares of Chase Common Stock by reason of the approval, execution
or delivery of the Merger Agreement or the Chase Stock Option Agreement or by
the consummation of any transaction contemplated by the Merger Agreement or the
Chase Stock Option Agreement. By exempting Chemical from the definition of
Acquiring Person, the Amendment in effect provides that neither the approval,
execution or delivery of the Merger Agreement or the Chase Stock Option
Agreement nor the consummation of any transaction contemplated by the Merger
Agreement or the Chase Stock Option Agreement shall be deemed to cause the
occurrence of a "Stock Acquisition Date", "Distribution Date", "Triggering
Event" or "Flip-In Event" under the Chase Rights Agreement.
The description of the Chase Rights Agreement and the Chase Amendment
specifying the terms of the Chase Rights are incorporated herein by reference.
See "Incorporation of Certain Documents By Reference".
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The foregoing description of the Chase Rights is qualified in its entirety by
reference to the Chase Rights Agreement and the Chase Amendment.
EXPERTS
The financial statements of Chemical and Chase incorporated herein by
reference to their respective Annual Reports on Form 10-K for the fiscal year
ended December 31, 1994, have been audited by Price Waterhouse LLP, independent
accountants for each of Chemical and Chase, and have been so incorporated in
reliance on the reports of Price Waterhouse LLP set forth therein, given on the
authority of such firm as experts in accounting and auditing.
Representatives of Price Waterhouse LLP are expected to be present at each
Special Meeting, will have the opportunity to make a statement at each such
Special Meeting if they desire to do so and are expected to be available to
respond to appropriate questions.
LEGAL OPINIONS
The legality of the shares of Chemical Common Stock to be issued to holders
of Chase Common Stock pursuant to the Merger will be passed upon for Chemical by
Simpson Thacher & Bartlett (a partnership which includes professional
corporations), New York, New York.
Certain federal income tax matters related to the Merger will be passed
upon for Chemical by Simpson Thacher & Bartlett, New York, New York, and for
Chase by Sullivan & Cromwell, New York, New York.
STOCKHOLDER PROPOSALS
Any Chemical stockholder who wishes to submit a proposal for presentation
to the 1996 Annual Meeting of Stockholders must submit the proposal to Chemical,
270 Park Avenue, New York, N.Y. 10017, Attention: Office of the Secretary, not
later than November 28, 1995, for inclusion, if appropriate, in Chemical's proxy
statement and the form of proxy relating to the 1996 Annual Meeting.
Any Chase stockholder who wishes to submit a proposal for presentation to
the 1996 Annual Meeting of Stockholders, if the Merger has not been consummated
prior to the date the meeting is to be held, must submit the proposal to Chase,
1 Chase Manhattan Plaza, New York, New York 10081, Attention: Office of the
Secretary, not later than November 10, 1995, for inclusion, if appropriate, in
Chase's proxy statement and the form of proxy relating to the 1996 Annual
Meeting.
87
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CHEMICAL BANKING CORPORATION
AND
THE CHASE MANHATTAN CORPORATION
ANNEXES TO THE JOINT PROXY
STATEMENT/PROSPECTUS
<TABLE>
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I. AGREEMENT AND PLAN OF MERGER
II. CHEMICAL STOCK OPTION AGREEMENT
III. CHASE STOCK OPTION AGREEMENT
IV. OPINION OF MORGAN STANLEY & CO. INCORPORATED
V. OPINION OF JAMES D. WOLFENSOHN INCORPORATED
VI. OPINION OF GOLDMAN, SACHS & CO.
</TABLE>
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<PAGE> 95
ANNEX I
CONFORMED COPY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 27, 1995
BETWEEN
CHEMICAL BANKING CORPORATION
AND
THE CHASE MANHATTAN CORPORATION
- --------------------------------------------------------------------------------
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<PAGE> 96
TABLE OF CONTENTS(1)
<TABLE>
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ARTICLE I
THE MERGER............................................................................ 1
1.1. Effective Time of the Merger................................................... 1
1.2. Closing........................................................................ 2
1.3. Effects of the Merger.......................................................... 2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES........................................................................ 2
2.1. Effect on Capital Stock........................................................ 2
(a) Cancellation of Treasury Stock and Chemical-Owned Stock, etc. .......... 2
(b) Conversion of Chase Common Stock........................................ 2
(c) Conversion of Chase Preferred Stock..................................... 3
2.2. Exchange of Certificates....................................................... 4
(a) Exchange Agent.......................................................... 4
(b) Exchange Procedures..................................................... 4
(c) Distributions with Respect to Unexchanged Shares; Voting................ 4
(d) No Further Ownership Rights in Chase Common Stock or Chase Preferred
Stock................................................................... 5
(e) No Fractional Shares.................................................... 5
(f) Termination of Exchange Fund............................................ 6
(g) No Liability............................................................ 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES........................................................ 6
3.1. Representations and Warranties of Chase........................................ 6
(a) Organization, Standing and Power........................................ 6
(b) Capital Structure....................................................... 7
(c) Authority............................................................... 8
(d) SEC Documents........................................................... 9
(e) Information Supplied.................................................... 9
(f) Compliance with Applicable Laws......................................... 10
(g) Litigation.............................................................. 10
(h) Taxes................................................................... 10
(i) Certain Agreements...................................................... 10
(j) Benefit Plans........................................................... 11
</TABLE>
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(1) Except for Exhibits 1.1(a) and 1.1(b) (which are included as Annexes III and
II, respectively, to the Joint Proxy Statement/Prospectus), the exhibits to
the Merger Agreement are excluded here. Such exhibits have been filed with
the Commission under cover of Chemical's Current Report on Form 8-K, dated
August 27, 1995, and under cover of Chase's Current Report on Form 8-K,
dated August 28, 1995, and are incorporated herein by reference.
i
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(k) Subsidiaries............................................................ 11
(l) Agreements with Bank Regulators......................................... 11
(m) Absence of Certain Changes or Events.................................... 11
(n) Section 203 of the DGCL and Certain Provisions of
Certificate of Incorporation Not Applicable.......................... 11
(o) Vote Required........................................................... 12
(p) Accounting Matters...................................................... 12
(q) Chase Rights Agreement.................................................. 12
(r) Properties.............................................................. 12
(s) Ownership of Chemical Common Stock...................................... 12
(t) Brokers or Finders...................................................... 12
3.2. Representations and Warranties of Chemical..................................... 13
(a) Organization, Standing and Power........................................ 13
(b) Capital Structure....................................................... 13
(c) Authority............................................................... 14
(d) SEC Documents........................................................... 15
(e) Information Supplied.................................................... 15
(f) Compliance with Applicable Laws......................................... 16
(g) Litigation.............................................................. 16
(h) Taxes................................................................... 16
(i) Certain Agreements...................................................... 16
(j) Benefit Plans........................................................... 17
(k) Subsidiaries............................................................ 17
(l) Agreements with Bank Regulators......................................... 17
(m) Absence of Certain Changes or Events.................................... 17
(n) Section 203 of the DGCL Not Applicable.................................. 17
(o) Vote Required........................................................... 17
(p) Accounting Matters...................................................... 18
(q) Chemical Rights Agreement............................................... 18
(r) Properties.............................................................. 18
(s) Ownership of Chase Common Stock......................................... 18
(t) Brokers or Finders...................................................... 18
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS............................................. 19
4.1. Covenants of Chase and Chemical................................................ 19
(a) Ordinary Course......................................................... 19
(b) Dividends; Changes in Stock............................................. 19
(c) Issuance of Securities.................................................. 19
(d) Governing Documents..................................................... 20
(e) No Solicitations........................................................ 20
(f) No Acquisitions......................................................... 20
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<TABLE>
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(g) No Dispositions......................................................... 21
(h) Indebtedness............................................................ 21
(i) Other Actions........................................................... 21
(j) Advice of Changes; Government Filings................................... 21
(k) Accounting Methods...................................................... 22
(l) Pooling and Tax-Free Reorganization Treatment........................... 22
(m) Compensation and Benefit Plans.......................................... 22
ARTICLE V
ADDITIONAL AGREEMENTS................................................................. 22
5.1. Preparation of S-4, and the Proxy Statement................................... 22
5.2. Access to Information......................................................... 23
5.3. Stockholder Meetings.......................................................... 23
5.4. Legal Conditions to Merger.................................................... 23
5.5. Affiliates.................................................................... 24
5.6. Stock Exchange Listing........................................................ 24
5.7. Employee Benefit Plans........................................................ 24
5.8. Stock Options................................................................. 24
5.9. Fees and Expenses............................................................. 25
5.10. Governance; Name.............................................................. 25
5.11. Indemnification; Directors' and Officers' Insurance........................... 25
5.12. Dividends..................................................................... 26
5.13. Additional Agreements......................................................... 27
ARTICLE VI
CONDITIONS PRECEDENT.................................................................. 27
6.1. Conditions to Each Party's Obligation To Effect the Merger..................... 27
(a) Stockholder Approval.................................................... 27
(b) NYSE Listing............................................................ 27
(c) Other Approvals......................................................... 27
(d) S-4..................................................................... 27
(e) No Injunctions or Restraints; Illegality................................ 27
(f) Pooling................................................................. 27
(g) Burdensome Condition.................................................... 27
6.2. Conditions to Obligations of Chemical.......................................... 28
(a) Representations and Warranties.......................................... 28
(b) Performance of Obligations of Chase..................................... 28
(c) Consents Under Agreements............................................... 28
(d) Rights Agreement........................................................ 28
(e) Tax Opinion............................................................. 28
6.3. Conditions to Obligations of Chase............................................. 28
</TABLE>
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(a) Representations and Warranties.......................................... 28
(b) Performance of Obligations of Chemical.................................. 29
(c) Consents Under Agreements............................................... 29
(d) Rights Agreement........................................................ 29
(e) Tax Opinion............................................................. 29
(f) Authorization of Stock.................................................. 29
ARTICLE VII
TERMINATION AND AMENDMENT............................................................. 29
7.1. Termination.................................................................... 29
7.2. Effect of Termination.......................................................... 30
7.3. Amendment...................................................................... 30
7.4. Extension; Waiver.............................................................. 30
ARTICLE VIII
GENERAL PROVISIONS.................................................................... 30
8.1. Nonsurvival of Representations, Warranties and Agreements...................... 30
8.2. Notices........................................................................ 30
8.3. Interpretation................................................................. 31
8.4. Counterparts................................................................... 31
8.5. Entire Agreement; No Third Party Beneficiaries; Rights of Ownership............ 31
8.6. Governing Law.................................................................. 31
8.7. Severability................................................................... 31
8.8. Assignment..................................................................... 32
</TABLE>
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INDEX OF DEFINED TERMS
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Agreement............................................................................. 1
Bank Regulators....................................................................... 10
Benefit Plans......................................................................... 11
BHC Act............................................................................... 6
Burdensome Condition.................................................................. 27
Certificate of Merger................................................................. 1
CFTC.................................................................................. 9
Chase................................................................................. 1
Chase 10.84% Preferred Stock.......................................................... 3
Chase 10 1/2% Preferred Stock......................................................... 3
Chase 8.32% Preferred Stock........................................................... 3
Chase 8.40% Preferred Stock........................................................... 3
Chase 8 1/2% Preferred Stock.......................................................... 3
Chase 9.08% Preferred Stock........................................................... 3
Chase 9.76% Preferred Stock........................................................... 3
Chase Adjustable Rate Preferred Stock................................................. 3
Chase Bank............................................................................ 1
Chase Benefit Plans................................................................... 11
Chase Certificates.................................................................... 4
Chase Common Stock.................................................................... 1
Chase Junior Preferred Stock.......................................................... 7
Chase Permits......................................................................... 10
Chase Plan............................................................................ 24
Chase Preferred Stock................................................................. 3
Chase Rights.......................................................................... 7
Chase Rights Agreement................................................................ 7
Chase SAR............................................................................. 24
Chase SEC Documents................................................................... 9
Chase Stock Option.................................................................... 24
Chase Stock Option Agreement.......................................................... 1
Chase Stock Plans..................................................................... 7
Chase Stock Purchase Contracts........................................................ 7
Chase Unit............................................................................ 24
Chase's Current Premium............................................................... 26
Chemical.............................................................................. 1
Chemical Bank......................................................................... 1
Chemical Benefit Plans................................................................ 17
Chemical Class B Common Stock......................................................... 13
Chemical Common Stock................................................................. 1
Chemical Common Stock Amendment....................................................... 14
Chemical Junior Preferred Stock....................................................... 1
Chemical Merger Preferred Stock....................................................... 3
Chemical Permits...................................................................... 16
Chemical Preferred Stock.............................................................. 13
Chemical Rights....................................................................... 1
Chemical Rights Agreement............................................................. 1
Chemical SARs......................................................................... 24
Chemical SEC Documents................................................................ 15
Chemical Stock Option Agreement....................................................... 1
Chemical Stock Plans.................................................................. 13
</TABLE>
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Closing............................................................................... 2
Closing Date.......................................................................... 2
Code.................................................................................. 1
Common Shares Trust................................................................... 5
Confidentiality Agreement............................................................. 23
Consents.............................................................................. 27
Constituent Corporations.............................................................. 2
DGCL.................................................................................. 1
DPC shares............................................................................ 2
Effective Time........................................................................ 2
Employee Benefits Agreement........................................................... 22
ERISA................................................................................. 11
Excess Shares......................................................................... 5
Exchange Act.......................................................................... 8
Exchange Agent........................................................................ 4
Exchange Fund......................................................................... 4
Exchange Ratio........................................................................ 3
FDIA.................................................................................. 8
Federal Reserve....................................................................... 8
FRA................................................................................... 8
Governmental Entity................................................................... 8
HSR Act............................................................................... 9
incentive stock options............................................................... 24
Indemnified Liabilities............................................................... 25
Indemnified Parties................................................................... 25
Injunction............................................................................ 27
material adverse effect............................................................... 6
Merger................................................................................ 1
NYSE.................................................................................. 5
Proxy Statement....................................................................... 8
Representatives....................................................................... 20
Requisite Regulatory Approvals........................................................ 27
S-4................................................................................... 9
SBA................................................................................... 9
SBIA.................................................................................. 9
SEC................................................................................... 6
Securities Act........................................................................ 9
Significant Subsidiary................................................................ 6
State Banking Approvals............................................................... 9
State Takeover Approvals.............................................................. 9
Stock Option Agreements............................................................... 1
Subsidiary............................................................................ 2
Surviving Corporation................................................................. 2
takeover proposal..................................................................... 20
tax................................................................................... 10
trust account shares.................................................................. 2
U.S. Trust Agreement.................................................................. 7
Violation............................................................................. 8
Voting Debt........................................................................... 7
Warrants.............................................................................. 7
</TABLE>
vi
<PAGE> 102
AGREEMENT AND PLAN OF MERGER dated as of August 27, 1995 (this "Agreement")
between CHEMICAL BANKING CORPORATION, a Delaware corporation ("Chemical"), and
THE CHASE MANHATTAN CORPORATION, a Delaware corporation ("Chase").
WHEREAS, the Boards of Directors of Chemical and Chase have approved, and
deem it advisable and in the best interests of their respective stockholders to
consummate, the business combination transaction provided for herein in which
Chase would merge with and into Chemical (the "Merger");
WHEREAS, the Boards of Directors of Chemical and Chase have each determined
that the Merger and the other transactions contemplated hereby are consistent
with, and in furtherance of, their respective business strategies and goals;
WHEREAS, concurrently with the execution and delivery of this Agreement,
(i) as a condition and inducement to Chemical's willingness to enter into this
Agreement and the Chemical Stock Option Agreement referred to below, Chemical
and Chase are entering into a Stock Option Agreement dated as of the date hereof
in the form of Exhibit 1.1(a) (the "Chase Stock Option Agreement") pursuant to
which Chase is granting to Chemical an option to purchase shares of the Common
Stock, par value $2.00 per share, of Chase (the "Chase Common Stock") and (ii)
as a condition and inducement to Chase's willingness to enter into this
Agreement and the Chase Stock Option Agreement, Chase and Chemical are entering
into a Stock Option Agreement dated as of the date hereof in the form of Exhibit
1.1(b) (the "Chemical Stock Option Agreement", and together with the Chase Stock
Option Agreement, the "Stock Option Agreements"), pursuant to which Chemical is
granting to Chase an option to purchase shares of the Common Stock, par value
$1.00 per share, of Chemical (the "Chemical Common Stock", which term shall,
unless the context indicates otherwise, also refer to and include the associated
rights ("Chemical Rights") to purchase one one-hundredth of a share of Junior
Participating Preferred Stock, par value $1.00 per share ("Chemical Junior
Preferred Stock"), of Chemical pursuant to the Rights Agreement, dated as of
April 13, 1989 (the "Chemical Rights Agreement"), between Chemical and Chemical
Bank, as Rights Agent);
WHEREAS, Chemical and Chase desire to make certain representations,
warranties and agreements in connection with the Merger and also to prescribe
various conditions to the Merger;
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, for accounting purposes, it is intended that the Merger shall be
accounted for as a "pooling of interests"; and
WHEREAS, promptly following the consummation of the Merger, the parties
hereto intend that Chemical Bank, a New York banking corporation and a
wholly-owned subsidiary of Chemical ("Chemical Bank"), and The Chase Manhattan
Bank, N.A., a national banking association and a wholly-owned subsidiary of
Chase ("Chase Bank"), be merged;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Stock Option Agreements, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1. Effective Time of the Merger. Subject to the provisions of this
Agreement, a certificate of merger (the "Certificate of Merger") shall be duly
prepared, executed and acknowledged by Chemical, on behalf of the Surviving
Corporation (as defined in Section 1.3(b)), and thereafter delivered to the
Secretary of State of the State of Delaware, for filing, as provided in the
Delaware General Corporation Law (the "DGCL"), on the Closing Date (as defined
in Section 1.2). The Merger shall become effective upon the filing of the
<PAGE> 103
Certificate of Merger with the Secretary of State of the State of Delaware or at
such time thereafter as is provided in the Certificate of Merger (the "Effective
Time").
1.2. Closing. The closing of the Merger (the "Closing") will take place at
10:00 a.m. on a date to be specified by the parties, which shall be the first
day which is (a) the last business day of a month and (b) at least two business
days after satisfaction or waiver (subject to applicable law) of the conditions
(excluding conditions that, by their terms, cannot be satisfied until the
Closing Date) set forth in Article VI (the "Closing Date"), unless another time
or date is agreed to in writing by the parties hereto. The Closing shall be held
at such location in The City of New York as is agreed to in writing by the
parties hereto.
1.3. Effects of the Merger. (a) At the Effective Time (i) Chase shall be
merged with and into Chemical and the separate existence of Chase shall cease,
(ii) the Certificate of Incorporation of Chemical as in effect immediately prior
to the Effective Time (as amended to increase the number of authorized shares of
Chemical Common Stock, to designate and establish the terms of the Chemical
Merger Preferred Stock (as defined in Section 2.1(c)) and to change the name of
Chemical, all as contemplated by this Agreement, and with such other amendments
thereto as may be contemplated by this Agreement) shall be the Certificate of
Incorporation of the Surviving Corporation and (iii) the By-laws of Chemical as
in effect immediately prior to the Effective Time shall be the By-laws of the
Surviving Corporation.
(b) As used in this Agreement, "Constituent Corporations" shall mean each
of Chemical and Chase, and "Surviving Corporation" shall mean Chemical, at and
after the Effective Time, as the surviving corporation in the Merger.
(c) At and after the Effective Time, the Merger will have the effects set
forth in the DGCL.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1. Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of Chase
Common Stock or Chase Preferred Stock (as defined in Section 2.1(c)):
(a) Cancellation of Treasury Stock and Chemical-Owned Stock, etc. All
shares of Chase Common Stock and Chase Preferred Stock that are owned by
Chase as treasury stock and all shares of Chase Common Stock or Chase
Preferred Stock that are owned by Chemical or any wholly-owned Subsidiary
of Chemical or of Chase (other than shares held in trust, managed,
custodial or nominee accounts and the like, or held by mutual funds for
which a Subsidiary of Chemical or Chase acts as investment advisor, that in
any such case are beneficially owned by third parties (any such shares,
"trust account shares") and shares acquired in respect of debts previously
contracted (any such shares, "DPC shares")) shall be cancelled and retired
and shall cease to exist and no stock of Chemical or other consideration
shall be delivered in exchange therefor. All shares of Chemical Common
Stock and Chemical Preferred Stock (as defined in Section 3.2(b)) that are
owned by Chase (other than trust account shares and DPC shares) shall
become treasury stock. As used in this Agreement, the word "Subsidiary"
when used with respect to any party means any corporation or other
organization, whether incorporated or unincorporated, (i) of which such
party or any other Subsidiary of such party is a general partner (excluding
partnerships, the general partnership interests of which held by such party
or any Subsidiary of such party do not have a majority of the voting
interests in such partnership), or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary
voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or
by any one or more of its Subsidiaries, or by such party and one or more of
its Subsidiaries.
(b) Conversion of Chase Common Stock. Subject to Section 2.2(e), each
share of Chase Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares to be
2
<PAGE> 104
cancelled in accordance with Section 2.1(a)) shall be converted into 1.04
fully paid and nonassessable shares of Chemical Common Stock. All such
shares of Chase Common Stock shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
certificate previously representing any such shares shall thereafter
represent the shares of Chemical Common Stock into which such Chase Common
Stock has been converted. Certificates previously representing shares of
Chase Common Stock shall be exchanged for certificates representing whole
shares of Chemical Common Stock issued in consideration therefor upon the
surrender of such certificates in accordance with Section 2.2, without
interest.
(c) Conversion of Chase Preferred Stock. Each share of the following
series of preferred stock of Chase, without par value (collectively, the
"Chase Preferred Stock"), issued and outstanding immediately prior to the
Effective Time (other than shares to be cancelled in accordance with
Section 2.1(a)) shall be converted into shares of Preferred Stock of
Chemical, with a par value of $1.00 per share (collectively, the "Chemical
Merger Preferred Stock"), as follows:
(i) Each such share of Preferred Stock, 10 1/2% Series G, stated
value $25.00 per share, of Chase (the "Chase 10 1/2% Preferred Stock")
shall be converted into one share of preferred stock of Chemical having
substantially the same terms as the Chase 10 1/2% Preferred Stock.
(ii) Each such share of Preferred Stock, 9.76% Series H, stated
value $25.00 per share, of Chase (the "Chase 9.76% Preferred Stock")
shall be converted into one share of preferred stock of Chemical having
substantially the same terms as the Chase 9.76% Preferred Stock.
(iii) Each such share of Preferred Stock, 10.84% Series I, stated
value $25.00 per share, of Chase (the "Chase 10.84% Preferred Stock")
shall be converted into one share of preferred stock of Chemical having
substantially the same terms as the Chase 10.84% Preferred Stock.
(iv) Each such share of Preferred Stock, 9.08% Series J, stated
value $25.00 per share, of Chase (the "Chase 9.08% Preferred Stock")
shall be converted into one share of preferred stock of Chemical having
substantially the same terms as the Chase 9.08% Preferred Stock.
(v) Each such share of Preferred Stock, 8 1/2% Series K, stated
value $25.00 per share, of Chase (the "Chase 8 1/2% Preferred Stock")
shall be converted into one share of preferred stock of Chemical having
substantially the same terms as the Chase 8 1/2% Preferred Stock.
(vi) Each such share of Preferred Stock, 8.32% Series L, stated
value $25.00 per share, of Chase (the "Chase 8.32% Preferred Stock")
shall be converted into one share of preferred stock of Chemical having
substantially the same terms as the Chase 8.32% Preferred Stock.
(vii) Each such share of Preferred Stock, 8.40% Series M, stated
value $25.00 per share, of Chase (the "Chase 8.40% Preferred Stock")
shall be converted into one share of preferred stock of Chemical having
substantially the same terms as the Chase 8.40% Preferred Stock.
(viii) Each such share of Preferred Stock, Adjustable Rate Series
N, stated value $25.00 per share, of Chase (the "Chase Adjustable Rate
Preferred Stock") shall be converted into one share of preferred stock
of Chemical having substantially the same terms as the Chase Adjustable
Rate Preferred Stock.
All of the shares of Chase Preferred Stock converted into Chemical
Merger Preferred Stock pursuant to this Article II shall no longer be
outstanding and shall automatically be cancelled and shall cease to exist,
and each certificate previously representing any such shares of Chase
Preferred Stock shall thereafter represent the shares of Chemical Merger
Preferred Stock into which such Chase Preferred Stock has been converted.
Certificates previously representing shares of Chase Preferred Stock shall
be exchanged for certificates representing whole shares of corresponding
Chemical Merger Preferred Stock issued in consideration therefor upon the
surrender of such certificates in accordance with Section 2.2 hereof,
without interest.
3
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2.2. Exchange of Certificates. (a) Exchange Agent. As of the Effective
Time, Chemical shall deposit, or shall cause to be deposited, with Chemical Bank
or another affiliate of Chemical or such other bank or trust company as may be
mutually designated by Chemical and Chase (the "Exchange Agent"), for the
benefit of the holders of certificates which immediately prior to the Effective
Time evidenced shares of Chase Common Stock and Chase Preferred Stock (the
"Chase Certificates"), for exchange in accordance with this Article II,
certificates representing the shares of Chemical Common Stock and Chemical
Merger Preferred Stock (such certificates for shares of Chemical Common Stock
and Chemical Merger Preferred Stock, together with any dividends or
distributions with respect thereto, being hereinafter referred to as the
"Exchange Fund") issuable pursuant to Section 2.1 in exchange for such shares of
Chase Common Stock and Chase Preferred Stock.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of shares
of Chase Common Stock or Chase Preferred Stock immediately prior to the
Effective Time whose shares were converted into shares of Chemical Common Stock
or Chemical Merger Preferred Stock pursuant to Section 2.1, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Chase Certificates shall pass, only upon delivery of the
Chase Certificates to the Exchange Agent, and which shall be in such form and
have such other provisions as Chemical and Chase may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Chase Certificates
in exchange for certificates representing shares of Chemical Common Stock and
Chemical Merger Preferred Stock, as the case may be. Upon surrender of a Chase
Certificate for cancellation to the Exchange Agent together with such letter of
transmittal, duly executed, the holder of such Chase Certificate shall be
entitled to receive in exchange therefor a certificate representing that number
of whole shares of Chemical Common Stock or Chemical Merger Preferred Stock
which such holder has the right to receive in respect of the Chase Certificate
surrendered pursuant to the provisions of this Article II (after taking into
account all shares of Chase Common Stock then held by such holder), and the
Chase Certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Chase Common Stock or Chase Preferred Stock which is
not registered in the transfer records of Chase, a certificate representing the
proper number of shares of Chemical Common Stock or Chemical Merger Preferred
Stock may be issued to a transferee if the Chase Certificate representing such
Chase Common Stock or Chase Preferred Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 2.2, each Chase Certificate shall be
deemed at any time after the Effective Time to represent only the Chemical
Common Stock or Chemical Merger Preferred Stock into which the shares of Chase
Common Stock or Chase Preferred Stock represented by such Chase Certificate have
been converted as provided in this Article II and the right to receive upon such
surrender cash in lieu of any fractional shares of Chemical Common Stock as
contemplated by this Section 2.2.
(c) Distributions with Respect to Unexchanged Shares; Voting. (i) No
dividends or other distributions declared or made after the 30th day following
the Effective Time with respect to Chemical Common Stock or Chemical Merger
Preferred Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Chase Certificate with respect to the shares of
Chemical Common Stock or Chemical Merger Preferred Stock represented thereby,
and no cash payment in lieu of fractional shares shall be paid to any such
holder pursuant to Section 2.2(e), until the holder of such Chase Certificate
shall surrender such Chase Certificate. Subject to the effect of applicable
laws, following surrender of any such Chase Certificate, there shall be paid to
the holder of the certificates representing whole shares of Chemical Common
Stock or Chemical Merger Preferred Stock issued in exchange therefor, without
interest, (A) at the time of such surrender or as promptly after the sale of the
Excess Shares (as defined in Section 2.2(e)) as practicable, the amount of any
cash payable with respect to a fractional share of Chemical Common Stock to
which such holder is entitled pursuant to Section 2.2(e) and the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid (but withheld pursuant to the immediately preceding sentence)
with respect to such whole shares of Chemical Common Stock or Chemical Merger
Preferred Stock, and (B) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of Chemical Common Stock or Chemical Merger
Preferred Stock.
4
<PAGE> 106
(ii) Former holders of record as of the Effective Time of shares of Chase
Common Stock and Chase Preferred Stock shall be entitled, at and after the
Effective Time, to vote the number of shares of Chemical Common Stock and
Chemical Merger Preferred Stock into which their shares of Chase Common Stock
and Chase Preferred Stock shall have been converted, regardless of whether the
Chase Certificates formerly representing such shares shall have been surrendered
in accordance with this Section 2.2 or certificates evidencing such Chemical
Common Stock or Chemical Merger Preferred Stock, as the case may be, shall have
been issued in exchange therefor.
(d) No Further Ownership Rights in Chase Common Stock or Chase Preferred
Stock. All shares of Chemical Common Stock or Chemical Merger Preferred Stock
issued upon conversion of shares of Chase Common Stock or Chase Preferred Stock
in accordance with the terms hereof (including any cash paid pursuant to Section
2.2(c) or 2.2(e)) shall be deemed to have been issued in full satisfaction of
all rights pertaining to such shares of Chase Common Stock or Chase Preferred
Stock (including with respect to the Chase Rights (as defined in Section
3.1(b)(i)), subject, however, to the Surviving Corporation's obligation to pay
any dividends or make any other distributions with a record date prior to the
Effective Time which may have been declared or made by Chase on such shares of
Chase Common Stock or Chase Preferred Stock in accordance with the terms of this
Agreement on or prior to the Effective Time and which remain unpaid at the
Effective Time, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Chase Common
Stock or Chase Preferred Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Chase Certificates are presented
to the Surviving Corporation for any reason, they shall be cancelled and
exchanged as provided in this Article II.
(e) No Fractional Shares. (i) No certificates or scrip representing
fractional shares of Chemical Common Stock shall be issued upon the surrender
for exchange of Chase Certificates evidencing Chase Common Stock, and such
fractional share interests will not entitle the owner thereof to vote or to any
rights of a stockholder of the Surviving Corporation.
(ii) As promptly as practicable following the Effective Time, the Exchange
Agent shall determine the excess of (x) the number of full shares of Chemical
Common Stock delivered to the Exchange Agent by Chemical pursuant to Section
2.2(a) over (y) the aggregate number of full shares of Chemical Common Stock to
be distributed to holders of Chase Common Stock pursuant to Section 2.2(b) (such
excess being herein called the "Excess Shares"). Following the Effective Time,
the Exchange Agent, as agent for the holders of Chase Common Stock, shall sell
the Excess Shares at then prevailing prices on the New York Stock Exchange, Inc.
(the "NYSE"), all in the manner provided in paragraph (iii) of this Section.
(iii) The sale of the Excess Shares by the Exchange Agent shall be executed
on the NYSE through one or more member firms of the NYSE and shall be executed
in round lots to the extent practicable. The Exchange Agent shall use all
reasonable efforts to complete the sale of the Excess Shares as promptly
following the Effective Time as, in the Exchange Agent's reasonable judgment, is
practicable consistent with obtaining the best execution of such sales in light
of prevailing market conditions. Until the net proceeds of such sale or sales
have been distributed to the holders of Chase Common Stock, the Exchange Agent
will hold such proceeds in trust for the holders of Chase Common Stock (the
"Common Shares Trust"). The Surviving Corporation shall pay all commissions,
transfer taxes and other out-of-pocket transaction costs, including the expenses
and compensation, of the Exchange Agent incurred in connection with such sale of
the Excess Shares. The Exchange Agent shall determine the portion of the Common
Shares Trust to which each holder of Chase Common Stock shall be entitled, if
any, by multiplying the amount of the aggregate net proceeds comprising the
Common Shares Trust by a fraction the numerator of which is the amount of the
fractional share interest to which such holder of Chase Common Stock is entitled
(after taking into account all shares of Chase Common Stock held at the
Effective Time by such holder) and the denominator of which is the aggregate
amount of fractional share interests to which all holders of Chase Common Stock
are entitled.
(iv) Notwithstanding the provisions of clauses (ii) and (iii), above,
Chemical may elect at its option, exercised prior to the Effective Time, in lieu
of the issuance and sale of Excess Shares and the making of the payments
contemplated in said clauses, to pay each holder of Chase Common Stock an amount
in cash equal
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to the product obtained by multiplying (a) the fractional share interest to
which such holder (after taking into account all shares of Chase Common Stock
held at the Effective Time by such holder) would otherwise be entitled by (b)
the closing price for a share of Chemical Common Stock on the NYSE Composite
Transaction Tape on the first business day immediately preceding the Effective
Time, and, in such case, all references herein to the cash proceeds of the sale
of the Excess Shares and similar references shall be deemed to mean and refer to
the payments calculated as set forth in this clause (iv).
(v) As soon as practicable after the determination of the amount of cash,
if any, to be paid to holders of Chase Common Stock with respect to any
fractional share interests, the Exchange Agent shall make available such amounts
to such holders of Chase Common Stock subject to and in accordance with the
terms of Section 2.2(c).
(f) Termination of Exchange Fund. Any portion of the Exchange Fund and
Common Shares Trust which remains undistributed to the stockholders of Chase for
six months after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any stockholders of Chase who have not theretofore
complied with this Article II shall thereafter look only to the Surviving
Corporation for payment of their claim for Chemical Common Stock or Chemical
Merger Preferred, as the case may be, any cash in lieu of fractional shares of
Chemical Common Stock and any dividends or distributions with respect to
Chemical Common Stock or Chemical Merger Preferred Stock.
(g) No Liability. Neither Chemical nor Chase nor the Surviving Corporation
shall be liable to any holder of shares of Chase Common Stock, Chase Preferred
Stock, Chemical Common Stock or Chemical Merger Preferred Stock, as the case may
be, for such shares (or dividends or distributions with respect thereto) or cash
from the Common Shares Trust delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Chase. Chase represents and
warrants to Chemical as follows:
(a) Organization, Standing and Power. Chase is a bank holding company
registered under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"). Chase Bank is a wholly-owned Subsidiary of Chase and a national
banking association organized under the laws of the United States. Each of
Chase and its Significant Subsidiaries (as defined below) is a bank or
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, has all
requisite power and authority to own, lease and operate its properties and
to carry on its business as now being conducted and is duly qualified and
in good standing to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification necessary other than in such jurisdictions where the failure
so to qualify would not, either individually or in the aggregate, have a
material adverse effect on Chase. The Certificate of Incorporation and
By-laws of Chase, copies of which were previously furnished to Chemical,
are true, complete and correct copies of such documents as in effect on the
date of this Agreement. As used in this Agreement, (i) a "Significant
Subsidiary" means any Subsidiary of Chase or Chemical, as the case may be,
that would constitute a Significant Subsidiary of such party within the
meaning of Rule 1-02 of Regulation S-X of the Securities and Exchange
Commission (the "SEC"), (ii) any reference to any event, change or effect
being "material" with respect to any entity means an event, change or
effect which is material in relation to the condition (financial or
otherwise), properties, assets, liabilities, businesses or results of
operations of such entity and its Subsidiaries taken as a whole and (iii)
the term "material adverse effect" (other than as set forth in Section
6.1(g)) means, with respect to any entity, a material adverse effect on the
condition (financial or otherwise), properties, assets, liabilities,
businesses or results of operations of such entity and its Subsidiaries
taken as a whole or on the ability of such entity to perform its
obligations hereunder on a timely basis.
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(b) Capital Structure. (i) As of the date hereof, the authorized
capital stock of Chase consists of 500,000,000 shares of Chase Common Stock
and 100,000,000 shares of Chase Preferred Stock. At the close of business
on July 31, 1995, (A) 173,624,034 shares of Chase Common Stock were
outstanding, 3,302,544 shares of Chase Common Stock were reserved for
issuance upon the exercise of Warrants (the "Warrants") issued pursuant to
the Warrant Agreement by and between Chase and Mellon Securities Trust
Company dated as of July 24, 1992, 25,794,790 shares of Chase Common Stock
were reserved for issuance upon the exercise of outstanding stock options
or pursuant to The Chase Manhattan 1994 Long-Term Incentive Plan, The Chase
Manhattan 1987 Long-Term Incentive Plan, The Chase Manhattan 1982 Long-Term
Incentive Plan, The Chase Manhattan Stock Option Program for Employees, or
in connection with Chase's dividend reinvestment and stock purchase plan
(such stock options and plans collectively, the "Chase Stock Plans"),
11,725,806 shares of Chase Common Stock were reserved for issuance in
connection with the proposed acquisition of U.S. Trust Corporation pursuant
to the terms of the acquisition agreement dated November 18, 1994, as in
effect on the date hereof (the "U.S. Trust Agreement"), and 13,668,900
shares of Chase Common Stock were held by Chase in its treasury or by its
Subsidiaries (other than as trust account shares or as DPC shares), (B)
56,000,000 shares of Chase Preferred Stock were outstanding, consisting of
5,600,000 shares of Chase 10.50% Preferred, 4,000,000 shares of Chase 9.76%
Preferred, 8,000,000 shares of Chase 10.84% Preferred, 6,000,000 shares of
Chase 9.08% Preferred, 6,800,000 shares of Chase 8.50% Preferred, 9,600,000
shares of Chase 8.32% Preferred, 6,900,000 shares of Chase 8.40% Preferred,
and 9,100,000 shares of Chase Adjustable Rate Preferred, and (C) 2,500,000
shares of Junior Participating Preferred Stock (the "Chase Junior Preferred
Stock") were reserved for issuance upon exercise of the rights (the "Chase
Rights") distributed to the holders of Chase Common Stock pursuant to the
Rights Agreement dated as of February 15, 1989 between Chase and Chase
Bank, as Rights Agent (the "Chase Rights Agreement"). All outstanding
shares of Chase Common Stock and Chase Preferred Stock have been duly
authorized and validly issued and are fully paid and non-assessable and not
subject to preemptive rights. The shares of Chase Common Stock which may be
issued pursuant to the Chase Stock Option Agreement have been duly
authorized and, if and when issued pursuant to the terms thereof, will be
validly issued, fully paid and non-assessable and not subject to preemptive
rights.
(ii) No bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which stockholders may vote ("Voting Debt")
of Chase are issued or outstanding.
(iii) As of the date of this Agreement, except for this Agreement, the
Warrants, $150,000,000 aggregate principal amount of Subordinated Notes due
1999 of Chase Bank with attached Equity Contracts (the "Chase Stock
Purchase Contracts"), Chase Stock Options (as defined in Section 5.8), the
U.S. Trust Agreement and the Chase Stock Option Agreement, there are no
options, warrants, calls, rights, commitments or agreements of any
character to which Chase or any Subsidiary of Chase is a party or by which
it is bound obligating Chase or any Subsidiary of Chase to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or any Voting Debt of Chase or of any Subsidiary of Chase or
obligating Chase or any Subsidiary of Chase to grant, extend or enter into
any such option, warrant, call, right, commitment or agreement. Assuming
compliance by Chemical (and the Surviving Corporation) with Section 5.8,
after the Effective Time, there will be no option, warrant, call, right or
agreement obligating Chase or any Subsidiary of Chase to issue, deliver or
sell, or cause to be issued, delivered or sold, any shares of capital stock
or any Voting Debt of Chase or any Subsidiary of Chase, or obligating Chase
or any Subsidiary of Chase to grant, extend or enter into any such option,
warrant, call, right or agreement. As of the date hereof, there are no
outstanding contractual obligations of Chase or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of
Chase or any of its Subsidiaries, other than the Chase Stock Option
Agreement.
(iv) Since July 31, 1995, Chase has not (A) issued or permitted to be
issued any shares of capital stock, or securities exercisable for or
convertible into shares of capital stock, of Chase or any of its
Subsidiaries, other than pursuant to and as required by the terms of the
Chase Stock Purchase Contracts, the Chase Rights Agreement, the Chase Stock
Option Agreement, the dividend reinvestment and stock purchase plan
referred to above, and any employee stock options issued prior to the date
hereof under the
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Chase Stock Plans and outstanding on such date (or in the ordinary course
of business as permitted by such plans and consistent with past practice);
(B) repurchased, redeemed or otherwise acquired, directly or indirectly
through one or more Chase Subsidiaries, any shares of capital stock of
Chase or any of its Subsidiaries (other than the acquisition of trust
account shares and DPC shares); or (C) declared, set aside, made or paid to
the stockholders of Chase dividends or other distributions on the
outstanding shares of capital stock of Chase, other than (x) regular
quarterly cash dividends on the Chase Common Stock at a rate not in excess
of the regular quarterly cash dividends most recently declared by Chase
prior to the date of this Agreement and (y) cash dividends on the Chase
Preferred Stock as required by the terms thereof as in effect on the date
hereof.
(v) Chase has terminated its dividend reinvestment and stock purchase
plan effective as of the date of this Agreement; provided that such
termination shall not preclude Chase from the issuance after the date
hereof of Chase Common Stock effected pursuant to the reinvestment under
such plan of the Chase Common Stock dividend payable on August 15, 1995.
(c) Authority. (i) Chase has all requisite corporate power and
authority to enter into this Agreement and the Stock Option Agreements and,
subject to approval of this Agreement by the requisite vote of the holders
of Chase Common Stock, to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the Stock
Option Agreements and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate
action on the part of Chase, subject in the case of the consummation of the
Merger contemplated hereby to the approval of this Agreement by the
stockholders of Chase. This Agreement and the Stock Option Agreements have
been duly executed and delivered by Chase and each constitutes a valid and
binding obligation of Chase, enforceable in accordance with its terms.
(ii) The execution and delivery of this Agreement and the Stock Option
Agreements do not or will not, as the case may be, and the consummation of
the transactions contemplated hereby and thereby will not, conflict with,
or result in any violation of, or constitute a default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or the loss of
a material benefit under, or the creation of a lien, pledge, security
interest, charge or other encumbrance on any assets (any such conflict,
violation, default, right of termination, cancellation or acceleration,
loss or creation, a "Violation") pursuant to, any provision of the
Certificate of Incorporation or By-laws of Chase or any Subsidiary of Chase
or, except as disclosed in writing to the other party prior to the date
hereof and subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in
paragraph (iii) below, result in any Violation of any loan or credit
agreement, note, mortgage, indenture, lease, Benefit Plan (as defined in
Section 3.1(j)) or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Chase or any Subsidiary of
Chase or their respective properties or assets, which Violation,
individually or in the aggregate, would have a material adverse effect on
Chase.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency
or commission or other governmental authority or instrumentality, domestic
or foreign (a "Governmental Entity"), is required by or with respect to
Chase or any Subsidiary of Chase in connection with the execution and
delivery of this Agreement and the Stock Option Agreements by Chase or the
consummation by Chase of the transactions contemplated hereby and thereby,
the failure to make or obtain which would have a material adverse effect on
Chase, except for (A) the filing of applications and notices with the Board
of Governors of the Federal Reserve System (the "Federal Reserve") under
the BHC Act, the Federal Reserve Act (the "FRA") and the Federal Deposit
Insurance Act ("FDIA") and approval of same, (B) the filing with the SEC of
(1) a joint proxy statement in definitive form relating to the meetings of
Chase's and Chemical's stockholders to be held in connection with the
Merger (the "Proxy Statement") and (2) such reports under Sections 13(a),
13(d), 13(g) and 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as may be required in connection with this Agreement,
the Stock Option Agreements and the transactions contemplated hereby and
thereby and the obtaining from the SEC of such orders as may be required in
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connection therewith, (C) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with
the relevant authorities of other states in which Chase is qualified to do
business, (D) if necessary, the filing of an application with the
Superintendent of Banks and the Banking Board of the State of New York and
such other applications, filings, authorizations, orders and approvals as
may be required under the banking laws of other states, and approval
thereof (collectively, the "State Banking Approvals") and pursuant to any
applicable state takeover laws ("State Takeover Approvals"), (E) filings
pursuant to Article 31-B of the New York Tax Law, (F) consents,
authorizations, approvals, filings or exemptions in connection with
compliance with the applicable provisions of federal securities laws
relating to the regulation of broker-dealers, investment companies and
investment advisors and federal commodities laws relating to the regulation
of futures commission merchants and the rules and regulations of the SEC
and the Commodity Futures Trading Commission (the "CFTC") thereunder and of
any applicable industry self-regulatory organizations, and the rules of the
NYSE, or which are required under consumer finance, mortgage banking and
other similar laws, (G) notices under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (H) such filings,
authorizations, orders and approvals as may be required under foreign laws
and (I) such filings, notifications and approvals as are required under the
Small Business Investment Act of 1958 ("SBIA") and the rules and
regulations of the Small Business Administration ("SBA") thereunder.
(d) SEC Documents. Chase has made available to Chemical a true and
complete copy of each report, schedule, registration statement and
definitive proxy statement filed by Chase with the SEC (other than reports
filed pursuant to Section 13(d) or 13(g) of the Exchange Act) since
December 31, 1994 (as such documents have since the time of their filing
been amended, the "Chase SEC Documents"), which are all the documents
(other than preliminary material and reports required pursuant to Section
13(d) or 13(g) of the Exchange Act) that Chase was required to file with
the SEC since such date. As of their respective dates of filing with the
SEC, the Chase SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Chase SEC Documents,
and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of Chase included in the
Chase SEC Documents complied as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case
of the unaudited statements, as permitted by Form 10-Q of the SEC) and
fairly present in all material respects the consolidated financial position
of Chase and its consolidated Subsidiaries as at the dates thereof and the
consolidated results of operations, changes in stockholders' equity and
cash flows of such companies for the periods then ended. All material
agreements, contracts and other documents required to be filed as exhibits
to any of the Chase SEC Documents have been so filed.
(e) Information Supplied. None of the information supplied or to be
supplied by Chase for inclusion or incorporation by reference in (i) the
registration statement on Form S-4 to be filed with the SEC by Chemical in
connection with the issuance of shares of Chemical Common Stock in the
Merger (the "S-4") will, at the time the S-4 is filed with the SEC and at
the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and (ii) the Proxy Statement will, at the date of mailing to
stockholders and at the times of the meetings of stockholders to be held in
connection with the Merger, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Proxy
Statement (except for such portions thereof that relate only to Chemical)
will comply as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the SEC thereunder.
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(f) Compliance with Applicable Laws. Chase and its Subsidiaries hold
all permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities which are material to the operation of the businesses
of Chase and its Subsidiaries, taken as a whole (the "Chase Permits").
Chase and its Subsidiaries are in compliance with the terms of the Chase
Permits, except where the failure so to comply, individually or in the
aggregate, would not have a material adverse effect on Chase. Except as
disclosed in the Chase SEC Documents filed prior to the date of this
Agreement, the businesses of Chase and its Subsidiaries are not being
conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except for possible violations which, individually or
in the aggregate, do not, and, insofar as reasonably can be foreseen, in
the future will not, have a material adverse effect on Chase. Except for
routine examinations by Federal or state Governmental Entities charged with
the supervision or regulation of banks or bank holding companies or engaged
in the insurance of bank deposits ("Bank Regulators"), as of the date of
this Agreement, to the knowledge of Chase, no investigation by any
Governmental Entity with respect to Chase or any of its Subsidiaries is
pending or threatened, other than, in each case, those the outcome of
which, individually or in the aggregate, as far as reasonably can be
foreseen, will not have a material adverse effect on Chase.
(g) Litigation. As of the date of this Agreement, except as disclosed
in the Chase SEC Documents filed prior to the date of this Agreement, there
is no suit, action or proceeding pending or, to the knowledge of Chase,
threatened, against or affecting Chase or any Subsidiary of Chase as to
which there is a substantial possibility of an outcome which would,
individually or in the aggregate, have a material adverse effect on Chase,
nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Chase or any
Subsidiary of Chase having, or which, insofar as reasonably can be
foreseen, in the future could have, individually or in the aggregate, any
such effect.
(h) Taxes. Chase and each of its Subsidiaries have filed all tax
returns required to be filed by any of them and have paid (or Chase has
paid on their behalf), or have set up an adequate reserve for the payment
of, all taxes required to be paid as shown on such returns, and the most
recent financial statements contained in the Chase SEC Documents reflect an
adequate reserve for all taxes payable by Chase and its Subsidiaries
accrued through the date of such financial statements. No material
deficiencies for any taxes have been proposed, asserted or assessed against
Chase or any of its Subsidiaries that are not adequately reserved for. For
the purpose of this Agreement, the term "tax" (including, with correlative
meaning, the terms "taxes" and "taxable") shall include, except where the
context otherwise requires, all Federal, state, local and foreign income,
profits, franchise, gross receipts, payroll, sales, employment, use,
property, withholding, excise, occupancy and other taxes, duties or
assessments of any nature whatsoever, together with all interest, penalties
and additions imposed with respect to such amounts.
(i) Certain Agreements. Except as disclosed in the Chase SEC
Documents filed prior to the date of this Agreement or as disclosed in
writing to the other party prior to the date hereof and except for this
Agreement, as of the date of this Agreement, neither Chase nor any of its
Subsidiaries is a party to any oral or written (i) consulting agreement not
terminable on six months or less notice involving the payment of more than
$1,000,000 per annum, in the case of any such agreement with an individual,
or $5,000,000 per annum, in the case of any other such agreement, or union,
guild or collective bargaining agreement covering any employees in the
United States, (ii) agreement with any executive officer or other key
employee of Chase or any Subsidiary of Chase the benefits of which are
contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving Chase or Chase Bank of the nature
contemplated by this Agreement or the Chase Stock Option Agreement and
which provides for the payment of in excess of $400,000, (iii) agreement
with respect to any executive officer of Chase or any Subsidiary of Chase
providing any term of employment or compensation guarantee extending for a
period longer than three years and for the payment of in excess of
$1,000,000 per annum or (iv) agreement or plan, including any stock option
plan, stock appreciation rights plan, restricted stock plan or stock
purchase plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of
any of the transactions contemplated by this Agreement
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or the Chase Stock Option Agreement or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Agreement or the Chase Stock Option Agreement.
(j) Benefit Plans. (i) With respect to each employee benefit plan
(including, without limitation, any "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (all the foregoing being herein called "Benefit Plans"),
maintained or contributed to by Chase or Chase Bank (the "Chase Benefit
Plans"), Chase has made available to Chemical a true and correct copy of
(A) the most recent annual report (Form 5500) filed with the IRS, (B) such
Chase Benefit Plan, (C) each trust agreement relating to such Chase Benefit
Plan, (D) the most recent summary plan description for each Chase Benefit
Plan for which a summary plan description is required, (E) the most recent
actuarial report or valuation relating to a Chase Benefit Plan subject to
Title IV of ERISA and (F) the most recent determination letter issued by
the IRS with respect to any Chase Benefit Plan qualified under Section
401(a) of the Code.
(ii) With respect to the Chase Benefit Plans, individually and in the
aggregate, no event has occurred and, to the knowledge of Chase, there
exists no condition or set of circumstances, in connection with which Chase
or any of its Subsidiaries could be subject to any liability that is
reasonably likely to have a material adverse effect on Chase (except
liability for benefits claims and funding obligations payable in the
ordinary course) under ERISA, the Code or any other applicable law.
(iii) True and complete copies of the Chase Stock Plans as in effect
on the date hereof have been provided to Chemical.
(k) Subsidiaries. Exhibit 21 to Chase's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994 includes all the Subsidiaries
of Chase as of the date of this Agreement which are Significant
Subsidiaries. Chase owns, directly or indirectly, beneficially and of
record 100% of the issued and outstanding voting securities of each such
Significant Subsidiary (other than directors' qualifying shares, if any).
Each of Chase's Subsidiaries that is a bank (as defined in the BHC Act) is
an "insured bank" as defined in the FDIA and applicable regulations
thereunder. Except as provided in 12 U.S.C. sec. 55 in the case of Chase
Bank, The Chase Manhattan Bank of New Jersey, N.A. and The Chase Manhattan
Private Bank (Florida), N.A., and any comparable provision of applicable
state law in the case of Chase Subsidiaries that are state-chartered banks,
all of the shares of capital stock of each of the Subsidiaries held by
Chase or by another Chase Subsidiary are fully paid and nonassessable and
are owned by Chase or a Subsidiary of Chase free and clear of any claim,
lien or encumbrance.
(l) Agreements with Bank Regulators. Neither Chase nor any Subsidiary
of it is a party to any written agreement or memorandum of understanding
with, or a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any
extraordinary supervisory letter from, or has adopted any board resolutions
at the request of, any Bank Regulator which restricts materially the
conduct of its business, or in any manner relates to its capital adequacy,
its credit policies or its management, nor has Chase been advised by any
Bank Regulator that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar submission, or any such board
resolutions.
(m) Absence of Certain Changes or Events. Except as disclosed in the
Chase SEC Documents filed prior to the date of this Agreement, since June
30, 1995, Chase and its Subsidiaries have not incurred any material
liability, except in the ordinary course of their businesses consistent
with their past practices, nor has there been any change, or any event
involving a prospective change, in the business, financial condition or
results of operations of Chase or any of its Subsidiaries which has had, or
is reasonably likely to have, a material adverse effect on Chase, and Chase
and its Subsidiaries have conducted their respective businesses in the
ordinary course consistent with their past practices.
(n) Section 203 of the DGCL and Certain Provisions of Certificate of
Incorporation Not Applicable. The provisions of Section 203 of the DGCL
will not, assuming the accuracy of the representations
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contained in Section 3.2(s) (without giving effect to the knowledge
qualification thereof), apply to this Agreement, the Chase Stock Option
Agreement, the Merger or the transactions contemplated hereby and thereby.
The provisions of Section 8.01 of Chase's Certificate of Incorporation do
not and will not apply to this Agreement, the Chase Stock Option Agreement,
the Merger or the transactions contemplated hereby or thereby.
(o) Vote Required. The affirmative vote of the holders of a majority
of the outstanding shares of Chase Common Stock is the only vote of the
holders of any class or series of Chase capital stock necessary to approve
this Agreement and the transactions contemplated hereby (assuming for
purposes of this representation the accuracy of the representations
contained in Section 3.2(s), without giving effect to the knowledge
qualification thereof).
(p) Accounting Matters. Neither Chase nor, to its best knowledge, any
of its affiliates, has through the date hereof taken or agreed to take any
action that would prevent Chemical from accounting for the business
combination to be effected by the Merger as a "pooling of interests".
(q) Chase Rights Agreement. The Chase Rights Agreement has been
amended so as to provide that Chemical will not become an "Acquiring
Person" and that no "Triggering Event", "Stock Acquisition Date" or
"Distribution Date" (as such terms are defined in the Chase Rights
Agreement) will occur as a result of the approval, execution or delivery of
this Agreement or the Chase Stock Option Agreement or the consummation of
the Merger pursuant to the Merger Agreement or the acquisition of shares of
Chase Common Stock by Chemical pursuant to the Chase Stock Option
Agreement.
(r) Properties. Except as disclosed in the Chase SEC Documents filed
prior to the date of this Agreement, Chase or one of its Subsidiaries (i)
has good and marketable title to all the properties and assets reflected in
the latest audited balance sheet included in such Chase SEC Documents as
being owned by Chase or one of its Subsidiaries or acquired after the date
thereof which are material to Chase's business on a consolidated basis
(except properties sold or otherwise disposed of since the date thereof in
the ordinary course of business), free and clear of all claims, liens,
charges, security interests or encumbrances of any nature whatsoever except
(A) statutory liens securing payments not yet due, (B) liens on assets of
Subsidiaries of Chase which are banks incurred in the ordinary course of
their banking business and (C) such imperfections or irregularities of
title, claims, liens, charges, security interests or encumbrances as do not
materially affect the use of the properties or assets subject thereto or
affected thereby or otherwise materially impair business operations at such
properties and (ii) is the lessee of all leasehold estates reflected in the
latest audited financial statements included in such Chase SEC Documents or
acquired after the date thereof which are material to its business on a
consolidated basis (except for leases that have expired by their terms
since the date thereof) and is in possession of the properties purported to
be leased thereunder, and each such lease is valid without default
thereunder by the lessee or, to Chase's knowledge, as of the date hereof,
the lessor.
(s) Ownership of Chemical Common Stock. Other than pursuant to the
Chemical Stock Option Agreement, as of the date hereof, neither Chase nor,
to its best knowledge, any of its affiliates or associates (as such terms
are defined under the Exchange Act), (i) beneficially owns, directly or
indirectly, or (ii) is party to any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of, in each
case, shares of capital stock of Chemical, which in the aggregate represent
10% or more of the outstanding shares of Chemical Common Stock (other than
trust account shares).
(t) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement,
except Goldman, Sachs & Co. and James D. Wolfensohn Incorporated, whose
fees and expenses will be paid by Chase in accordance with Chase's
agreements with such firms (copies of which agreements have been delivered
by Chase to Chemical prior to the date of this Agreement), and Chase agrees
to indemnify Chemical and to hold Chemical harmless from and against any
and all claims, liabilities or obligations with respect to any other
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fees, commissions or expenses asserted by any person on the basis of any
act or statement alleged to have been made by Chase or its affiliate.
3.2. Representations and Warranties of Chemical. Chemical represents and
warrants to Chase as follows:
(a) Organization, Standing and Power. Chemical is a bank holding
company registered under the BHC Act. Chemical Bank is a wholly-owned
Subsidiary of Chemical and a banking corporation organized under the laws
of the State of New York. Each of Chemical and its Significant Subsidiaries
is a bank, corporation or partnership duly organized, validly existing and,
in the case of banks or corporations, in good standing under the laws of
its jurisdiction of incorporation or organization, has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified and in good standing
to do business in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification
necessary other than in such jurisdictions where the failure so to qualify
would not, either individually or in the aggregate, have a material adverse
effect on Chemical. The Certificate of Incorporation and By-laws of
Chemical, copies of which were previously furnished to Chase, are true,
complete and correct copies of such documents as in effect on the date of
this Agreement.
(b) Capital Structure. (i) As of the date hereof, the authorized
capital stock of Chemical consists of 400,000,000 shares of Chemical Common
Stock, 34,700,000 shares of Class B Common Stock, without par value
("Chemical Class B Common Stock"), and 200,000,000 shares of preferred
stock, par value $1.00 per share ("Chemical Preferred Stock"). As of the
close of business on July 31, 1995 (A) 252,114,984 shares of Chemical
Common Stock were outstanding, 60,385 shares of Chemical Common Stock were
reserved for issuance upon the conversion of Chemical Preferred Stock,
16,185,158 shares of Chemical Common Stock were reserved for issuance upon
the exercise of outstanding stock options or pursuant to Chemical's
dividend reinvestment plan, the Chemical Banking Corporation Long-Term
Stock Incentive Plan, the Deferred Compensation Plan for Non-Employee
Directors of Chemical Banking Corporation and Chemical Bank, the Chemical
Banking Corporation Post-Retirement Compensation Plan for Non-Employee
Directors, the Chemical Bank U.K. Profit Sharing Scheme, the Long-Term
Incentive Program of Manufacturers Hanover Corporation and Subsidiaries,
the Chemical Banking Corporation 1992 Stock Option Plan of Margaretten
Financial Corporation, the Chemical Banking Corporation 1993 Long-Term
Incentive Plan of Margaretten Financial Corporation and the Chemical
Banking Corporation 1983 Employee Stock Purchase Plan (such plans and
programs, together with the Chemical Success Sharing Program, collectively,
the "Chemical Stock Plans"), and 2,816,490 shares of Chemical Common Stock
were held by Chemical in its treasury or by its Subsidiaries (other than
trust account shares or DPC shares); (B) no shares of Chemical Class B
Common Stock were outstanding; (C) 26,000,000 shares of Chemical Preferred
Stock were outstanding, consisting of 4,000,000 shares of 10.96% Preferred
Stock, 14,000,000 shares of 8 3/8% Preferred Stock, 2,000,000 shares of
7.92% Cumulative Preferred Stock, 2,000,000 shares of 7.58% Cumulative
Preferred Stock, 2,000,000 shares of 7 1/2% Cumulative Preferred Stock, and
2,000,000 shares of Adjustable Rate Cumulative Preferred Stock, Series L;
and (D) 4,000,000 shares of Chemical Junior Preferred Stock were reserved
for issuance upon exercise of Chemical Rights pursuant to the Chemical
Rights Agreement. All outstanding shares of Chemical Common Stock and
Chemical Preferred Stock have been duly authorized and validly issued and
are fully paid and non-assessable and not subject to preemptive rights. The
shares of Chemical Common Stock and Chemical Merger Preferred Stock (A) to
be issued pursuant to or as specifically contemplated by this Agreement
(including without limitation as contemplated by Section 5.8 hereof), or
(B) which may be issued pursuant to the Chemical Stock Option Agreement,
will be, if and when issued in accordance with the terms hereof and thereof
or as contemplated hereby and thereby, and subject to approval by the
stockholders of Chemical of the Chemical Common Stock Amendment (as defined
in Section 3.2(c)(ii)), duly authorized, validly issued, fully paid and
non-assessable and not subject to preemptive rights.
(ii) No Voting Debt of Chemical is issued or outstanding.
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<PAGE> 115
(iii) As of the date of this Agreement, except for this Agreement, the
Chemical Stock Plans, the Chemical Rights Agreement and the Chemical Stock
Option Agreement, there are no options, warrants, calls, rights,
commitments or agreements of any character to which Chemical or any
Subsidiary of Chemical is a party or by which it is bound obligating
Chemical or any Subsidiary of Chemical to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock or any
Voting Debt of Chemical or of any Subsidiary of Chemical or obligating
Chemical or any Subsidiary of Chemical to grant, extend or enter into any
such option, warrant, call, right, commitment or agreement. As of the date
hereof, there are no outstanding contractual obligations of Chemical or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any shares
of capital stock of Chemical or any of its Subsidiaries, other than the
Chemical Stock Option Agreement.
(iv) Since July 31, 1995, Chemical has not (A) issued or permitted to
be issued any shares of capital stock, or securities exercisable for or
convertible into shares of capital stock, of Chemical or any of its
Subsidiaries, other than pursuant to and as required by the terms of the
Chemical Stock Plans (or in the ordinary course of business as permitted by
such plans and consistent with past practice), the Chemical Rights
Agreement and the Chemical Stock Option Agreement; (B) repurchased,
redeemed or otherwise acquired, directly or indirectly through one or more
Chemical Subsidiaries, any shares of capital stock of Chemical or any of
its Subsidiaries (other than the acquisition of trust account shares or DPC
shares); or (C) declared, set aside, made or paid to the stockholders of
Chemical dividends or other distributions on the outstanding shares of
capital stock of Chemical, other than (x) regular quarterly cash dividends
on the Chemical Common Stock at a rate not in excess of the regular
quarterly cash dividends most recently declared by Chemical prior to the
date of this Agreement and (y) cash dividends on the Chemical Preferred
Stock as required by the terms of the Chemical Preferred Stock as in effect
on the date hereof.
(c) Authority. (i) Chemical has all requisite corporate power and
authority to enter into this Agreement and the Stock Option Agreements and,
subject to approval by the requisite vote of the holders of Chemical Common
Stock of (x) this Agreement and (y) the amendment to Chemical's Certificate
of Incorporation necessary to increase the shares of authorized Chemical
Common Stock to a number not less than the number sufficient to consummate
the issuance of Chemical Common Stock contemplated under this Agreement
(the "Chemical Common Stock Amendment"), to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this
Agreement and the Stock Option Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Chemical, subject in the case
of the consummation of the Merger contemplated hereby to the approval of
this Agreement and the Chemical Common Stock Amendment by the stockholders
of Chemical. This Agreement and the Stock Option Agreements have been duly
executed and delivered by Chemical and each constitutes a valid and binding
obligation of Chemical, enforceable in accordance with its terms.
(ii) The execution and delivery of this Agreement and the Stock Option
Agreements do not or will not, as the case may be, and the consummation of
the transactions contemplated hereby and thereby will not, result in any
Violation pursuant to any provision of the Certificate of Incorporation or
By-laws of Chemical or any Subsidiary of Chemical or, except as disclosed
in writing to the other party prior to the date hereof and subject to
obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph (iii)
below, result in any Violation of any loan or credit agreement, note,
mortgage, indenture, lease, Benefit Plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Chemical
or any Subsidiary of Chemical or their respective properties or assets
which Violation, individually or in the aggregate, would have a material
adverse effect on Chemical.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to Chemical, or any Subsidiary of Chemical in
connection with the execution and delivery of this Agreement and the Stock
Option Agreements by Chemical or the consummation by Chemical of the
transactions contemplated hereby and thereby, the failure to obtain which
would have a material adverse effect on Chemical, except for (A) the filing
of
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<PAGE> 116
applications and notices with the Federal Reserve under the BHC Act, the
FRA and the FDIA and approval of same, (B) the filing with the SEC of the
Proxy Statement, the S-4 and such reports under Sections 12, 13(a), 13(d),
13(g) and 16(a) of the Exchange Act as may be required in connection with
this Agreement, the Stock Option Agreements and the transactions
contemplated hereby and thereby and the obtaining from the SEC of such
orders as may be required in connection therewith, (C) such filings and
approvals as are required to be made or obtained under the securities or
blue sky laws of various states in connection with the transactions
contemplated by this Agreement, (D) the filing of the Certificate of Merger
(including therein the Chemical Common Stock Amendment) and the
Certificates of Designations for the Chemical Merger Preferred Stock with
the Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which the Surviving
Corporation will be qualified to do business, (E) the State Banking
Approvals and any applicable State Takeover Approvals, (F) filings pursuant
to Article 31-B of the New York Tax Law, (G) consents, authorizations,
approvals, filings or exemptions in connection with compliance with the
applicable provisions of federal securities laws relating to the regulation
of broker-dealers, investment companies and investment advisors and federal
commodities laws relating to the regulation of futures commission merchants
and the rules and regulations of the SEC and the CFTC thereunder and of any
applicable industry self-regulatory organization, and the rules of the
NYSE, or which are required under consumer finance, mortgage banking and
other similar laws, (H) notices under the HSR Act, (I) such filings,
authorizations, orders and approvals as may be required under foreign laws
and (J) such filings, notifications and approvals as are required under the
SBIA and the rules and regulations of the SBA thereunder.
(d) SEC Documents. Chemical has made available to Chase a true and
complete copy of each report, schedule, registration statement and
definitive proxy statement filed by Chemical with the SEC (other than
reports filed pursuant to Section 13(d) or 13(g) of the Exchange Act) since
December 31, 1994 (as such documents have since the time of their filing
been amended, the "Chemical SEC Documents"), which are all the documents
(other than preliminary material and reports required pursuant to Section
13(d) or 13(g) of the Exchange Act) that Chemical was required to file with
the SEC since such date. As of their respective dates of filing with the
SEC, the Chemical SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC thereunder applicable to such
Chemical SEC Documents, and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Chemical included in the Chemical SEC Documents complied as
to form, as of their respective dates of filing with the SEC, in all
material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements,
as permitted by Form 10-Q of the SEC) and fairly present in all material
respects the consolidated financial position of Chemical and its
consolidated Subsidiaries as at the dates thereof and the consolidated
results of operations, changes in stockholders' equity and cash flows of
such companies for the periods then ended. All material agreements,
contracts and other documents required to be filed as exhibits to any of
the Chemical SEC Documents have been so filed.
(e) Information Supplied. None of the information supplied or to be
supplied by Chemical for inclusion or incorporation by reference in (i) the
S-4 will, at the time the S-4 becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) the Proxy Statement will, at the
date of mailing to stockholders and at the times of the meetings of
stockholders to be held in connection with the Merger, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Proxy Statement (except for such portions thereof that relate only to
Chase) will comply as to form in all material respects with the
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<PAGE> 117
requirements of the Exchange Act and the rules and regulations of the SEC
thereunder, and the S-4 (except for such portions thereof that relate only
to Chase) will comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations of the SEC
thereunder.
(f) Compliance with Applicable Laws. Chemical and its Subsidiaries
hold all permits, licenses, variances, exemptions, orders and approvals of
all Governmental Entities which are material to the operation of the
businesses of Chemical and its Subsidiaries, taken as a whole (the
"Chemical Permits"). Chemical and its Subsidiaries are in compliance with
the terms of the Chemical Permits and all applicable laws and regulations,
except where the failure so to comply, individually or in the aggregate,
would not have a material adverse effect on Chemical. Except as disclosed
in the Chemical SEC Documents filed prior to the date hereof, the
businesses of Chemical and its Subsidiaries are not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity,
except for possible violations which, individually or in the aggregate, do
not, and, insofar as reasonably can be foreseen, in the future will not,
have a material adverse effect on Chemical. Except for routine examinations
by Bank Regulators, as of the date of this Agreement, to the knowledge of
Chemical, no investigation by any Governmental Entity with respect to
Chemical or any of its Subsidiaries is pending or threatened, other than,
in each case, those the outcome of which, individually or in the aggregate,
as far as reasonably can be foreseen, will not have a material adverse
effect on Chemical.
(g) Litigation. As of the date of this Agreement, except as disclosed
in the Chemical SEC Documents filed prior to the date of this Agreement,
there is no suit, action or proceeding pending or, to the knowledge of
Chemical, threatened, against or affecting Chemical or any Subsidiary of
Chemical as to which there is a substantial possibility of an outcome which
would, individually or in the aggregate, have a material adverse effect on
Chemical, nor is there any judgment, decree, injunction, rule or order of
any Governmental Entity or arbitrator outstanding against Chemical or any
Subsidiary of Chemical having, or which, insofar as reasonably can be
foreseen, in the future could have, individually or in the aggregate, any
such effect.
(h) Taxes. Chemical and each of its Subsidiaries have filed all tax
returns required to be filed by any of them and have paid (or Chemical has
paid on their behalf), or have set up an adequate reserve for the payment
of, all taxes required to be paid as shown on such returns, and the most
recent financial statements contained in the Chemical SEC Documents reflect
an adequate reserve for all taxes payable by Chemical and its Subsidiaries
accrued through the date of such financial statements. No material
deficiencies for any taxes have been proposed, asserted or assessed against
Chemical or any of its Subsidiaries that are not adequately reserved for.
(i) Certain Agreements. Except as disclosed in the Chemical SEC
Documents filed prior to the date of this Agreement, or as disclosed in
writing to the other party prior to the date of this Agreement, and except
for this Agreement, as of the date of this Agreement neither Chemical nor
any of its Subsidiaries is a party to any oral or written (i) consulting
agreement not terminable on six months or less notice involving the payment
of more than $1,000,000 per annum, in the case of any such agreement with
an individual, or $5,000,000 per annum, in the case of any other such
agreement, or union, guild or collective bargaining agreement covering any
employees in the United States, (ii) agreement with any executive officer
or other key employee of Chemical or any Subsidiary of Chemical the
benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving Chemical or any
Subsidiary of Chemical of the nature contemplated by this Agreement or the
Chemical Stock Option Agreement and which provides for the payment of in
excess of $400,000, (iii) agreement with respect to any executive officer
of Chemical or any Subsidiary of Chemical providing any term of employment
or compensation guarantee extending for a period longer than three years
and for the payment of in excess of $1,000,000 per annum or (iv) agreement
or plan, including any stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan, any of the benefits of which
will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by
this Agreement or the Chemical Stock Option Agreement or the value of any
of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement or the Chemical Stock Option
Agreement.
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(j) Benefit Plans. (i) With respect to each Benefit Plan maintained
or contributed to by Chemical or Chemical Bank (the "Chemical Benefit
Plans"), Chemical has made available to Chase a true and correct copy of
(A) the most recent annual report (Form 5500) filed with the IRS, (B) such
Chemical Benefit Plan, (C) each trust agreement relating to such Chemical
Benefit Plan, (D) the most recent summary plan description for each
Chemical Benefit Plan for which a summary plan description is required, (E)
the most recent actuarial report or valuation relating to a Chemical
Benefit Plan subject to Title IV of ERISA and (F) the most recent
determination letter issued by the IRS with respect to any Chemical Benefit
Plan qualified under Section 401(a) of the Code.
(ii) With respect to the Chemical Benefit Plans, individually and in
the aggregate, no event has occurred and, to the knowledge of Chemical,
there exists no condition or set of circumstances in connection with which
Chemical or any of its Subsidiaries could be subject to any liability that
is reasonably likely to have a material adverse effect upon Chemical
(except liability for benefits claims and funding obligations payable in
the ordinary course) under ERISA, the Code or any other applicable law.
(iii) True and complete copies of the Chemical Stock Plans as in
effect on the date hereof have been provided to Chase.
(k) Subsidiaries. Exhibit 21.1 to Chemical's Annual Report on Form
10-K for the fiscal year ended December 31, 1994, includes all the
Subsidiaries of Chemical as of the date of this Agreement which are
Significant Subsidiaries. Chemical owns, directly or indirectly,
beneficially and of record 100% of the issued and outstanding voting
securities of each such Subsidiary (other than directors' qualifying
shares, if any). Each of Chemical's Subsidiaries that is a bank (as defined
in the BHC Act) is an "insured bank" as defined in the FDIA and applicable
regulations thereunder. Except as provided in 12 U.S.C. sec. 55 in the case
of Subsidiaries of Chemical that are national banks and any comparable
provision of applicable state law in the case of Subsidiaries of Chemical
that are state-chartered banks, all of the shares of capital stock of each
of the Subsidiaries held by Chemical or by another Subsidiary of Chemical
are fully paid and nonassessable and are owned by Chemical or a Subsidiary
of Chemical free and clear of any claim, lien or encumbrance.
(l) Agreements with Bank Regulators. Neither Chemical nor any
Subsidiary of it is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any
board resolutions at the request of, any Bank Regulator which restricts
materially the conduct of its business, or in any manner relates to its
capital adequacy, its credit policies or its management, nor has Chemical
been advised by any Bank Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting)
any such order, decree, agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter or similar submission,
or any such board resolutions.
(m) Absence of Certain Changes or Events. Except as disclosed in the
Chemical SEC Documents filed prior to the date of this Agreement, since
June 30, 1995, Chemical and its Subsidiaries have not incurred any material
liability, except in the ordinary course of their business consistent with
their past practices, nor has there been any change, or any event involving
a prospective change, in the business, financial condition or results of
operations of Chemical or any of its Subsidiaries which has had, or is
reasonably likely to have, a material adverse effect on Chemical, and
Chemical and its Subsidiaries have conducted their respective businesses in
the ordinary course consistent with their past practices.
(n) Section 203 of the DGCL Not Applicable. The provisions of Section
203 of the DGCL will not, assuming the accuracy of the representations
contained in Section 3.1(s) (without giving effect to the knowledge
qualification thereof), apply to this Agreement, the Chemical Stock Option
Agreement, the Merger or the transactions contemplated hereby and thereby.
(o) Vote Required. The affirmative vote of the holders of a majority
of the outstanding shares of Chemical Common Stock is the only vote of the
holders of any class or series of Chemical capital stock necessary to
approve the Merger (assuming for the purposes of this representation the
accuracy of the
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representations contained in Section 3.1(s) without giving effect to the
knowledge qualification thereof) or the Chemical Common Stock Amendment.
(p) Accounting Matters. Neither Chemical nor, to its best knowledge,
any of its affiliates, has through the date of this Agreement taken or
agreed to take any action that would prevent Chemical from accounting for
the business combination to be effected by the Merger as a "pooling of
interests".
(q) Chemical Rights Agreement. The Chemical Rights Agreement has been
amended so as to provide that Chase will not become an "Acquiring Person"
or an "Adverse Person" and that no "Triggering Event", "Stock Acquisition
Date" or "Distribution Date" (as such terms are defined in the Chemical
Rights Agreement) will occur as a result of the approval, execution or
delivery of this Agreement or the Chemical Stock Option Agreement or the
consummation of the Merger pursuant to the Merger Agreement or the
acquisition of shares of Chemical Common Stock by Chase pursuant to the
Chemical Stock Option Agreement.
(r) Properties. Except as disclosed in the Chemical SEC Documents
filed prior to the date of this Agreement, Chemical or one of its
Subsidiaries (i) has good and marketable title to all the properties and
assets reflected in the latest audited balance sheet included in such
Chemical SEC Documents as being owned by Chemical or one of its
Subsidiaries or acquired after the date thereof which are material to
Chemical's business on a consolidated basis (except properties sold or
otherwise disposed of since the date thereof in the ordinary course of
business), free and clear of all claims, liens, charges, security interests
or encumbrances of any nature whatsoever except (A) statutory liens
securing payments not yet due, (B) liens on assets of Subsidiaries of
Chemical which are banks incurred in the ordinary course of their banking
business and (C) such imperfections or irregularities of title, claims,
liens, charges, security interests or encumbrances as do not materially
effect the use of the properties or assets subject thereto or affected
thereby or otherwise materially impair business operations at such
properties and (ii) is the lessee of all leasehold estates reflected in the
latest audited financial statements included in such Chemical SEC Documents
or acquired after the date thereof which are material to its business on a
consolidated basis (except for leases that have expired by their terms
since the date thereof) and is in possession of the properties purported to
be leased thereunder and each such lease is valid without default
thereunder by the lessee or, to Chemical's knowledge, as of the date
hereof, the lessor.
(s) Ownership of Chase Common Stock. Other than pursuant to the Chase
Stock Option Agreement, as of the date hereof, neither Chemical nor, to its
best knowledge, any of its affiliates or associates (as such terms are
defined under the Exchange Act), (i) beneficially owns, directly or
indirectly, or (ii) is party to any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of, in each
case, shares of capital stock of Chase, which in the aggregate represent
10% or more of the outstanding shares of Chase Common Stock (other than
trust account shares).
(t) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement,
except Morgan Stanley & Co. Incorporated, whose fees and expenses Page will
be paid by Chemical in accordance with Chemical's agreement with such firm
(a copy of which agreement has been delivered by Chemical to Chase prior to
the date of this Agreement), and Chemical agrees to indemnify Chase and to
hold Chase harmless from and against any and all claims, liabilities or
obligations with respect to any other fees, commissions or expenses
asserted by any person on the basis of any act or statement alleged to have
been made by Chemical or its affiliates.
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ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1. Covenants of Chase and Chemical. During the period from the date of
this Agreement and continuing until the Effective Time, Chase and Chemical each
agrees as to itself and its Subsidiaries that (except as expressly contemplated
or permitted by this Agreement or the Stock Option Agreements or to the extent
that the other party shall otherwise consent in writing):
(a) Ordinary Course. Such party and its Subsidiaries shall carry on
their respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and use all
reasonable efforts to preserve intact their present business organizations,
maintain their rights and franchises and preserve their relationships with
customers, suppliers and others having business dealings with them to the
end that their goodwill and ongoing businesses shall not be impaired in any
material respect at the Effective Time. No party shall, or shall permit any
of its Subsidiaries to, (i) enter into any new material line of business,
(ii) change its or its Subsidiaries' lending, investment, liability
management and other material banking policies in any respect which is
material to such party, except as required by law or by policies imposed by
a Bank Regulator, or (iii) incur or commit to any capital expenditures or
any obligations or liabilities in connection therewith other than capital
expenditures and obligations or liabilities incurred or committed to in the
ordinary course of business consistent with past practice.
(b) Dividends; Changes in Stock. No party shall, or shall permit any
of its Subsidiaries to, or shall propose to, (i) declare or pay any
dividends on or make other distributions in respect of any of its capital
stock, except (A) as provided in Section 5.12, (B) Chase may continue the
declaration and payment of regular quarterly cash dividends not in excess
of $.45 per share of Chase Common Stock and regular cash dividends as
provided by and in accordance with the terms of the Chase Preferred Stock
as in effect on the date of this Agreement and Chemical may continue the
declaration and payment of regular quarterly cash dividends not in excess
of $.50 per share of Chemical Common Stock and regular cash dividends as
provided by and in accordance with the present terms of the Chemical
Preferred Stock as in effect on the date of this Agreement, in each case
with usual record and payment dates for such dividends in accordance with
such parties' past dividend practice or as required by the terms of such
preferred stock, and (C) for dividends by a wholly-owned Subsidiary of such
party, (ii) split, combine or reclassify any of its capital stock or issue
or authorize or propose the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock or (iii)
repurchase, redeem or otherwise acquire, or permit any Subsidiary to
purchase or otherwise acquire (other than as agent for stockholders
reinvesting dividends pursuant to a dividend reinvestment plan in
accordance with the terms thereof as in effect on the date of this
Agreement, and except for the acquisition of trust account shares and DPC
shares), any shares of its capital stock or any securities convertible into
or exercisable for any shares of its capital stock. Chase shall not redeem
the Chase Rights and Chemical shall not redeem the Chemical Rights.
(c) Issuance of Securities. No party shall, or shall permit any of
its Subsidiaries to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any
class, any Voting Debt or any securities convertible into or exercisable
for, or any rights, warrants or options to acquire, any such shares or
Voting Debt, or enter into any agreement with respect to any of the
foregoing, other than (i) the issuance of Chase Common Stock (and attached
Chase Rights) or Chemical Common Stock, as the case may be, upon the
exercise of Warrants, or pursuant to, or pursuant to the exercise of stock
options issued under, the Chemical Stock Plans or Chase Stock Plans, in
each case in the ordinary course of business and consistent with past
practices and in accordance with the terms of the applicable Chemical Stock
Plan or Chase Stock Plan as in effect on the date of this Agreement, or
pursuant to the Chase Stock Purchase Contracts or the Stock Option
Agreements, (ii) issuances by a wholly-owned Subsidiary of its capital
stock to its parent, (iii) in the case of Chemical, issuance of Chemical
Junior Preferred Stock (and/or Chemical Common Stock) upon exercise of the
Chemical Rights in accordance with their present terms and reservation for
issuance in accordance with such terms of shares of Chemical Junior
Preferred Stock (and/or Chemical Common Stock) in addition to those
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presently reserved for issuance, (iv) in the case of Chase, issuance of
Chase Junior Preferred Stock (and/or Chase Common Stock) upon exercise of
the Chase Rights in accordance with their present terms and reservation for
issuance in accordance with such terms of shares of Chase Junior Preferred
Stock (and/or Chase Common Stock) in addition to those presently reserved
for issuance, (v) the issuance of Chase Common Stock pursuant to the U.S.
Trust Agreement as in effect on the date hereof, and (vi) issuances of
Chase Common Stock effected pursuant to the reinvestment under Chase's
dividend reinvestment plan of the Chase Common Stock dividend payable on
August 15, 1995.
(d) Governing Documents. No party shall amend or propose to amend the
Certificate of Incorporation or By-laws of such party, nor shall Chemical
amend the Chemical Rights Agreement (as amended as described in Section
3.2(q)) in any way adverse to Chase or its ability to consummate the
transactions contemplated hereby or by the Stock Option Agreements nor
shall Chase amend the Chase Rights Agreement (as amended as described in
Section 3.1(q)) in any way adverse to Chemical or its ability to consummate
the transactions contemplated hereby or by the Stock Option Agreements;
provided, however, that Chemical, at or prior to the Effective Time, (i)
shall file Certificates of Designations for each series of Chemical Merger
Preferred Stock as contemplated by Section 2.1, (ii) shall amend its
Certificate of Incorporation as contemplated by Section 3.2(c)(i), (iii)
may amend its Certificate of Incorporation to eliminate provisions therein
relating to the Chemical Class B Common Stock (provided that the
effectiveness of such an amendment as described in this clause (iii) shall
in no event be a condition to or impair either party's ability to
consummate the Merger) and (iv) may file such certificates as may be
necessary to eliminate from its Certificate of Incorporation provisions
relating to any series of Chemical Preferred Stock which is no longer
outstanding (provided that the effectiveness of such a certificate as
described in this clause (iv) shall in no event be a condition to or impair
either party's ability to consummate the Merger).
(e) No Solicitations. No party shall, or shall permit any of its
Subsidiaries to, or shall authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative or agent (collectively,
"Representatives") retained by it or any of its Subsidiaries to, solicit or
encourage (including by way of furnishing nonpublic information), or take
any other action to facilitate, any inquiries or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any takeover
proposal (as defined below), or agree to or endorse any takeover proposal,
or participate in any discussions or negotiations, or provide third parties
with any nonpublic information, relating to any such inquiry or proposal.
Each of Chemical and Chase shall advise the other orally (within one
business day) and in writing (as promptly as practicable), in reasonable
detail, of any such inquiry or proposal which it or any of its Subsidiaries
or any Representative of Chemical or Chase, as the case may be, may receive
and if such inquiry or proposal is in writing, then Chemical or Chase, as
the case may be, shall deliver to the other a copy of such inquiry or
proposal. As used in this Agreement, "takeover proposal" shall mean any
tender or exchange offer, proposal for a merger, consolidation or other
business combination involving Chemical or Chase or any Significant
Subsidiary of Chemical or Chase or any proposal or offer to acquire in any
manner 20% or more of the outstanding shares of any class of voting
securities, or 15% or more of the consolidated assets, of Chemical or Chase
or any Significant Subsidiary of Chemical or Chase, other than the
transactions contemplated by this Agreement and the Stock Option
Agreements. This Section 4.1(e) shall not prohibit accurate disclosure by a
party that is required in any Chase SEC Document or Chemical SEC Document
(including the Proxy Statement and the S-4) or otherwise under applicable
law of the opinion of the Board of Directors of such party as of the date
of such Chase SEC Document or Chemical SEC Document or such other required
disclosure as to the transactions contemplated hereby or as to any takeover
proposal.
(f) No Acquisitions. Other than (i) pursuant to the Stock Option
Agreements, (ii) acquisitions disclosed in writing to the other party prior
to the date of this Agreement, (iii) acquisitions in existing or related
lines of business of the party making such acquisition the fair market
value of the total consideration for which does not exceed $50,000,000 in
the aggregate in the case of each party, or (iv) pursuant to the U.S. Trust
Agreement as in effect on the date hereof, neither party shall, or shall
permit any of its Subsidiaries to, acquire or agree to acquire by merging
or consolidating with, or by
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purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof
or otherwise acquire or agree to acquire any assets, in each case which are
material, individually or in the aggregate, to such party; provided,
however, that the foregoing shall not prohibit (i) internal reorganizations
or consolidations involving existing Subsidiaries other than Chemical Bank
or Chase Bank, (ii) foreclosures and other debt-previously-contracted
acquisitions in the ordinary course of business, (iii) acquisitions of
control by a banking Subsidiary in its fiduciary capacity, (iv) investments
made by small business investment company or venture capital Subsidiaries,
acquisitions of financial assets and merchant banking activities, in each
case in the ordinary course of business, (v) the creation of new
Subsidiaries organized to conduct or continue activities otherwise
permitted by this Agreement, or (vi) agreements relating to the merger of
Chemical Bank and Chase Bank after the Effective Time.
(g) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing Subsidiaries other than Chemical Bank or
Chase Bank, (ii) dispositions referred to in Chase SEC Documents or
Chemical SEC Documents filed prior to the date of this Agreement or as
previously disclosed in writing by a party to the other party, (iii) as may
be required by law to consummate the transactions contemplated hereby, (iv)
securitization activities in the ordinary course of business and (v) other
activities in the ordinary course of business consistent with prior
practice, no party shall, or shall permit any of its Subsidiaries to, sell,
lease, encumber or otherwise dispose of, or agree to sell, lease, encumber
or otherwise dispose of, any of its assets (including capital stock of
Subsidiaries), which are material, individually or in the aggregate, to
such party.
(h) Indebtedness. No party shall, or shall permit any of its
Subsidiaries to, incur any long-term indebtedness for borrowed money or
guarantee any such long-term indebtedness or issue or sell any long-term
debt securities or warrants or rights to acquire any long-term debt
securities of such party or any of its Subsidiaries or guarantee any
long-term debt securities of others other than (i) in replacement for
existing or maturing debt, (ii) indebtedness of any Subsidiary of a party
to such party or another Subsidiary of such party or (iii) in the ordinary
course of business consistent with prior practice.
(i) Other Actions. No party shall, or shall permit any of its
Subsidiaries to, intentionally take any action that would, or reasonably
might be expected to, result in any of its representations and warranties
set forth in this Agreement being or becoming untrue, subject to such
exceptions as do not have, and would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on such party
or on the Surviving Corporation following the Effective Time, or in any of
the conditions to the Merger set forth in Article VI not being satisfied or
in a violation of any provision of either of the Stock Option Agreements,
or (unless such action is required by applicable law or sound banking
practice) which would adversely affect the ability of any of them to obtain
any of the Requisite Regulatory Approvals without imposition of a condition
or restriction of the type referred to in Section 6.1(g).
(j) Advice of Changes; Government Filings. Each party shall confer on
a regular and frequent basis with the other, report on operational matters
and promptly advise the other orally and in writing of any change or event
having, or which, insofar as can reasonably be foreseen, could have, a
material adverse effect on such party or which would cause or constitute a
material breach of any of the representations, warranties or covenants of
such party contained herein. Chemical and Chase shall file all reports
required to be filed by each of them with the SEC between the date of this
Agreement and the Effective Time and shall deliver to the other party
copies of all such reports promptly after the same are filed. Chemical,
Chase and each Subsidiary of Chemical or Chase that is a bank shall file
all call reports with the appropriate Bank Regulators and all other
reports, applications and other documents required to be filed with the
applicable Governmental Entities between the date hereof and the Effective
Time and shall make available to the other party copies of all such reports
promptly after the same are filed. Each of Chemical and Chase shall have
the right to review in advance, and to the extent practicable each will
consult with the other, in each case subject to applicable laws relating to
the exchange of information, with respect to all the information relating
to the other party, and any of their respective Subsidiaries, which appear
in any filing made with, or written materials submitted to, any third party
or any Governmental Entity in connection with the transactions contemplated
by this Agreement. In exercising
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the foregoing right, each of the parties hereto agrees to act reasonably
and as promptly as practicable. Each party hereto agrees that to the extent
practicable it will consult with the other party hereto with respect to the
obtaining of all permits, consents, approvals and authorizations of all
third parties and Governmental Entities necessary or advisable to
consummate the transactions contemplated by this Agreement and each party
will keep the other party apprised of the status of matters relating to
completion of the transactions contemplated hereby.
(k) Accounting Methods. Except as disclosed in Chemical SEC Documents
or Chase SEC Documents (as the case may be) filed prior to the date of this
Agreement, neither Chemical nor Chase shall change its methods of
accounting in effect at December 31, 1994, except as required by changes in
generally accepted accounting principles as concurred in by such party's
independent auditors. Neither Chemical nor Chase will change its fiscal
year.
(l) Pooling and Tax-Free Reorganization Treatment. Neither Chemical
nor Chase shall, or shall permit any of its Subsidiaries to, intentionally
take or cause to be taken any action, whether before or after the Effective
Time, which would disqualify the Merger as a "pooling of interests" for
accounting purposes or as a "reorganization" within the meaning of Section
368(a) of the Code; provided, however, that nothing hereunder shall limit
the ability of Chemical or Chase to exercise their respective rights under
the Stock Option Agreements.
(m) Compensation and Benefit Plans. Concurrently with the execution
and delivery of this Agreement, Chemical and Chase shall enter into the
Employee Benefits Agreement in the form of Exhibit 4.1(m) (the "Employee
Benefits Agreement"). Except as provided in the Employee Benefits
Agreement, which is hereby incorporated by reference herein, during the
period from the date of this Agreement and continuing until the Effective
Time, each of Chemical and Chase agrees as to itself and its Subsidiaries
that it will not, without the prior written consent of the other party, (i)
enter into, adopt, amend (except for (A) such amendments as may be required
by law, (B) plan documents and restatements currently being prepared by
Chase or Chemical which do not increase benefits and (C) amendments or
restatements currently being prepared by Chemical in connection with its
acquisition of Margaretten Financial Corporation) or terminate any Chemical
Benefit Plan or Chase Benefit Plan, as the case may be, or any other
employee benefit plan or any agreement, arrangement, plan or policy between
such party and one or more of its directors or officers, (ii) except for
normal increases in the ordinary course of business consistent with past
practice that, in the aggregate, do not result in a material increase in
benefits or compensation expense to such party, increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock options,
stock appreciation rights, restricted stock, restricted stock units or
performance units or shares) or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing or (iii) enter into or
renew any contract, agreement, commitment or arrangement providing for the
payment to any director, officer or employee of such party of compensation
or benefits contingent, or the terms of which are materially altered, upon
the occurrence of any of the transactions contemplated by this Agreement or
the Stock Option Agreements.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1. Preparation of S-4, and the Proxy Statement. Chemical and Chase shall
cooperate with each other in the preparation of, and shall promptly prepare and
file with the SEC, the Proxy Statement and Chemical shall prepare and file with
the SEC the S-4, in which the Proxy Statement will be included as a prospectus.
Each of Chemical and Chase shall use all reasonable efforts to have the S-4
declared effective under the Securities Act as promptly as practicable after
such filing. Chemical shall also take any action (other than qualifying to do
business in any jurisdiction in which it is now not so qualified) required to be
taken under any applicable state securities laws in connection with the issuance
of Chemical Common Stock and Chemical Merger Preferred Stock in the Merger and
Chemical Common Stock upon the exercise of the Chase Stock
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Options and the Warrants, and Chase shall furnish all information concerning
Chase and the holders of Chase Common Stock and Chase Preferred Stock as may be
reasonably requested in connection with any such action.
5.2. Access to Information. Upon reasonable notice, Chase and Chemical
shall each (and shall cause each of their respective Subsidiaries to) afford to
the Representatives of the other, access, during normal business hours during
the period prior to the Effective Time, to all its properties, books, contracts,
commitments and records and, during such period, each of Chase and Chemical
shall (and shall cause each of their respective Subsidiaries to) make available
to the other (a) a copy of each report, schedule, registration statement and
other document filed or received by it during such period pursuant to the
requirements of Federal securities laws or Federal or state banking laws (other
than reports or documents which such party is not permitted to disclose under
applicable law) and (b) all other information concerning its business,
properties and personnel as such other party may reasonably request. The parties
will hold any such information which is nonpublic in confidence to the extent
required by, and in accordance with, the provisions of the letter dated July 31,
1995, between Chase and Chemical (the "Confidentiality Agreement"). No
investigation by either Chemical or Chase shall affect the representations and
warranties of the other, except to the extent such representations and
warranties are by their terms qualified by disclosures made to such first party.
5.3. Stockholder Meetings. Chase and Chemical each shall call a meeting of
its respective stockholders to be held as promptly as practicable for the
purpose of voting upon the approval of this Agreement and, in the case of the
stockholders of Chemical, the Chemical Common Stock Amendment. Subject to the
next succeeding sentence, Chase and Chemical will, through their respective
Boards of Directors, recommend to their respective stockholders approval of such
matters. The Board of Directors of Chemical or Chase, acting on behalf of
Chemical or Chase, respectively, may fail to make such recommendation, or
withdraw, modify or change any such recommendation, if and only if such Board of
Directors, after having consulted with and considered the written advice of
outside counsel, has determined that the making of such recommendation, or the
failure so to withdraw, modify or change such recommendation, would constitute a
breach of the fiduciary duties of such directors to their respective
stockholders under applicable law. Chase and Chemical shall coordinate and
cooperate with respect to the timing of such meetings and shall use their best
efforts to hold such meetings on the same day and as soon as practicable after
the date on which the S-4 becomes effective. This Section 5.3 shall not prohibit
accurate disclosure by a party that is required in any Chase SEC Document or
Chemical SEC Document (including the Proxy Statement and the S-4) or otherwise
under applicable law of the opinion of the Board of Directors of such party as
of the date of such SEC Document or such other required disclosure as to the
transactions contemplated hereby or as to any takeover proposal.
5.4. Legal Conditions to Merger. (a) Each of Chase and Chemical shall, and
shall cause its Subsidiaries to, use all reasonable efforts (i) to take, or
cause to be taken, all actions necessary to comply promptly with all legal
requirements which may be imposed on such party or its Subsidiaries with respect
to the Merger and to consummate the transactions contemplated by this Agreement
as promptly as practicable, subject to the appropriate vote of stockholders of
Chase and Chemical described in Section 6.1(a), and (ii) to obtain (and to
cooperate with the other party to obtain) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity and or any other
public or private third party which is required to be obtained or made by such
party or any of its Subsidiaries in connection with the Merger and the
transactions contemplated by this Agreement; provided, however, that a party
shall not be obligated to take any action pursuant to the foregoing if the
taking of such action or such compliance or the obtaining of such consent,
authorization, order, approval or exemption is likely, in such party's
reasonable opinion, to result in a condition or restriction on such party or on
the Surviving Corporation having an effect of the type referred to in Section
6.1(g). Each of Chase and Chemical will promptly cooperate with and furnish
information to the other in connection with any such burden suffered by, or
requirement imposed upon, any of them or any of their Subsidiaries in connection
with the foregoing.
(b) Chemical agrees to execute and deliver, or cause to be executed and
delivered by or on behalf of the Surviving Corporation, at or prior to the
Effective Time, supplemental indentures and other instruments
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required for the due assumption of Chase's outstanding debt securities and the
Warrants to the extent required by the terms of such securities and the
instruments and agreements relating thereto.
5.5. Affiliates. At least 40 days prior to the Closing Date, Chase shall
deliver to Chemical a letter identifying all persons who are, at the time this
Agreement is submitted for approval to the stockholders of Chase, "affiliates"
of Chase for purposes of Rule 145 under the Securities Act and Chemical shall
deliver to Chase a letter identifying all persons who are, at the time this
Agreement is submitted for approval to the stockholders of Chemical,
"affiliates" of Chemical for purposes of such Rule 145. Each of Chemical and
Chase shall use all reasonable efforts to cause each person named on the letter
delivered by it to deliver to the other party at least 30 days prior to the
Closing Date a written agreement, substantially in the form attached as Exhibit
5.5(a) (in the case of persons named in the letter delivered by Chase) or
Exhibit 5.5(b) (in the case of persons named in the letter delivered by
Chemical).
5.6. Stock Exchange Listing. Chemical shall use all reasonable efforts to
cause the shares of Chemical Common Stock and of each series of Chemical Merger
Preferred Stock to be issued in the Merger and the shares of Chemical Common
Stock to be reserved for issuance upon exercise of Chase Stock Options (as
defined below) and the Warrants to be approved for listing on the NYSE, subject
to official notice of issuance, prior to the Closing Date.
5.7. Employee Benefit Plans. (a) Except as otherwise provided in the
Employee Benefits Agreement, Chemical and Chase agree that, unless otherwise
mutually determined, the Chemical Benefit Plans and Chase Benefit Plans in
effect at the date of this Agreement shall remain in effect after the Effective
Time with respect to employees covered by such plans at the Effective Time, and
the parties shall negotiate in good faith to formulate Benefit Plans for the
Surviving Corporation and its Subsidiaries, with respect both to employees who
were covered by the Chemical Benefit Plans and Chase Benefit Plans at the
Effective Time and employees who were not covered by such plans at the Effective
Time, that provide benefits for services after the Effective Time on a basis
that does not discriminate between employees who were covered by the Chemical
Benefit Plans and employees who were covered by the Chase Benefit Plans.
(b) Except as otherwise provided in Section 5.8, in the case of Chase
Benefit Plans under which the employees' interests are based upon Chase Common
Stock, Chemical and Chase agree that such interests shall be based on Chemical
Common Stock in an equitable manner.
(c) With respect to Benefit Plans maintained or contributed to outside the
United States for the benefit of non-United States citizens or residents, the
principles set forth in the preceding paragraphs of this Section 5.7 shall apply
to the extent the application of such principles does not violate applicable
foreign law.
5.8. Stock Options. (a) At the Effective Time, each outstanding option to
purchase shares of Chase Common Stock (a "Chase Stock Option") and each
outstanding stock appreciation right (a "Chase SAR") or restricted stock unit (a
"Chase Unit") issued pursuant to any incentive or stock option program of Chase
(the "Chase Plan"), whether vested or unvested, shall be assumed by Chemical.
Each Chase Stock Option shall be deemed to constitute an option to acquire, on
the same terms and conditions as were applicable under such Chase Stock Option,
the same number of shares of Chemical Common Stock as the holder of such Chase
Stock Option would have been entitled to receive pursuant to the Merger had such
holder exercised such option in full immediately prior to the Effective Time,
rounded, if necessary, up or down, to the nearest whole share, at a price per
share equal to (y) the aggregate exercise price for the shares of Chase Common
Stock otherwise purchasable pursuant to such Chase Stock Option divided by (z)
the number of full shares of Chemical Common Stock deemed purchasable pursuant
to such Chase Stock Option; provided, however, that in the case of any option to
which Section 421 of the Code applies by reason of its qualification under
Section 422 of the Code ("incentive stock options"), the option price, the
number of shares purchasable pursuant to such option and the terms and
conditions of exercise of such option shall be determined in order to comply
with Section 424(a) of the Code. Each holder of a Chase SAR shall be entitled to
that number of stock appreciation rights of Chemical ("Chemical SARs"),
determined in the same manner as set forth above with respect to Chase Stock
Options assumed by Chemical. Each holder of a Chase Unit shall be entitled to
that number of restricted stock units of Chemical determined by multiplying the
number of Chase Units held by such holder immediately prior to the Effective
Time by 1.04.
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(b) As soon as practicable after the Effective Time, Chemical shall deliver
to the holders of Chase Stock Options, Chase SARs and Chase Units appropriate
notices setting forth such holders' rights pursuant to the Chase Plan and the
agreements evidencing the grants of such Chase Stock Options, Chase SARs or
Chase Units, as the case may be, shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 5.8 after giving
effect to the Merger and the assumption by Chemical as set forth above). If
necessary, Chemical shall comply with the terms of the Chase Plan and ensure, to
the extent required by, and subject to the provisions of, such Plan, that Chase
Stock Options which qualified as incentive stock options prior to the Effective
Time continue to qualify as incentive stock options of Chemical after the
Effective Time.
(c) Chemical shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Chemical Common Stock for delivery
upon exercise of Chase Stock Options assumed by it in accordance with this
Section 5.8. As soon as practicable after the Effective Time, Chemical shall
file a registration statement on Form S-3 or Form S-8, as the case may be (or
any successor or other appropriate forms), or another appropriate form with
respect to the shares of Chemical Common Stock subject to such options and shall
use its best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options remain
outstanding. With respect to those individuals who subsequent to the Merger will
be subject to the reporting requirements under Section 16(a) of the Exchange
Act, where applicable, Chemical shall administer the Chase Plan assumed pursuant
to this Section 5.8 in a manner that complies with Rule 16b-3 promulgated under
the Exchange Act to the extent the Chase Plan complied with such rule prior to
the Merger.
5.9. Fees and Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement, the Stock Option
Agreements and the transactions contemplated hereby and thereby shall be paid by
the party incurring such expense, except as otherwise provided in the Stock
Option Agreements and except that (a) if the Merger is consummated, Chemical
shall pay, or cause to be paid, any and all property or transfer taxes imposed
on Chase or its Subsidiaries and any real property transfer or gains tax imposed
on any holder of shares of capital stock of Chase resulting from the Merger and
(b) expenses incurred in connection with filing, printing and mailing the Proxy
Statement and the S-4 shall be shared equally by Chemical and Chase.
5.10. Governance; Name. (a) Chemical's Board of Directors shall take
action to cause the directors comprising the full Board of Directors of the
Surviving Corporation at the Effective Time to be the persons listed in Exhibit
5.10(a). Chemical's Board of Directors shall also take action to cause the
persons indicated in Exhibit 5.10(b) to be elected to the offices specified in
such Exhibit. If, prior to the Effective Time, any of the persons listed in
Exhibit 5.10(a) shall decline or be unable to serve as a director, Chemical (if
such person was so designated by Chemical) or Chase (if such person was so
designated by Chase) shall designate another person to serve in such person's
stead, which person shall be reasonably acceptable to the other party.
(b) As of the Effective Time, the name of the Surviving Corporation shall
be The Chase Manhattan Corporation.
5.11. Indemnification; Directors' and Officers' Insurance. (a) From and
after the Effective Time, the Surviving Corporation shall indemnify, defend and
hold harmless each person who is now, or has been at any time prior to the date
hereof or who becomes prior to the Effective Time, an officer, director or
employee of Chase or any of its Subsidiaries (the "Indemnified Parties") against
(i) all losses, claims, damages, costs, expenses, liabilities or judgments or
amounts that are paid in settlement of or in connection with any claim, action,
suit, proceeding or investigation based in whole or in part on or arising in
whole or in part out of the fact that such person is or was a director, officer
or employee of Chase or any Subsidiary of Chase, whether pertaining to any
matter existing or occurring at or prior to the Effective Time and whether
asserted or claimed prior to, or at or after, the Effective Time ("Indemnified
Liabilities") and (ii) all Indemnified Liabilities based in whole or in part on,
or arising in whole or in part out of, or pertaining to this Agreement or the
transactions contemplated hereby, in each case to the full extent Chase would
have been permitted under Delaware law and its Certificate of Incorporation and
By-laws to indemnify such person (and the Surviving
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Corporation shall pay expenses in advance of the final disposition of any such
action or proceeding to each Indemnified Party to the full extent permitted by
law upon receipt of any undertaking required by Section 145(e) of the DGCL).
Without limiting the foregoing, in the event any such claim, action, suit,
proceeding or investigation is brought against any Indemnified Parties (whether
arising before or after the Effective Time), (i) any counsel retained by the
Indemnified Parties for any period after the Effective Time shall be reasonably
satisfactory to the Surviving Corporation; (ii) after the Effective Time, the
Surviving Corporation shall pay all reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are received; and
(iii) after the Effective Time, the Surviving Corporation will use all
reasonable efforts to assist in the vigorous defense of any such matter,
provided that the Surviving Corporation shall not be liable for any settlement
of any claim effected without its written consent, which consent, however, shall
not be unreasonably withheld. Any Indemnified Party wishing to claim
indemnification under this Section 5.11, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify the Surviving
Corporation (but the failure so to notify the Surviving Corporation shall not
relieve it from any liability which it may have under this Section 5.11 except
to the extent such failure materially prejudices the Surviving Corporation), and
shall deliver to the Surviving Corporation the undertaking, if any, required by
Section 145(e) of the DGCL. The Surviving Corporation shall be liable for the
fees and expenses hereunder with respect to only one law firm, in addition to
local counsel in each applicable jurisdiction, to represent the Indemnified
Parties as a group with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict between the positions
of any two or more Indemnified Parties that would preclude or render inadvisable
joint or multiple representation of such parties.
(b) For a period of six years after the Effective Time, the Surviving
Corporation shall cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by Chase (provided that
the Surviving Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are no less
advantageous) with respect to claims arising from facts or events which occurred
before the Effective Time; provided, however, that the Surviving Corporation
shall not be obligated to make annual premium payments for such insurance to the
extent such premiums exceed 250% of the premiums paid as of the date hereof by
Chase for such insurance ("Chase's Current Premium"), and if such premiums for
such insurance would at any time exceed 250% of Chase's Current Premium, then
the Surviving Corporation shall cause to be maintained policies of insurance
which, in the Surviving Corporation's good faith determination, provide the
maximum coverage available at an annual premium equal to 250% of Chase's Current
Premium. Notwithstanding anything to the contrary contained elsewhere herein,
the Surviving Corporation's indemnity agreement set forth above shall be limited
to cover claims only to the extent that those claims are not covered under
Chase's directors' and officers' insurance policies (or any substitute policies
permitted by this Section 5.11(b)).
(c) In the event Chemical or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties and assets
to any person, then, and in each such case, to the extent necessary, proper
provision shall be made so that the successors and assigns of Chemical assume
the obligations set forth in this section.
(d) The provisions of this Section 5.11 (i) are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his heirs and
his representatives and (ii) are in addition to, and not in substitution for,
any other rights to indemnification or contribution that any such person may
have by contract or otherwise.
5.12. Dividends. After the date of this Agreement, each of Chemical and
Chase shall coordinate with the other the payment of dividends with respect to
the Chemical Common Stock and Chase Common Stock and the record dates and
payment dates relating thereto, it being the intention of the parties hereto
that holders of Chemical Common Stock and Chase Common Stock shall not receive
two dividends, or fail to receive one dividend, for any single calendar quarter
with respect to their shares of Chemical Common Stock and/or Chase Common Stock
or any shares of Chemical Common Stock that any such holder receives in exchange
for such shares of Chase Common Stock in the Merger.
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5.13. Additional Agreements. In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of this
Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of either of
the Constituent Corporations, the proper officers and directors of each party to
this Agreement shall take all such necessary action.
ARTICLE VI
CONDITIONS PRECEDENT
6.1. Conditions to Each Party's Obligation To Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction prior to the Closing Date of the following conditions:
(a) Stockholder Approval. This Agreement shall have been approved and
adopted by the affirmative vote of the holders of a majority of the
outstanding shares of Chase Common Stock, and this Agreement and the
Chemical Common Stock Amendment shall have been approved and adopted by the
affirmative vote of the holders of a majority of the outstanding shares of
Chemical Common Stock.
(b) NYSE Listing. The shares of Chemical Common Stock and of each
series of Chemical Merger Preferred Stock issuable to Chase stockholders
pursuant to this Agreement and such other shares of Chemical Common Stock
required to be reserved for issuance in connection with the Merger shall
have been authorized for listing on the NYSE upon official notice of
issuance.
(c) Other Approvals. Other than the filing provided for by Section
1.1 and any filing pursuant to Article 31-B of the New York Tax Law, all
authorizations, consents, orders or approvals of, or declarations or
filings with, and all expirations of waiting periods imposed by, any
Governmental Entity (all the foregoing, "Consents") which are necessary for
the consummation of the Merger, other than immaterial Consents the failure
to obtain which would have no material adverse effect on the consummation
of the Merger or on the Surviving Corporation, shall have been filed, have
occurred or been obtained (all such permits, approvals, filings and
consents and the lapse of all such waiting periods being referred to as the
"Requisite Regulatory Approvals") and all such Requisite Regulatory
Approvals shall be in full force and effect. Chemical shall have received
all state securities or blue sky permits and other authorizations necessary
to issue the Chemical Common Stock and Chemical Merger Preferred Stock in
exchange for Chase Common Stock and Chase Preferred Stock and to consummate
the Merger.
(d) S-4. The S-4 shall have become effective under the Securities Act
and shall not be the subject of any stop order or proceedings seeking a
stop order.
(e) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint or
prohibition (an "Injunction") preventing the consummation of the Merger
shall be in effect. There shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable
to the Merger, by any Federal or state Governmental Entity which makes the
consummation of the Merger illegal.
(f) Pooling. Chemical and Chase shall each have received letters from
Price Waterhouse LLP to the effect that the Merger qualifies for "pooling
of interests" accounting treatment if consummated in accordance with this
Agreement and such letters shall not have been withdrawn.
(g) Burdensome Condition. There shall not be any action taken, or any
statute, rule, regulation, order or decree enacted, entered, enforced or
deemed applicable to the Merger by any Federal or state Governmental Entity
which, in connection with the grant of a Requisite Regulatory Approval or
otherwise, imposes any condition or restriction (a "Burdensome Condition")
upon the Surviving Corporation or its Subsidiaries which would reasonably
be expected to either (i) have a material adverse effect after the
Effective Time on the present or prospective consolidated financial
condition, business or operating results of the Surviving Corporation, or
(ii) prevent the parties from realizing the major portion
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of the economic benefits of the Merger and the transactions contemplated
thereby (including the merger of Chemical Bank and Chase Bank) that they
currently anticipate obtaining therefrom.
6.2. Conditions to Obligations of Chemical. The obligation of Chemical to
effect the Merger is subject to the satisfaction of the following conditions
unless waived by Chemical:
(a) Representations and Warranties. The representations and
warranties of Chase set forth in this Agreement shall be true and correct
as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date, subject to such
exceptions as do not have, and would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on Chase or on
the Surviving Corporation following the Effective Time, and Chemical shall
have received a certificate signed on behalf of Chase by the Chairman and
Chief Executive Officer or the Vice Chairman and by the Executive Vice
President and Chief Financial Officer of Chase to such effect.
(b) Performance of Obligations of Chase. Chase shall have performed
in all material respects all obligations required to be performed by it
under this Agreement and the Employee Benefits Agreement at or prior to the
Closing Date, and Chemical shall have received a certificate signed on
behalf of Chase by the Chairman and Chief Executive Officer or the Vice
Chairman and by the Executive Vice President and Chief Financial Officer of
Chase to such effect.
(c) Consents Under Agreements. Chase shall have obtained the consent
or approval of each person (other than the Governmental Entities referred
to in Section 6.1(c)) whose consent or approval shall be required in order
to permit the succession by the Surviving Corporation pursuant to the
Merger to any obligation, right or interest of Chase or any Subsidiary of
Chase under any loan or credit agreement, note, mortgage, indenture, lease,
license or other agreement or instrument, except those for which failure to
obtain such consents and approvals would not, individually or in the
aggregate, have a material adverse effect, after the Effective Time, on the
Surviving Corporation.
(d) Rights Agreement. None of the events described in Section
11(a)(ii) or 13 of the Chase Rights Agreement shall have occurred, and the
Chase Rights shall not have become nonredeemable and the Rights shall not
become exercisable for capital stock of Chemical upon consummation of the
Merger.
(e) Tax Opinion. Chemical shall have received the opinion of Simpson
Thacher & Bartlett, counsel to Chemical, dated the Closing Date, to the
effect that (i) the Merger will be treated for Federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code, (ii)
Chemical and Chase will each be a party to that reorganization within the
meaning of Section 368(b) of the Code, (iii) no income, gain or loss will
be recognized for Federal income tax purposes by either Chase or Chemical
as a result of the consummation of the Merger, and (iv) no income, gain or
loss will be recognized for Federal income tax purposes by stockholders of
Chase upon the exchange in the Merger of shares of Chase solely for shares
of Chemical (except to the extent of any cash received in lieu of
fractional shares). In connection with clause (iv) of the foregoing, it
shall not be a requirement of this Section 6.2(e) that counsel opine as to
the Federal income tax treatment of any real property transfer or gains
taxes paid by Chemical pursuant to Section 5.9 of this Agreement.
6.3. Conditions to Obligations of Chase. The obligation of Chase to effect
the Merger is subject to the satisfaction of the following conditions unless
waived by Chase:
(a) Representations and Warranties. The representations and
warranties of Chemical set forth in this Agreement shall be true and
correct as of the date of this Agreement and (except to the extent such
representations speak as of an earlier date) as of the Closing Date as
though made on and as of the Closing Date, subject to such exceptions as do
not have, and would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on Chemical or on the Surviving
Corporation following the Effective Time, and Chase shall have received a
certificate signed on behalf of Chemical by the Chairman and Chief
Executive Officer or the President or Vice Chairman and by the Executive
Vice President and Chief Financial Officer of Chemical to such effect.
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(b) Performance of Obligations of Chemical. Chemical shall have
performed in all material respects all obligations required to be performed
by it under this Agreement and the Employee Benefits Agreement at or prior
to the Closing Date, and Chase shall have received a certificate signed on
behalf of Chemical by the Chairman and Chief Executive Officer or the
President or Vice Chairman and by the Executive Vice President and Chief
Financial Officer of Chemical to such effect.
(c) Consents Under Agreements. Chemical shall have obtained the
consent or approval of each person (other than the Governmental Entities
referred to in Section 6.1(c)) whose consent or approval shall be required
in connection with the transactions contemplated hereby under any loan or
credit agreement, note, mortgage, indenture, lease, license or other
agreement or instrument, except those for which failure to obtain such
consents and approvals would not, individually or in the aggregate, have a
material adverse effect, after the Effective Time, on the Surviving
Corporation.
(d) Rights Agreement. None of the events described in Section
11(a)(ii) or 13 of the Chemical Rights Agreement shall have occurred, and
the Chemical Rights shall not have become nonredeemable and shall not
become nonredeemable upon consummation of the Merger.
(e) Tax Opinion. Chase shall have received the opinion of Sullivan &
Cromwell, counsel to Chase, dated the Closing Date, to the effect that (i)
the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, (ii)
Chemical and Chase will each be a party to that reorganization within the
meaning of Section 368(b) of the Code, (iii) no income, gain or loss will
be recognized for Federal income tax purposes by either Chase or Chemical
as a result of the consummation of the Merger, and (iv) no income, gain or
loss will be recognized for Federal income tax purposes by stockholders of
Chase upon the exchange in the Merger of shares of Chase solely for shares
of Chemical (except to the extent of any cash received in lieu of
fractional shares). In connection with clause (iv) of the foregoing, it
shall not be a requirement of this Section 6.3(e) that counsel opine as to
the Federal income tax treatment of any real property transfer or gains
taxes paid by Chemical pursuant to Section 5.9 of this Agreement.
(f) Authorization of Stock. Subject only to the filing of the
Certificate of Merger and the Certificates of Designations in accordance
with the DGCL, Chemical shall have duly taken all corporate action so that,
when issued, the shares of Chemical Common Stock and Chemical Merger
Preferred Stock to be issued pursuant to Article II shall have been duly
authorized, validly issued, fully paid and non-assessable.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time, by action taken or authorized by the Board of Directors of
the terminating party or parties, whether before or after approval of the
matters presented in connection with the Merger by the stockholders of Chase or
Chemical:
(a) by mutual consent of Chemical and Chase in a written instrument;
(b) by either Chemical or Chase upon written notice to the other party
if the Federal Reserve shall have issued an order denying approval of the
Merger and the other material aspects of the transactions contemplated by
this Agreement (including, without limitation, the merger of Chemical Bank
and Chase Bank) or if any Governmental Entity of competent jurisdiction
shall have issued a final permanent order enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this
Agreement or imposing a Burdensome Condition, and in any such case the time
for appeal or petition for reconsideration of such order shall have expired
without such appeal or petition being granted;
(c) by either Chemical or Chase if the Merger shall not have been
consummated on or before September 30, 1996; or
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(d) by either Chemical or Chase if any approval of the stockholders of
Chase or of Chemical required for the consummation of the Merger shall not
have been obtained by reason of the failure to obtain the required vote at
a duly held meeting of stockholders or at any adjournment thereof.
7.2. Effect of Termination. (a) In the event of termination of this
Agreement by either Chase or Chemical as provided in Section 7.1, this Agreement
shall forthwith become void and there shall be no liability or obligation on the
part of Chemical or Chase or their respective officers or directors except (i)
with respect to Sections 3.1(t) and 3.2(t), the penultimate sentence of Section
5.2, and Section 5.9, and (ii) with respect to any liabilities or damages
incurred or suffered by a party as a result of the wilful breach by the other
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
7.3. Amendment. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after approval of the matters presented in connection with the Merger
by the stockholders of Chase or of Chemical, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
7.4. Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
8.1. Nonsurvival of Representations, Warranties and Agreements. None of
the representations, warranties, covenants and agreements in this Agreement or
in any instrument delivered pursuant to this Agreement (other than the Stock
Option Agreements, which shall terminate in accordance with their terms),
including any rights arising out of any breach of such representations,
warranties, covenants, and agreements, shall survive the Effective Time, except
for those covenants and agreements contained herein and therein that by their
terms apply or are to be performed in whole or in part after the Effective Time.
8.2. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, or by telecopy or telefacsimile, upon confirmation of receipt, (b)
on the first business day following the date of dispatch if delivered by a
recognized next-day courier service, or (c) on the third business day following
the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice.
(a) if to Chemical, to
Chemical Banking Corporation
270 Park Avenue
New York, New York 10017
Attention: General Counsel
Telecopy No.: (212) 270-4288
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with a copy to
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, N.Y. 10017
Attention: Lee Meyerson, Esq.
Telecopy No.: (212) 455-2502
and
(b) if to Chase, to
The Chase Manhattan Corporation
1 Chase Manhattan Plaza
New York, New York 10081
Attention: General Counsel
Telecopy No.: (212) 552-5378
with a copy to
Sullivan & Cromwell
125 Broad Street
New York, N.Y. 10004
Attention: H. Rodgin Cohen, Esq.
Telecopy No.: (212) 558-3588
8.3. Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases "the date of this
Agreement", "the date hereof" and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to August 27, 1995.
8.4. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
8.5. Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. This Agreement (including the documents and the instruments referred
to herein, including the Stock Option Agreements) (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof, other
than the Confidentiality Agreement, which shall survive the execution and
delivery of this Agreement and (b) except as provided in Section 5.11, is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder. The parties hereby acknowledge that, except as otherwise
specifically provided in the Stock Option Agreements or as hereinafter agreed to
in writing, no party shall have the right to acquire or shall be deemed to have
acquired shares of common stock of the other party pursuant to the Merger until
consummation thereof.
8.6. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York, without regard to any
applicable conflicts of law provisions thereof.
8.7. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability and, unless the
effect of such invalidity or unenforceability would prevent the parties from
realizing the major portion of the economic benefits of the Merger that they
currently anticipate obtaining therefrom, shall not
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render invalid or unenforceable the remaining terms and provisions of this
Agreement or affect the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable. For purposes of this Agreement, the term
"major portion" of the economic benefits of the Merger means two-thirds of such
economic benefits.
8.8. Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either of the parties hereto
(whether by operation of law or otherwise) without the prior written consent of
the other party, and any attempt to make any such assignment without such
consent shall be null and void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
IN WITNESS WHEREOF, Chemical and Chase have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of August
27, 1995.
CHEMICAL BANKING CORPORATION
By: /s/ Walter V. Shipley
------------------------------------
Name: Walter V. Shipley
Title: Chairman and Chief
Executive Officer
Attest:
/s/ John B. Wynne
- -----------------------------------
Name: John B. Wynne
Title: Secretary
THE CHASE MANHATTAN CORPORATION
By: /s/ Thomas G. Labrecque
------------------------------------
Name: Thomas G. Labrecque
Title: Chairman and Chief
Executive Officer
Attest:
/s/ L. Edward Shaw, Jr.
- -----------------------------------
Name: L. Edward Shaw, Jr.
Title: Executive Vice President
and General Counsel
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ANNEX II
CONFORMED COPY
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 27, 1995 (the "Agreement"), by
and between CHEMICAL BANKING CORPORATION, a Delaware corporation ("Issuer"), and
THE CHASE MANHATTAN CORPORATION, a Delaware corporation ("Grantee").
WHEREAS, Grantee and Issuer are concurrently herewith entering into an
Agreement and Plan of Merger dated as of the date hereof (the "Merger
Agreement"; capitalized terms not defined herein shall have the meanings set
forth in the Merger Agreement), providing for, among other things, the merger of
Grantee with and into Grantee with Issuer as the surviving corporation;
WHEREAS, as a condition and inducement to Grantee's willingness to enter
into the Merger Agreement and the Chase Stock Option Agreement, Grantee has
requested that Issuer agree, and Issuer has agreed, to grant Grantee the Option
(as defined below); and
WHEREAS, as a condition and inducement to Issuer's willingness to enter
into the Merger Agreement and this Agreement, Issuer has requested that Grantee
agree, and Grantee has agreed, to grant Issuer an option to purchase shares of
Grantee's common stock on substantially the same terms as the Option;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, in the
Merger Agreement and in the Chase Stock Option Agreement, Issuer and Grantee
agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Grantee an irrevocable option (the "Option") to purchase
up to 50,170,882 (as adjusted as set forth herein) shares (the "Option Shares")
of Common Stock, par value $1.00 per share ("Issuer Common Stock"), of Issuer at
a purchase price of $53.50 per Option Share (the "Purchase Price").
2. Exercise of Option. (a) If not in material breach of the Merger
Agreement or the Chase Stock Option Agreement, Grantee may exercise the Option,
in whole or in part, at any time and from time to time following the occurrence
of a Purchase Event (as defined below); provided that, except as provided in the
last sentence of this Section 2(a), the Option shall terminate and be of no
further force and effect upon the earliest to occur of (i) the Effective Time,
(ii) 18 months after the first occurrence of a Purchase Event or (iii)
termination of the Merger Agreement prior to the occurrence of a Purchase Event;
and, provided, further, that any purchase of shares upon exercise of the Option
shall be subject to compliance with applicable law, including the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). Notwithstanding the termination
of the Option, Grantee shall be entitled to purchase those Option Shares with
respect to which it has exercised the Option in accordance with the terms hereof
prior to the termination of the Option. The termination of the Option shall not
affect any rights hereunder which by their terms extend beyond the date of such
termination.
(b) As used herein, a "Purchase Event" means any of the following events:
(i) any person (other than Grantee or any Subsidiary of Grantee) shall
have commenced (as such term is defined in Rule 14d-2 under the Exchange
Act), or shall have filed a registration statement under the Securities Act
with respect to, a tender offer or exchange offer to purchase any shares of
Issuer Common Stock such that, upon consummation of such offer, such person
or a "group" (as such term is defined under the Exchange Act) of which such
person is a member shall have acquired beneficial ownership (as such term
is defined in Rule 13d-3 of the Exchange Act), or the right to acquire
beneficial ownership, of 15% or more of the then outstanding Issuer Common
Stock (any such offer, a "Tender Offer");
(ii) Issuer or any Subsidiary of Issuer shall have authorized,
recommended, proposed or publicly announced an intention to authorize,
recommend or propose, or entered into, an agreement with any
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person (other than Grantee or any Subsidiary of Grantee) to (A) effect a
merger, consolidation or other business combination involving Issuer or any
of its Significant Subsidiaries, (B) sell, lease or otherwise dispose of
assets or deposits of Issuer or its Subsidiaries aggregating 20% or more of
the consolidated assets or deposits of Issuer and its Subsidiaries or (C)
issue, sell or otherwise dispose of (including by way of merger,
consolidation, share exchange or any similar transaction) securities
representing 15% or more of the voting power of Issuer or any of its
Significant Subsidiaries (any of the foregoing an "Acquisition
Transaction");
(iii) any person (other than Grantee or any Subsidiary of Grantee)
shall have acquired beneficial ownership (as such term is defined in Rule
13d-3 under the Exchange Act) or the right to acquire beneficial ownership
of, or any "group" (as such term is defined under the Exchange Act) shall
have been formed which beneficially owns or has the right to acquire
beneficial ownership of, shares of Issuer Common Stock (other than trust
account shares) aggregating 15% or more of the then outstanding Issuer
Common Stock; or
(iv) the holders of Issuer Common Stock shall not have approved the
Merger Agreement at the meeting of such stockholders held for the purpose
of voting on the Merger Agreement, such meeting shall not have been held or
shall have been cancelled prior to termination of the Merger Agreement or
Issuer's Board of Directors shall have withdrawn or modified in a manner
adverse to Grantee or to Grantee's ability to consummate the transactions
contemplated by the Merger Agreement the recommendation of Issuer's Board
of Directors with respect to the Merger Agreement, in each case after any
person (other than Grantee or any Subsidiary of Grantee) shall have (A)
publicly announced a proposal, or publicly disclosed an intention to make a
proposal, to engage in an Acquisition Transaction or (B) filed an
application (or given a notice), whether in draft or final form, under the
BHC Act or the Change in Bank Control Act of 1978 for approval to engage in
an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
(c) In the event Grantee wishes to exercise the Option, it shall send to
Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three business days nor later than 20 business days from the Notice Date for the
closing of such purchase (the "Closing Date"); provided that if the closing of
the purchase and sale pursuant to the Option (the "Closing") cannot be
consummated by reason of any applicable judgment, decree, order, law or
regulation, the period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated; and provided, further, without
limiting the foregoing, that if prior notification to or approval of the Federal
Reserve or any other regulatory authority is required in connection with such
purchase, Grantee shall promptly file the required notice or application for
approval and shall expeditiously process the same (and Issuer shall cooperate
with Grantee in the filing of any such notice or application and the obtaining
of any such approval), and the period of time that otherwise would run pursuant
to this sentence shall run instead from the date on which, as the case may be,
(i) any required notification period has expired or been terminated or (ii) such
approval has been obtained, and in either event, any requisite waiting period
has passed.
(d) Notwithstanding Section 2(c), in no event shall any Closing Date be
more than 18 months after the related Notice Date, and if the Closing Date shall
not have occurred within 18 months after the related Notice Date due to the
failure to obtain any such required approval, the exercise of the Option
effected on the Notice Date shall be deemed to have expired. In the event (i)
Grantee receives official notice that an approval of the Federal Reserve or any
other regulatory authority required for the purchase of Option Shares will not
be issued or granted or (ii) a Closing Date shall not have occurred within 18
months after the related Notice Date due to the failure to obtain any such
required approval, Grantee shall be entitled to exercise its right as set forth
in Section 7 or Section 8, as applicable, or to exercise the Option in
connection with the resale of Issuer Common Stock or other securities pursuant
to a registration statement as provided in Section 10. The provisions of this
Section 2 and Section 3 shall apply with appropriate adjustments to any such
exercise.
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3. Payment and Delivery of Certificates. (a) On each Closing Date, Grantee
shall pay to Issuer in immediately available funds by wire transfer to a bank
account designated by Issuer an amount equal to the Purchase Price multiplied by
the Option Shares to be purchased on such Closing Date.
(b) At each Closing, simultaneously with the delivery of immediately
available funds as provided in Section 3(a), Issuer shall deliver to Grantee a
certificate or certificates representing the Option Shares to be purchased at
such Closing, which Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever, and Grantee shall deliver to
Issuer a letter agreeing that Grantee shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable law or the provisions
of this Agreement. If at the time of issuance of any Option Shares pursuant to
an exercise of all or part of the Option hereunder, Issuer shall not have
redeemed the Chemical Rights, or shall have issued any similar securities, then
each Option Share issued pursuant to such exercise shall also represent a
corresponding Chemical Right or new rights with terms substantially the same as
and at least as favorable to Grantee as are provided under the Chemical Rights
Agreement or any similar agreement then in effect.
(c) Certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF AUGUST 27,
1995. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions arising under
the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably satisfactory to Issuer and its counsel, to the
effect that such legend is not required for purposes of the Securities Act and
(ii) the reference to restrictions pursuant to this Agreement in the above
legend shall be removed by delivery of substitute certificate(s) without such
reference if the Option Shares evidenced by certificate(s) containing such
reference have been sold or transferred in compliance with the provisions of
this Agreement under circumstances that do not require the retention of such
reference.
4. Representations and Warranties of Issuer. Issuer hereby represents and
warrants to Grantee as follows:
(a) Due Authorization. Issuer has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals
referred to herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Issuer. This Agreement has been duly
executed and delivered by Issuer and constitutes a valid and binding
obligation of Issuer, enforceable in accordance with its terms.
(b) Authorized Stock. Issuer has taken all necessary corporate and
other action to authorize and reserve and, subject to obtaining the
governmental and other approvals and consents referred to herein, to permit
it to issue, and, at all times from the date hereof until the obligation to
deliver Issuer Common Stock upon the exercise of the Option terminates,
will have reserved for issuance, upon exercise of the Option, shares of
Issuer Common Stock necessary for Grantee to exercise the Option, and
Issuer will take all necessary corporate action to authorize and reserve
for issuance all additional shares of Issuer Common Stock or other
securities which may be issued pursuant to Section 6 upon exercise of the
Option or any Substitute Option (as hereinafter defined). The shares of
Issuer Common Stock to be issued upon due exercise of the Option, including
all additional shares of Issuer Common Stock or other securities which may
be issuable upon exercise of the Option or any Substitute Option pursuant
to Section 6, upon issuance pursuant hereto, shall be duly and validly
issued, fully paid and nonassessable,
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and shall be delivered free and clear of all liens, claims, charges and
encumbrances of any kind or nature whatsoever, including any preemptive
rights of any stockholder of Issuer.
(c) No Conflicts. Except as disclosed pursuant to the Merger
Agreement, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, conflict
with, or result in any Violation pursuant to any provision of the
Certificate of Incorporation or By-laws of Issuer or any Subsidiary of
Issuer or, subject to obtaining any approvals or consents contemplated
hereby, result in any Violation of any loan or credit agreement, note,
mortgage, indenture, lease, Chemical Benefit Plan or other agreement,
obligation, instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Issuer or any Subsidiary of Issuer or their respective properties or assets
which Violation would, individually or in the aggregate, have a material
adverse effect (as defined in the Merger Agreement) on Issuer.
(d) Board Action. The Board of Directors of Issuer having approved
this Agreement and the consummation of the transactions contemplated
hereby, the provisions of Section 203 of the Delaware General Corporation
Law do not and will not apply to this Agreement or the purchase of shares
of Issuer Common Stock pursuant to this Agreement.
(e) Rights Amendment. The Chemical Rights Agreement has been amended
to provide that Grantee will not become an "Acquiring Person" or an
"Adverse Person" and that no "Triggering Event," "Stock Acquisition Date"
or "Distribution Date" (as such terms are defined in the Chemical Rights
Agreement) will occur as a result of the approval, execution or delivery of
this Agreement or the Merger Agreement or the consummation of the
transactions contemplated hereby and thereby, including the acquisition of
shares of Issuer Common Stock by Grantee pursuant to this Agreement.
5. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer that:
(a) Due Authorization. Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals or
consents referred to herein, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Grantee. This Agreement has been
duly executed and delivered by Grantee and constitutes a valid and binding
obligation of Grantee, enforceable in accordance with its terms.
(b) No Conflicts. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not
result in any Violation pursuant to any provision of the Certificate of
Incorporation or By-laws of Grantee or any Subsidiary of Grantee or,
subject to obtaining any approvals or consents contemplated hereby, result
in any Violation of any loan or credit agreement, note, mortgage,
indenture, lease, Chase Benefit Plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Grantee
or any Subsidiary of Grantee or their respective properties or assets which
Violation, individually or in the aggregate, would have a material adverse
effect on Grantee.
(c) Purchase Not for Distribution. Any Option Shares or other
securities acquired by Grantee upon exercise of the Option will not be
taken with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act.
6. Adjustment upon Changes in Capitalization, etc. (a) In the event of any
change in Issuer Common Stock by reason of a stock dividend, split-up,
recapitalization, combination, exchange of shares or similar transaction, the
type and number of shares or securities subject to the Option, and the Purchase
Price therefor, shall be adjusted appropriately, and proper provision shall be
made in the agreements governing such transaction, so that Grantee shall receive
upon exercise of the Option the number and class of shares or other securities
or property that Grantee would have received in respect of Issuer Common Stock
if the Option had been exercised immediately prior to such event or the record
date therefor, as applicable. If any additional shares of Issuer Common Stock
are issued after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 6(a)), the number of shares of
Issuer Common Stock subject to
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the Option shall be adjusted so that, after such issuance, it equals 19.9% of
the number of shares of Issuer Common Stock then issued and outstanding, without
giving effect to any shares subject to or issued pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of its
Subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person, other than Grantee or one of
its Subsidiaries, to merge into Issuer and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the shares of Issuer
Common Stock outstanding immediately prior to the consummation of such merger
shall be changed into or exchanged for stock or other securities of Issuer or
any other person or cash or any other property, or the shares of Issuer Common
Stock outstanding immediately prior to the consummation of such merger shall
after such merger represent less than 50% of the outstanding voting securities
of the merged company, or (iii) to sell or otherwise transfer all or
substantially all of its assets or deposits to any person, other than Grantee or
one of its Subsidiaries, then, and in each such case, the agreement governing
such transaction shall make proper provisions so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of Grantee, of either (I) the Acquiring Corporation
(as defined below) or (II) any person that controls the Acquiring Corporation
(any such person being referred to as "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option; provided
that the exercise price therefor and number of shares subject thereto shall be
as set forth in this Section 6 and the repurchase rights relating thereto shall
be as set forth in Section 8; provided, further, that the Substitute Option
shall be exercisable immediately upon issuance without the occurrence of a
Purchase Event; and provided, further, that if the terms of the Substitute
Option cannot, for legal reasons, be the same as the Option (subject to the
variations described in the foregoing provisos), such terms shall be as similar
as possible and in no event less advantageous to Grantee. Substitute Option
Issuer shall also enter into an agreement with Grantee in substantially the same
form as this Agreement (subject to the variations described in the foregoing
provisos), which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares of
Substitute Common Stock (as defined below) as is equal to the Assigned Value (as
defined below) multiplied by the number of shares of Issuer Common Stock for
which the Option was theretofore exercisable, divided by the Average Price (as
defined below), rounded up to the nearest whole share. The exercise price per
share of Substitute Common Stock of the Substitute Option (the "Substitute
Option Price") shall then be equal to the Purchase Price multiplied by a
fraction in which the numerator is the number of shares of Issuer Common Stock
for which the Option was theretofore exercisable and the denominator is the
number of shares of Substitute Common Stock for which the Substitute Option is
exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of outstanding Substitute
Common Stock but for the limitation in the first sentence of this Section 6(e),
Substitute Option Issuer shall make a cash payment to Grantee equal to the
excess of (i) the value of the Substitute Option without giving effect to the
limitation in the first sentence of this Section 6(e) over (ii) the value of the
Substitute Option after giving effect to the limitation in the first sentence of
this Section 6(e). This difference in value shall be determined by a nationally
recognized investment banking firm selected by Grantee.
(f) Issuer shall not enter into any transaction described in Section 6(b)
unless the Acquiring Corporation and any person that controls the Acquiring
Corporation assume in writing all the obligations of Issuer hereunder and take
all other actions that may be necessary so that the provisions of this Section 6
are given full force and effect (including, without limitation, any action that
may be necessary so that the holders of the other shares of common stock issued
by Substitute Option Issuer are not entitled to exercise any rights by reason of
the issuance or exercise of the Substitute Option and the shares of Substitute
Common Stock are
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otherwise in no way distinguishable from or have lesser economic value than
other shares of common stock issued by Substitute Option Issuer (other than any
diminution in value resulting from the fact that the shares of Substitute Common
Stock are restricted securities, as defined in Rule 144 under the Securities Act
or any successor provision)).
(g) For purposes hereof, the following terms have the following meanings:
(1) "Acquiring Corporation" means (i) the continuing or surviving
corporation of a consolidation or merger with Issuer (if other than
Issuer), (ii) Issuer in a merger in which Issuer is the continuing or
surviving corporation and (iii) the transferee of all or substantially all
of Issuer's assets or deposits.
(2) "Assigned Value" means the highest of (w) the price per share of
Issuer Common Stock at which a Tender Offer has been made after the date
hereof and prior to the consummation of the consolidation, merger or sale
referred to in Section 6(b), (x) the price per share to be paid by any
third party or the consideration per share to received by holders of Issuer
Common Stock, in each case pursuant to the agreement with Issuer with
respect to the consolidation, merger or sale referred to in Section 6(b),
(y) the highest closing sales price per share for Issuer Common Stock
quoted on the NYSE (or if such Issuer Common Stock is not quoted on the
NYSE, the highest bid price per share as quoted on the National Association
of Securities Dealers Automated Quotation System or, if the shares of
Issuer Common Stock are not quoted thereon, on the principal trading market
on which such shares are traded as reported by a recognized source) during
the 12-month period immediately preceding the consolidation, merger or sale
referred to in Section 6(b) and (z) in the event the transaction referred
to in Section 6(b) is a sale of all or substantially all of Issuer's assets
and/or deposits, an amount equal to (i) the sum of the price paid in such
sale for such assets and/or deposits and the current market value of the
remaining assets of Issuer, as determined by a nationally recognized
investment banking firm selected by Grantee divided by (ii) the number of
shares of Issuer Common Stock outstanding at such time. In the event that a
Tender Offer is made for Issuer Common Stock or an agreement is entered
into for a merger or consolidation involving consideration other than cash,
the value of the securities or other property issuable or deliverable in
exchange for Issuer Common Stock shall be determined by a nationally
recognized investment banking firm selected by Grantee.
(3) "Average Price" means the average closing sales price per share of
a share of Substitute Common Stock quoted on the NYSE (or if such
Substitute Common Stock is not quoted on the NYSE, the highest bid price
per share as quoted on the National Association of Securities Dealers
Automated Quotation System or, if the shares of Substitute Common Stock are
not quoted thereon, on the principal trading market on which such shares
are traded as reported by a recognized source) for the one year immediately
preceding the consolidation, merger or sale in question, but in no event
higher than the closing price of the shares of Substitute Common Stock on
the day preceding such consolidation, merger or sale; provided that if
Substitute Option Issuer is Issuer, the Average Price shall be computed
with respect to a share of common stock issued by Issuer, the person
merging into Issuer or by any company which controls such person, as
Grantee may elect.
(4) "Substitute Common Stock" means the shares of capital stock (or
similar equity interest) with the greatest voting power in respect of the
election of directors (or persons similarly responsible for the direction
of the business and affairs) of the Substitute Option Issuer.
7. Repurchase of Option at the Election of Grantee. (a) At the request of
Grantee at any time commencing (i) upon the first occurrence of a Repurchase
Event (as defined below) and ending 18 months immediately thereafter and (ii)
for 30 business days following the occurrence of either of the events set forth
in clauses (i) and (ii) of Section 2(d) (but solely as to the shares of Issuer
Common Stock with respect to which the required approval was not received),
Issuer (or any successor entity thereof) shall repurchase from Grantee (I) the
Option and (II) all shares of Issuer Common Stock purchased by Grantee pursuant
hereto with respect to which Grantee then has beneficial ownership. The date on
which Grantee exercises its rights
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under this Section 7 is referred to as the "Section 7 Request Date". Such
repurchase shall be at an aggregate price (the "Section 7 Repurchase
Consideration") equal to:
(A) the aggregate Purchase Price paid by Grantee for any shares of
Issuer Common Stock acquired pursuant to the Option with respect to which
Grantee then has beneficial ownership; plus;
(B) the excess, if any, of (x) the Applicable Price (as defined below)
as of the Section 7 Request Date for a share of Issuer Common Stock over
(y) the Purchase Price (subject to adjustment pursuant to Section 6(a)),
multiplied by the number of shares of Issuer Common Stock with respect to
which the Option has not been exercised; plus
(C) the excess, if any, of the Applicable Price as of the Section 7
Request Date over the Purchase Price paid (or, in the case of Option Shares
with respect to which the Option has been exercised but the Closing Date
has not occurred, payable (subject to adjustment pursuant to Section 6(a)))
by Grantee for each share of Issuer Common Stock with respect to which the
Option has been exercised and with respect to which Grantee then has
beneficial ownership, multiplied by the number of such shares; plus
(D) the amount of the documented reasonable out-of-pocket expenses
incurred by Grantee in connection with the Merger Agreement and this
Agreement and the transactions contemplated thereby and hereby, including
reasonable accounting, investment banking and legal fees.
(b) If Grantee exercises its rights under this Section 7, Issuer shall,
within 10 business days after the Section 7 Request Date, pay the Section 7
Repurchase Consideration to Grantee in immediately available funds, and Grantee
shall surrender to Issuer the Option and the certificates evidencing the shares
of Issuer Common Stock purchased hereunder with respect to which Grantee then
has beneficial ownership, and Grantee shall warrant that it has sole record and
beneficial ownership of such shares and that the same are then free and clear of
all liens, claims, charges and encumbrances of any kind whatsoever.
Notwithstanding the foregoing, to the extent that prior notification to or
approval of the Federal Reserve or other regulatory authority is required in
connection with the payment of all or any portion of the Section 7 Repurchase
Consideration, Issuer shall deliver from time to time that portion of the
Section 7 Repurchase Consideration that it is not then so prohibited from paying
and shall promptly provide the required notice or application for approval and
shall expeditiously process the same (and Grantee shall cooperate with Issuer in
the filing of any such notice or application and the obtaining of any such
approval), and the period of time that otherwise would run pursuant to the
preceding sentence for the payment of the portion of the Section 7 Repurchase
Consideration requiring such notification or approval shall run instead from the
date on which, as the case may be, (i) any required notification period has
expired or been terminated or (ii) such approval has been obtained and, in
either event, any requisite waiting period shall have passed. If the Federal
Reserve or any other regulatory authority disapproves of any part of Issuer's
proposed repurchase pursuant to this Section 7, Issuer shall promptly give
notice of such fact to Grantee and redeliver to Grantee the Option Shares it is
then prohibited from repurchasing, and Grantee shall have the right to exercise
the Option as to the number of Option Shares for which the Option was
exercisable at the Section 7 Request Date less the number of shares as to which
payment has been made pursuant to Section 7(a)(B); provided that if the Option
shall have terminated prior to the date of such notice or shall be scheduled to
terminate at any time before the expiration of a period ending on the thirtieth
business day after such date, Grantee shall nonetheless have the right so to
exercise the Option or exercise its rights under Section 10 until the expiration
of such period of 30 business days. Notwithstanding anything herein to the
contrary, Issuer shall not be obligated to repurchase the Option or any shares
of Issuer Common Stock pursuant to this Section 7 on more than one occasion.
(c) For purposes of this Agreement, the "Applicable Price," as of any date,
means the highest of (i) the highest price per share at which a Tender Offer has
been made for shares of Issuer Common Stock after the date hereof and on or
prior to such date, (ii) the price per share to be paid by any third party for
shares of Issuer Common Stock or the consideration per share to be received by
holders of Issuer Common Stock, in each case pursuant to an agreement for a
merger or other business combination transaction with Issuer entered into on or
prior to such date or (iii) the highest closing sales price per share of Issuer
Common Stock quoted on the NYSE (or if Issuer Common Stock is not quoted on the
NYSE, the highest bid price per share as quoted on the National Association of
Securities Dealers Automated Quotations System or, if the shares of
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Issuer Common Stock are not quoted thereon, on the principal trading market on
which such shares are traded as reported by a recognized source) during the 60
business days preceding such date. If the consideration to be offered, paid or
received pursuant to either of the foregoing clauses (i) or (ii) shall be other
than in cash, the value of such consideration shall be determined in good faith
by an independent nationally recognized investment banking firm selected by
Grantee and reasonably acceptable to Issuer, which determination shall be
conclusive for all purposes of this Agreement.
(d) As used herein, a "Repurchase Event" means the occurrence of any of the
Purchase Events specified in Section 2(b)(ii) or (iii).
8. Repurchase of Substitute Option. (a) At the request of Grantee at any
time after issuance of the Substitute Option, Substitute Option Issuer (or any
successor entity thereof) shall repurchase from Grantee (I) the Substitute
Option and (II) all shares of Substitute Common Stock purchased by Grantee
pursuant to such Substitute Option with respect to which Grantee then has
beneficial ownership. The date on which Grantee exercises its rights under this
Section 8 is referred to as the "Section 8 Request Date". Such repurchase shall
be at an aggregate price (the "Section 8 Repurchase Consideration") equal to:
(i) the Substitute Option Price paid by Grantee for any shares of
Substitute Common Stock acquired pursuant to the Substitute Option with
respect to which Grantee then has beneficial ownership; plus
(ii) the excess, if any, of (x) the Highest Closing Price (as defined
below) for a share of Substitute Common Stock over (y) the Substitute
Option Price (subject to adjustment pursuant to Section 6), multiplied by
the number of shares of Substitute Common Stock with respect to which the
Substitute Option has not been exercised; plus
(iii) the excess, if any, of the Highest Closing Price over the
Substitute Option Price paid (or, in the case of Substitute Common Stock
with respect to which the Substitute Option has been exercised but the
Closing Date has not occurred, payable (subject to adjustment pursuant to
Section 6)) by Grantee for each share of Substitute Common Stock with
respect to which the Substitute Option has been exercised and with respect
to which Grantee then has beneficial ownership, multiplied by the number of
such shares; plus
(iv) the amount of the documented reasonable out-of-pocket expenses
incurred by Grantee in connection with the Merger Agreement and this
Agreement and the transactions contemplated thereby and hereby, including
reasonable accounting, investment banking and legal fees.
(b) If Grantee exercises its rights under this Section 8, Substitute Option
Issuer shall, within 10 business days after the Section 8 Request Date, pay the
Section 8 Repurchase Consideration to Grantee in immediately available funds,
and Grantee shall surrender to Substitute Option Issuer the Substitute Option
and the certificates evidencing the shares of Substitute Common Stock purchased
thereunder with respect to which Grantee then has beneficial ownership, and
Grantee shall warrant that it has sole record and beneficial ownership of such
shares and that the same are then free and clear of all liens, claims, charges
and encumbrances of any kind whatsoever. Notwithstanding the foregoing, to the
extent that prior notification to or approval of the Federal Reserve or other
regulatory authority is required in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, Substitute Option Issuer
shall deliver from time to time that portion of the Section 8 Repurchase
Consideration that it is not then so prohibited from paying and shall promptly
provide the required notice or application for approval and shall expeditiously
process the same (and Grantee shall cooperate with Substitute Option Issuer in
the filing of any such notice or application and the obtaining of any such
approval), and the period of time that otherwise would run pursuant to the
preceding sentence for the payment of the portion of the Section 8 Repurchase
Consideration requiring such notification or approval shall run instead from the
date on which, as the case may be, (i) any required notification period has
expired or been terminated or (ii) such approval has been obtained and, in
either event, any requisite waiting period shall have passed. If the Federal
Reserve or any other regulatory authority disapproves of any part of Substitute
Option Issuer's proposed repurchase pursuant to this Section 8, Substitute
Option Issuer shall promptly give notice of such fact to Grantee and redeliver
to Grantee the
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Substitute Common Stock it is then prohibited from repurchasing, and Grantee
shall have the right to exercise the Substitute Option as to the number of
shares of Substitute Common Stock for which the Substitute Option was
exercisable at the Section 8 Request Date; provided that if the Substitute
Option shall have terminated prior to the date of such notice or shall be
scheduled to terminate at any time before the expiration of a period ending on
the thirtieth business day after such date, Grantee shall nonetheless have the
right so to exercise the Substitute Option or exercise its rights under Section
10 until the expiration of such period of 30 business days. Notwithstanding
anything herein to the contrary, Substitute Option Issuer shall not be obligated
to repurchase the Substitute Option or any shares of Substitute Common Stock
pursuant to this Section 8 on more than one occasion.
(c) For purposes of this Agreement, the "Highest Closing Price" means the
highest closing sales price for shares of Substitute Common Stock quoted on the
NYSE (or if the Substitute Common Stock is not quoted on the NYSE, the highest
bid price per share as quoted on the National Association of Securities Dealers
Automated Quotations System or, if the shares of Substitute Common Stock are not
quoted thereon, on the principal trading market on which such shares are traded
as reported by a recognized source) during the six-month period preceding the
Section 8 Request Date.
9. Mandatory Repurchase of Option. (a) In the event that any person who
has participated in a Purchase Event enters into any agreement or understanding
with Grantee with respect to Grantee's exercise of, or its election not to
exercise, any of Grantee's rights set forth in Section 2 or 7 of this Agreement,
Grantee shall, by written notice to Issuer, require that Issuer repurchase, and
Issuer shall repurchase, (I) the Option and (II) all (but not less than all) the
shares of Issuer Common Stock purchased by Grantee pursuant hereto and with
respect to which Grantee then has beneficial ownership; provided, however, that
the parties shall not be obligated to effect such mandatory repurchase if the
Board of Directors of Issuer determines, after having consulted with and
considered the written advice of outside counsel, that such mandatory repurchase
would cause the members of the Board of Directors to breach their fiduciary
duties; and provided, further, that any such determination by the Board of
Directors of Issuer shall not operate to limit Grantee's rights pursuant to
Section 7 hereof. The date of Grantee's written notice referred to above is
referred to as the "Section 9 Notice Date". Such repurchase shall be at an
aggregate price (the "Section 9 Repurchase Consideration") equal to:
(i) the aggregate Purchase Price paid by Grantee for any shares of
Issuer Common Stock acquired pursuant to the Option with respect to which
Grantee then has beneficial ownership; plus
(ii) the excess, if any, of (x) the Applicable Price as of the Section
9 Notice Date for a share of Issuer Common Stock over (y) the Purchase
Price (subject to adjustment pursuant to Section 6(a)), multiplied by the
number of shares of Issuer Common Stock with respect to which the Option
has not been exercised; plus
(iii) the excess, if any, of the Applicable Price as of the Section 9
Notice Date over the Purchase Price paid (or, in the case of Option Shares
with respect to which the Option has been exercised but the Closing Date
has not occurred, payable (subject to adjustment pursuant to Section 6(a)))
by Grantee for each share of Issuer Common Stock with respect to which the
Option has been exercised and with respect to which Grantee then has
beneficial ownership, multiplied by the number of such shares; plus
(iv) the amount of the documented reasonable out-of-pocket expenses
incurred by Grantee in connection with the Merger Agreement and this
Agreement and the transactions contemplated thereby and hereby, including
reasonable accounting, investment banking and legal fees.
(b) Notwithstanding the provisions of Section 9(a), within 30 days
following the Section 9 Notice Date, Grantee may deliver an Offeror's Notice
pursuant to Section 11, in which case the provisions of Section 11 and not those
of this Section 9 shall control. If Grantee does not deliver an Offeror's Notice
within such 30-day period, Issuer shall, within 10 business days after the
expiration of such 30-day period or, if applicable, upon abandonment of the
transaction covered by such Offeror's Notice, pay the Section 9 Repurchase
Consideration in immediately available funds, and Grantee shall surrender to
Issuer the Option and the certificates evidencing the shares of Issuer Common
Stock purchased hereunder with respect to which Grantee then has beneficial
ownership, and Grantee shall warrant that it has sole record and beneficial
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ownership of such shares and that the same are then free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. If the Federal Reserve
or any other regulatory authority disapproves of any part of Issuer's proposed
repurchase pursuant to this Section 9, Issuer shall promptly give notice of such
fact to Grantee and thereafter deliver or cause to be delivered from time to
time to Grantee the portion of the Section 9 Repurchase Consideration that
Issuer is no longer prohibited from delivering, within five business days after
the date on which it is no longer so prohibited.
(c) If, prior to the date which is 18 months after the Section 9 Notice
Date, Issuer enters into, or is the subject of, any transaction which would have
constituted a Repurchase Event hereunder but for the prior repurchase by Issuer
of the Option and shares of Issuer Common Stock under this Section 9, then
concurrently with the occurrence of such event, Issuer shall pay to Grantee, as
additional consideration for the Option and shares of Issuer Common Stock
purchased by Issuer pursuant to this Section, an amount in immediately available
funds equal to the excess, if any, of (i) the Section 9 Repurchase Consideration
calculated as if the Section 9 Notice Date had occurred on the date of such
Repurchase Event over (ii) the amount previously paid by Issuer to Grantee
pursuant to this Section 9.
(d) In the event that Issuer is, as a result of law or regulation,
prohibited from performing any of its obligations under this Section 9, Issuer
shall not thereafter enter into any Acquisition Transaction unless the other
parties thereto agree to assume Issuer's obligations under this Section 9 to the
extent not previously performed. The foregoing sentence shall not operate to
limit or waive any remedies Grantee may have against Issuer for Issuer's failure
to perform its obligations under this Section 9.
10. Registration Rights. Issuer shall, if requested by Grantee at any time
and from time to time (a) within three years of the first exercise of the Option
or (b) for 30 business days following the occurrence of either of the events set
forth in clauses (i) and (ii) of Section 2(d) or receipt by Grantee of official
notice that an approval of the Federal Reserve or any other regulatory authority
required for a repurchase as contemplated hereby would not be issued or granted
(but solely as to the securities or portion of the Option with respect to which
the required approval was not received), as expeditiously as possible prepare
and file up to two registration statements under the Securities Act if such
registration is necessary in order to permit the sale or other disposition of
any or all shares of securities that have been acquired by or are issuable to
Grantee upon exercise of the Option in accordance with the intended method of
sale or other disposition stated by Grantee, including a "shelf' registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other securities
under any applicable state securities laws. Grantee agrees to use all reasonable
efforts to cause, and to cause any underwriters of any sale or other disposition
to cause, any sale or other disposition pursuant to such registration statement
to be effected on a widely distributed basis so that upon consummation thereof
no purchaser or transferee shall own beneficially more than 2% of the then
outstanding voting power of Issuer. Issuer shall use all reasonable efforts to
cause each such registration statement to become effective, to obtain all
consents or waivers of other parties which are required therefor and to keep
such registration statement effective for such period not in excess of 180 days
from the day such registration statement first becomes effective as may be
reasonably necessary to effect such sale or other disposition. In the event that
Grantee requests Issuer to file a registration statement following the failure
to obtain a required approval for an exercise of the Option as described in
Section 2(d), the closing of the sale or other disposition of Issuer Common
Stock or other securities pursuant to such registration statement shall occur
substantially simultaneously with the exercise of the Option. The obligations of
Issuer hereunder to file a registration statement and to maintain its
effectiveness may be suspended for one or more periods of time not exceeding 60
days in the aggregate if the Board of Directors of Issuer shall have determined
that the filing of such registration statement or the maintenance of its
effectiveness would require disclosure of nonpublic information that would
materially and adversely affect Issuer. Any registration statement prepared and
filed under this Section 10, and any sale covered thereby, shall be at Issuer's
expense except for underwriting discounts or commissions, brokers' fees and the
fees and disbursements of Grantee's counsel related thereto. Grantee shall
provide all information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder. If during the time periods
referred to in the first sentence of this Section 10 Issuer effects a
registration under the Securities Act of Issuer Common Stock for its own account
or for any other stockholders of Issuer (other than on Form S-4 or Form S-8, or
any successor form),
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it shall allow Grantee the right to participate in such registration, and such
participation shall not affect the obligation of Issuer to effect two
registration statements for Grantee under this Section 10; provided that, if the
managing underwriters of such offering advise Issuer in writing that in their
opinion the number of shares of Issuer Common Stock requested to be included in
such registration exceeds the number which can be sold in such offering, Issuer
shall include the shares requested to be included therein by Grantee pro rata
with the shares intended to be included therein by Issuer. In connection with
any registration pursuant to this Section 10, Issuer and Grantee shall provide
each other and any underwriter of the offering with customary representations,
warranties, covenants, indemnification and contribution in connection with such
registration.
11. First Refusal. At any time after the first occurrence of a Purchase
Event and prior to the later of (a) the expiration of 24 months immediately
following the first purchase of shares of Issuer Common Stock pursuant to the
Option and (b) the termination of the Option pursuant to Section 2(a), if
Grantee shall desire to sell, assign, transfer or otherwise dispose of all or
any of the Option or the shares of Issuer Common Stock or other securities
acquired by it pursuant to the Option, it shall give Issuer written notice of
the proposed transaction (an "Offeror's Notice"), identifying the proposed
transferee, accompanied by a copy of a binding offer to purchase the Option or
such shares or other securities signed by such transferee and setting forth the
terms of the proposed transaction. An Offeror's Notice shall be deemed an offer
by Grantee to Issuer, which may be accepted within 10 business days of the
receipt of such Offeror's Notice, on the same terms and conditions and at the
same price at which Grantee is proposing to transfer the Option or such shares
or other securities to such transferee. The purchase of the Option or any such
shares or other securities by Issuer shall be settled within 10 business days of
the date of the acceptance of the offer and the purchase price shall be paid to
Grantee in immediately available funds; provided that, if prior notification to
or approval of the Federal Reserve or any other regulatory authority is required
in connection with such purchase, Issuer shall promptly file the required notice
or application for approval and shall expeditiously process the same (and
Grantee shall cooperate with Issuer in the filing of any such notice or
application and the obtaining of any such approval) and the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which, as the case may be, (a) any required notification period has expired or
been terminated or (b) such approval has been obtained and, in either event, any
requisite waiting period shall have passed. In the event of the failure or
refusal of Issuer to purchase all of the Option or all of the shares or other
securities covered by an Offeror's Notice or if the Federal Reserve or any other
regulatory authority disapproves Issuer's proposed purchase of any portion of
the Option or such shares or other securities, Grantee may, within 60 days from
the date of the Offeror's Notice (subject to any necessary extension for
regulatory notification, approval or waiting periods), sell all, but not less
than all, of such portion of the Option or such shares or other securities to
the proposed transferee at no less than the price specified and on terms no more
favorable than those set forth in the Offeror's Notice. The requirements of this
Section 11 shall not apply to (w) any disposition as a result of which the
proposed transferee would own beneficially not more than 2% of the outstanding
voting power of Issuer, (x) any disposition of Issuer Common Stock or other
securities by a person to whom Grantee has assigned its rights under the Option
with the consent of Issuer, (y) any sale by means of a public offering
registered under the Securities Act in which steps are taken to reasonably
assure that no purchaser will acquire securities representing more than 2% of
the outstanding voting power of Issuer or (z) any transfer to a wholly owned
Subsidiary of Grantee which agrees in writing to be bound by the terms hereof.
12. Listing. If Issuer Common Stock or any other securities to be acquired
upon exercise of the Option are then listed on the NYSE, Issuer, upon the
request of Grantee, will promptly file an application to list the shares of
Issuer Common Stock or other securities to be acquired upon exercise of the
Option on the NYSE and will use its best efforts to obtain approval of such
listing as soon as practicable.
13. Division of Option. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of Grantee, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of
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loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement, if mutilated, Issuer will execute
and deliver a new Agreement of like tenor and date. Any such new Agreement
executed and delivered shall constitute an additional contractual obligation on
the part of Issuer, whether or not the Agreement so lost, stolen, destroyed or
mutilated shall at any time be enforceable by anyone.
14. Miscellaneous. (a) Expenses. Except as otherwise provided in Sections
7, 8, 9 and 10, each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision. This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. Except as
otherwise set forth in the Merger Agreement, this Agreement (including the
Merger Agreement and the other documents and instruments referred to herein) (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or a federal or state regulatory agency to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
regulatory agency determines that the Option does not permit Grantee to acquire,
or does not require Issuer to repurchase, the full number of shares of Issuer
Common Stock or Substitute Common Stock as provided in Sections 2, 7 and 8 (as
adjusted pursuant to Section 6), it is the express intention of Issuer to allow
Grantee to acquire or to require Issuer to repurchase such lesser number of
shares as may be permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to any
applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Grantee to:
The Chase Manhattan Corporation
1 Chase Manhattan Plaza
New York, New York 10081
Attention: General Counsel
Telecopier No.: (212) 552-5378
with a copy to:
H. Rodgin Cohen, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopier No.: (212) 558-3588
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If to Issuer to:
Chemical Banking Corporation
270 Park Avenue
New York, New York 10017
Attention: General Counsel
Telecopier No.: (212) 270-4288
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Lee Meyerson, Esq.
Telecopier No.: (212) 455-2502
(g) Counterparts. This Agreement and any amendments hereto may be executed
in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned Subsidiary of Grantee and that Grantee may assign
all or part of its rights hereunder to any person after the occurrence of a
Purchase Event. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
(i) Further Assurances. In the event of any exercise of the Option by
Grantee, Issuer and Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this Agreement may
be enforced by either party through specific performance, injunctive relief and
other equitable relief. Both parties further agree to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized as
of the day and year first written above.
THE CHASE MANHATTAN CORPORATION
by /s/ Thomas G. Labrecque
------------------------------------
Name: Thomas G. Labrecque
Title: Chairman and Chief
Executive Officer
CHEMICAL BANKING CORPORATION
by /s/ Walter V. Shipley
------------------------------------
Name: Walter V. Shipley
Title: Chairman and Chief
Executive Officer
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ANNEX III
CONFORMED COPY
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 27, 1995 (the "Agreement"), by
and between THE CHASE MANHATTAN CORPORATION, a Delaware corporation ("Issuer"),
and CHEMICAL BANKING CORPORATION, a Delaware corporation ("Grantee").
WHEREAS, Grantee and Issuer are concurrently herewith entering into an
Agreement and Plan of Merger dated as of the date hereof (the "Merger
Agreement"; capitalized terms not defined herein shall have the meanings set
forth in the Merger Agreement), providing for, among other things, the merger of
Issuer with and into Grantee with Grantee as the surviving corporation;
WHEREAS, as a condition and inducement to Grantee's willingness to enter
into the Merger Agreement and the Chemical Stock Option Agreement, Grantee has
requested that Issuer agree, and Issuer has agreed, to grant Grantee the Option
(as defined below); and
WHEREAS, as a condition and inducement to Issuer's willingness to enter
into the Merger Agreement and this Agreement, Issuer has requested that Grantee
agree, and Grantee has agreed, to grant Issuer an option to purchase shares of
Grantee's common stock on substantially the same terms as the Option;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, in the
Merger Agreement and in the Chemical Stock Option Agreement, Issuer and Grantee
agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Grantee an irrevocable option (the "Option") to purchase
up to 34,551,183 (as adjusted as set forth herein) shares (the "Option Shares")
of Common Stock, par value $2.00 per share ("Issuer Common Stock"), of Issuer at
a purchase price of $51.875 per Option Share (the "Purchase Price").
2. Exercise of Option. (a) If not in material breach of the Merger
Agreement or the Chemical Stock Option Agreement, Grantee may exercise the
Option, in whole or in part, at any time and from time to time following the
occurrence of a Purchase Event (as defined below); provided that, except as
provided in the last sentence of this Section 2(a), the Option shall terminate
and be of no further force and effect upon the earliest to occur of (i) the
Effective Time, (ii) 18 months after the first occurrence of a Purchase Event or
(iii) termination of the Merger Agreement prior to the occurrence of a Purchase
Event; and, provided, further, that any purchase of shares upon exercise of the
Option shall be subject to compliance with applicable law, including the Bank
Holding Company Act of 1956, as amended (the "BHC Act"). Notwithstanding the
termination of the Option, Grantee shall be entitled to purchase those Option
Shares with respect to which it has exercised the Option in accordance with the
terms hereof prior to the termination of the Option. The termination of the
Option shall not affect any rights hereunder which by their terms extend beyond
the date of such termination.
(b) As used herein, a "Purchase Event" means any of the following events:
(i) any person (other than Grantee or any Subsidiary of Grantee) shall
have commenced (as such term is defined in Rule 14d-2 under the Exchange
Act), or shall have filed a registration statement under the Securities Act
with respect to, a tender offer or exchange offer to purchase any shares of
Issuer Common Stock such that, upon consummation of such offer, such person
or a "group" (as such term is defined under the Exchange Act) of which such
person is a member shall have acquired beneficial ownership (as such term
is defined in Rule 13d-3 of the Exchange Act), or the right to acquire
beneficial ownership, of 15% or more of the then outstanding Issuer Common
Stock (any such offer, a "Tender Offer");
(ii) Issuer or any Subsidiary of Issuer shall have authorized,
recommended, proposed or publicly announced an intention to authorize,
recommend or propose, or entered into, an agreement with any person (other
than Grantee or any Subsidiary of Grantee) to (A) effect a merger,
consolidation or other business combination involving Issuer or any of its
Significant Subsidiaries, (B) sell, lease or otherwise dispose of assets or
deposits of Issuer or its Subsidiaries aggregating 20% or more of the
consolidated
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assets or deposits of Issuer and its Subsidiaries or (C) issue, sell or
otherwise dispose of (including by way of merger, consolidation, share
exchange or any similar transaction) securities representing 15% or more of
the voting power of Issuer or any of its Significant Subsidiaries (any of
the foregoing an "Acquisition Transaction");
(iii) any person (other than Grantee or any Subsidiary of Grantee)
shall have acquired beneficial ownership (as such term is defined in Rule
13d-3 under the Exchange Act) or the right to acquire beneficial ownership
of, or any "group" (as such term is defined under the Exchange Act) shall
have been formed which beneficially owns or has the right to acquire
beneficial ownership of, shares of Issuer Common Stock (other than trust
account shares) aggregating 15% or more of the then outstanding Issuer
Common Stock; or
(iv) the holders of Issuer Common Stock shall not have approved the
Merger Agreement at the meeting of such stockholders held for the purpose
of voting on the Merger Agreement, such meeting shall not have been held or
shall have been cancelled prior to termination of the Merger Agreement or
Issuer's Board of Directors shall have withdrawn or modified in a manner
adverse to Grantee or to Grantee's ability to consummate the transactions
contemplated by the Merger Agreement the recommendation of Issuer's Board
of Directors with respect to the Merger Agreement, in each case after any
person (other than Grantee or any Subsidiary of Grantee) shall have (A)
publicly announced a proposal, or publicly disclosed an intention to make a
proposal, to engage in an Acquisition Transaction or (B) filed an
application (or given a notice), whether in draft or final form, under the
BHC Act or the Change in Bank Control Act of 1978 for approval to engage in
an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
(c) In the event Grantee wishes to exercise the Option, it shall send to
Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three business days nor later than 20 business days from the Notice Date for the
closing of such purchase (the "Closing Date"); provided that if the closing of
the purchase and sale pursuant to the Option (the "Closing") cannot be
consummated by reason of any applicable judgment, decree, order, law or
regulation, the period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated; and provided, further, without
limiting the foregoing, that if prior notification to or approval of the Federal
Reserve or any other regulatory authority is required in connection with such
purchase, Grantee shall promptly file the required notice or application for
approval and shall expeditiously process the same (and Issuer shall cooperate
with Grantee in the filing of any such notice or application and the obtaining
of any such approval), and the period of time that otherwise would run pursuant
to this sentence shall run instead from the date on which, as the case may be,
(i) any required notification period has expired or been terminated or (ii) such
approval has been obtained, and in either event, any requisite waiting period
has passed.
(d) Notwithstanding Section 2(c), in no event shall any Closing Date be
more than 18 months after the related Notice Date, and if the Closing Date shall
not have occurred within 18 months after the related Notice Date due to the
failure to obtain any such required approval, the exercise of the Option
effected on the Notice Date shall be deemed to have expired. In the event (i)
Grantee receives official notice that an approval of the Federal Reserve or any
other regulatory authority required for the purchase of Option Shares will not
be issued or granted or (ii) a Closing Date shall not have occurred within 18
months after the related Notice Date due to the failure to obtain any such
required approval, Grantee shall be entitled to exercise its right as set forth
in Section 7 or Section 8, as applicable, or to exercise the Option in
connection with the resale of Issuer Common Stock or other securities pursuant
to a registration statement as provided in Section 10. The provisions of this
Section 2 and Section 3 shall apply with appropriate adjustments to any such
exercise.
3. Payment and Delivery of Certificates. (a) On each Closing Date, Grantee
shall pay to Issuer in immediately available funds by wire transfer to a bank
account designated by Issuer an amount equal to the Purchase Price multiplied by
the Option Shares to be purchased on such Closing Date.
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(b) At each Closing, simultaneously with the delivery of immediately
available funds as provided in Section 3(a), Issuer shall deliver to Grantee a
certificate or certificates representing the Option Shares to be purchased at
such Closing, which Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever, and Grantee shall deliver to
Issuer a letter agreeing that Grantee shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable law or the provisions
of this Agreement. If at the time of issuance of any Option Shares pursuant to
an exercise of all or part of the Option hereunder, Issuer shall not have
redeemed the Chase Rights, or shall have issued any similar securities, then
each Option Share issued pursuant to such exercise shall also represent a
corresponding Chase Right or new rights with terms substantially the same as and
at least as favorable to Grantee as are provided under the Chase Rights
Agreement or any similar agreement then in effect.
(c) Certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF
AUGUST 27, 1995. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER
HEREOF WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN
REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions arising under
the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably satisfactory to Issuer and its counsel, to the
effect that such legend is not required for purposes of the Securities Act and
(ii) the reference to restrictions pursuant to this Agreement in the above
legend shall be removed by delivery of substitute certificate(s) without such
reference if the Option Shares evidenced by certificate(s) containing such
reference have been sold or transferred in compliance with the provisions of
this Agreement under circumstances that do not require the retention of such
reference.
4. Representations and Warranties of Issuer. Issuer hereby represents and
warrants to Grantee as follows:
(a) Due Authorization. Issuer has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals
referred to herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Issuer. This Agreement has been duly
executed and delivered by Issuer and constitutes a valid and binding
obligation of Issuer, enforceable in accordance with its terms.
(b) Authorized Stock. Issuer has taken all necessary corporate and
other action to authorize and reserve and, subject to obtaining the
governmental and other approvals and consents referred to herein, to permit
it to issue, and, at all times from the date hereof until the obligation to
deliver Issuer Common Stock upon the exercise of the Option terminates,
will have reserved for issuance, upon exercise of the Option, shares of
Issuer Common Stock necessary for Grantee to exercise the Option, and
Issuer will take all necessary corporate action to authorize and reserve
for issuance all additional shares of Issuer Common Stock or other
securities which may be issued pursuant to Section 6 upon exercise of the
Option or any Substitute Option (as hereinafter defined). The shares of
Issuer Common Stock to be issued upon due exercise of the Option, including
all additional shares of Issuer Common Stock or other securities which may
be issuable upon exercise of the Option or any Substitute Option pursuant
to Section 6, upon issuance pursuant hereto, shall be duly and validly
issued, fully paid and nonassessable, and shall be delivered free and clear
of all liens, claims, charges and encumbrances of any kind or nature
whatsoever, including any preemptive rights of any stockholder of Issuer.
(c) No Conflicts. Except as disclosed pursuant to the Merger
Agreement, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will
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not, conflict with, or result in any Violation pursuant to any provision of
the Certificate of Incorporation or By-laws of Issuer or any Subsidiary of
Issuer or, subject to obtaining any approvals or consents contemplated
hereby, result in any Violation of any loan or credit agreement, note,
mortgage, indenture, lease, Chase Benefit Plan or other agreement,
obligation, instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Issuer or any Subsidiary of Issuer or their respective properties or assets
which Violation would, individually or in the aggregate, have a material
adverse effect (as defined in the Merger Agreement) on Issuer.
(d) Board Action. The Board of Directors of Issuer having approved
this Agreement and the consummation of the transactions contemplated
hereby, the provisions of Section 203 of the Delaware General Corporation
Law and the provisions of Section 8.01 of Issuer's Certificate of
Incorporation do not and will not apply to this Agreement or the purchase
of shares of Issuer Common Stock pursuant to this Agreement.
(e) Rights Amendment. The Chase Rights Agreement has been amended to
provide that Grantee will not become an "Acquiring Person" and that no
"Triggering Event," "Stock Acquisition Date" or "Distribution Date" (as
such terms are defined in the Chase Rights Agreement) will occur as a
result of the approval, execution or delivery of this Agreement or the
Merger Agreement or the consummation of the transactions contemplated
hereby and thereby, including the acquisition of shares of Issuer Common
Stock by Grantee pursuant to this Agreement.
5. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer that:
(a) Due Authorization. Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals or
consents referred to herein, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Grantee. This Agreement has been
duly executed and delivered by Grantee and constitutes a valid and binding
obligation of Grantee, enforceable in accordance with its terms.
(b) No Conflicts. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not
result in any Violation pursuant to any provision of the Certificate of
Incorporation or By-laws of Grantee or any Subsidiary of Grantee or,
subject to obtaining any approvals or consents contemplated hereby, result
in any Violation of any loan or credit agreement, note, mortgage,
indenture, lease, Chemical Benefit Plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Grantee
or any Subsidiary of Grantee or their respective properties or assets which
Violation, individually or in the aggregate, would have a material adverse
effect on Grantee.
(c) Purchase Not for Distribution. Any Option Shares or other
securities acquired by Grantee upon exercise of the Option will not be
taken with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act.
6. Adjustment upon Changes in Capitalization, etc. (a) In the event of any
change in Issuer Common Stock by reason of a stock dividend, split-up,
recapitalization, combination, exchange of shares or similar transaction, the
type and number of shares or securities subject to the Option, and the Purchase
Price therefor, shall be adjusted appropriately, and proper provision shall be
made in the agreements governing such transaction, so that Grantee shall receive
upon exercise of the Option the number and class of shares or other securities
or property that Grantee would have received in respect of Issuer Common Stock
if the Option had been exercised immediately prior to such event or the record
date therefor, as applicable. If any additional shares of Issuer Common Stock
are issued after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 6(a)), the number of shares of
Issuer Common Stock subject to the Option shall be adjusted so that, after such
issuance, it equals 19.9% of the number of shares of Issuer Common Stock then
issued and outstanding, without giving effect to any shares subject to or issued
pursuant to the Option.
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(b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of its
Subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person, other than Grantee or one of
its Subsidiaries, to merge into Issuer and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the shares of Issuer
Common Stock outstanding immediately prior to the consummation of such merger
shall be changed into or exchanged for stock or other securities of Issuer or
any other person or cash or any other property, or the shares of Issuer Common
Stock outstanding immediately prior to the consummation of such merger shall
after such merger represent less than 50% of the outstanding voting securities
of the merged company, or (iii) to sell or otherwise transfer all or
substantially all of its assets or deposits to any person, other than Grantee or
one of its Subsidiaries, then, and in each such case, the agreement governing
such transaction shall make proper provisions so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of Grantee, of either (I) the Acquiring Corporation
(as defined below) or (II) any person that controls the Acquiring Corporation
(any such person being referred to as "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option; provided
that the exercise price therefor and number of shares subject thereto shall be
as set forth in this Section 6 and the repurchase rights relating thereto shall
be as set forth in Section 8; provided, further, that the Substitute Option
shall be exercisable immediately upon issuance without the occurrence of a
Purchase Event; and provided, further, that if the terms of the Substitute
Option cannot, for legal reasons, be the same as the Option (subject to the
variations described in the foregoing provisos), such terms shall be as similar
as possible and in no event less advantageous to Grantee. Substitute Option
Issuer shall also enter into an agreement with Grantee in substantially the same
form as this Agreement (subject to the variations described in the foregoing
provisos), which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares of
Substitute Common Stock (as defined below) as is equal to the Assigned Value (as
defined below) multiplied by the number of shares of Issuer Common Stock for
which the Option was theretofore exercisable, divided by the Average Price (as
defined below), rounded up to the nearest whole share. The exercise price per
share of Substitute Common Stock of the Substitute Option (the "Substitute
Option Price") shall then be equal to the Purchase Price multiplied by a
fraction in which the numerator is the number of shares of Issuer Common Stock
for which the Option was theretofore exercisable and the denominator is the
number of shares of Substitute Common Stock for which the Substitute Option is
exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of outstanding Substitute
Common Stock but for the limitation in the first sentence of this Section 6(e),
Substitute Option Issuer shall make a cash payment to Grantee equal to the
excess of (i) the value of the Substitute Option without giving effect to the
limitation in the first sentence of this Section 6(e) over (ii) the value of the
Substitute Option after giving effect to the limitation in the first sentence of
this Section 6(e). This difference in value shall be determined by a nationally
recognized investment banking firm selected by Grantee.
(f) Issuer shall not enter into any transaction described in Section 6(b)
unless the Acquiring Corporation and any person that controls the Acquiring
Corporation assume in writing all the obligations of Issuer hereunder and take
all other actions that may be necessary so that the provisions of this Section 6
are given full force and effect (including, without limitation, any action that
may be necessary so that the holders of the other shares of common stock issued
by Substitute Option Issuer are not entitled to exercise any rights by reason of
the issuance or exercise of the Substitute Option and the shares of Substitute
Common Stock are otherwise in no way distinguishable from or have lesser
economic value than other shares of common stock issued by Substitute Option
Issuer (other than any diminution in value resulting from the fact that the
shares of Substitute Common Stock are restricted securities, as defined in Rule
144 under the Securities Act or any successor provision)).
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(g) For purposes hereof, the following terms have the following meanings:
(1) "Acquiring Corporation" means (i) the continuing or surviving
corporation of a consolidation or merger with Issuer (if other than
Issuer), (ii) Issuer in a merger in which Issuer is the continuing or
surviving corporation and (iii) the transferee of all or substantially all
of Issuer's assets or deposits.
(2) "Assigned Value" means the highest of (w) the price per share of
Issuer Common Stock at which a Tender Offer has been made after the date
hereof and prior to the consummation of the consolidation, merger or sale
referred to in Section 6(b), (x) the price per share to be paid by any
third party or the consideration per share to received by holders of Issuer
Common Stock, in each case pursuant to the agreement with Issuer with
respect to the consolidation, merger or sale referred to in Section 6(b),
(y) the highest closing sales price per share for Issuer Common Stock
quoted on the NYSE (or if such Issuer Common Stock is not quoted on the
NYSE, the highest bid price per share as quoted on the National Association
of Securities Dealers Automated Quotation System or, if the shares of
Issuer Common Stock are not quoted thereon, on the principal trading market
on which such shares are traded as reported by a recognized source) during
the 12-month period immediately preceding the consolidation, merger or sale
referred to in Section 6(b) and (z) in the event the transaction referred
to in Section 6(b) is a sale of all or substantially all of Issuer's assets
and/or deposits, an amount equal to (i) the sum of the price paid in such
sale for such assets and/or deposits and the current market value of the
remaining assets of Issuer, as determined by a nationally recognized
investment banking firm selected by Grantee divided by (ii) the number of
shares of Issuer Common Stock outstanding at such time. In the event that a
Tender Offer is made for Issuer Common Stock or an agreement is entered
into for a merger or consolidation involving consideration other than cash,
the value of the securities or other property issuable or deliverable in
exchange for Issuer Common Stock shall be determined by a nationally
recognized investment banking firm selected by Grantee.
(3) "Average Price" means the average closing sales price per share of
a share of Substitute Common Stock quoted on the NYSE (or if such
Substitute Common Stock is not quoted on the NYSE, the highest bid price
per share as quoted on the National Association of Securities Dealers
Automated Quotation System or, if the shares of Substitute Common Stock are
not quoted thereon, on the principal trading market on which such shares
are traded as reported by a recognized source) for the one year immediately
preceding the consolidation, merger or sale in question, but in no event
higher than the closing price of the shares of Substitute Common Stock on
the day preceding such consolidation, merger or sale; provided that if
Substitute Option Issuer is Issuer, the Average Price shall be computed
with respect to a share of common stock issued by Issuer, the person
merging into Issuer or by any company which controls such person, as
Grantee may elect.
(4) "Substitute Common Stock" means the shares of capital stock (or
similar equity interest) with the greatest voting power in respect of the
election of directors (or persons similarly responsible for the direction
of the business and affairs) of the Substitute Option Issuer.
7. Repurchase of Option at the Election of Grantee. (a) At the request of
Grantee at any time commencing (i) upon the first occurrence of a Repurchase
Event (as defined below) and ending 18 months immediately thereafter and (ii)
for 30 business days following the occurrence of either of the events set forth
in clauses (i) and (ii) of Section 2(d) (but solely as to the shares of Issuer
Common Stock with respect to which the required approval was not received),
Issuer (or any successor entity thereof) shall repurchase from Grantee (I) the
Option and (II) all shares of Issuer Common Stock purchased by Grantee pursuant
hereto with respect to which Grantee then has beneficial ownership. The date on
which Grantee exercises its rights under this Section 7 is referred to as the
"Section 7 Request Date". Such repurchase shall be at an aggregate price (the
"Section 7 Repurchase Consideration") equal to:
(A) the aggregate Purchase Price paid by Grantee for any shares of
Issuer Common Stock acquired pursuant to the Option with respect to which
Grantee then has beneficial ownership; plus
(B) the excess, if any, of (x) the Applicable Price (as defined below)
as of the Section 7 Request Date for a share of Issuer Common Stock over
(y) the Purchase Price (subject to adjustment pursuant to
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Section 6(a)), multiplied by the number of shares of Issuer Common Stock
with respect to which the Option has not been exercised; plus
(C) the excess, if any, of the Applicable Price as of the Section 7
Request Date over the Purchase Price paid (or, in the case of Option Shares
with respect to which the Option has been exercised but the Closing Date
has not occurred, payable (subject to adjustment pursuant to Section 6(a)))
by Grantee for each share of Issuer Common Stock with respect to which the
Option has been exercised and with respect to which Grantee then has
beneficial ownership, multiplied by the number of such shares; plus
(D) the amount of the documented reasonable out-of-pocket expenses
incurred by Grantee in connection with the Merger Agreement and this
Agreement and the transactions contemplated thereby and hereby, including
reasonable accounting, investment banking and legal fees.
(b) If Grantee exercises its rights under this Section 7, Issuer shall,
within 10 business days after the Section 7 Request Date, pay the Section 7
Repurchase Consideration to Grantee in immediately available funds, and Grantee
shall surrender to Issuer the Option and the certificates evidencing the shares
of Issuer Common Stock purchased hereunder with respect to which Grantee then
has beneficial ownership, and Grantee shall warrant that it has sole record and
beneficial ownership of such shares and that the same are then free and clear of
all liens, claims, charges and encumbrances of any kind whatsoever.
Notwithstanding the foregoing, to the extent that prior notification to or
approval of the Federal Reserve or other regulatory authority is required in
connection with the payment of all or any portion of the Section 7 Repurchase
Consideration, Issuer shall deliver from time to time that portion of the
Section 7 Repurchase Consideration that it is not then so prohibited from paying
and shall promptly provide the required notice or application for approval and
shall expeditiously process the same (and Grantee shall cooperate with Issuer in
the filing of any such notice or application and the obtaining of any such
approval), and the period of time that otherwise would run pursuant to the
preceding sentence for the payment of the portion of the Section 7 Repurchase
Consideration requiring such notification or approval shall run instead from the
date on which, as the case may be, (i) any required notification period has
expired or been terminated or (ii) such approval has been obtained and, in
either event, any requisite waiting period shall have passed. If the Federal
Reserve or any other regulatory authority disapproves of any part of Issuer's
proposed repurchase pursuant to this Section 7, Issuer shall promptly give
notice of such fact to Grantee and redeliver to Grantee the Option Shares it is
then prohibited from repurchasing, and Grantee shall have the right to exercise
the Option as to the number of Option Shares for which the Option was
exercisable at the Section 7 Request Date less the number of shares as to which
payment has been made pursuant to Section 7(a)(B); provided that if the Option
shall have terminated prior to the date of such notice or shall be scheduled to
terminate at any time before the expiration of a period ending on the thirtieth
business day after such date, Grantee shall nonetheless have the right so to
exercise the Option or exercise its rights under Section 10 until the expiration
of such period of 30 business days. Notwithstanding anything herein to the
contrary, Issuer shall not be obligated to repurchase the Option or any shares
of Issuer Common Stock pursuant to this Section 7 on more than one occasion.
(c) For purposes of this Agreement, the "Applicable Price," as of any date,
means the highest of (i) the highest price per share at which a Tender Offer has
been made for shares of Issuer Common Stock after the date hereof and on or
prior to such date, (ii) the price per share to be paid by any third party for
shares of Issuer Common Stock or the consideration per share to be received by
holders of Issuer Common Stock, in each case pursuant to an agreement for a
merger or other business combination transaction with Issuer entered into on or
prior to such date or (iii) the highest closing sales price per share of Issuer
Common Stock quoted on the NYSE (or if Issuer Common Stock is not quoted on the
NYSE, the highest bid price per share as quoted on the National Association of
Securities Dealers Automated Quotations System or, if the shares of Issuer
Common Stock are not quoted thereon, on the principal trading market on which
such shares are traded as reported by a recognized source) during the 60
business days preceding such date. If the consideration to be offered, paid or
received pursuant to either of the foregoing clauses (i) or (ii) shall be other
than in cash, the value of such consideration shall be determined in good faith
by an independent nationally recognized investment banking firm selected by
Grantee and reasonably acceptable to Issuer, which determination shall be
conclusive for all purposes of this Agreement.
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(d) As used herein, a "Repurchase Event" means the occurrence of any of the
Purchase Events specified in Section 2(b)(ii) or (iii).
8. Repurchase of Substitute Option. (a) At the request of Grantee at any
time after issuance of the Substitute Option, Substitute Option Issuer (or any
successor entity thereof) shall repurchase from Grantee (I) the Substitute
Option and (II) all shares of Substitute Common Stock purchased by Grantee
pursuant to such Substitute Option with respect to which Grantee then has
beneficial ownership. The date on which Grantee exercises its rights under this
Section 8 is referred to as the "Section 8 Request Date". Such repurchase shall
be at an aggregate price (the "Section 8 Repurchase Consideration") equal to:
(i) the Substitute Option Price paid by Grantee for any shares of
Substitute Common Stock acquired pursuant to the Substitute Option with
respect to which Grantee then has beneficial ownership; plus
(ii) the excess, if any, of (x) the Highest Closing Price (as defined
below) for a share of Substitute Common Stock over (y) the Substitute
Option Price (subject to adjustment pursuant to Section 6), multiplied by
the number of shares of Substitute Common Stock with respect to which the
Substitute Option has not been exercised; plus
(iii) the excess, if any, of the Highest Closing Price over the
Substitute Option Price paid (or, in the case of Substitute Common Stock
with respect to which the Substitute Option has been exercised but the
Closing Date has not occurred, payable (subject to adjustment pursuant to
Section 6)) by Grantee for each share of Substitute Common Stock with
respect to which the Substitute Option has been exercised and with respect
to which Grantee then has beneficial ownership, multiplied by the number of
such shares; plus
(iv) the amount of the documented reasonable out-of-pocket expenses
incurred by Grantee in connection with the Merger Agreement and this
Agreement and the transactions contemplated thereby and hereby, including
reasonable accounting, investment banking and legal fees.
(b) If Grantee exercises its rights under this Section 8, Substitute Option
Issuer shall, within 10 business days after the Section 8 Request Date, pay the
Section 8 Repurchase Consideration to Grantee in immediately available funds,
and Grantee shall surrender to Substitute Option Issuer the Substitute Option
and the certificates evidencing the shares of Substitute Common Stock purchased
thereunder with respect to which Grantee then has beneficial ownership, and
Grantee shall warrant that it has sole record and beneficial ownership of such
shares and that the same are then free and clear of all liens, claims, charges
and encumbrances of any kind whatsoever. Notwithstanding the foregoing, to the
extent that prior notification to or approval of the Federal Reserve or other
regulatory authority is required in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, Substitute Option Issuer
shall deliver from time to time that portion of the Section 8 Repurchase
Consideration that it is not then so prohibited from paying and shall promptly
provide the required notice or application for approval and shall expeditiously
process the same (and Grantee shall cooperate with Substitute Option Issuer in
the filing of any such notice or application and the obtaining of any such
approval), and the period of time that otherwise would run pursuant to the
preceding sentence for the payment of the portion of the Section 8 Repurchase
Consideration requiring such notification or approval shall run instead from the
date on which, as the case may be, (i) any required notification period has
expired or been terminated or (ii) such approval has been obtained and, in
either event, any requisite waiting period shall have passed. If the Federal
Reserve or any other regulatory authority disapproves of any part of Substitute
Option Issuer's proposed repurchase pursuant to this Section 8, Substitute
Option Issuer shall promptly give notice of such fact to Grantee and redeliver
to Grantee the Substitute Common Stock it is then prohibited from repurchasing,
and Grantee shall have the right to exercise the Substitute Option as to the
number of shares of Substitute Common Stock for which the Substitute Option was
exercisable at the Section 8 Request Date; provided that if the Substitute
Option shall have terminated prior to the date of such notice or shall be
scheduled to terminate at any time before the expiration of a period ending on
the thirtieth business day after such date, Grantee shall nonetheless have the
right so to exercise the Substitute Option or exercise its rights under Section
10 until the expiration of such period of 30 business days. Notwithstanding
anything herein to the contrary, Substitute Option Issuer shall not be
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obligated to repurchase the Substitute Option or any shares of Substitute Common
Stock pursuant to this Section 8 on more than one occasion.
(c) For purposes of this Agreement, the "Highest Closing Price" means the
highest closing sales price for shares of Substitute Common Stock quoted on the
NYSE (or if the Substitute Common Stock is not quoted on the NYSE, the highest
bid price per share as quoted on the National Association of Securities Dealers
Automated Quotations System or, if the shares of Substitute Common Stock are not
quoted thereon, on the principal trading market on which such shares are traded
as reported by a recognized source) during the six-month period preceding the
Section 8 Request Date.
9. Mandatory Repurchase of Option. (a) In the event that any person who
has participated in a Purchase Event enters into any agreement or understanding
with Grantee with respect to Grantee's exercise of, or its election not to
exercise, any of Grantee's rights set forth in Section 2 or 7 of this Agreement,
Grantee shall, by written notice to Issuer, require that Issuer repurchase, and
Issuer shall repurchase, (I) the Option and (II) all (but not less than all) the
shares of Issuer Common Stock purchased by Grantee pursuant hereto and with
respect to which Grantee then has beneficial ownership; provided, however, that
the parties shall not be obligated to effect such mandatory repurchase if the
Board of Directors of Issuer determines, after having consulted with and
considered the written advice of outside counsel, that such mandatory repurchase
would cause the members of the Board of Directors to breach their fiduciary
duties; and provided, further, that any such determination by the Board of
Directors of Issuer shall not operate to limit Grantee's rights pursuant to
Section 7 hereof. The date of Grantee's written notice referred to above is
referred to as the "Section 9 Notice Date". Such repurchase shall be at an
aggregate price (the "Section 9 Repurchase Consideration") equal to:
(i) the aggregate Purchase Price paid by Grantee for any shares of
Issuer Common Stock acquired pursuant to the Option with respect to which
Grantee then has beneficial ownership; plus
(ii) the excess, if any, of (x) the Applicable Price as of the Section
9 Notice Date for a share of Issuer Common Stock over (y) the Purchase
Price (subject to adjustment pursuant to Section 6(a)), multiplied by the
number of shares of Issuer Common Stock with respect to which the Option
has not been exercised; plus
(iii) the excess, if any, of the Applicable Price as of the Section 9
Notice Date over the Purchase Price paid (or, in the case of Option Shares
with respect to which the Option has been exercised but the Closing Date
has not occurred, payable (subject to adjustment pursuant to Section 6(a)))
by Grantee for each share of Issuer Common Stock with respect to which the
Option has been exercised and with respect to which Grantee then has
beneficial ownership, multiplied by the number of such shares; plus
(iv) the amount of the documented reasonable out-of-pocket expenses
incurred by Grantee in connection with the Merger Agreement and this
Agreement and the transactions contemplated thereby and hereby, including
reasonable accounting, investment banking and legal fees.
(b) Notwithstanding the provisions of Section 9(a), within 30 days
following the Section 9 Notice Date, Grantee may deliver an Offeror's Notice
pursuant to Section 11, in which case the provisions of Section 11 and not those
of this Section 9 shall control. If Grantee does not deliver an Offeror's Notice
within such 30-day period, Issuer shall, within 10 business days after the
expiration of such 30-day period or, if applicable, upon abandonment of the
transaction covered by such Offeror's Notice, pay the Section 9 Repurchase
Consideration in immediately available funds, and Grantee shall surrender to
Issuer the Option and the certificates evidencing the shares of Issuer Common
Stock purchased hereunder with respect to which Grantee then has beneficial
ownership, and Grantee shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. If the Federal Reserve
or any other regulatory authority disapproves of any part of Issuer's proposed
repurchase pursuant to this Section 9, Issuer shall promptly give notice of such
fact to Grantee and thereafter deliver or cause to be delivered from time to
time to Grantee the portion of the Section 9 Repurchase Consideration that
Issuer is no longer prohibited from delivering, within five business days after
the date on which it is no longer so prohibited.
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(c) If, prior to the date which is 18 months after the Section 9 Notice
Date, Issuer enters into, or is the subject of, any transaction which would have
constituted a Repurchase Event hereunder but for the prior repurchase by Issuer
of the Option and shares of Issuer Common Stock under this Section 9, then
concurrently with the occurrence of such event, Issuer shall pay to Grantee, as
additional consideration for the Option and shares of Issuer Common Stock
purchased by Issuer pursuant to this Section, an amount in immediately available
funds equal to the excess, if any, of (i) the Section 9 Repurchase Consideration
calculated as if the Section 9 Notice Date had occurred on the date of such
Repurchase Event over (ii) the amount previously paid by Issuer to Grantee
pursuant to this Section 9.
(d) In the event that Issuer is, as a result of law or regulation,
prohibited from performing any of its obligations under this Section 9, Issuer
shall not thereafter enter into any Acquisition Transaction unless the other
parties thereto agree to assume Issuer's obligations under this Section 9 to the
extent not previously performed. The foregoing sentence shall not operate to
limit or waive any remedies Grantee may have against Issuer for Issuer's failure
to perform its obligations under this Section 9.
10. Registration Rights. Issuer shall, if requested by Grantee at any time
and from time to time (a) within three years of the first exercise of the Option
or (b) for 30 business days following the occurrence of either of the events set
forth in clauses (i) and (ii) of Section 2(d) or receipt by Grantee of official
notice that an approval of the Federal Reserve or any other regulatory authority
required for a repurchase as contemplated hereby would not be issued or granted
(but solely as to the securities or portion of the Option with respect to which
the required approval was not received), as expeditiously as possible prepare
and file up to two registration statements under the Securities Act if such
registration is necessary in order to permit the sale or other disposition of
any or all shares of securities that have been acquired by or are issuable to
Grantee upon exercise of the Option in accordance with the intended method of
sale or other disposition stated by Grantee, including a "shelf' registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other securities
under any applicable state securities laws. Grantee agrees to use all reasonable
efforts to cause, and to cause any underwriters of any sale or other disposition
to cause, any sale or other disposition pursuant to such registration statement
to be effected on a widely distributed basis so that upon consummation thereof
no purchaser or transferee shall own beneficially more than 2% of the then
outstanding voting power of Issuer. Issuer shall use all reasonable efforts to
cause each such registration statement to become effective, to obtain all
consents or waivers of other parties which are required therefor and to keep
such registration statement effective for such period not in excess of 180 days
from the day such registration statement first becomes effective as may be
reasonably necessary to effect such sale or other disposition. In the event that
Grantee requests Issuer to file a registration statement following the failure
to obtain a required approval for an exercise of the Option as described in
Section 2(d), the closing of the sale or other disposition of Issuer Common
Stock or other securities pursuant to such registration statement shall occur
substantially simultaneously with the exercise of the Option. The obligations of
Issuer hereunder to file a registration statement and to maintain its
effectiveness may be suspended for one or more periods of time not exceeding 60
days in the aggregate if the Board of Directors of Issuer shall have determined
that the filing of such registration statement or the maintenance of its
effectiveness would require disclosure of nonpublic information that would
materially and adversely affect Issuer. Any registration statement prepared and
filed under this Section 10, and any sale covered thereby, shall be at Issuer's
expense except for underwriting discounts or commissions, brokers' fees and the
fees and disbursements of Grantee's counsel related thereto. Grantee shall
provide all information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder. If during the time periods
referred to in the first sentence of this Section 10 Issuer effects a
registration under the Securities Act of Issuer Common Stock for its own account
or for any other stockholders of Issuer (other than on Form S-4 or Form S-8, or
any successor form), it shall allow Grantee the right to participate in such
registration, and such participation shall not affect the obligation of Issuer
to effect two registration statements for Grantee under this Section 10;
provided that, if the managing underwriters of such offering advise Issuer in
writing that in their opinion the number of shares of Issuer Common Stock
requested to be included in such registration exceeds the number which can be
sold in such offering, Issuer shall include the shares requested to be included
therein by Grantee pro rata with the shares intended to be included therein by
Issuer. In connection with any registration pursuant to this
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Section 10, Issuer and Grantee shall provide each other and any underwriter of
the offering with customary representations, warranties, covenants,
indemnification and contribution in connection with such registration.
11. First Refusal. At any time after the first occurrence of a Purchase
Event and prior to the later of (a) the expiration of 24 months immediately
following the first purchase of shares of Issuer Common Stock pursuant to the
Option and (b) the termination of the Option pursuant to Section 2(a), if
Grantee shall desire to sell, assign, transfer or otherwise dispose of all or
any of the Option or the shares of Issuer Common Stock or other securities
acquired by it pursuant to the Option, it shall give Issuer written notice of
the proposed transaction (an "Offeror's Notice"), identifying the proposed
transferee, accompanied by a copy of a binding offer to purchase the Option or
such shares or other securities signed by such transferee and setting forth the
terms of the proposed transaction. An Offeror's Notice shall be deemed an offer
by Grantee to Issuer, which may be accepted within 10 business days of the
receipt of such Offeror's Notice, on the same terms and conditions and at the
same price at which Grantee is proposing to transfer the Option or such shares
or other securities to such transferee. The purchase of the Option or any such
shares or other securities by Issuer shall be settled within 10 business days of
the date of the acceptance of the offer and the purchase price shall be paid to
Grantee in immediately available funds; provided that, if prior notification to
or approval of the Federal Reserve or any other regulatory authority is required
in connection with such purchase, Issuer shall promptly file the required notice
or application for approval and shall expeditiously process the same (and
Grantee shall cooperate with Issuer in the filing of any such notice or
application and the obtaining of any such approval) and the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which, as the case may be, (a) any required notification period has expired or
been terminated or (b) such approval has been obtained and, in either event, any
requisite waiting period shall have passed. In the event of the failure or
refusal of Issuer to purchase all of the Option or all of the shares or other
securities covered by an Offeror's Notice or if the Federal Reserve or any other
regulatory authority disapproves Issuer's proposed purchase of any portion of
the Option or such shares or other securities, Grantee may, within 60 days from
the date of the Offeror's Notice (subject to any necessary extension for
regulatory notification, approval or waiting periods), sell all, but not less
than all, of such portion of the Option or such shares or other securities to
the proposed transferee at no less than the price specified and on terms no more
favorable than those set forth in the Offeror's Notice. The requirements of this
Section 11 shall not apply to (w) any disposition as a result of which the
proposed transferee would own beneficially not more than 2% of the outstanding
voting power of Issuer, (x) any disposition of Issuer Common Stock or other
securities by a person to whom Grantee has assigned its rights under the Option
with the consent of Issuer, (y) any sale by means of a public offering
registered under the Securities Act in which steps are taken to reasonably
assure that no purchaser will acquire securities representing more than 2% of
the outstanding voting power of Issuer or (z) any transfer to a wholly owned
Subsidiary of Grantee which agrees in writing to be bound by the terms hereof.
12. Listing. If Issuer Common Stock or any other securities to be acquired
upon exercise of the Option are then listed on the NYSE, Issuer, upon the
request of Grantee, will promptly file an application to list the shares of
Issuer Common Stock or other securities to be acquired upon exercise of the
Option on the NYSE and will use its best efforts to obtain approval of such
listing as soon as practicable.
13. Division of Option. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of Grantee, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
11
<PAGE> 158
14. Miscellaneous. (a) Expenses. Except as otherwise provided in Sections
7, 8, 9 and 10, each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision. This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. Except as
otherwise set forth in the Merger Agreement, this Agreement (including the
Merger Agreement and the other documents and instruments referred to herein) (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or a federal or state regulatory agency to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
regulatory agency determines that the Option does not permit Grantee to acquire,
or does not require Issuer to repurchase, the full number of shares of Issuer
Common Stock or Substitute Common Stock as provided in Sections 2, 7 and 8 (as
adjusted pursuant to Section 6), it is the express intention of Issuer to allow
Grantee to acquire or to require Issuer to repurchase such lesser number of
shares as may be permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to any
applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Issuer to:
The Chase Manhattan Corporation
1 Chase Manhattan Plaza
New York, New York 10081
Attention: General Counsel
Telecopier No.: (212) 552-5378
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: H. Rodgin Cohen, Esq.
Telecopier No.: (212) 558-3588
If to Grantee to:
Chemical Banking Corporation
270 Park Avenue
New York, New York 10017
Attention: General Counsel
Telecopier No.: (212) 270-4288
12
<PAGE> 159
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Lee Meyerson, Esq.
Telecopier No.: (212) 455-2502
(g) Counterparts. This Agreement and any amendments hereto may be executed
in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned Subsidiary of Grantee and that Grantee may assign
all or part of its rights hereunder to any person after the occurrence of a
Purchase Event. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
(i) Further Assurances. In the event of any exercise of the Option by
Grantee, Issuer and Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this Agreement may
be enforced by either party through specific performance, injunctive relief and
other equitable relief. Both parties further agree to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized as
of the day and year first written above.
THE CHASE MANHATTAN CORPORATION
by /s/ Thomas G. Labrecque
------------------------------------
Name: Thomas G. Labrecque
Title: Chairman and Chief
Executive Officer
CHEMICAL BANKING CORPORATION
by /s/ Walter V. Shipley
------------------------------------
Name: Walter V. Shipley
Title: Chairman and Chief
Executive Officer
13
<PAGE> 160
ANNEX IV
MORGAN STANLEY
MORGAN STANLEY & CO.
INCORPORATED
1585 BROADWAY
NEW YORK, NEW YORK 10036
(212) 761-4000
October 31, 1995
Board of Directors
Chemical Banking Corporation
270 Park Avenue
New York, NY 10017
Members of the Board:
We understand that Chemical Banking Corporation ("CHL") and The Chase
Manhattan Corporation ("CMB") have entered into an Agreement and Plan of Merger,
dated as of August 27, 1995 (the "Merger Agreement"), which provides, among
other things, for the merger of CMB with and into CHL (the "Merger"). Pursuant
to the merger, each outstanding share of common stock, par value $2.00 per
share, of CMB (the "CMB Common Stock"), other than shares held in treasury or
held by CHL or any wholly owned subsidiary of CHL or CMB, will be converted into
1.04 shares (the "Exchange Ratio") of common stock, par value $1.00 per share,
of CHL (the "CHL Common Stock"). The terms and conditions of the Merger are more
fully set forth in the Merger Agreement.
You have asked for our opinion as to whether the Exchange Ratio pursuant to
the Merger Agreement is fair from a financial point of view to holders of CHL
Common Stock (other than CMB and its affiliates).
For purposes of the opinion set forth herein, we have:
(i) analyzed certain publicly available financial statements and
other information of CMB and CHL, respectively;
(ii) analyzed certain internal financial statements and other
financial and operating data concerning CMB prepared by the
management of CMB;
(iii) analyzed certain financial projections prepared by the
management of CMB;
(iv) discussed the past and current operations and financial
condition and the prospects of CMB with senior executives of
CMB;
(v) analyzed certain internal financial statements and other
financial operating data concerning CHL prepared by the
management of CHL;
(vi) analyzed certain financial projections prepared by the
management of CHL;
(vii) discussed the past and current operations and financial
condition and the prospects of CHL with senior executives of
CHL, and analyzed the pro forma impact of the Merger on CHL's
earnings per share, consolidated capitalization and financial
ratios;
(viii) reviewed the reported prices and trading activity for the CMB
Common Stock and the CHL Common Stock;
<PAGE> 161
MORGAN STANLEY
(ix) compared the financial performance of CMB and CHL and the
prices and trading activity of the CMB Common Stock and the
CHL Common Stock with that of certain other comparable
publicly traded companies and their securities;
(x) discussed with independent auditors of CMB their review of the
financial and accounting affairs of CMB and with the
independent auditors of CHL their review of the financial and
accounting affairs of CHL;
(xi) discussed the strategic objectives of the Merger and the plan
for the combined company with senior executives of CHL and
CMB;
(xii) analyzed certain pro forma financial projections for the
combined company prepared by CHL and CMB;
(xiii) reviewed and discussed with senior managements of CHL and CMB
certain estimates of the cost savings projected by CHL and
CMB for the combined company and compared such amounts to
those estimated in certain precedent transactions;
(xiv) reviewed the financial terms, to the extent publicly
available, of certain comparable precedent transactions;
(xv) participated in discussions and negotiations among
representatives of CHL and CMB and their financial and legal
advisors;
(xvi) reviewed the Merger Agreement and certain related documents;
and
(xvii) performed such other analyses as we have deemed appropriate.
We have assumed and relied upon without independent verification the
accuracy and completeness of the information reviewed by us for the purposes of
this opinion. With respect to the financial projections, including the estimates
of cost savings expected to result from the Merger, we have assumed that they
have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the future financial performance of CHL and CMB. We
have not made any independent valuation or appraisal of the assets or
liabilities of CMB or CHL, nor have we been furnished with any such appraisals
and we have not examined any individual loan credit files of CMB or CHL. Our
opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to us as of, the date hereof.
We have acted as financial advisor to the Board of Directors of CHL in
connection with this transaction and will receive a fee for our services. In the
past, Morgan Stanley & Co. Incorporated and its affiliates have provided
financial advisory and financing services for CHL and CMB and have received fees
for the rendering of these services.
It is understood that this letter is for the information of the Board of
Directors of CHL and may not be used for any other purpose without our prior
written consent, except that this opinion may be included in its entirety in any
filing made by Chemical with the Securities and Exchange Commission with respect
to the Merger and the transactions related thereto. In addition, we express no
recommendation as to how the stockholders of Chemical should vote at the
stockholders' meeting held in connection with the Merger.
2
<PAGE> 162
MORGAN STANLEY
Based on the foregoing, we are of the opinion on the date hereof that the
Exchange Ratio pursuant to the Merger Agreement is fair from a financial point
of view to holders of CHL Common Stock (other than CMB and its affiliates).
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ DONALD A. MOORE, JR.
------------------------------------
Donald A. Moore, Jr.
Managing Director
3
<PAGE> 163
ANNEX V
[JAMES WOLFENSOHN LOGO]
October 31, 1995
Board of Directors
The Chase Manhattan Corporation
1 Chase Manhattan Plaza
New York, New York 10081
Gentlemen and Madam:
You have requested our opinion, as investment bankers, as to the fairness,
from a financial point of view, to the holders of the outstanding shares of
Common Stock, par value $2.00 per share (the "Shares"), of The Chase Manhattan
Corporation (the "Company") of the exchange ratio of 1.04 shares of Common
Stock, par value $1.00 per share ("Chemical Common Stock"), of Chemical Banking
Corporation ("Chemical") to be received for each Share (the "Exchange Ratio") in
the merger (the "Merger") contemplated by the Agreement and Plan of Merger dated
as of August 27, 1995 between Chemical and the Company (the "Agreement").
In connection with this opinion, we have reviewed, among other things, the
Agreement; Annual Reports to Stockholders and Annual Reports on Form 10-K of the
Company and Chemical for the five years ended December 31, 1994; certain interim
reports to stockholders and Quarterly Reports on Form 10-Q of the Company and
Chemical; certain other communications from the Company and Chemical to their
respective stockholders; and certain internal financial analyses and forecasts
for the Company and Chemical prepared by their respective managements, including
analyses and forecasts of certain cost savings, operating efficiencies, revenue
effects and financial synergies (collectively, the "Synergies") expected by the
Company and Chemical to be achieved as a result of the Merger. We have also
reviewed, and considered in our analysis, information prepared by members of
senior managements of the Company and Chemical relating to the relative
contributions of the Company and Chemical to the combined company and the
estimated pro forma impact of the Merger on earnings per share, consolidated
capitalization and certain other financial ratios for the combined company as
compared to the Company and Chemical. We also have held discussions with members
of the senior managements of the Company and Chemical regarding the past and
current business operations, regulatory relationships, financial conditions and
future prospects of their respective companies, senior managements' assessment
of the strategic fit and implications of the Merger, and the Synergies. In
addition, we have reviewed the reported price and trading activity for the
Shares and Chemical Common Stock, compared certain financial and stock market
information for the Company and Chemical with similar public information for
certain other companies having certain similar characteristics or operating in
similar lines of business to the Company and Chemical, the securities of which
are publicly traded, reviewed the financial terms, to the extent publicly
available, of certain recent business combinations in the commercial banking
industry and performed such other studies and analyses as we considered
appropriate.
We have relied without independent verification upon the accuracy and
completeness of all of the financial and other information reviewed by us or
conveyed to us in discussions with senior managements of the Company and
Chemical for purposes of this opinion. In that regard, we have assumed, with
your consent, that the financial forecasts (and the assumptions and bases
therefor), including the Synergies, have been reasonably prepared on a basis
reflecting the best currently available judgments and estimates of the Company
and Chemical and will be realized in the amounts and at the times contemplated
thereby, and in rendering our opinion we express no view as to the
reasonableness of such forecasts or the assumptions on which they are based. We
are not experts in the evaluation of loan portfolios for purposes of assessing
the adequacy of the allowances for losses with respect thereto and have assumed,
with your consent, that such allowances for each of the Company and Chemical are
in the aggregate adequate to cover all such losses. Similarly, we have assumed,
with your consent and without independent analysis, that the obligations of the
<PAGE> 164
[JAMES WOLFENSOHN LOGO]
Board of Directors
October 31, 1995
Page 2
Company and Chemical pursuant to derivatives, swaps, foreign exchange financial
instruments and off-balance sheet lending-related financial instruments will not
have an adverse effect which would be relevant to our analysis. In addition, we
have not reviewed individual credit files or conducted a physical inspection of
any of the properties or assets, nor have we made an independent evaluation or
appraisal of the assets and liabilities of the Company or Chemical or any of
their subsidiaries and we have not been furnished with any such evaluation or
appraisal. We also have assumed, with your consent, that obtaining any necessary
regulatory approvals and third-party consents for the Merger or otherwise will
not have a materially adverse effect on the combined company. Our opinion as to
the fairness of the Exchange Ratio addresses the ownership position in the
combined company to be received by the holders of Shares pursuant to the
Exchange Ratio on the terms set forth in the Agreement and does not address the
future trading or acquisition value for the stock of the combined company. In
addition, our opinion does not address the relative merits of the Merger and
alternative business strategies. In that regard, we were not requested to, and
did not, solicit third party indications of interest in acquiring all or part of
the Company or in engaging in a business combination or any other strategic
transaction with the Company. We also have assumed with your consent that the
Merger will be accounted for as a pooling of interests under generally accepted
accounting principles and that the holders of Shares will not recognize gain or
loss for tax purposes as a result of the Merger. Our opinion is necessarily
based on the economic, market and other conditions as in effect on, and the
information made available to us as of, the date hereof.
Our firm is experienced in providing advice in connection with mergers and
acquisitions and related transactions. We have acted as financial advisor to the
Company in connection with the Merger and will be paid a fee for our services as
financial advisor which is in substantial part contingent upon the consummation
of the Merger. Our firm has for a number of years provided financial advisory
services to the Company and receives fees for the rendering of these services.
Our opinion is directed to the Board of Directors of the Company and does
not constitute a recommendation to any stockholder of the Company as to how such
stockholder should vote at the stockholders' meeting to be held in connection
with the Merger.
Based upon and subject to the foregoing and based upon such other matters
as we consider relevant, it is our opinion as investment bankers that as of the
date hereof the Exchange Ratio pursuant to the Agreement is fair from a
financial point of view to the holders of Shares.
Very truly yours,
/s/ JAMES D. WOLFENSOHN INCORPORATED
--------------------------------------
JAMES D. WOLFENSOHN INCORPORATED
<PAGE> 165
ANNEX VI
Goldman, Sachs & Co. 85 Broad Street New York, New York 10004
Tel: 212-902-1000
(LOGO)
PRIVILEGED AND CONFIDENTIAL
October 31, 1995
Board of Directors
The Chase Manhattan Corporation
1 Chase Manhattan Plaza
New York, New York 10081
Gentlemen and Madame:
You have requested our opinion as to the fairness to the holders of the
outstanding shares of Common Stock, par value $2.00 per share (the "Shares"), of
The Chase Manhattan Corporation (the "Company" or "Chase") of the exchange ratio
of 1.04 shares of Common Stock, par value $1.00 per share ("Chemical Common
Stock") of Chemical Banking Corporation ("Chemical") to be received for each
Share (the "Exchange Ratio") in the merger (the "Merger") contemplated by the
Agreement and Plan of Merger dated as of August 27, 1995 between Chemical and
the Company (the "Agreement").
Goldman, Sachs & Co. ("Goldman Sachs"), as part of its investment banking
business, is continually engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes. We are familiar with the Company, having provided certain
investment banking services to the Company from time to time, including having
acted as underwriter of offerings by the Company of its common stock, preferred
stock and debt securities, having acted as financial advisor to the Company and
as principal in connection with asset dispositions and having acted as financial
advisor to the Company regarding a review of its strategic alternatives, and
having acted as financial advisor in connection with, and having participated in
certain of the negotiations leading to, the Agreement. We also have provided
certain investment banking services to Chemical from time to time, including
having acted as financial advisor to Chemical in its merger with Manufacturers
Hanover Corporation in 1991 and currently acting as financial advisor to
Chemical with regard to Chemical's ownership interest in The CIT Group Holdings,
Inc., and may provide investment banking services to Chemical in the future. In
addition, Goldman Sachs is a full service securities firm and in the course of
its trading activities it may from time to time effect transactions, for its own
account or the account of customers, and hold positions in securities or options
on securities of the Company and Chemical.
In connection with this opinion, we have reviewed, among other things, the
Agreement; Annual Reports to Stockholders and Annual Reports on Form 10-K of the
Company and Chemical for the five years ended December 31, 1994; certain interim
reports to stockholders and Quarterly Reports on Form 10-Q of the Company and
Chemical; certain other communications from the Company and Chemical to their
respective stockholders; and certain internal financial analyses and forecasts
for the Company and Chemical prepared by their respective managements, including
analyses and forecasts of certain cost savings, operating efficiencies, revenue
effects and financial synergies (collectively, the "Synergies") expected by the
Company and Chemical to be achieved as a result
<PAGE> 166
The Chase Manhattan Corporation
October 31, 1995
Page Two
of the Merger. We have also reviewed, and considered in our analysis,
information prepared by members of senior managements of Chase and Chemical
relating to the relative contributions of Chase and Chemical to the combined
company and the estimated pro forma impact of the Merger on earnings per share,
consolidated capitalization and certain other financial ratios for the combined
company as compared to Chase and Chemical. We also have held discussions with
members of the senior managements of the Company and Chemical regarding the past
and current business operations, regulatory relationships, financial conditions
and future prospects of their respective companies, senior management's
assessment of the strategic fit and implications of the Merger, and the
Synergies. In addition, we have reviewed the reported price and trading activity
for the Shares and Chemical Common Stock, compared certain financial and stock
market information for the Company and Chemical with similar public information
for certain other companies having certain similar characteristics or operating
in similar lines of business to the Company and Chemical, the securities of
which are publicly traded, reviewed the financial terms, to the extent publicly
available, of certain recent business combinations in the commercial banking
industry and performed such other studies and analyses as we considered
appropriate.
We have relied without independent verification upon the accuracy and
completeness of all of the financial and other information reviewed by us or
conveyed to us in discussions with senior managements of Chase and Chemical for
purposes of this opinion. In that regard, we have assumed, with your consent,
that the financial forecasts (and the assumptions and bases therefor), including
the Synergies, have been reasonably prepared on a basis reflecting the best
currently available judgments and estimates of the Company and Chemical and will
be realized in the amounts and at the times contemplated thereby, and in
rendering our opinion we express no view as to the reasonableness of such
forecasts or the assumptions on which they are based. We are not experts in the
evaluation of loan portfolios for purposes of assessing the adequacy of the
allowances for losses with respect thereto and have assumed, with your consent,
that such allowances for each of the Company and Chemical are in the aggregate
adequate to cover all such losses. Similarly, we have assumed, with your consent
and without independent analysis, that the obligations of Chase and Chemical
pursuant to derivatives, swaps, foreign exchange, financial instruments and off-
balance sheet lending-related financial instruments will not have an adverse
effect which would be relevant to our analysis. In addition, we have not
reviewed individual credit files or conducted a physical inspection of any of
the properties or assets, nor have we made an independent evaluation or
appraisal of the assets and liabilities of the Company or Chemical or any of
their subsidiaries and we have not been furnished with any such evaluation or
appraisal. We also have assumed, with your consent, that obtaining any necessary
regulatory approvals and third-party consents for the Merger or otherwise will
not have a materially adverse effect on Chase, Chemical or the combined company.
Our opinion as to the fairness of the Exchange Ratio addresses the ownership
position in the combined company to be received by the holders of Shares
pursuant to the Exchange Ratio on the terms set forth in the Agreement and does
not address the future trading or acquisition value for the stock of the
combined company. In addition, our opinion does not address the relative merits
of the Merger and alternative business strategies. In that regard, we were not
requested to, and did not, solicit third party indications of interest in
acquiring all or part of the Company or in engaging in a business combination or
any other strategic transaction with the Company. We also have assumed with your
consent that the Merger will be accounted for as a pooling of interests under
generally accepted accounting principles and that the holders of Shares will not
recognize gain or loss for tax purposes as a result of the Merger.
Our opinion is directed to the Board of Directors of the Company and does not
constitute a recommendation to any stockholder of the Company as to how such
stockholder should vote at the stockholders' meeting held in connection with the
Merger.
<PAGE> 167
The Chase Manhattan Corporation
October 31, 1995
Page Three
Based upon and subject to the foregoing and based upon such other matters as we
consider relevant, it is our opinion that as of the date hereof the Exchange
Ratio pursuant to the Agreement is fair to the holders of Shares.
Very truly yours,
/s/ GOLDMAN, SACHS & CO.
- -----------------------------
GOLDMAN, SACHS & CO.
<PAGE> 168
TICKET REQUEST
If you plan to attend the Special Meeting of Stockholders of Chemical
Banking Corporation to be held at 10 a.m., New York time, on December 11, 1995,
at the Starlight Roof of The Waldorf-Astoria Hotel, located at 301 Park Avenue,
New York, New York, the form below should be completed and mailed with your
proxy card.*
(Cut along dotted line)
- --------------------------------------------------------------------------------
I PLAN TO ATTEND THE SPECIAL MEETING OF THE STOCKHOLDERS OF CHEMICAL
BANKING CORPORATION ON DECEMBER 11, 1995, IN NEW YORK, NEW YORK.
- --------------------------------------------------------------------------------
Name(s) (Please print)
- --------------------------------------------------------------------------------
Street Address
- --------------------------------------------------------------------------------
City State (Zip Code)
/ / Check box if you request an assistive listening device.
/ / Check box if you request sign interpretation.
* If you are a beneficial owner of Chemical Common Stock held by a bank or
broker (in "street name"), you may need proof of ownership to be admitted
to the meeting. A recent brokerage statement or letter from a broker or
bank are examples of such proof of ownership.
<PAGE> 169
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the Delaware General Corporation Law ("DGCL"), a corporation
may indemnify any person in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than a derivative action by or in the right of such
corporation) who is or was a director, officer, employee or agent of such
corporation, or serving at the request of such corporation in such capacity for
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding, if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of such
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
The DGCL also permits indemnification by a corporation under similar
circumstances for expenses (including attorneys' fees) actually and reasonably
incurred by such persons in connection with the defense or settlement of a
derivative action, except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to such corporation unless the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that such
person is fairly and reasonably entitled to indemnity for such expenses which
such court shall deem proper.
The DGCL provides that the indemnification described above shall not be
deemed exclusive of other indemnification that may be granted by a corporation
pursuant to its By-Laws, disinterested directors' vote, stockholders' vote,
agreement or otherwise.
The DGCL also provides corporations with the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
in a similar capacity for another corporation, partnership, joint venture, trust
or other enterprise against any liability asserted against him or her in any
such capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against such liability
as described above.
The Restated Certificate of Incorporation of Chemical Banking Corporation
(the "Registrant") provides that, to the fullest extent that the DGCL as from
time to time in effect permits the limitation or elimination of the liability of
directors, no director of the Registrant shall be personally liable to the
Registrant or its stockholders for monetary damages for breach of fiduciary duty
as a director.
The Registrant's Restated Certificate of Incorporation empowers the
Registrant to indemnify any director, officer, employee or agent of the
Registrant or any other person who is serving at the Registrant's request in any
such capacity with another corporation, partnership, joint venture, trust or
other enterprise (including, without limitation, an employee benefit plan) to
the fullest extent permitted under the DGCL as from time to time in effect, and
any such indemnification may continue as to any person who has ceased to be a
director, officer, employee or agent and may inure to the benefit of the heirs,
executors and administrators of such a person.
The Registrant's Restated Certificate of Incorporation also empowers the
Registrant by action of its Board of Directors, notwithstanding any interest of
the directors in the action, to purchase and maintain insurance in such amounts
as the Board of Directors deems appropriate to protect any director, officer,
employee or agent of the Registrant or any other person who is serving at the
Registrant's request in any such capacity with another corporation, partnership,
joint venture, trust or other enterprise (including, without limitation, an
employee benefit plan) against any liability asserted against him or incurred by
him in any such capacity arising out of his status as such (including, without
limitation, expenses, judgments, fines (including any excise taxes assessed on a
person with respect to any employee benefit plan) and amounts paid in
settlement) to the fullest extent permitted under the DGCL as from time to time
in effect, whether or not the
II-1
<PAGE> 170
Registrant would have the power or be required or indemnify any such individual
under the terms of any agreement or by-law or the DGCL.
In addition, the Registrant's By-laws require indemnification to the
fullest extent permitted under applicable law, as from time to time in effect.
The By-laws provide a clear and unconditional right to indemnification for
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by any person in connection with any
threatened, pending or completed investigation, claim, action, suit or
proceeding, whether civil, administrative or investigative (including, to the
extent permitted by law, any derivative action) by reason of the fact that such
person is or was serving as a director, officer, employee or agent of the
Registrant or, at the request of the Registrant, of another corporation,
partnership, joint venture, trust or other enterprise (including, without
limitation, an employee benefit plan). The By-laws specify that the right to
indemnification so provided is a contract right, set forth certain procedural
and evidentiary standards applicable to the enforcement of a claim under the
By-laws, entitle the persons to be indemnified to be reimbursed for the expenses
of prosecuting any such claim against the Registrant and entitle them to have
all expenses incurred in advance of the final disposition of a proceeding paid
by the Registrant. Such provisions, however, are intended to be in furtherance
and not in limitation of the general right to indemnification provided in the
By-laws, which right of indemnification and of advancement of expenses is not
exclusive.
The Registrant's By-laws also provide that the Registrant may enter into
contracts with any director, officer, employee or agent of the Registrant in
furtherance of the indemnification provisions in the By-laws, as well as create
a trust fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure payment of amounts indemnified.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBITS
- --------
<S> <C>
2.1 Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical Banking
Corporation and The Chase Manhattan Corporation (included as Annex I to the Proxy
Statement/Prospectus)
2.2 Stock Option Agreement, dated as of August 27, 1995, between Chemical Banking
Corporation, as Issuer, and The Chase Manhattan Corporation, as Grantee (included as
Annex II to the Proxy Statement/Prospectus)
2.3 Stock Option Agreement, dated as of August 27, 1995, between The Chase Manhattan
Corporation, as Issuer, and Chemical Banking Corporation, as Grantee (included as
Annex III to the Proxy Statement/Prospectus)
2.4 Employee Benefits Agreement, dated as of August 27, 1995, between Chemical Banking
Corporation and The Chase Manhattan Corporation
3.1 Restated Certificate of Incorporation of Chemical Banking Corporation (incorporated
by reference to Exhibit 3.1 of the Annual Report on Form 10-K dated December 31,
1993 of Chemical Banking Corporation)
3.2 Certificate of Designations of the Adjustable Rate Cumulative Preferred Stock,
Series L, of Chemical Banking Corporation (incorporated by reference to Exhibit 2 of
the Registration Statement on Form 8-A of Chemical Banking Corporation dated June 6,
1994)
3.3 By-Laws of Chemical Banking Corporation, as amended (incorporated by reference to
Exhibit 3.2 of the Annual Report on Form 10-K dated December 31, 1993 of Chemical
Banking Corporation)
4.1 Rights Agreement, dated as of April 13, 1989, between Chemical Banking Corporation
and Chemical Bank (as successor rights agent to Harris Trust Company of New York)
(incorporated by reference to Exhibit 1 to the Registration Statement on Form 8-A of
Chemical Banking Corporation dated April 13, 1989)
4.2 Amendment to Rights Agreement, dated as of August 27, 1995, between Chemical Banking
Corporation and Chemical Bank (incorporated by reference to Exhibit 4 to the Current
Report on Form 8-K of Chemical Banking Corporation dated August 27, 1995)
</TABLE>
II-2
<PAGE> 171
<TABLE>
<CAPTION>
EXHIBITS
- --------
<S> <C>
4.3 Form of Proposed Amended and Restated Certificate of Incorporation of Chemical
Banking Corporation
4.4 Form of Certificate of Designations of the 10 1/2% Cumulative Preferred Stock of
Chemical Banking Corporation
4.5 Form of Certificate of Designations of the 9.76% Cumulative Preferred Stock of
Chemical Banking Corporation
4.6 Form of Certificate of Designations of the 10.84% Cumulative Preferred Stock of
Chemical Banking Corporation
4.7 Form of Certificate of Designations of the 9.08% Cumulative Preferred Stock of
Chemical Banking Corporation
4.8 Form of Certificate of Designations of the 8 1/2% Cumulative Preferred Stock of
Chemical Banking Corporation
4.9 Form of Certificate of Designations of the 8.32% Cumulative Preferred Stock of
Chemical Banking Corporation
4.10 Form of Certificate of Designations of the 8.40% Cumulative Preferred Stock of
Chemical Banking Corporation
4.11 Form of Certificate of Designations of the Adjustable Rate Cumulative Preferred
Stock, Series N, of Chemical Banking Corporation
5 Opinion of Simpson Thacher & Bartlett regarding the legality of securities being
issued
8.1 Opinion of Simpson Thacher & Bartlett as to tax matters
8.2 Opinion of Sullivan & Cromwell as to tax matters
23.1 Consent of Price Waterhouse as to financial statements of Chemical Banking
Corporation
23.2 Consent of Price Waterhouse as to financial statements of The Chase Manhattan
Corporation
23.3 Consent of Simpson Thacher & Bartlett (contained in exhibits 5 and 8.1)
23.4 Consent of Sullivan & Cromwell (contained in exhibit 8.2)
23.5 Consent of Morgan Stanley & Co. Incorporated
23.6 Consent of James D. Wolfensohn Incorporated
23.7 Consent of Goldman, Sachs & Co.
24 Powers of Attorney
99.1 Consents of persons named to be directors of the Registrant who have not signed the
Registration Statement
99.2 Opinion of Morgan Stanley & Co. Incorporated (included as Annex IV to the Proxy
Statement/ Prospectus)
99.3 Opinion of James D. Wolfensohn Incorporated (included as Annex V to the Proxy
Statement/ Prospectus)
99.4 Opinion of Goldman, Sachs & Co. (included as Annex VI to the Proxy
Statement/Prospectus)
99.5 Chairman's Letter to Stockholders of Chemical Banking Corporation
99.6 Notice of Special Meeting of Stockholders of Chemical Banking Corporation
99.7 Chairman's Letter to Stockholders of The Chase Manhattan Corporation
99.8 Notice of Special Meeting of Stockholders of The Chase Manhattan Corporation
99.9 Form of Proxy for the Special Meeting of Stockholders of Chemical Banking
Corporation
99.10 Form of Proxy for the Special Meeting of Stockholders of The Chase Manhattan
Corporation
</TABLE>
II-3
<PAGE> 172
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) (1) The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other Items of the
applicable form.
(2) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Act and
is used in connection with an offering of securities subject to Rule
415, will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director,
II-4
<PAGE> 173
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(e) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11 or 13 of this form, within one business
day of receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to
the request.
(f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject
of and included in the registration statement when it became effective.
II-5
<PAGE> 174
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in New York City, State of New York, on
October 31, 1995.
CHEMICAL BANKING CORPORATION
By /s/ John B. Wynne
------------------------------------
(John B. Wynne, Secretary)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ----------------------------------- -----------------
<S> <C> <C>
* Chairman, Chief Executive Officer October 31, 1995
- ---------------------------------------- and Director
Walter V. Shipley
* President and Director October 31, 1995
- ----------------------------------------
Edward D. Miller
* Director October 31, 1995
- ----------------------------------------
Frank A. Bennack, Jr.
* Director October 31, 1995
- ----------------------------------------
Michel C. Bergerac
* Director October 31, 1995
- ----------------------------------------
Randolph W. Bromery
* Director October 31, 1995
- ----------------------------------------
Charles W. Duncan, Jr.
* Director October 31, 1995
- ----------------------------------------
Melvin R. Goodes
* Director October 31, 1995
- ----------------------------------------
George V. Grune
* Director October 31, 1995
- ----------------------------------------
William B. Harrison, Jr.
* Director October 31, 1995
- ----------------------------------------
Harold S. Hook
* Director October 31, 1995
- ----------------------------------------
Helene L. Kaplan
</TABLE>
II-6
<PAGE> 175
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ----------------------------------- -----------------
<S> <C> <C>
* Director October 31, 1995
- ----------------------------------------
J. Bruce Llewellyn
* Director October 31, 1995
- ----------------------------------------
John P. Mascotte
* Director October 31, 1995
- ----------------------------------------
John F. McGillicuddy
* Director October 31, 1995
- ----------------------------------------
Andrew C. Sigler
* Director October 31, 1995
- ----------------------------------------
Michael I. Sovern
* Director October 31, 1995
- ----------------------------------------
John R. Stafford
* Director October 31, 1995
- ----------------------------------------
W. Bruce Thomas
* Director October 31, 1995
- ----------------------------------------
Marina v.N. Whitman
* Director October 31, 1995
- ----------------------------------------
Richard D. Wood
* Executive Vice President October 31, 1995
- ---------------------------------------- and Chief Financial Officer
Peter J. Tobin (Principal Financial Officer)
* Controller October 31, 1995
- ---------------------------------------- (Chief Accounting Officer)
Joseph L. Sclafani
</TABLE>
- ---------------
* John B. Wynne hereby signs this Registration Statement on October 31, 1995, on
behalf of each of the above-named Directors and Officers of the Registrant
above whose typed names asterisks appear, pursuant to powers of attorney duly
executed by such Directors and Officers and filed with the Securities and
Exchange Commission as exhibits to this Registration Statement.
/s/ John B. Wynne
--------------------------------------
John B. Wynne
Attorney-in-fact
II-7
<PAGE> 176
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
- ------ ---------------------------------------------------------------------------- --------
<C> <S> <C>
2.1 Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical
Banking Corporation and The Chase Manhattan Corporation (included as Annex I
to the Proxy Statement/Prospectus)..........................................
2.2 Stock Option Agreement, dated as of August 27, 1995, between Chemical
Banking Corporation, as Issuer, and The Chase Manhattan Corporation, as
Grantee (included as Annex II to the Proxy Statement/Prospectus)............
2.3 Stock Option Agreement, dated as of August 27, 1995, between The Chase
Manhattan Corporation, as Issuer, and Chemical Banking Corporation, as
Grantee (included as Annex III to the Proxy Statement/Prospectus)...........
2.4 Employee Benefits Agreement, dated as of August 27, 1995, between Chemical
Banking Corporation and The Chase Manhattan Corporation.....................
3.1 Restated Certificate of Incorporation of Chemical Banking Corporation
(incorporated by reference to Exhibit 3.1 of the Annual Report on Form 10-K
dated December 31, 1993 of Chemical Banking Corporation)....................
3.2 Certificate of Designations of the Adjustable Rate Cumulative Preferred
Stock, Series L, of Chemical Banking Corporation (incorporated by reference
to Exhibit 2 of the Registration Statement on Form 8-A of Chemical Banking
Corporation dated June 6, 1994).............................................
3.3 By-Laws of Chemical Banking Corporation, as amended (incorporated by
reference to Exhibit 3.2 of the Annual Report on Form 10-K dated December
31, 1993 of Chemical Banking Corporation)...................................
4.1 Rights Agreement, dated as of April 13, 1989, between Chemical Banking
Corporation and Chemical Bank (as successor rights agent to Harris Trust
Company of New York) (incorporated by reference to Exhibit 1 to the
Registration Statement on Form 8-A of Chemical Banking Corporation dated
April 13, 1989).............................................................
4.2 Amendment to Rights Agreement, dated as of August 27, 1995, between Chemical
Banking Corporation and Chemical Bank (incorporated by reference to Exhibit
4 to the Current Report on Form 8-K of Chemical Banking Corporation dated
August 27, 1995)............................................................
4.3 Form of Proposed Amended and Restated Certificate of Incorporation of
Chemical Banking Corporation................................................
4.4 Form of Certificate of Designations of the 10 1/2% Cumulative Preferred
Stock of Chemical Banking Corporation.......................................
4.5 Form of Certificate of Designations of the 9.76% Cumulative Preferred Stock
of Chemical Banking Corporation.............................................
4.6 Form of Certificate of Designations of the 10.84% Cumulative Preferred Stock
of Chemical Banking Corporation.............................................
4.7 Form of Certificate of Designations of the 9.08% Cumulative Preferred Stock
of Chemical Banking Corporation.............................................
</TABLE>
<PAGE> 177
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
- ------ ---------------------------------------------------------------------------- --------
<C> <S> <C>
4.8 Form of Certificate of Designations of the 8 1/2% Cumulative Preferred Stock
of Chemical Banking Corporation.............................................
4.9 Form of Certificate of Designations of the 8.32% Cumulative Preferred Stock
of Chemical Banking Corporation.............................................
4.10 Form of Certificate of Designations of the 8.40% Cumulative Preferred Stock
of Chemical Banking Corporation.............................................
4.11 Form of Certificate of Designations of the Adjustable Rate Cumulative
Preferred Stock, Series N, of Chemical Banking Corporation..................
5 Opinion of Simpson Thacher & Bartlett regarding the legality of securities
being issued................................................................
8.1 Opinion of Simpson Thacher & Bartlett as to tax matters.....................
8.2 Opinion of Sullivan & Cromwell as to tax matters............................
23.1 Consent of Price Waterhouse as to financial statements of Chemical Banking
Corporation.................................................................
23.2 Consent of Price Waterhouse as to financial statements of The Chase
Manhattan Corporation.......................................................
23.3 Consent of Simpson Thacher & Bartlett (contained in exhibits 5 and 8.1).....
23.4 Consent of Sullivan & Cromwell (contained in exhibit 8.2)...................
23.5 Consent of Morgan Stanley & Co. Incorporated................................
23.6 Consent of James D. Wolfensohn Incorporated.................................
23.7 Consent of Goldman, Sachs & Co..............................................
24 Powers of Attorney..........................................................
99.1 Consents of persons named to be directors of the Registrant who have not
signed the Registration Statement...........................................
99.2 Opinion of Morgan Stanley & Co. Incorporated (included as Annex IV to the
Proxy Statement/Prospectus).................................................
99.3 Opinion of James D. Wolfensohn Incorporated (included as Annex V to the
Proxy Statement/Prospectus).................................................
99.4 Opinion of Goldman, Sachs & Co. (included as Annex VI to the Proxy
Statement/ Prospectus)......................................................
99.5 Chairman's Letter to Stockholders of Chemical Banking Corporation...........
99.6 Notice of Special Meeting of Stockholders of Chemical Banking Corporation...
99.7 Chairman's Letter to Stockholders of The Chase Manhattan Corporation........
</TABLE>
<PAGE> 178
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
- ------ ---------------------------------------------------------------------------- --------
<C> <S> <C>
99.8 Notice of Special Meeting of Stockholders of The Chase Manhattan
Corporation.................................................................
99.9 Form of Proxy for the Special Meeting of Stockholders of Chemical Banking
Corporation.................................................................
99.10 Form of Proxy for the Special Meeting of Stockholders of The Chase Manhattan
Corporation.................................................................
</TABLE>
<PAGE> 1
EXHIBIT NO. 2.4
CONFORMED COPY
EMPLOYEE BENEFITS AGREEMENT
EMPLOYEE BENEFITS AGREEMENT, dated as of August 27, 1995 (this
"Agreement"), between CHEMICAL BANKING CORPORATION ("Chemical"), a Delaware
corporation, and THE CHASE MANHATTAN CORPORATION ("Chase"), a Delaware
corporation.
WHEREAS, Chemical and Chase are entering into an Agreement and
Plan of Merger (the "Merger Agreement") dated as of the date hereof providing
for the merger of Chase into Chemical;
WHEREAS, concurrently therewith Chemical and Chase are
entering into this Agreement in order to cover various employee benefit matters
relating to the Merger; and
WHEREAS, Chemical and Chase wish to achieve consistency, where
appropriate, between the treatment of Chemical and Chase employees and Chase
wishes to give effect to its intent, in the context of an approved change in
control (as further described herein) to amend or interpret its plans so that
the merger does not, of itself, result in the acceleration of vesting and
payments thereunder, to the extent permitted by the applicable employee plans
or arrangements, or by law;
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations and warranties contained herein and in the Merger
Agreement, the parties hereto agree as follows:
1. Definitions.
All capitalized terms in this Agreement shall have the same
meanings as set forth therefor in the Merger Agreement unless otherwise
specified herein.
2. Executive Agreements.
Promptly after the execution and delivery of the Merger
Agreement, Chase shall offer to its officers who are parties to individual
agreements (the "Chase Executive Agreements") with Chase concerning their
termination of employment after the occurrence of a Change in Control (as
defined therein) to modify such Chase Executive Agreements in the manner agreed
upon between Chemical and Chase. Such modified Agreements shall be referred to
hereafter as the "Revised Chase Executive Agreements."
If any such officer of Chase whose individual agreement
expires on December 31, 1995 does not accept the offer described above, then
prior to September 30, 1995, Chase shall provide such officer a notice pursuant
to Section 2 of his or her Chase Executive Agreement that the term of such
Chase Executive
<PAGE> 2
2
Agreement shall not be extended beyond December 31, 1995 except as otherwise
provided in Section 2 of such agreement.
Promptly after the execution and delivery of the Merger
Agreement, Chemical will offer to approximately 40 executives of Chemical, at
the Executive Vice-President level or higher, to enter into agreements with
them (the "Chemical Executive Agreements") concerning their termination of
employment after the occurrence of the shareholder approval of the Merger in a
form agreed upon between Chemical and Chase and providing for benefits
equivalent or comparable to those in the Revised Chase Executive Agreements,
with appropriate adjustments to reflect differences in existing benefit and
compensation plans between Chemical and Chase. Any existing individual
contracts between Chemical and its executives will not be renewed or modified
by Chemical to extend their terms.
3. Special Severance Plan.
Chase hereby represents to Chemical that, prior to a
"Potential Change in Control," as defined in such Plan, Chase amended its
Special Severance Plan for certain key management personnel (the "Chase Special
Severance Plan") to provide that with respect to any Approved Change in Control
(as defined therein), the term "Good Reason," as used in such Plan, shall be
defined as set forth in Exhibit A hereto, and the severance payment schedule in
the event of an eligible termination of employment shall be amended as set
forth in Exhibit B. This Plan, as amended, shall apply to eligible
terminations occurring on or after the date of this Agreement.
Chemical hereby represents to Chase that it has adopted or may
adopt a special severance plan for approximately 385 key management personnel
of Chemical at or above Chemical's salary grade 380 providing for severance
benefits equivalent to those afforded by Chase to its key management personnel
under the Chase Special Severance Plan, as amended pursuant to the preceding
paragraph. This Plan shall apply to eligible terminations occurring on or
after the date of this Agreement.
4. General Severance Plans.
Chemical and Chase hereby represent and agree that the
severance pay to be provided to all employees of Chemical and Chase (and their
respective subsidiaries) under their respective current severance or salary
continuation plans whose positions are eliminated between the date of this
Agreement and the second anniversary of the effective date of the Merger, and
who are not covered by the arrangements referred to in Sections 2 and 3 of this
Agreement, shall be as set forth in Exhibit C hereto.
<PAGE> 3
3
5. Long Term Incentive Plans.
Chase hereby represents that, prior to the execution and
delivery of the Merger Agreement (and prior, where applicable, to a "Potential
Change in Control," as defined in a plan subject to this Section 5), as Chase
always contemplated in the case of a strategic business combination of the kind
contemplated by the Merger Agreement, it amended its 1987/1982 Long-Term
Incentive Plan and the Compensation Committee of its Board of Directors (the
"Chase Compensation Committee") amended its 1994 Long-Term Incentive Plan so
that:
(a) there shall be no acceleration of vesting of
restricted stock, restricted stock units, performance share units or
other equity interests granted under any of the Long-Term Incentive
Plans (collectively, the "Equity Awards") or acceleration of
exercisability of options or stock appreciation rights (collectively,
the "Options") granted thereunder, upon the occurrence of an Approved
Change in Control;
(b) any unvested Equity Awards, and any Options that are
not yet exercisable, granted to an employee of Chase and/or a
subsidiary of Chase prior to the date hereof shall become vested or
exercisable, as the case may be, upon a termination of such employee's
employment after an Approved Change in Control for any reason other
than by Chase (and its subsidiaries) or by the Surviving Corporation
(and its subsidiaries) for "Cause" or by such employee for other than
for "Good Reason," (as such terms are defined in the participant's
Revised Chase Executive Agreement, the amended Chase Manhattan
Corporation Special Severance Plan or the amended Chase Manhattan 1994
Long Term Incentive Plan, as applicable to such employee) at any time
after the Approved Change in Control; and
(c) the definition of Good Reason in each such Long Term
Incentive Plan shall contain no reference to the participant's job
status or responsibilities.
In addition, as otherwise provided in the applicable Long-Term
Incentive Plan, in the event of a termination described in (b) above the
Options shall remain exercisable for two years from the date of such employee's
termination unless they expire prior to such two-year period in accordance with
their original terms.
Chemical hereby represents that it will continue its practice
of providing for acceleration of vesting of restricted stock and restricted
stock units, (except those relating to its outstanding grants of Performance
Accelerated Restricted Stock ("PARS"), which are provided for in Section 11
below) and accelerated exercisability of stock options granted under such
plans, as well as providing for a two-year exercise period for
<PAGE> 4
4
such accelerated options, in the event of a job elimination, and that it will
utilize the same definition of "Good Reason" in administering its plans as set
forth in Section 5(b) with respect to Chase's plans.
6. Stock Option Program for Employees.
Chase hereby represents that it will administer its Stock
Option Program for Employees so that no more than 200,000 exercise-sales
thereunder can be made on any one day.
7. Supplemental Benefit Plans.
Chase hereby represents that prior to execution and delivery
of the Merger Agreement (and prior, where applicable, to a "Potential Change in
Control" as defined in one or more such Plans), it has caused The Chase
Manhattan Bank, N.A. ("Chase Bank") to amend its Supplemental Benefit Plan, its
TRA 86 Supplemental Benefit Plan and its Supplemental Retirement Plan to
provide that an Approved Change in Control will not constitute a Change in
Control for the purposes of any of such Plan; provided, however, that any
vesting of plan benefits that would have occurred under such Plans if the
Approved Change in Control had been a Change in Control shall occur upon the
termination of a Plan participant's employment by Chase (and its subsidiaries)
or by the Surviving Corporation (and its subsidiaries) unless such termination
is by Chase for "cause" or by the Plan participant's resignation other than for
"good reason" (as each such term is defined in the participant's Revised Chase
Executive Agreement, the amended Chase Manhattan Corporation Special Severance
Plan or the amended Chase Manhattan 1994 Long Term Incentive Plan, as
applicable to such Plan participant, in the latter case without regard to a
participant's job status or responsibilities).
Chemical shall amend the supplemental plans of Chemical and
its subsidiaries to provide for treatment of participants in such plans
equivalent to the treatment of Chase employees under the foregoing Chase
amendments.
8. Retirement and Family Benefits Plan.
Chase hereby represents that prior to execution and delivery
of the Merger Agreement, it amended its Retirement and Family Benefits Plan, to
the extent permitted by law and consistent with maintaining its qualified
status under the Code, to provide that an Approved Change in Control in 1995 or
1996 will not constitute a Change in Control for the purposes of such Plan.
The principal effect of such amendment will be that no acceleration of vesting
shall occur with respect to any employee who, on the date of the amendment, has
less than three years of service for vesting purposes under the Plan.
Chemical will amend the Retirement Plan of Chemical Bank and
Certain Affiliated Companies and any qualified defined
<PAGE> 5
5
benefit plan of any Chemical subsidiary to produce the same result with respect
to plan participants as was produced with respect to similarly situated
employees of Chase by the foregoing Chase amendments.
9. Thrift-Incentive Plan.
Chase hereby represents that prior to execution and delivery
of the Merger Agreement, it amended its Thrift-Incentive Plan, to the extent
permitted by law and consistent with maintaining its qualified status under the
Code, to provide that the Approved Change in Control in 1995 or 1996 will not
constitute a Change in Control for the purposes of such Plan. The principal
effect of such amendment will be that no acceleration of vesting shall occur
with respect to any employee who, on the date of the amendment, has less than
three years of service for vesting purposes under the Plan.
Chemical will amend the Savings Incentive Plan of Chemical
Bank and Certain Affiliated Companies and any qualified defined contribution
plan of any Chemical subsidiary to produce the same result with respect to plan
participants as was produced with respect to similarly situated employees of
Chase by the foregoing Chase amendments.
10. Three Year Incentive Arrangement for Certain Executive
Officers.
Chase hereby represents that, prior to the execution and
delivery of the Merger Agreement, the Chase Compensation Committee amended
Chase's Three Year Incentive Arrangement for Certain Executive Officers to
provide that the Chase Compensation Committee shall have the authority to
reduce the amount of any award that would be payable under the Plan (and/or to
impose additional conditions upon the payment of such award) on account of an
Approved Change in Control.
11. Management Incentive Plan.
Chase hereby represents that prior to execution and delivery
of the Merger Agreement, it caused Chase Bank to amend its Management Incentive
Plan to provide that an Approved Change in Control will not constitute a Change
in Control for the purposes of such Plan.
In addition, with respect to the grant by the Compensation
Committee of Chase Bank of a three year award arrangement intended to parallel
the Three Year Arrangement for Certain Executive Officers (as described in
Section 10 above), Chase hereby represents that, prior to the execution and
delivery of the Merger Agreement, it has caused the Compensation Committee of
Chase Bank to amend such arrangement to provide that:
<PAGE> 6
6
(a) an Approved Change in Control will not constitute a
Change in Control for the purposes of such Arrangement; and
(b) the Compensation Committee of Chase Bank will
determine, on or about the date hereof, the amount to be awarded with
respect to achievement of the $52 target and such amount will be paid
out in cash within 30 days after the date hereof. If the $60 target
(as adjusted to reflect the Merger) is met on or before March 31,
1997, the Compensation Committee of the successor to the Chase Bank
will then determine the amount payable with respect to the achievement
of such target. If, prior to March 31, 1997, the executive's
employment is terminated without "cause" or the executive resigns for
"good reason," (each as defined in the executive's Revised Chase
Executive Agreement, the amended Chase Manhattan Corporation Special
Severance Plan or the amended Chase Manhattan 1994 Long Term Incentive
Plan, as applicable to such executive) the executive will be entitled
to a subsequent payout of the amount payable for the $60 target if
such target is reached after termination of employment.
Chemical will afford holders of PARs the same treatment
described above, except that (i) if the Executive's employment is terminated
without "cause" or the executive resigns for "good reason" (as defined above)
prior to the applicable vesting date, a portion of the restricted shares shall
become immediately vested, without regard to the attainment of any stock value
targets, in accordance with Chemical's prevailing practice and (ii) the stock
value targets of $55, $60 and $65 shall be preserved and the applicable vesting
date will be adjusted to reflect Chemical's PARs program.
12. Annual Incentive Compensation Deferrals.
Chase hereby represents that prior to execution and delivery
of the Merger Agreement, it amended its Annual Incentive Compensation Plan
Deferral Program to provide that an Approved Change in Control will not
constitute a Change in Control for the purposes of such Program.
13. Annual Incentive Arrangement for Certain Executive Officers.
Chase hereby represents that prior to execution and delivery
of the Merger Agreement, the Chase Compensation Committee has determined that
any awards that may be deferred under Chase's Annual Incentive Arrangement for
Certain Executive Officers for 1995 or 1996 shall be deferred under principles
and procedures substantially identical to those applicable to the plan
described in the first paragraph of Section 11.
<PAGE> 7
7
14. Director Plans.
Chase hereby represents that prior to execution and delivery
of the Merger Agreement, it amended all of its plans and arrangements for
compensation and benefits for outside directors to provide that an Approved
Change in Control will not constitute a Change in Control for the purposes of
any such plans or arrangements.
15. Assumption of Obligations by Surviving Corporation.
Upon the Merger, Chemical and Chase agree that the Surviving
Corporation will expressly assume and perform the respective obligations of
Chase and Chemical under each of the agreements, arrangement plans and programs
described in Section 2 and 3 of this Agreement.
16. No Third Party Beneficiaries.
It is the express understanding and intention of the parties
hereto that no current, future or former employee of Chemical or Chase or any
other person or entity shall be deemed to be a third party beneficiary or to
have or acquire any right with respect to or to enforce the provisions of this
Agreement, and that nothing in this Agreement shall be deemed to constitute a
plan or an amendment to any plan, program, agreement or arrangement.
<PAGE> 8
8
IN WITNESS WHEREOF, Chemical and Chase have caused this
Agreement to be signed by their respective officers thereunto duly authorized
as of the day and year first written above.
THE CHASE MANHATTAN CORPORATION
By: /s/ Thomas G. Labrecque
-----------------------------
Name: Thomas G. Labrecque
Title: Chairman and Chief
Executive Officer
CHEMICAL BANKING CORPORATION
By: /s/ Walter V. Shipley
-----------------------------
Name: Walter V. Shipley
Title: Chairman and Chief
Executive Officer
<PAGE> 9
Exhibit A
Good Reason
"Good Reason" for termination by the Participant*/ of the Participant's
employment shall mean the occurrence (without the Participant's express written
consent) of any one of the following acts, or failure to act, unless, in the
case of any act or failure to act described in clause (2), (3), (4) or (5)
below, such act or failure to act is corrected prior to the Date of Termination
specified in the Notice of Termination given in respect thereof:
(1) a reduction in the Participant's Annual Base Salary as in
effect on the date the Participant first became a Participant in the Plan or as
the same may be increased from time to time;
(2) the failure by the Participant's primary employer to pay to
the Participant any portion of the Participant's current compensation, or the
failure by Chase or any Subsidiary to pay to the Participant any portion of an
installment of deferred compensation under any deferred compensation program
within seven days of the date such compensation is due;
(3) the failure by Chase or a Subsidiary to pay to the Participant
by February 15 following any calendar year an annual cash bonus for such
calendar year that, in the reasonable, good faith judgment of the Compensation
Committee of the Board of Directors of Chase or the Corporate Human Resources
Executive of Chase, fairly reflects the performance of the Participant, any
unit or units (or portions thereof) for which the Participant was responsible
and Chase as a whole during such calendar year; provided that the Participant
may not claim that a bonus equal to or greater than the highest annual bonus
paid to the Participant for any of the three calendar years immediately
preceding the Change in Control does not fairly reflect such performance;
(4) the failure by Chase or a Subsidiary to include the
Participant in any other employee benefit or compensation plan or arrangement
on a basis reasonably comparable to that of other participants in the Plan
having responsibilities of equal importance to those of the Participant;
provided, however, that failure to include the Participant in a plan or
arrangement designed for a general category of positions that does not include
the Participant's position, as determined in good faith by the Compensation
Committee of the Board of Directors of Chase or the Corporate Human Resources
Executive of Chase, shall not be considered Good Reason;
- --------------------------
*/ Capitalized terms shall have the meanings set forth therefor in the
Chase Manhattan Corporation Special Severance Plan.
<PAGE> 10
2
(5) any purported termination of the Participant's employment
which is not effected pursuant to a Notice of Termination and, for purposes of
the Plan, no such purported termination shall be effective.
A Participant's right to terminate employment for Good Reason shall
not be affected by the Participant's incapacity due to physical or mental
illness. The Participant's continued employment shall not constitute consent
to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
<PAGE> 11
EXHIBIT B
Chase Special Severance Plan -
(c) Amount of Severance Benefits.
(1) Lump Sum Severance Payment. A Participant's Lump Sum
Severance Payment shall be an amount equal to the sum of (i) the Participant's
Annual Base Salary, and (ii) the number of Weeks of Annual Base Salary
determined by reference to the schedule set forth below based on the
Participant's length of full-time service with Chase and its subsidiaries:
Lump Sum Severance Payment Schedule
<TABLE>
<CAPTION>
Weeks of
Length of Service Annual Base Salary
----------------- ------------------
<S> <C>
0 - 2 years Eight
More than 2 years 3 weeks for each complete
year of service
</TABLE>
Notwithstanding the foregoing, the Lump-Sum Severance Payment determined under
this subsection (1) may not exceed 104 Weeks of Annual Base Salary.
<PAGE> 12
EXHIBIT C
Chase General Severance Plan -
Each eligible employee shall be entitled to a lump sum severance payment
determined by reference to the schedule set forth below based on the employee's
length of full-time service with Chase and its subsidiaries and the employee's
base salary:
Severance Payment Schedule
<TABLE>
<CAPTION>
Weeks of
Length of Service Base Salary
----------------- -----------
<S> <C>
0 - 2 years Eight
More than 2 years 3 weeks for each complete
year of service
</TABLE>
In addition, each such Participant who shall have completed 25 years
or more of full-time service with Chase and its subsidiaries on or
before December 31, 1995 shall be entitled to an additional 26 weeks
of Annual Base Salary.
Notwithstanding the foregoing, the number of weeks of base salary to be
provided hereunder shall not exceed 104 weeks.
Eligible employees would be continued in the health and welfare plans for the
number of weeks equal to the weeks of base salary upon which their severance
payment is computed during which they receive salary continuation. Any
remaining COBRA coverage would begin after that period.
<PAGE> 1
EXHIBIT NO. 4.3
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
of
CHEMICAL BANKING CORPORATION
Under Section 245
of the
General Corporation Law of the State of Delaware
We, Walter V. Shipley, Chairman, and John B. Wynne, Secretary,
of Chemical Banking Corporation (the "Corporation") do hereby certify under the
seal of the Corporation as follows:
First: The name of the Corporation is Chemical Banking
Corporation; the Corporation was originally incorporated as Chemical New York
Corporation.
Second: The Certificate of Incorporation of the Corporation
was filed with the Secretary of State of the State of Delaware in Dover,
Delaware, on the 28th day of October, 1968.
Third: This Amended and Restated Certificate of Incorporation
was duly adopted in accordance with Section 245 of the General Corporation Law
of the State of Delaware and amends the provisions of the Corporation's
Restated Certificate of Incorporation as heretofore restated, amended and
supplemented.
Fourth: The text of the Restated Certificate of Incorporation
of said Chemical Banking Corporation, as amended, is hereby amended and
restated to read in full, as follows:
FIRST. The name of the Corporation is
THE CHASE MANHATTAN CORPORATION
SECOND. The address of its registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. The name of its registered agent at such address is The Corporation
Trust Company.
THIRD. The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware. Without limiting in any manner the scope
and generality of the foregoing, the Corporation shall have the following
purposes and powers:
(1) To acquire by purchase, subscription, or otherwise,
and to receive, hold, own, guarantee, sell, assign, exchange,
transfer, mortgage, pledge, or otherwise dispose of or deal in and
with any and all securities, as such term is hereinafter defined,
issued or created by any
<PAGE> 2
2
corporation, firm, organization, association or other entity, public
or private, whether formed under the laws of the United States of
America or of any state, commonwealth, territory, dependency or
possession thereof, or of any foreign country or of any political
subdivision, territory, dependency, possession or municipality
thereof, or issued or created by the United States of America or any
state or commonwealth thereof or any foreign country, or by any
agency, subdivision, territory, dependency, possession or municipality
of any of the foregoing, and as owner thereof to possess and exercise
all the rights, powers and privileges of ownership, including the
right to execute consents and vote thereon;
(2) to make, establish and maintain investments in
securities, and to supervise and manage such investments;
(3) to cause to be organized under the laws of the United
States of America or of any state, commonwealth, territory, dependency
or possession thereof, or of any foreign country or of any political
subdivision, territory, dependency, possession or municipality
thereof, one or more corporations, firms, organizations, associations
or other entities and to cause the same to be dissolved, wound up,
liquidated, merged or consolidated;
(4) to acquire by purchase or exchange, or by transfer to
or by merger or consolidation with the Corporation or any corporation,
firm, organization, association or other entity owned or controlled,
directly or indirectly, by the Corporation, or to otherwise acquire,
the whole or any part of the business, good will, rights or other
assets of any corporation, firm, organization, association or other
entity, and to undertake or assume in connection therewith the whole
or any part of the liabilities and obligations thereof, to effect any
such acquisition in whole or in part by delivery of cash or other
property, including securities issued by the Corporation, or by any
other lawful means;
(5) to make loans and give other forms of credit, with or
without security, and to negotiate and make contracts and agreements
in connection therewith;
(6) to aid by loan, subsidy, guaranty or in any other
lawful manner any corporation, firm, organization, association or
other entity of which any securities are in any manner directly or
indirectly held by the Corporation or in which the Corporation or any
such corporation, firm, organization, association or entity may be or
become otherwise interested; to guarantee the payment of dividends on
any stock issued by any such corporation, firm, organization,
association or entity; to guarantee or, with or without recourse
against any such corporation, firm, organization, association or
entity, to assume the payment
<PAGE> 3
3
of the principal of, or the interest on, any obligations issued or
incurred by such corporation, firm, organization, association or
entity; to do any and all other acts and things for the enhancement,
protection or preservation of any securities which are in any manner,
directly or indirectly, held, guaranteed or assumed by the
Corporation, and to do any and all acts and things designed to
accomplish any such purpose;
(7) to borrow money for any business, object or purpose
of the Corporation from time to time, without limit as to amount; to
issue any kind of evidence of indebtedness, whether or not in
connection with borrowing money, including evidences of indebtedness
convertible into stock of the Corporation, to secure the payment of
any evidence of indebtedness by the creation of any interest in any of
the property or rights of the Corporation, whether at that time owned
or thereafter acquired;
(8) to render service, assistance, counsel and advice to,
and to act as representative or agent in any capacity (whether
managing, operating, financial, purchasing, selling, advertising or
otherwise) of, any corporation, firm, organization, association or
other entity; and
(9) to engage in any commercial, financial, mercantile,
industrial, manufacturing, marine, exploration, mining, agricultural,
research, licensing, servicing, or agency business not prohibited by
law, and any, some or all of the foregoing.
The term "securities" as used in this Certificate of
Incorporation shall mean any and all notes, stocks, treasury stocks, bonds,
debentures, evidences of indebtedness, certificates of interest or
participation in any profit-sharing agreement, collateral-trust certificates,
preorganization certificates or subscriptions, transferable shares, investment
contracts, voting trust certificates, certificates of deposit for a security,
fractional undivided interests in oil, gas, or other mineral rights, or, in
general, any interests or instruments commonly known as "securities", or any
and all certificates of interest or participation in, temporary or interim
certificates for, receipts for, guaranties of, or warrants or rights to
subscribe to or purchase, any of the foregoing.
The purposes and powers specified in the foregoing paragraphs
shall, except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other paragraph in this
Certificate of Incorporation, but the purposes and powers specified in each of
the foregoing paragraphs of this Article THIRD shall be regarded as independent
purposes and powers.
<PAGE> 4
4
The Corporation shall possess and may exercise all powers and
privileges necessary or convenient to effect any or all of the foregoing
purposes, or to further any or all of the foregoing powers, and the enumeration
herein of any specific purposes or powers shall not be held to limit or
restrict in any manner the exercise by the Corporation of the general powers
and privileges now or hereafter conferred by the laws of the State of Delaware
upon corporations formed under the General Corporation Law of Delaware.
FOURTH. The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue is NINE HUNDRED FIFTY
MILLION, of which TWO HUNDRED MILLION shares shall be shares of preferred stock
of the par value of $1 per share (hereinafter called "Preferred Stock") and
SEVEN HUNDRED FIFTY MILLION shares shall be shares of common stock of the par
value of $1 per share (hereinafter called "Common Stock").
Any amendment to this Certificate of Incorporation which shall
increase or decrease the authorized capital stock of the Corporation may be
adopted by the affirmative vote of the holders of capital stock representing
not less than a majority of the voting power represented by the outstanding
shares of capital stock of the Corporation entitled to vote.
The designations and the powers, preferences and rights, and
the qualifications, limitations or restrictions thereof, of the Preferred Stock
shall be as follows:
(1) The Board of Directors is expressly authorized at any
time, and from time to time, to provide for the issuance of shares of
Preferred Stock in one or more series, with such voting powers, full
or limited but not to exceed one vote per share, or without voting
powers and with such designations, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, as shall be stated and expressed
in the resolution or resolutions providing for the issue thereof
adopted by the Board of Directors, and as are not stated and expressed
in this Certificate of Incorporation, or any amendment thereto,
including (but without limiting the generality of the foregoing) the
following:
(a) the designation of such series;
(b) the dividend rate of such series, the
conditions and dates upon which such dividends shall be
payable, the preference or relation which such dividends shall
bear to the dividends payable on any other class or classes or
on any other series of any class or classes of capital stock,
and whether such dividends shall be cumulative or
non-cumulative;
<PAGE> 5
5
(c) whether the shares of such series shall be
subject to redemption by the Corporation, and, if made subject
to such redemption, the times, prices and other terms and
conditions of such redemption;
(d) the terms and amount of any sinking fund
provided for the purchase or redemption of the shares of such
series;
(e) whether or not the shares of such series
shall be convertible into or exchangeable for shares of any
other class or classes or of any other series of any class or
classes of capital stock of the Corporation, and, if provision
be made for conversion or exchange, the times, prices, rates,
adjustments and other terms and conditions of such conversion
or exchange;
(f) the extent, if any, to which the holders of
the shares of such series shall be entitled to vote as a class
or otherwise with respect to the election of the directors or
otherwise; provided, however, that in no event shall any
holder of any series of Preferred Stock be entitled to more
than one vote for each share of such Preferred Stock held by
him;
(g) the restrictions, if any, on the issue or
reissue of any additional Preferred Stock;
(h) the rights of the holders of the shares of
such series upon the dissolution of, or upon the distribution
of assets of, the Corporation.
(2) Except as otherwise required by law and except for
such voting powers with respect to the election of directors or other
matters as may be stated in the resolutions of the Board of Directors
creating any series of Preferred Stock, the holders of any such series
shall have no voting power whatsoever.
(3) The voting powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
Corporation's Junior Participating Preferred Stock are set forth in
Appendix A hereto and are incorporated herein by reference.
(4) The voting powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
Corporation's Adjustable Rate Cumulative Preferred Stock, Series L are
set forth in Appendix B hereto and are incorporated herein by
reference.
<PAGE> 6
6
(5) The voting powers, designations, preferences, and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
Corporation's 10.96% Preferred Stock are set forth in Appendix C
hereto and are incorporated herein by reference.
(6) The voting powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
Corporation's 8-3/8% Preferred Stock are set forth in Appendix D
hereto and are incorporated herein by reference.
(7) The voting powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
Corporation's 7.92% Cumulative Preferred Stock are set forth in
Appendix E hereto and are incorporated herein by reference.
(8) The voting powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
Corporation's 7.58% Cumulative Preferred Stock are set forth in
Appendix F hereto and are incorporated herein by reference.
(9) The voting powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
Corporation's 7-1/2% Cumulative Preferred Stock are set forth in
Appendix G hereto and are incorporated herein by reference.
FIFTH. The by-laws may be made, altered, amended or repealed
by the Board of Directors. The books of the Corporation (subject to the
provisions of the laws of the State of Delaware) may be kept outside of the
State of Delaware at such places as from time to time may be designated by the
Board of Directors.
SIXTH. (1) To the fullest extent that the General
Corporation Law of the State of Delaware as it exists on the date
hereof or as it may hereafter be amended permits the limitation or
elimination of the liability of directors, no director of the
Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director.
(2) The Corporation shall have the power to indemnify any
director, officer, employee or agent of the Corporation or any other
person who is serving at the request of the Corporation in any such
capacity with another corporation, partnership, joint venture, trust
or other enterprise (including, without limitation, any employee
benefit plan) to the fullest extent permitted by the General
Corporation
<PAGE> 7
7
Law of the State of Delaware as it exists on the date hereof or as it
may hereafter be amended, and any such indemnification may continue as
to any person who has ceased to be a director, officer, employee or
agent and may inure to the benefit of the heirs, executors and
administrators of such a person.
(3) By action of its Board of Directors, notwithstanding
any interest of the directors in the action, the Corporation may
purchase and maintain insurance, in such amounts as the Board of
Directors deems appropriate, to protect any director, officer,
employee or agent of the Corporation or any other person who is
serving at the request of the Corporation in any such capacity with
another corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit plan)
against any liability asserted against him or incurred by him in any
such capacity or arising out of his status as such (including, without
limitation, expenses, judgments, fines and amounts paid in settlement)
to the fullest extent permitted by the General Corporation Law of the
State of Delaware as it exists on the date hereof or as it may
hereafter be amended, and whether or not the Corporation would have
the power or would be required to indemnify any such person under the
terms of any agreement or by-law or the General Corporation Law of the
State of Delaware. For purposes of this paragraph (3), "fines" shall
include any excise taxes assessed on a person with respect to any
employee benefit plan.
SEVENTH. (1) Any action required or permitted to be taken by
the holders of Common Stock of the Corporation must be effected at a
duly called annual or special meeting of the stockholders of the
Corporation and may not be effected by any consent in writing.
(2) Whenever the vote of holders of shares of any class
or series other than Common Stock at a meeting thereof is required or
permitted to be taken for or in connection with any corporate action
by any provision of the General Corporation Law of the State of
Delaware, the meeting and vote of such stockholders may be dispensed
with if such action is taken with the written consent of such holders
representing not less than a majority of the voting power of all the
capital stock of such class or series entitled to be voted upon such
action if a meeting were held; provided that in no case shall the
written consent be by such holders having less than the minimum
percentage of the vote required by statute for such action, and
provided that prompt notice is given in writing to all such
stockholders entitled to vote thereon of the taking of corporate
action without a meeting and by less than unanimous written consent.
<PAGE> 8
8
(3) Election of directors need not be by ballot unless
the by-laws so provide.
EIGHTH. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, we have signed this certificate and caused
the corporate seal of the Corporation to be hereunto affixed this _______ day
of ____________ __, 199_.
---------------------------
Walter V. Shipley
Chairman
[Corporate Seal]
Attest:
- ------------------------
John B. Wynne
Secretary
<PAGE> 9
Appendix A
CERTIFICATE OF DESIGNATIONS
OF
JUNIOR PARTICIPATING PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors of Chemical Banking
Corporation, a Delaware corporation (hereinafter called the "Corporation"), at
meetings duly convened and held on April 13, 1989 and _______ __, 1995, at
which a quorum was present and acting throughout:
"RESOLVED that, pursuant to authority conferred upon the Board
of Directors by the Certificate of Incorporation of the Corporation
(hereinafter called the "Certificate of Incorporation"), the Board of
Directors hereby provides for the issuance of a series of Preferred
Stock of the Corporation to consist of 7,500,000 shares, and hereby
fixes the voting powers, designation, preferences and relative,
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the shares of
such series, in addition to those set forth in the Certificate of
Incorporation, as follows:
"(a) Designation. The designation of the series
of Preferred Stock created by this resolution shall be "Junior
Participating Preferred Stock" (hereinafter called this
"Series") and the number of shares constituting this Series is
seven million five hundred thousand (7,500,000).
"(b) Dividends.
"(1) Subject to the prior and superior
rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the
shares of this Series with respect to dividends, the
holders of shares of this Series shall be entitled to
receive, when and as declared by the Board of
Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on March
31, June 30, September 30
A-1
<PAGE> 10
and December 31 of each year (each such date being
referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or
fraction of a share of this Series, in an amount per
share (rounded to the nearest cent) equal to the
greater of (A) $2.00 or (B) subject to the provision
for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and
100 times the aggregate per share amount (payable in
kind) of all noncash dividends or other distributions
other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $12.00 per
share, of the Corporation (the "Common Stock") since
the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of
any share or fraction of a share of this Series. In
the event the Corporation shall at any time after
April 13, 1989 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which
holders of shares of this Series were entitled
immediately prior to such event under clause (B) of
the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock
outstanding immediately after such event and the
denominator of which is the number of shares of
Common Stock that were outstanding immediately prior
to such event.
"(2) The Corporation shall declare a
dividend or distribution on this Series as provided
in clause (A) of the preceding paragraph (1)
immediately after it declares a dividend or
distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall
have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment
Date, a dividend of $2.00 per share on this Series
shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
A-2
<PAGE> 11
"(3) Dividends shall begin to accrue and
be cumulative on outstanding shares of this Series
from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of this
Series unless the date of issue of such shares is
prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of
shares of this Series entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the
shares of this Series in an amount less than the
total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares
at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of
shares of this Series entitled to receive payment of
a dividend or distribution declared thereon, which
record date shall be no more than 30 days prior to
the date fixed for the payment thereof.
"(4) No full dividends shall be declared
or paid or set apart for payment on the Preferred
Stock of any series ranking, as to dividends, on a
parity with or junior to this Series for any period
unless full cumulative dividends have been or
contemporaneously are declared and a sum sufficient
for the payment thereof set apart for such payment on
this Series for all dividend payment periods
terminating on or prior to the date of payment of
such full cumulative dividends. When dividends are
not paid in full, as aforesaid, upon the shares of
this Series and any other Preferred Stock ranking on
a parity as to dividends with this Series, all
dividends declared upon shares of this Series and any
other Preferred Stock ranking on a parity as to
dividends with this Series shall be declared pro rata
so that the amount of dividends declared per share on
this Series and such other Preferred Stock shall in
all cases bear to each other the same ratio that
accrued dividends per share on the shares of this
Series and such other Preferred Stock bear to each
other. Holders of shares of this Series shall not be
entitled to any dividends, whether payable in
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cash, property or stock, in excess of full cumulative
dividends, as herein provided, on this Series. No
interest, or sum of money in lieu of interest, shall
be payable in respect of any dividend payment or
payments on this Series which may be in arrears.
"(5) So long as any shares of this
Series are outstanding, no dividend (other than a
dividend in Common Stock or in any other stock
ranking junior to this Series as to dividends and
upon liquidation and other than as provided in
paragraph (4) of this Section (b)) shall be declared
or paid or set aside for payment or other
distribution declared or made upon the Common Stock
or upon any other stock ranking junior to or on a
parity with this Series as to dividends or upon
liquidation, nor shall any Common Stock or any other
stock of the Corporation ranking junior to or on a
parity with this Series as to dividends or upon
liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid
to or made available for a sinking fund for the
redemption of any shares of any such stock) by the
Corporation (except by conversion into or exchange
for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation) unless,
in each case, the full cumulative dividends on all
outstanding shares of this Series shall have been
paid for all past dividend payment periods.
"(c) Redemption.
"(1) The shares of this Series shall be
redeemable only as expressly provided in this Section
(c). The Corporation, at its option, may redeem
shares of this Series, as a whole or in part, at any
time or from time to time, at a redemption price
equal to, subject to the provisions for adjustment
hereinafter set forth, 100 times the "current per
share market price" of the Common Stock on the date
of the mailing of the notice of redemption, plus
accrued and unpaid dividends to the date fixed for
such redemption. In the event the Corporation shall
at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which
holders of shares of this Series were otherwise
entitled immediately prior to such event under the
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preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding
immediately after such event and the denominator of
which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
The "current per share market price" on any date
shall be deemed to be the average of the closing
price per share of such Common Stock for the 10
consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date. The closing
price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked
prices, regular way, in either case as reported in
the principal consolidated transaction reporting
system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the
Common Stock is not listed or admitted to trading on
the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system
with respect to securities listed or admitted to
trading on the principal national securities exchange
on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or
admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted
the average of the high bid and low asked prices in
the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other
system then in use or, if on any such date the Common
Stock is not quoted by any such organization, the
average of the closing bid and asked prices as
furnished by a professional market maker making a
market in the Common Stock selected by the Board of
Directors of the Corporation. If on such date no
such market maker is making a market in the Common
Stock, the fair value of the Common Stock on such
date as determined in good faith by the Board of
Directors of the Corporation shall be used. The term
"Trading Day" shall mean a day on which the principal
national securities exchange on which the Common
Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock
is not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday,
Thursday or Friday on which banking institutions in
the State of New York are not authorized or obligated
by law or executive order to close.
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<PAGE> 14
"(2) In the event that fewer than all
the outstanding shares of this Series are to be
redeemed, the number of shares to be redeemed shall
be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or
pro rata as may be determined by the Board of
Directors or by any other method which may be
determined by the Board of Directors in its sole
discretion to be equitable.
"(3) In the event the Corporation shall
redeem shares of this Series, notice of such
redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 nor more
than 60 days prior to the redemption date, to each
holder of record of the shares to be redeemed, at
such holder's address as the same appears on the
stock register of the Corporation. Each such notice
shall state: (i) the redemption date; (ii) the
number of shares of this Series to be redeemed and,
if fewer than all the shares held by such holder are
to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the redemption
price; (iv) the place or places where certificates
for such shares are to be surrendered for payment of
the redemption price; and (v) that dividends on the
shares to be redeemed will cease to accrue on the
close of business on such redemption date.
"(4) Notice having been mailed as
aforesaid, from and after the redemption date (unless
default shall be made by the Corporation in providing
money for the payment of the redemption price)
dividends on the shares of this Series so called for
redemption shall cease to accrue, and said shares
shall no longer be deemed to be outstanding, and all
rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon
surrender in accordance with said notice of the
certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the
notice shall so state), such shares shall be redeemed
by the Corporation at the redemption price aforesaid.
In case fewer than all the shares represented by any
such certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares
without cost to the holder thereof.
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<PAGE> 15
"(5) Any shares of this Series which
shall at any time have been redeemed shall, after
such redemption, have the status of authorized but
unissued shares of Preferred Stock without
designation as to series until such shares are once
more designated as part of a particular series by the
Board of Directors.
"(6) Notwithstanding the foregoing
provisions of this Section (c), if any dividends on
this Series are in arrears, no shares of this Series
shall be redeemed unless all outstanding shares of
this Series are simultaneously redeemed, and the
Corporation shall not purchase or otherwise acquire
any shares of this Series; provided, however, that
the foregoing shall not prevent the purchase or
acquisition of shares of this Series pursuant to a
purchase or exchange offer made on the same terms to
holders of all outstanding shares of this Series.
"(d) Conversion or Exchange. The holders of
shares of this Series shall not have any rights to convert
such shares into or exchange such shares for shares of any
other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
"(e) Voting. The shares of this Series shall not
have any voting powers either general or special, except that
if at the time of any annual meeting of stockholders for the
election of directors a default in preference dividends on the
Preferred Stock shall exist, the number of directors
constituting the Board of Directors of the Corporation shall
be increased by two, and the holders of the Preferred Stock of
all series (whether or not the holders of such series of
Preferred Stock would be entitled to vote for the election of
directors if such default in preference dividends did not
exist), shall have the right at such meeting, voting together
as a single class without regard to series, to the exclusion
of the holders of Common Stock, to elect two directors of the
Corporation to fill such newly created directorships. Such
right shall continue until there are no dividends in arrears
upon the Preferred Stock. Each director elected by the
holders of shares of Preferred Stock (herein called a
"Preferred Director"), shall continue to serve as such
director for the full term for which he shall have been
elected, notwithstanding that prior to the end of such term a
default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed
except by, the vote of the holders of record of the
outstanding shares of Preferred Stock
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<PAGE> 16
voting together as a single class without regard to series, at
a meeting of the stockholders, or of the holders of shares of
Preferred Stock called for the purpose. So long as a default
in any preference dividends on the Preferred Stock shall
exist, (A) any vacancy in the office of a Preferred Director
may be filled (except as provided in the following clause (B))
by an instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (B) in the case of
the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding shares of
Preferred Stock voting together as a single class without
regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes
hereof, to be a Preferred Director. Whenever the term of
office of the Preferred Directors shall end and a default in
preference dividends shall no longer exist, the number of
Directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes hereof,
a "default in preference dividends" on the Preferred Stock
shall be deemed to have occurred whenever the amount of
accrued dividends upon any series of the Preferred Stock shall
be equivalent to six full quarter-yearly dividends or more,
and, having so occurred, such default shall be deemed to exist
thereafter until, but only until, all accrued dividends on all
shares of Preferred Stock of each and every series then
outstanding shall have been paid to the end of the last
preceding quarterly dividend period.
"(f) Liquidation Rights.
"(1) Upon the dissolution, liquidation
or winding up of the Corporation, the holders of the
shares of this Series shall be entitled to receive
out of the assets of the Corporation, before any
payment or distribution shall be made on the Common
Stock or on any other class of stock ranking junior
to the Preferred Stock upon liquidation, the amount
of $100 per share, plus a sum equal to all dividends
(whether or not earned or declared) on such shares
accrued and unpaid thereon to the date of final
distribution (the "Liquidation Preference").
Following the payment of the full amount of
the Liquidation Preference, no additional
distributions shall be made to the holders of shares
of this Series unless, prior thereto, the holders of
shares of Common Stock shall have received an amount
per share (the "Common
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<PAGE> 17
Adjustment") equal to the quotient obtained by
dividing (i) the Liquidation Preference by (ii) 100
(as appropriately adjusted as set forth in paragraph
(2) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to
the Common Stock) (such number in clause (ii), the
"Adjustment Number"). Following the payment of the
full amount of the Liquidation Preference and the
Common Adjustment, in respect of all outstanding
shares of Junior Participating Preferred Stock and
Common Stock, respectively, holders of this Series
and holders of shares of Common Stock shall receive
their ratable and proportionate share of the
remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such
Junior Participating Preferred Stock and Common
Stock, on a per share basis, respectively.
"(2) In the event the Corporation shall
at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number
in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after
such event and the denominator of which is the number
of shares of Common Stock that were outstanding
immediately prior to such event.
"(3) The sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all the
property and assets of the Corporation shall be
deemed a voluntary dissolution, liquidation or
winding up of the Corporation for the purposes of
this Section (f), but the merger or consolidation of
the Corporation into or with any other corporation or
the merger or consolidation of any other corporation
into or with the Corporation, shall not be deemed to
be a dissolution, liquidation or winding up,
voluntarily or involuntarily, for the purposes of
this Section (f).
"(4) After the payment to the holders of
the shares of this Series of the full preferential
amounts provided for in this Section (f), the
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<PAGE> 18
holders of this Series as such shall have no right
or claim to any of the remaining assets of the
Corporation.
"(5) In the event the assets of the
Corporation available for distribution to the holders
of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to
pay in full all amounts to which such holders are
entitled pursuant to paragraph (1) of this Section
(f), no such distribution shall be made on account of
any shares of any other class or series of Preferred
Stock ranking on a parity with the shares of this
Series upon such dissolution, liquidation or winding
up unless proportionate distributive amounts shall be
paid on account of the shares of this Series,
ratably, in proportion to the full distributable
amounts for which holders of all such parity shares
are respectively entitled upon such dissolution,
liquidation or winding up.
"(g) For purposes of this resolution, any stock of
any class or classes of the Corporation shall be deemed to
rank:
"(1) prior to the shares of this Series,
either as to dividends or upon liquidation, if the
holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or
priority to the holders of shares of this Series;
"(2) on a parity with shares of this
Series, either as to dividends or upon liquidation,
whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share
or sinking fund provisions, if any, be different from
those of this Series, if the holders of such stock
shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation
or winding up of the Corporation, as the case may be,
in proportion to their respective dividend rates or
liquidation prices, without preference or priority,
one over the other, as between the holders of such
stock and the holders of shares of this Series; and
"(3) junior to shares of this Series,
either as to dividends or upon liquidation, if the
holders of shares of this Series shall be entitled
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to receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or
priority to the holders of shares of such class or
classes."
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Appendix B
CERTIFICATE OF DESIGNATIONS
OF
ADJUSTABLE RATE CUMULATIVE PREFERRED STOCK, SERIES L
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors of Chemical Banking
Corporation, a Delaware corporation (hereinafter called the "Corporation"), at
a meeting duly convened and held on April 28, 1987, at which a quorum was
present and acting throughout:
"RESOLVED that, pursuant to authority conferred upon the Board
of Directors by the Certificate of Incorporation of the Corporation
(hereinafter called the "Certificate of Incorporation"), the Board of
Directors hereby provides for the issuance of a series of Preferred
Stock of the Corporation to consist of 34,692,402 shares, and hereby
fixes the voting powers, designation, preferences and relative,
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the shares of
such series, in addition to those set forth in the Certificate of
Incorporation, as follows:
"(a) Designation. The designation of the series of
Preferred Stock created by this resolution shall be
"Adjustable Rate Cumulative Preferred Stock, Series C"
(hereinafter called this "Series") and the number of shares
constituting this Series is Thirty-four million six hundred
ninety-two thousand four hundred eighty-two (34,692,482).
Shares of this Series shall have a stated value of $12 per
share. The number of authorized shares of this Series may be
reduced by further resolution duly adopted by the Board of
Directors of the Corporation or the Executive Committee
thereof and by the filing of a certificate pursuant to the
provisions of the General Corporation Law of the State of
Delaware stating that such reduction has been so authorized,
but the number of authorized shares of this Series shall not
be increased.
"(b) Dividend Rates.
"(1) Dividend rates on the shares of this
Series shall be: (i) for the period (the "Initial
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Dividend Period") from May 1, 1987, to and including
June 30, 1987, at 7.65% per annum of the stated value
thereof and (ii) for each quarterly dividend period
(hereinafter referred to as a "Quarterly Dividend
Period", and the Initial Dividend Period or any
Quarterly Dividend Period being hereinafter
individually referred to as a "Dividend Period" and
collectively referred to as "Dividend Periods")
thereafter, which quarterly dividend Periods shall
commence on January 1, April 1, July 1 and October 1
in each year and shall end on, and include the day
next preceding the first day of the next quarterly
dividend period, at a rate per annum of the stated
value thereof equal to the Effective Rate (as defined
in Paragraph (2) of this section (b)) in respect of
such quarterly dividend Period. Such dividends shall
be cumulative from the date of original issue of such
shares and shall be payable, when and as declared by
the Board of Directors or by a committee of said
Board duly authorized by said Board to declare such
dividends on March 31, June 30, September 30 and
December 31 of each year, commencing June 30, 1987.
Each such dividend shall be paid to the holders of
record of shares of this Series as they appear on the
stock register of the Corporation on such record
date, not exceeding 30 days preceding the payment
date thereof, as shall be fixed by the Board of
Directors of the Corporation or by a committee of
said Board of Directors duly authorized to fix such
date. Dividends on account of arrears for any past
Dividend Periods may be declared and paid at any
time, without reference to any regular dividend
payment date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof
as may be fixed by the Board of Directors of the
Corporation or by a committee of said Board of
Directors duly authorized to fix such date.
"(2) Except as provided below in this
paragraph, the "Effective Rate" for any Quarterly
Dividend Period shall be (a) 1% less than (b) the
highest of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate and the Thirty Year Constant
Maturity Rate (each as hereinafter defined) for such
Dividend Period. In the event that the Corporation
determines in good faith that for any reason
"(i) any one of the Treasury Bill
Rate, the Ten Year Constant Maturity Rate and
the Thirty Year Constant Maturity Rate cannot
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<PAGE> 22
be determined for any Quarterly Dividend
Period, then the Effective Rate for such
Dividend Period shall be 1% less than the
higher of whichever two of such Rates can be
so determined;
"(ii) only one of the Treasury Bill
Rate, the Ten Year Constant Maturity Rate and
the Thirty Year Constant Maturity Rate can be
determined for any Quarterly Dividend Period,
then the Effective Rate for such Dividend
Period shall be 1% less than whichever such
Rate can be so determined; or
"(iii) none of the Treasury Bill Rate,
the Ten Year Constant Maturity Rate and the
Thirty Year Constant Maturity Rate can be
determined for any Quarterly Dividend Period,
then the rate in effect for the preceding
Dividend Period (or, if the rate being so
continued is for the Initial Dividend Period,
a rate .5% higher than such rate) shall be
continued for such Dividend Period.
Anything herein to the contrary notwithstanding, the Effective Rate
for any Quarterly Dividend Period shall in no event be less than
5-1/2% per annum or greater than 11-1/2% per annum.
"(3) Except as provided below in this paragraph, the
"Treasury Bill Rate" for each Quarterly Dividend Period shall be the
arithmetic average of the two most recent weekly per annum market
discount rates (or the one weekly per annum market discount rate if
only one such rate shall be published during the relevant Calendar
Period as provided below) for three-month U.S. Treasury bills, as
published weekly by the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") during the Calendar Period
immediately prior to the last ten calendar days of March, June,
September or December, as the case may be, prior to the Quarterly
Dividend Period for which the dividend rate on this Series is being
determined. In the event that the Federal Reserve Board does not
publish such a weekly per annum market discount rate during such
Calendar Period, then the Treasury Bill Rate for such Dividend Period
shall be the arithmetic average of the two most recent weekly per
annum market discount rates (or the one weekly per annum market
discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for three-month U.S.
Treasury bills, as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that a per annum market
discount rate for three-month U.S. Treasury bills shall not
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be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such
Calendar Period, then the Treasury Bill Rate for such Dividend Period
shall be the arithmetic average of the two most recent weekly per
annum market discount rates (or the one weekly per annum market
discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for all of the U.S.
Treasury bills then having maturities of not less than 80 nor more
than 100 days, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board shall not publish such
rates, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that
the Corporation determines in good faith that for any reason no such
U.S. Treasury bill rates are published as provided above during such
Calendar Period, then the Treasury Bill Rate for such Dividend Period
shall be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of
the issues of marketable noninterest-bearing U.S. Treasury securities
with a maturity of not less than 80 nor more than 100 days from the
date of each such quotation, as chosen and quoted daily for each
business day in New York City (or less frequently if daily quotations
shall not be generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the
Corporation. In the event that the Corporation determines in good
faith that for any reason the Corporation cannot determine the
Treasury Bill Rate for any Quarterly Dividend Period as provided above
in this paragraph, the Treasury Bill Rate for such Dividend Period
shall be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of
the issues of marketable interest-bearing U.S. Treasury securities
with a maturity of not less than 80 nor more than 100 days, as chosen
and quoted daily for each business day in New York City (or less
frequently if daily quotations shall not be generally available) to
the Corporation by at least three recognized dealers in U.S.
Government securities selected by the Corporation.
"(4) Except as provided below in this paragraph, the "Ten
Year Constant Maturity Rate" for each Quarterly Dividend Period shall
be the arithmetic average of the two most recent weekly per annum Ten
Year Average Yields (or the one weekly per annum Ten Year Average
Yield, if only one such Yield shall be published during the relevant
Calendar Period as provided below), as published weekly by the Federal
Reserve Board during the Calendar Period immediately prior to the last
ten calendar days of March, June, September or December, as the case
may be, prior to the Quarterly Dividend Period for which the dividend
rate on this Series is being determined. In the event that the
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<PAGE> 24
Federal Reserve Board does not publish such a weekly per annum Ten
Year Average Yield during such Calendar Period, then the Ten Year
Constant Maturity Rate for such Dividend Period shall be the
arithmetic average of the two most recent weekly per annum Ten Year
Average Yields (or the one weekly per annum Ten Year Average Yield, if
only one such Yield shall be published during the relevant Calendar
Period as provided below), as published weekly during such Calendar
Period by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that a
per annum Ten Year Average Yield shall not be published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Ten Year
Constant Maturity Rate for such Dividend Period shall be the
arithmetic average of the two most recent weekly per annum average
yields to maturity (or the one weekly average yield to maturity, if
only one such yield shall be published during the relevant Calendar
Period as provided below) for all of the actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special
Securities) then having maturities of not less than eight nor more
than twelve years, as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board shall not
publish such yields, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the
event that the Corporation determines in good faith that for any
reason the Corporation cannot determine the Ten Year Constant Maturity
Rate for any Quarterly Dividend Period as provided above in this
paragraph, then the Ten Year Constant Maturity Rate for such Dividend
Period shall be the arithmetic average of the per annum average yields
to maturity based upon the closing bids during such Calendar Period
for each of the issues of actively traded marketable U.S. Treasury
fixed interest rate securities (other than Special Securities) with a
final maturity date not less than eight nor more than twelve years
from the date of each such quotation, as chosen and quoted daily for
each business day in New York City (or less frequently if daily
quotations shall not be generally available) to the Corporation by at
least three recognized dealers in U.S. Government securities selected
by the Corporation.
"(5) Except as provided below in this paragraph, the "Thirty
Year Constant Maturity Rate" for each Quarterly Dividend Period shall
be the arithmetic average of the two most recent weekly per annum
Thirty Year Average Yields (or the one weekly per annum Thirty Year
Average Yield, if only one such Yield shall be published during the
relevant Calendar Period as provided below), as published weekly by
the Federal Reserve Board during the Calendar Period immediately prior
to the last ten calendar days of March, June, September or December,
as the case may be, prior to
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the Quarterly Dividend Period for which the dividend rate on this
Series is being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum Thirty Year Average
Yield during such Calendar Period, then the Thirty Year Constant
Maturity Rate for such Dividend Period shall be the arithmetic average
of the two most recent weekly per annum Thirty Year Average Yields (or
the one weekly per annum Thirty Year Average Yield if only one such
Yield shall be published during the relevant Calendar Period as
provided below), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. In the event that a per annum
Thirty Year Average Yield shall not be published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Thirty Year
Constant Maturity Rate for such Dividend Period shall be the
arithmetic average of the two most recent weekly per annum average
yields to maturity (or the one weekly average yield to maturity, if
only one such yield shall be published during the relevant Calendar
Period as provided below) for all of the actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special
Securities) then having maturities of not less than twenty-eight nor
more than thirty years, as published during such Calendar Period by
the Federal Reserve Board or, if the Federal Reserve Board shall not
publish such yields, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the
event that the Corporation determines in good faith that for any
reason the Corporation cannot for any Quarterly Dividend Period as
provided above in this paragraph, then the Thirty Year Constant
Maturity Rate for such Dividend Period shall be the arithmetic average
of the per annum average yields to maturity based upon the closing
bids during such Calendar Period for each of the issues of actively
traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) with a final maturity date not less than
twenty-eight nor more than thirty years from the date of each such
quotation, as chosen and quoted daily for each business day in New
York City (or less frequently if daily quotations shall not be
generally available) to the Corporation by at least three recognized
dealers in U.S. Government securities selected by the Corporation.
"(6) The Treasury Bill Rate, the Ten Year Constant Maturity
Rate and the Thirty Year Constant Maturity Rate shall each be rounded
to the nearest five hundredths of a percentage point.
"(7) The Effective Rate with respect to each Quarterly
Dividend Period will be calculated as promptly as practicable by the
Corporation according to the appropriate method described herein. The
mathematical accuracy of each
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<PAGE> 26
such calculation will be confirmed in writing by independent
accountants of recognized standing. The Corporation will cause each
Effective Rate to be published in a newspaper of general circulation
in New York City prior to the commencement of the new Quarterly
Dividend Period to which it applies and will cause notice of such
Effective Rate to be enclosed with the dividend payment checks next
mailed to the holders of shares of this Series.
"(8) For purposes of this Section (b), the term
"(i) "Calendar Period" shall mean 14
calendar days;
"(ii) "Special Securities" shall mean
securities which can, at the option of the
holder, be surrendered at face value in
payment of any Federal estate tax or which
provide tax benefits to the holder and are
priced to reflect such tax benefits or which
were originally issued at a deep or
substantial discount;
"(iii) "Ten Year Average Yield" shall
mean the average yield to maturity for
actively traded marketable U.S. Treasury
fixed interest rate securities (adjusted to
constant maturities of ten years); and
"(iv) "Thirty Year Average Yield"
shall mean the average yield to maturity for
actively traded marketable U.S. Treasury
fixed interest rate securities (adjusted to
constant maturities of 30 years).
"(9) No full dividends shall be declared or paid or set apart
for payment on the Preferred Stock of any series ranking, as to
dividends, on a parity with or junior to this Series for any period
unless full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment
thereof set apart for such payment on this Series for all dividend
payment periods terminating on or prior to the date of payment of such
full cumulative dividends. When dividends are not paid in full, as
aforesaid, upon the shares of this Series and any other Preferred
Stock ranking on a parity as to dividends with this Series, all
dividends declared upon shares of this Series and any other Preferred
Stock ranking on a parity as to dividends with this Series shall be
declared pro rata so that the amount of dividends declared per share
on this Series and such other Preferred Stock shall in all cases bear
to each other the same ratio that accrued dividends per share on the
shares of this Series and such other Preferred Stock bear to each
other. Holders of shares of this Series
B-7
<PAGE> 27
shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of full cumulative dividends, as herein
provided, on this Series. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or
payments on this Series which may be in arrears.
"(10) So long as any shares of this Series are outstanding,
no dividend (other than a dividend in Common Stock or in any other
stock ranking junior to this Series as to dividends and upon
liquidation and other than as provided in paragraph (9) of this
Section (b)) shall be declared or paid or set aside for payment or
other distribution declared or made upon the Common Stock or upon any
other stock ranking junior to or on a parity with this Series as to
dividends or upon liquidation, nor shall any Common Stock or any other
stock of the Corporation ranking junior to or on a parity with this
Series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or
made available for a sinking fund for the redemption of any shares of
any such stock) by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior to this Series as
to dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of this Series shall
have been paid for all past dividend payment periods.
"(11) Dividends payable on this Series for each full
Quarterly Dividend Period (other than the Initial Dividend Period)
shall be computed by annualizing the Effective Rate and dividing by
four. Dividends payable on this Series for any period less than a
full Quarterly Dividend Period, and for the Initial Dividend Period,
shall be computed on the basis of a 360-day year of 30-day months and
the actual number of days elapsed in the period for which payable.
"(c) Redemption
"(1) The shares of this Series shall be redeemable only as
expressly provided in this Section (c). On and after May 1, 1992, the
Corporation, at its option, may redeem shares of this Series, as a
whole or in part, at any time or from time to time at a redemption
price of (i) in the case of any redemption on a redemption date
occurring on or after May 1, 1992, and prior to May 1, 1997, $12.36
per share and (ii) in the case of any redemption on a redemption date
occurring on or after May 1, 1997, $12 per share, plus, in each case,
accrued and unpaid dividends thereon to the date fixed for redemption.
"(2) In the event that fewer than all the outstanding shares
of this Series are to be redeemed, the number of shares to be redeemed
shall be determined by the Board of
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<PAGE> 28
Directors and the shares to be redeemed shall be determined by lot or
pro rata as may be determined by the Board of Directors or by any
other method which may be determined by the Board of Directors in its
sole discretion to be equitable.
"(3) In the event the Corporation shall redeem shares of this
Series, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior
to the redemption date, to each holder of record of the shares to be
redeemed, at such holder's address as the same appears on the stock
register of the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the number of shares of this Series to be
redeemed and, if fewer than all the shares held by such holder are to
be redeemed, the number of such shares to be redeemed from such
holder; (iii) the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be redeemed
will cease to accrue on the close of business on such redemption date.
"(4) Notice having been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation
in providing money for the payment of the redemption price), dividends
on the shares of this Series so called for redemption shall cease to
accrue, and said shares shall no longer be deemed to be outstanding,
and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender in accordance with said
notice of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer if the Board of Directors of the
Corporation shall so require and the notice shall so state), such
shares shall be redeemed by the Corporation at the redemption price
aforesaid. In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.
"(5) Any shares of this Series which shall at any time have
been redeemed shall, after such redemption, have the status of
authorized but unissued shares of Preferred Stock, without designation
as to series until such shares are once more designated as part of a
particular series by the Board of Directors.
"(6) Notwithstanding the foregoing provisions of this Section
(c), if any dividends on this Series are in arrears, no shares of this
Series shall be redeemed unless all outstanding shares of this Series
are simultaneously redeemed, and the Corporation shall not purchase or
otherwise acquire any shares of this Series; provided,
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<PAGE> 29
however, that the foregoing shall not prevent the purchase or
acquisition of shares of this Series pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding
shares of this Series.
"(d) Conversion or Exchange. The holders of shares of this
Series shall not have any rights to convert such shares into or exchange such
shares for shares of any other class or classes or of any other series of any
class or classes of capital stock of the Corporation.
"(e) Voting. The shares of this Series shall not have any
voting powers either general or special, except that
"(1) Unless the vote or consent of the holders of a greater
number of shares shall then be required by law, the consent of the
holders of at least 66-2/3% of all of the shares of this Series at the
time outstanding, given in person or by proxy, either in writing or by
a vote at a meeting called for the purpose at which the holders of
shares of this Series shall vote together as a separate class, shall
be necessary for authorizing, effecting or validating the amendment,
alteration or repeal of any of the provisions of the Certificate of
Incorporation or of any certificate amendatory thereof or supplemental
thereto (including any Certificate of Designation and Terms or any
similar document relating to any series of Preferred Stock) so as to
affect adversely the preferences, rights, powers or privileges of this
Series;
"(2) Unless the vote or consent of the holders of a greater
number of shares shall then be required by law, the consent of the
holders of at least 66-2/3% of all of the shares of this Series and
all other series of Preferred Stock ranking on a parity with shares of
this Series, either as to dividends or upon liquidation, at the time
outstanding, given in person or by proxy, either in writing or by a
vote at a meeting called for the purpose at which the holders of
shares of this Series and such other series of Preferred Stock shall
vote together as a single class without regard to series, shall be
necessary for authorizing, effecting or validating the creation,
authorization or issue of any shares of any class of stock of the
Corporation ranking prior to the shares of this Series as to dividends
or upon liquidation, or the reclassification of any authorized stock
of the Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security convertible into
or evidencing the right to purchase any such prior shares;
"(3) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the consent of
the holders of at least a majority of all of the shares of this Series
and all other series of Preferred
B-10
<PAGE> 30
Stock ranking on a parity with this Series, either as to dividends or
upon liquidation, at the time outstanding, given in person or by
proxy, either in writing or by a vote at a meeting called for the
purpose at which the holders of shares of this Series and such other
series of Preferred Stock shall vote together as a single class
without regard to series, shall be necessary for authorizing,
effecting or validating either of the following:
"(a) any increase of the authorized amount of the
Preferred Stock, or the creation or authorization of any
shares of any other class of stock of the Corporation ranking
on a parity with the shares of this Series as to dividends or
upon liquidation, or the reclassification of any authorized
stock of the Corporation into any such parity shares, or the
creation or authorization of any obligation or security
convertible into or evidencing the right to purchase any such
parity shares; or
"(b) the sale, lease or conveyance of all or
substantially all the property or business of the Corporation
or the merger or consolidation of the Corporation into or with
any other Corporation; provided, however, that no such vote or
consent of the holders of shares of this Series and such other
series of Preferred Stock, voting as a class without regard to
series, shall be required for the merger or consolidation of
another corporation into or with the Corporation if none of
the preferences, rights, powers or privileges of this Series
or such other series of Preferred Stock or the holders thereof
will be adversely affected thereby and there shall not be
authorized or outstanding after such merger or consolidation
any class of stock or other securities (except such stock or
securities of the Corporation as may have been authorized or
outstanding immediately preceding such merger or
consolidation) ranking prior to the shares of this Series and
such other series of Preferred Stock as to dividends or upon
liquidation; and provided further, however, that there shall
not be authorized or outstanding after such merger or
consolidation more than 75,000,000 shares of Preferred Stock
or any class of stock or other securities (except such stock
or securities of the Corporation as may have been authorized
or outstanding immediately preceding such merger or
consolidation) ranking on a parity with the shares of this
Series as to dividends or upon liquidation, in which case the
vote specified by this paragraph (3) shall be required;
"(4) If at the time of any annual meeting of stockholders for
the election of directors a default in preference dividends on the
Preferred Stock shall exist, the
B-11
<PAGE> 31
number of directors constituting the Board of Directors of the
Corporation shall be increased by two, and the holders of the
Preferred Stock of all series (whether or not the holders of such
series of Preferred Stock would be entitled to vote for the election
of directors if such default in preference dividends did not exist),
shall have the right at such meeting, voting together as a single
class without regard to series, to the exclusion of the holders of
Common Stock, to elect two directors of the Corporation to fill such
newly created directorships. Such right shall continue until there
are no dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (herein called a
"Preferred Director"), shall continue to serve as such director for
the full term for which he shall have been elected, notwithstanding
that prior to the end of such term a default in preference dividends
shall cease to exist. Any Preferred Director may be removed by, and
shall not be removed except by, the vote of the holders of record of
the outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the stockholders, or
of the holders of shares of Preferred Stock, called for the purpose.
So long as a default in any preference dividends on the Preferred
Stock shall exist, (A) any vacancy in the office of a Preferred
Director may be filled (except as provided in the following clause
(B)) by an instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (B) in the case of the
removal of any Preferred Director, the vacancy may be filled by the
vote of the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at the
same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a default
in preference dividends shall nc longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
quarterly dividend period.
"(f) Liquidation Rights.
"(1) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of the shares of this Series shall be
entitled to receive out of the assets of the
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<PAGE> 32
Corporation, before any payment or distribution shall be made on the
Common Stock or on any other class of stock ranking junior to the
Preferred Stock upon liquidation, the amount of $12 per share, plus a
sum equal to all dividends (whether or not earned or declared) on such
shares accrued and unpaid thereon to the date of final distribution.
"(2) The sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation shall be
deemed a voluntary dissolution, liquidation or winding up of the
Corporation for the purposes of this Section (f), but the merger or
consolidation of the Corporation into or with any other corporation or
the merger or consolidation of any other corporation into or with the
Corporation, shall not be deemed to be a dissolution, liquidation or
winding up, voluntary or involuntary, for the purposes of this Section
(f).
"(3) After the payment to the holders of the shares of this
Series of the full preferential amounts provided for in this Section
(f), the holders of this Series as such shall have no right or claim
to any of the remaining assets of the Corporation.
"(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any
dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to paragraph (1)
of this Section (f), no such distribution shall be made on account of
any shares of any other class or series of Preferred Stock ranking on
a parity with the shares of this Series upon such dissolution,
liquidation or winding up unless proportionate distributive amounts
shall be paid on account of the shares of this Series, ratably, in
proportion to the full distributable amounts for which holders of all
such parity shares are respectively entitled upon such dissolution,
liquidation or winding up.
"(5) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of this Series then outstanding
shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders all amounts to which
such holders are entitled pursuant to paragraph (1) of this Section
(f) before any payment shall be made to the holders of any class of
capital stock of the Corporation ranking junior upon liquidation to
this Series.
"(g) For purposes of this resolution, any stock of any class
or classes of the Corporation shall be deemed to rank:
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<PAGE> 33
"(1) prior to the shares of this Series, either as to
dividends or upon liquidation, if the holders of such class or classes
shall be entitled to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the
holders of shares of this Series;
"(2) on a parity with shares of this Series, either as to
dividends or upon liquidation, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share
or sinking fund provisions, if any, be different from those of this
Series, if the holders of such stock shall be entitled to the receipt
of dividends or of amounts distributable upon dissolution, liquidation
or winding up of the Corporation, as the case may be, in proportion to
their respective dividend rates or liquidation prices, without
preference or priority, one over the other, as between the holders of
such stock and the holders of shares of this Series; and
"(3) junior to shares of this Series, either as to dividends
or upon liquidation, if such class shall be Common Stock or if the
holders of shares of this Series shall be entitled to receipt of
dividends or of amounts distributable upon dissolution, liquidation or
winding up of the Corporation, as the case may be, in preference or
priority to the holders of shares of such class or classes."
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Appendix C
CERTIFICATE OF DESIGNATIONS
OF
10.96% PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolution was duly adopted by the Board of
Directors of the Corporation at a meeting duly held and convened on July 14,
1991, at which a quorum was present and acting throughout:
"RESOLVED, that pursuant to authority conferred upon the Board
of Directors by the Certificate of Incorporation of the Corporation,
as amended (the "Certificate of Incorporation"), the Board of
Directors hereby provides for the issuance of 4,000,000 shares of a
series of Preferred Stock, $1 par value, of the Corporation ranking on
a parity with the series of Preferred Stock designated as the
Corporation's "Adjustable Rate Cumulative Preferred Stock", the
Corporation's "Adjustable Rate Cumulative Preferred Stock, Series B",
the Corporation's "Adjustable Rate Cumulative Preferred Stock, Series
C", the Corporation's "10-3/4% Cumulative Preferred Stock", the
Corporation's "Adjustable Rate Cumulative Preferred Stock, Series E",
the Corporation's "Adjustable Rate Cumulative Preferred Stock, Series
F," and the Corporation's "10% Convertible Preferred Stock", and the
designations, preferences and privileges, relative, participating,
optional and other special rights, and qualifications, limitations and
restrictions of all 4,000,000 shares of this series, in addition to
those set forth in the Certificate of Incorporation of the Corporation
are hereby fixed as follows:
"(a) Designation. The designation of this series
shall be 10.96% Preferred Stock (hereinafter referred to as
this "Series") and the number of shares constituting this
Series shall be 4,000,000 shares. Shares of this Series shall
have a stated value of $25 per share. The number of
authorized shares of this Series may be reduced by further
resolution duly adopted by the Board of Directors of the
Corporation or the Preferred Stock Committee of the Board of
Directors and by the filing of a certificate pursuant to the
provisions of the General Corporation Law of the State
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<PAGE> 35
of Delaware stating that such reduction has been so authorized
(but not below the number of shares of this Series then
outstanding), but the number of authorized shares of this
Series shall not be increased.
"(b) Dividend Rights.
"(1) Dividends shall be payable on the shares of
this Series for the Initial Dividend Period (as defined below)
and each quarterly dividend period (a "Quarterly Dividend
Period") thereafter (the Initial Dividend Period and each such
subsequent Quarterly Dividend Period being hereinafter
referred to as a "Dividend Period" and collectively referred
to as "Dividend Periods"), which Quarterly Dividend Periods
shall commence on March 31, June 30, September 30 and December
31 in each year, commencing with the first such date to occur
after the effective time of the merger of the Corporation with
Manufacturers Hanover Corporation (the "Effective Time"), and
shall end on and include the day next preceding the first day
of the next Quarterly Dividend Period, at a rate per annum of
the stated value thereof equal to 10.96%. The Initial Dividend
Period is the period commencing on the most recent date next
preceding the Effective Time on which a dividend was paid on
the 10.96% Preferred Stock of Manufacturers Hanover
Corporation (or commencing on the date of the Effective Time
if such date was such a dividend payment date) and shall end
on and include the date next preceding the first day of the
next Quarterly Dividend Period; provided, however, that in the
event the Effective Time shall occur after the record date for
the payment of a regular quarterly dividend on the 10.96%
Preferred Stock of Manufacturers Hanover Corporation but prior
to the payment date for such dividend, then the Initial
Dividend Period shall be the first Quarterly Dividend Period
as described in the preceding sentence. Dividends shall be
cumulative from the date on which the Initial Dividend Period
commences and shall be payable, when, as and if declared by
the Board of Directors or by the Preferred Stock Committee of
the Board of Directors, on March 31, June 30, September 30 and
December 31 in each year, commencing with such date that next
follows the end of the Initial Dividend Period. Each such
dividend shall be paid to the holders of record of shares of
this Series as they appear on the stock register of the
Corporation on such record date, not exceeding 45 days
preceding the payment date thereof, as shall be fixed by the
Board of Directors of the Corporation or by the Preferred
Stock Committee of the Board of Directors. Dividends on
account of arrears for any past Dividend Periods may be
declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on
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<PAGE> 36
such date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the
Corporation or by the Preferred Stock Committee of the Board
of Directors.
"(2) Dividends payable on this Series for any period
greater or less than a Quarterly Dividend Period, including
the Initial Dividend Period, shall be computed on the basis of
a 360-day year consisting of twelve 30-day months. Dividends
payable on this Series for each Quarterly Dividend Period
shall be computed by annualizing the Dividend Rate and
dividing by four.
"(3) No full dividends shall be declared or paid or
set apart for payment on the Preferred Stock or any series
ranking, as to dividends, on a parity with or junior to this
Series for any period unless full cumulative dividends have
been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for
such payment on this Series for all Dividend Periods
terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as
aforesaid, upon the shares of this Series and any other series
of Preferred Stock ranking on a parity as to dividends with
this Series, all dividends declared upon shares of this Series
and any other series of Preferred Stock ranking on a parity as
to dividends with this Series shall be declared pro rata so
that the amount of dividends declared per share on this Series
and such other series of Preferred Stock shall in all cases
bear to each other the same ratio that accrued and unpaid
dividends per share on the shares of this Series and such
other series of Preferred Stock bear to each other. Holders of
shares of this Series shall not be entitled to any dividend,
whether payable in cash, property or stocks, in excess of full
cumulative dividends, as herein provided, on this Series. No
interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on this
Series which may be in arrears.
"(4) So long as any shares of this Series are
outstanding, no dividend (other than a dividend in Common
Stock of the Corporation (the "Common Stock") or in any other
stock ranking junior to this Series as to dividends and upon
liquidation and other than as provided in Section (3) of this
Section (b)) shall be declared or paid or set aside for
Payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to or on a parity
with this Series as to dividends or upon liquidation, nor
shall any Common Stock or any other stock of the Corporation
ranking junior to or on a parity with this
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<PAGE> 37
Series as to dividends or upon liquidation be redeemed,
purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation
unless, in each case, the full cumulative dividends on all
outstanding shares of this Series shall have been paid for all
past Dividend Periods.
"(c) Redemption.
"(1) Shares of this Series are not redeemable prior
to June 30, 2000. On or after such date, the Corporation may
elect to redeem the shares of this Series, as a whole or in
part, any time or from time to time at a redemption price of
$25 per share, plus accrued and unpaid dividends thereon to
the redemption date. In the event the Corporation shall elect
to redeem shares of this Series, the Corporation shall give
notice to the holders of record of shares of this Series being
so redeemed, not less than 30 nor more than 60 days prior to
such redemption, by first class mail, postage prepaid, at
their addresses as shown on the stock registry books of the
Corporation that said shares are being redeemed, provided that
without limiting the obligation of the Corporation hereunder
to give the notice provided in this Section (c)(1), the
failure of the Corporation to give such notice shall not
invalidate any corporate action by the Corporation. Each such
notice shall state: (i) the redemption date; (ii) the number
of shares of this Series to be redeemed and, if fewer than all
the shares held by such holder are to be redeemed, the number
of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates
for such shares are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be
redeemed will cease to accrue on the redemption date.
"(2) In the event that fewer than all the
outstanding shares of this Series are to be redeemed, the
number of shares to be redeemed shall be determined by the
Board of Directors of the Corporation or the Preferred Stock
Committee of the Board of Directors and the shares to be
redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors of the Corporation or
the Preferred Stock Committee of the Board of Directors or by
any other method as may be determined by the Board of
Directors of the Corporation or the Preferred Stock Committee
of the Board of Directors in its sole discretion to be
equitable provided that such method satisfies any applicable
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<PAGE> 38
requirements of any securities exchange on which this Series
is listed.
"(3) Notice having been mailed as aforesaid, from
and after the applicable redemption date (unless default shall
be made by the Corporation in providing money for the payment
of the redemption price), dividends on the shares of this
Series to be redeemed on such redemption date shall cease to
accrue, and said shares shall no longer be deemed to be
outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive
from the Corporation the redemption price) shall cease. Upon
surrender of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation or the Preferred Stock Committee
of the Board of Directors shall so require and the notice
shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid. In case fewer
than all the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
"(4) Any shares of this Series which shall at any
time have been redeemed shall, after such redemption, have the
status of authorized but unissued shares of Preferred Stock,
without designation as to series until such shares are once
more designated as part of a particular series by the Board of
Directors of the Corporation or the Preferred Stock Committee
of the Board of Directors.
"(5) Notwithstanding the foregoing provisions of
this Section (c), if any dividends on this Series are in
arrears, no shares of this Series shall be redeemed unless all
outstanding shares of this Series are simultaneously redeemed,
and the Corporation shall not purchase or otherwise acquire
any shares of this Series; provided, however, that the
foregoing shall not prevent the purchase or acquisition of
shares of this Series pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding shares of
this Series.
"(d) Conversion. The holders of shares of this
Series shall not have any rights to convert such shares into
shares of any other class or series of capital stock of the
Corporation.
"(e) Voting Rights. The shares of this Series of
Preferred Stock shall not have any voting powers either
general or special, except that:
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<PAGE> 39
"(1) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the
consent of the holders of at least 66 2/3% of all of the
shares of this Series at the time outstanding, given in person
or by proxy, either in writing or by a vote at a meeting
called for that purpose at which the holders of shares of this
Series shall vote together as a separate class, shall be
necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the provisions of
the Certificate of Incorporation or of any certificate
amendatory thereof or supplemental thereto (including any
Certificate of Designations or any similar documents relating
to any series of Preferred Stock) which would adversely affect
the preferences, rights, powers or privileges of this Series;
"(2) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the
consent of the holders of at least 66 2/3% of all of the
shares of this Series and all other series of Preferred Stock
ranking on a parity with shares of this Series, either as to
dividends or upon liquidation, at the time outstanding, given
in person or by proxy, either in writing or by a vote at a
meeting called for that purpose at which the holders of shares
of this Series and such other series of Preferred Stock shall
vote together as a single class without regard to series,
shall be necessary for authorizing, effecting or validating
the creation, authorization or issue of any shares of any
class of stock of the Corporation ranking prior to the shares
of this Series as to dividends or upon liquidation, or the
reclassification of any authorized stock of the Corporation
into any such prior shares, or the creation, authorization or
issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares;
"(3) If at the time of any annual meeting of
stockholders for the election of directors a default in
preference dividends on the Preferred Stock shall exist, the
number of directors constituting the Board of Directors of the
Corporation shall be increased by two, and the holders of the
Preferred Stock of all series shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of Common Stock, to
elect two directors of the Corporation to fill such newly
created directorships. Such right shall continue until there
are no dividends in arrears upon the Preferred Stock. Each
director elected by the holders of shares of Preferred Stock
(herein called a "Preferred
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Director"), shall continue to serve as such director for the
full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except
by, the vote of the holders of record of the outstanding
shares of Preferred Stock, voting together as a single class
without regard to series, at a meeting of the stockholders, or
of the holders of shares of Preferred Stock, called for that
purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (A) any vacancy in the office
of Preferred Director may be filled (except as provided in the
following clause (B)) by an instrument in writing signed by
the remaining Preferred Director and filed with the
Corporation, and (B) in the case of the removal of any
Preferred Director, the vacancy may be filled by the vote of
the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at
the same meeting at which such removal shall be voted. Each
director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a
Preferred Director. Whenever the term of office of the
Preferred Directors shall end and a default in preference
dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall
be reduced by two. For the purposes hereof, a "default in
preference dividends" on the Preferred Stock shall be deemed
to have occurred whenever the amount of accrued dividends upon
any series of the Preferred Stock shall be equivalent to six
full quarter-yearly dividends or more, and, having so
occurred, such default shall be deemed to exist thereafter
until, but only until, all accrued dividends on all shares of
Preferred Stock of each and every series then outstanding
shall have been paid to the end of the last preceding Dividend
Period.
"(f) Liquidation Rights.
"(1) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the holders of
the shares of this Series shall be entitled to receive and to
be paid out of the assets of the Corporation available for
distribution to its stockholders, before any payment or
distribution shall be made on the Common Stock or on any other
class of stock ranking junior to this Series upon liquidation,
a liquidation preference in the amount of $25 per share of
this Series, plus accrued and unpaid dividends thereon.
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"(2) After the payment to the holders of the shares
of this Series of the full amount of the liquidating
distribution to which they are entitled under this Section
(f), the holders of this Series as such shall have no right or
claim to any of the remaining assets of the Corporation.
"(3) If, upon any voluntary or involuntary
dissolution, liquidation, or winding up of the Corporation,
the amounts payable with respect to the liquidation preference
of the shares of this Series and any other shares of stock of
the Corporation ranking as to any such distribution on a
parity with the shares of this Series are not paid in full,
the holders of the shares of this Series and of such other
shares will share ratably in any such distribution of assets
of the Corporation in proportion to the full respective
liquidation preference to which they are entitled.
"(4) Neither the sale of all or substantially all of
the property or business of the Corporation, nor the merger or
consolidation of the Corporation into or with any other
corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to
be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section (f).
"(5) Upon the dissolution, liquidation or winding
up of the Corporation, the holders of shares of this Series
then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its
stockholders all amounts to which such holders are entitled
pursuant to Section (1) of this Section (f) before any payment
shall be made to the holders of any class of capital stock of
the Corporation ranking junior to this Series upon
liquidation.
"(g) Ranking. For purposes of this resolution, any
stock of any class or classes of the Corporation shall be
deemed to rank:
"(1) prior to the shares of this Series, either as
to dividends or upon liquidation, if the holders of such class
or classes shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, in preference or
priority to the holders of shares of this Series; and
"(2) on a parity with shares of this Series, either
as to dividends or upon liquidation, whether or not the
dividend rates, dividend payment dates or
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redemption or liquidation prices per share or sinking fund
provision, if any, be different from those of this Series, if
the holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may
be, in proportion to their respective dividend rates or
liquidation prices, without preference or priority, one over
the other, as between the holders of such stock and the
holders of shares of this Series; and
"(3) junior to shares of this Series, either as to
dividends or upon liquidation, if such class shall be Common
Stock or if the holders of shares of this Series shall be
entitled to receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to
the holders of shares of such class or classes."
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Appendix D
CERTIFICATE OF DESIGNATIONS
OF
8-3/8% PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were duly adopted by the Board of
Directors of the Corporation on March 17, 1992 and by the Preferred Stock
Committee of the Board of Directors on May 20, 1992, respectively, pursuant to
authority conferred upon the Board of Directors by the provisions of the
Certificate of Incorporation of the Corporation which authorize the issuance of
up to 200,000,000 shares of preferred stock, $1 par value (the "Preferred
Stock"), and pursuant to authority conferred upon the Preferred Stock Committee
of the Board of Directors by Section 141(c) of the General Corporation Law of
the State of Delaware, by the By-Laws of the Corporation and by the resolutions
of the Board of Directors adopted at a meeting duly convened and held on March
17, 1992:
1. The Board of Directors on March 17, 1992 adopted the
following resolutions authorizing a Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of the Preferred Stock:
"RESOLVED that the Board of Directors of Chemical Banking
Corporation (the "Board of Directors") deems it advisable and in the
best interests of Chemical Banking Corporation (the "Corporation") to
provide for the issuance and sale by the Corporation from time to time
of shares of preferred stock ($1 par value), in one or more series,
having an aggregate liquidation preference over the Corporation's
common stock, $1 par value (the "Common Stock"), not in excess of
$800,000,000, with such voting powers, designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions as are set forth in, or
are determined in accordance with, these resolutions (the "Preferred
Shares");
"RESOLVED that the Board of Directors deems it in the best
interests of the Corporation to delegate to the Preferred Stock Committee those
powers and duties set forth below;
"RESOLVED that the Preferred Stock Committee may, without the
further action of the Board of Directors, from time
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to time authorize the issuance and sale from time to time of one or more series
of Preferred Shares for cash or other property, as shall be determined by the
Preferred Stock Committee, subject to the limitations above, and any such
Preferred Shares may be sold through agents, through underwriters, through
dealers and directly to purchasers, in one or more offerings registered under
the Securities Act of 1933 (the "Act") or in transactions not required to be
registered under the Act, all as shall be determined by the Preferred Stock
Committee; and any such issuance and sale of Preferred Shares, including the
issuance from time to time of any warrants for such Preferred Shares, common or
preferred stock of the Corporation into which any series of Preferred Shares
may be convertible or exchangeable and the issuance and sale from time to time
of Depositary Shares (as hereinafter defined; it being intended that, unless
the context shall otherwise require, when used in these resolutions the term
"Preferred Shares" shall also include any warrants or Depositary Shares related
thereto) related to the Preferred Shares, be and hereby is authorized and
approved;
"RESOLVED that the Preferred Stock Committee be and hereby is
authorized and empowered to act on behalf and in the stead of the Board of
Directors in connection with the issuance of one or more series of the
Preferred Shares and any common or preferred stock into which such Preferred
Shares may be convertible or exchangeable and, in connection therewith, is
hereby authorized, to the fullest extent permitted by the Delaware General
Corporation Law as it now exists or is hereafter amended, to determine the
price at which the Preferred Shares of each such series will be sold by the
Corporation, to declare dividends payable on the Preferred Shares, to reserve
for issuance on the books of the Corporation or otherwise a sufficient number
of shares of any common or preferred stock of the Corporation into which any
series of the Preferred Shares may be convertible or exchangeable and to
determine the designation, preferences and privileges, the relative,
participating, optional or other special rights, and the qualifications,
limitations and restrictions thereof;
"RESOLVED that, without limiting the generality of the
preceding resolution, the Preferred Stock Committee is hereby expressly
authorized:
"(i) to determine whether the Preferred Shares will be
issued in one or more series and the number of shares of any such
series;
"(ii) to fix the dividend rate or rates of such shares
and/or the methods of determining dividends and the dates on which
dividends shall be payable;
"(iii) to determine whether dividends of any series of
Preferred Shares shall be cumulative or noncumulative and,
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if cumulative, the dates from which dividends shall commence to
cumulate;
"(iv) to determine the conversion or exchange provisions,
if any, of the shares of any series of the Preferred Shares, including
without limitation, the class and series of capital stock of the
Corporation into which such shares shall be convertible or
exchangeable;
"(v) to determine whether the Corporation shall elect to
offer (a) warrants for such Preferred Shares ("Warrants") or (b)
depositary shares evidenced by depositary receipts, each representing
a fraction (to be determined by the Preferred Stock Committee) of a
share of a particular series of the Preferred Shares ("Depositary
Shares"), which Preferred Shares will be issued and deposited with a
depositary, in each case, in lieu of offering full shares of such
series of the Preferred Shares;
"(vi) to fix the liquidation preference of the shares of
any series of the Preferred Shares, subject to the limitation that the
aggregate liquidation preference of all the Preferred Shares issued
shall not exceed $800,000,000;
"(vii) to determine whether the shares of any series of the
Preferred Shares shall be subject to redemption, optional or mandatory
or pursuant to a sinking fund, and, if such series shall be subject to
redemption, the redemption provisions of such series; and
"(viii) to fix or determine any additional dividend,
liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations and restrictions thereof;
"RESOLVED that the Preferred Stock Committee be and hereby is
authorized and empowered to authorize, approve and take such other action as is
deemed advisable in connection with the issuance of one or more series of the
Preferred Shares, including, without limitation, the following:
"(i) selecting the underwriters, dealers and agents, if any,
to or through which the Preferred Shares will be sold and offered;
"(ii) approving the form and substance, and the execution and
delivery, of any underwriting agreement, agency agreement, placement
agreement or other agreement to be entered into by the Corporation in
connection with the issuance and sale of the Preferred Shares,
including, without limitation, setting the amount of any underwriting
discounts and other items constituting underwriters' compensation and
any discounts and commissions allowed or paid to dealers or agents;
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"(iii) selecting the bank or trust company which will act as
depositary if Depositary Shares are offered and approving the form and
substance, and the execution and delivery, of any deposit agreement to
be entered into by the Corporation with such depositary; and
"(iv) appointing a registrar and transfer agent for the
registration, transfer and exchange of the Preferred Shares and
appointing a dividend disbursing agent for the Preferred Shares;
"RESOLVED that for each series of Preferred Shares a
certificate shall be prepared and filed on behalf of the Corporation with the
Secretary of State of the State of Delaware pursuant to Section 151 of the
General Corporation Law of the State of Delaware (a "Certificate of
Designations"); that each such Certificate of Designations be in such form as
is approved by action of the Board of Directors or the Preferred Stock
Committee; and that the proper officers of the Corporation be and hereby are
authorized to execute and file each such Certificate of Designations pursuant
to the General Corporation Law of the State of Delaware;"
2. The Board of Directors on March 17, 1992 adopted the
following resolution fixing the voting rights of the Preferred Stock authorized
by the preceding resolutions:
"RESOLVED that the Certificate of Designations for each series of the
Preferred Shares shall provide that the shares of such series shall not have
any voting powers either general or special, except that:
"(i) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the consent of
the holders of at least 66-2/3% of all of the shares of any series at
the time outstanding, given in person or by proxy, either in writing
or by a vote at a meeting called for the purpose at which the holders
of shares of such series shall vote together as a separate class,
shall be necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the provisions of the
Certificate of Incorporation or of any certificate amendatory thereof
or supplemental thereto (including any Certificate of Designations or
any similar document relating to any series of Preferred Stock) so as
to affect adversely the preferences, rights, powers or privileges of
such series;
"(ii) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the consent of
the holders of at least 66-2/3% of all of the shares of any such
series and all other series of Preferred Stock ranking on a parity
with shares of such series, either as to dividends or upon
liquidation, at the time
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<PAGE> 47
outstanding, given in person or by proxy, either in writing or by a
vote at a meeting called for the purpose at which the holders of
shares of such series and such other series of Preferred Stock shall
vote together as a single class without regard to series, shall be
necessary for authorizing, effecting or validating the creation,
authorization or issue of any shares of any class of stock of the
Corporation ranking prior to the shares of such series as to dividends
or upon liquidation, or the reclassification of any authorized stock
of the Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security convertible into
or evidencing the right to purchase any such prior shares; and
"(iii) If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there is a
default in preference dividends on the Preferred Stock, the number of
directors constituting the Board of Directors of the Corporation shall
be increased by two, and the holders of the Preferred Stock of all
series (whether or not the holders of such series of Preferred Stock
would be entitled to vote for the election of directors if such
default in preference dividends did not exist), shall have the right
at such meeting, voting together as a single class without regard to
series, to the exclusion of the holders of Common Stock, to elect two
directors of the Corporation to fill such newly created directorships.
Such right shall continue until there are no dividends in arrears upon
the Preferred Stock. Each director elected by the holders of shares
of Preferred Stock (a "Preferred Director"), shall continue to serve
as such director for the full term for which he shall have been
elected, notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred Director
may be removed by, and shall not be removed except by, the vote of the
holders of record of the outstanding shares of Preferred Stock, voting
together as a single class without regard to series, at a meeting of
the Corporation's stockholders, or of the holders of shares of
Preferred Stock, called for the purpose. So long as a default in any
preference dividends on the Preferred Stock shall exist, (a) any
vacancy in the office of a Preferred Director may be filled (except as
provided in the following clause (b)) by an instrument in writing
signed by the remaining Preferred Director and filed with the
Corporation and (b) in the case of the removal of any Preferred
Director, the vacancy may be filled by the vote of the holders of the
outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at the same meeting at which such
removal shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes hereof,
to be a Preferred Director. Whenever the term of office of the
Preferred Directors shall end and a default in preference dividends
shall no longer exist, the
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<PAGE> 48
number of directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes hereof, a
"default in preference dividends" on the Preferred Stock shall be
deemed to have occurred whenever the amount of accrued dividends upon
any series of the Preferred Stock shall be equivalent to six full
quarter-yearly dividends or more, and, having so occurred, such
default shall be deemed to exist thereafter until, but only until, all
accrued dividends on all shares of Preferred Stock of each and every
series then outstanding shall have been paid to the end of the last
preceding dividend period."
3. The Preferred Stock Committee of the Board of Directors on
May 20, 1992, pursuant to the authority conferred upon the Preferred Stock
Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by Section 3.03 of the By-Laws of the
Corporation and by the resolutions of the Board of Directors set forth above,
adopted the following resolution:
"RESOLVED that the issue of up to 14,000,000 shares of 8-3/8%
Preferred Stock, $1 par value, of the Corporation ranking on a parity with the
series of Preferred Stock of the Corporation designated as the Corporation's
"Adjustable Rate Cumulative Preferred Stock", the Corporation's "Adjustable
Rate Cumulative Preferred Stock, Series B", the Corporation's "Adjustable Rate
Cumulative Preferred Stock, Series C", the Corporation's "10-3/4% Cumulative
Preferred Stock", the Corporation's "Adjustable Rate Cumulative Preferred
Stock, Series E", the Corporation's "Adjustable Rate Cumulative Preferred
Stock, Series F", the Corporation's "10.96% Preferred Stock" and the
Corporation's "10% Convertible Preferred Stock" is hereby authorized and the
designation, preferences and privileges, relative, participating, optional and
other special rights, and qualifications, limitations and restrictions of all
14,000,000 shares of this Series, in addition to those set forth in the
Certificate of Incorporation of the Corporation and, with respect to voting
rights, in the resolutions of the Board of Directors of the Corporation adopted
on March 17, 1992, are hereby fixed as follows:
"1. Designation. The designation of this Series shall be
8-3/8% Preferred Stock (hereinafter referred to as the "Series") and
the number of shares constituting this Series shall be Fourteen
Million (14,000,000). Shares of this Series shall have a stated value
of $25. The number of authorized shares of this Series may be reduced
by further resolution duly adopted by the Board of Directors of the
Corporation or the Preferred Stock Committee of the Board of Directors
and by the filing of a certificate pursuant to the provisions of the
General Corporation Law of the State of Delaware stating that such
reduction has been so authorized, but the number of authorized shares
of this Series shall not be increased.
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<PAGE> 49
"2. Dividends. (a) Dividends shall be payable on the shares
of this Series: (i) for the period (the "Initial Dividend Period")
from the date of original issue of shares of this Series to and
including September 30, 1992, and (ii) for each quarterly dividend
period thereafter (the Initial Dividend Period and each quarterly
dividend period thereafter being hereinafter individually referred to
as a "Dividend Period" and collectively referred to as "Dividend
Periods"), which quarterly Dividend Periods shall commence on January
1, April 1, July 1 and October 1 in each year, commencing October 1,
1992 and shall end on and include the day next preceding the first day
of the next Dividend Period, at a rate per annum of the stated value
thereof equal to 8-3/8% (the "Dividend Rate"). Dividends shall be
cumulative from such date of original issue and shall be payable, when
and as declared by the Board of Directors or by the Preferred Stock
Committee of the Board of Directors, on March 31, June 30, September
30 and December 31 of each year, commencing on September 30, 1992.
Each such dividend shall be paid to the holders of record of shares of
this Series as they appear on the stock register of the Corporation on
such record date, not exceeding 45 days preceding the payment date
thereof, as shall be fixed by the Board of Directors of the
Corporation or by the Preferred Stock Committee of the Board of
Directors. Dividends on account of arrears for any past Dividend
Periods may be declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof, as may be fixed
by the Board of Directors of the Corporation or by the Preferred Stock
Committee of the Board of Directors.
"(b) Dividends payable on this Series for any period greater
or less than a full Dividend Period, including the Initial Dividend
Period, shall be computed on the basis of a 360-day year consisting of
twelve 30-day months and the actual number of days elapsed in the
period. Dividends payable on this Series for each full Dividend
Period shall be computed by annualizing the Dividend Rate and dividing
by four.
"(c) No full dividends shall be declared or paid or set apart
for payment on the Preferred Stock of any series ranking, as to
dividends, on a parity with or junior to this Series for any period
unless full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment
thereof set apart for such payment on this Series for all Dividend
Periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as
aforesaid, upon the shares of this Series and any other series of
Preferred Stock ranking on a parity as to dividends with this Series,
all dividends declared upon
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<PAGE> 50
shares of this Series and any other series of Preferred Stock ranking
on a parity as to dividends with this Series shall be declared pro
rata so that the amount of dividends declared per share on this Series
and such other Preferred Stock shall in all cases bear to each other
the same ratio that accrued and unpaid dividends per share on the
shares of this Series and such other Preferred Stock bear to each
other. Holders of shares of this Series shall not be entitled to any
dividend, whether payable in cash, property or stocks, in excess of
full cumulative dividends, as herein provided, on this Series. No
interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on this Series which may
be in arrears.
"(d) So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock
ranking junior to this Series as to dividends and upon liquidation and
other than as provided in paragraph (c) of this Section 2) shall be
declared or paid or set aside for payment or other distribution
declared or made upon the Common Stock or upon any other stock ranking
junior to or on a parity with this Series as to dividends or upon
liquidation, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any
such stock) by the Corporation (except by conversion into or exchange
for stock of the Corporation ranking junior to this Series as to
dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of this Series shall
have been paid or declared and set aside for payment for all past
Dividend Periods.
"3. Redemption. (a) The shares of this Series are not
redeemable prior to June 1, 1997. The Corporation, at its option, may
redeem shares of this Series, as a whole or in part, at any time or
from time to time on or after June 1, 1997, at a redemption price of
$25 per share, plus accrued and unpaid dividends thereon to the date
fixed for redemption.
"(b) In the event that fewer than all the outstanding shares
of this Series are to be redeemed, the number of shares to be redeemed
shall be determined by the Board of Directors of the Corporation or
the Preferred Stock Committee of the Board of Directors and the shares
to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors of the Corporation or the
Preferred Stock Committee of the Board of Directors or by any other
method as may be determined by the Board of Directors of the
Corporation or the Preferred Stock
D-8
<PAGE> 51
Committee of the Board of Directors in its sole discretion to be
equitable, provided that such method satisfies any applicable
requirements of any securities exchange on which this Series is
listed.
"(c) In the event the Corporation shall redeem shares of this
Series, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 or more than 60 days prior to
the redemption date, to each holder of record of the shares to be
redeemed, at such holder's address as the same appears on the stock
register of the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the number of shares of this Series to be
redeemed and, if fewer than all the shares held by such holder are to
be redeemed, the number of such shares to be redeemed from such
holder; (iii) the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be redeemed
will cease to accrue on the redemption date.
"(d) Notice having been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation
in providing money for the payment of the redemption price) dividends
on the shares of this Series so called for redemption shall cease to
accrue, and said shares shall no longer be deemed to be outstanding,
and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender in accordance with said
notice of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors of the
Corporation or the Preferred Stock Committee of the Board of Directors
shall so require and the notice shall so state), such shares shall be
redeemed by the Corporation at the redemption price aforesaid. In
case fewer than all the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
"(e) Any shares of this Series which shall at any time have
been redeemed shall, after such redemption, have the status of
authorized but unissued shares of Preferred Stock, without designation
as to series until such shares are once more designated as part of a
particular series by the Board of Directors of the Corporation or the
Preferred Stock Committee of the Board of Directors.
"(f) Notwithstanding the foregoing provisions of this Section
3, if any dividends on this Series are in arrears, no shares of this
Series shall be redeemed unless all outstanding shares of this Series
are simultaneously redeemed, and the Corporation shall not purchase or
D-9
<PAGE> 52
otherwise acquire any shares of this Series; provided, however, that
the foregoing shall not prevent the purchase or acquisition of shares
of this Series pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding shares of this Series.
"4. Conversion. The holders of shares of this Series
shall not have any rights to convert such shares into shares of any other class
or series of capital stock of the Corporation.
"5. Liquidation Rights.
"(a) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the holders of the
shares of this Series shall be entitled to receive and to be paid out
of the assets of the Corporation available for distribution to its
stockholders, before any payment or distribution shall be made on the
Common Stock or on any other class of stock ranking junior to this
Series upon liquidation, the amount of $25 per share, plus accrued and
unpaid dividends thereon.
"(b) After the payment to the holders of the shares of this
Series of the full preferential amounts provided for in this Section
5, the holders of this Series as such shall have no right or claim to
any of the remaining assets of the Corporation.
"(c) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable
with respect to the stated value of the shares of this Series and any
other shares of stock of the Corporation ranking as to any such
distribution on a parity with the shares of this Series are not paid
in full, the holders of the shares of this Series and of such other
shares will share ratably in any such distribution of assets of the
Corporation in proportion to the full respective stated values to
which they are entitled.
"(d) Neither the sale of all or substantially all the
property or business of the Corporation, nor the merger or
consolidation of the Corporation into or with any other corporation or
the merger or consolidation of any other corporation into or with the
Corporation, shall be deemed to be a dissolution, liquidation or
winding up, voluntary or involuntary, for the purposes of this Section
5.
"(e) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of this Series then outstanding
shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders all amounts to which
such holders are entitled pursuant to paragraph (a) of this Section 5
before any payment shall be made to the holder of any class of capital
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stock of the Corporation ranking junior to this Series upon
liquidation.
"6. Ranking. For purposes of this resolution, any stock
of any class or classes of the Corporation shall be deemed to rank:
"(a) prior to the shares of this Series, either as to
dividends or upon liquidation, if the holders of such class or classes
shall be entitled to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the
holders of shares of this Series;
"(b) on a parity with shares of this Series, either as to
dividends or upon liquidation, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share
or sinking fund provisions, if any, be different from those of this
Series, if the holders of such stock shall be entitled to the receipt
of dividends or of amounts distributable upon dissolution, liquidation
or winding up of the Corporation, as the case may be, without
preference or priority, one over the other, as between the holders of
such stock and the holders of shares of this Series; and
"(c) junior to shares of this Series, either as to dividends
or upon liquidation, if such class shall be Common Stock or if the
holders of shares of this Series shall be entitled to receipt of
dividends or of amounts distributable upon dissolution, liquidation or
winding up of the Corporation, as the case may be, in preference or
priority to the holders of shares of such class or classes.
"7. Voting Rights. The shares of this Series shall have
the voting rights set forth in the resolutions of the Board of Directors of the
Corporation adopted on March 17, 1992."
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Appendix E
CERTIFICATE OF DESIGNATIONS
OF
7.92% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were duly adopted by the Board of
Directors of the Corporation on March 17, 1992 and by the Preferred Stock
Committee of the Board of Directors on September 10, 1992, respectively,
pursuant to authority conferred upon the Board of Directors by the provisions
of the Certificate of Incorporation of the Corporation which authorize the
issuance of up to 200,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"), and pursuant to authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by the By-Laws of the Corporation and
by the resolutions of the Board of Directors adopted at a meeting duly convened
and held on March 17, 1992:
1. The Board of Directors, on March 17, 1992 adopted the
following resolutions authorizing a Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of the Preferred Stock:
"RESOLVED that the Board of Directors of Chemical Banking
Corporation (the "Board of Directors") deems it advisable and in the
best interests of Chemical Banking Corporation (the "Corporation") to
provide for the issuance and sale by the Corporation from time to time
of shares of preferred stock ($1 par value), in one or more series,
having an aggregate liquidation preference over the Corporation's
common stock, $1 par value (the "Common Stock"), not in excess of
$800,000,000, with such voting powers, designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions, as are set forth in, or
are determined in accordance with, these resolutions (the "Preferred
Shares");
"RESOLVED that the Board of Directors deems it in the best
interests of the Corporation to delegate to the Preferred Stock
Committee those powers and duties set forth below;
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"RESOLVED that the Preferred Stock Committee may, without the
further action of the Board of Directors, from time to time authorize
the issuance and sale from time to time of one or more series of
Preferred Shares for cash or other property, as shall be determined by
the Preferred Stock Committee, subject to the limitations above, and
any such Preferred Shares may be sold through agents, through
underwriters, through dealers and directly to purchasers, in one or
more offerings registered under the Securities Act of 1933 (the "Act")
or in transactions not required to be registered under the Act, all as
shall be determined by the Preferred Stock Committee; and any such
issuance and sale of Preferred Shares, including the issuance from
time to time of any warrants for such Preferred Shares, common or
preferred stock of the Corporation into which any series of Preferred
Shares may be convertible or exchangeable and the issuance and sale
from time to time of Depositary Shares (as hereinafter defined; it
being intended that, unless the context shall otherwise require, when
used in these resolutions the term "Preferred Shares" shall also
include any warrants or Depositary Shares related thereto) related to
the Preferred Shares, be and hereby is authorized and approved;
"RESOLVED that the Preferred Stock Committee be and hereby is
authorized and empowered to act on behalf and in the stead of the
Board of Directors in connection with the issuance of one or more
series of the Preferred Shares and any common or preferred stock into
which such Preferred Shares may be convertible or exchangeable and, in
connection therewith, is hereby authorized, to the fullest extent
permitted by the Delaware General Corporation Law as it now exists or
is hereafter amended, to determine the price at which the Preferred
Shares of each such series will be sold by the Corporation, to declare
dividends payable on the Preferred Shares, to reserve for issuance on
the books of the Corporation or otherwise a sufficient number of
shares of any common or preferred stock of the Corporation into which
any series of the Preferred Shares may be convertible or exchangeable
and to determine the designation, preferences and privileges, the
relative, participating, optional or other special rights, and the
qualifications, limitations and restrictions thereof;
"RESOLVED that, without limiting the generality of the
preceding resolution, the Preferred Stock Committee is hereby
expressly authorized:
"(i) to determine whether the Preferred Shares
will be issued in one or more series and the number of shares
of any such series;
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"(ii) to fix the dividend rate or rates of such
shares and/or the methods of determining dividends and the
dates on which dividends shall be payable;
"(iii) to determine whether dividends of any series
of Preferred Shares shall be cumulative or noncumulative and,
if cumulative, the dates from which dividends shall commence
to cumulate;
"(iv) to determine the conversion or exchange
provisions, if any, of the shares of any series of the
Preferred Shares, including without limitation, the class and
series of capital stock of the Corporation into which such
shares shall be convertible or exchangeable;
"(v) to determine whether the Corporation shall
elect to offer (a) warrants for such Preferred Shares
("Warrants") or (b) depositary shares evidenced by depositary
receipts, each representing a fraction (to be determined by
the Preferred Stock Committee) of a share of a particular
series of the Preferred Shares ("Depositary Shares"), which
Preferred Shares will be issued and deposited with a
depositary, in each case, in lieu of offering full shares of
such series of the Preferred Shares;
"(vi) to fix the liquidation preference of the
shares of any series of the Preferred Shares, subject to the
limitation that the aggregate liquidation preference of all
the Preferred Shares issued shall not exceed $800,000,000;
"(vii) to determine whether the shares of any series
of the Preferred Shares shall be subject to redemption,
optional or mandatory or pursuant to a sinking fund, and, if
such series shall be subject to redemption, the redemption
provisions of such series; and
"(viii) to fix or determine any additional dividend,
liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions thereof;
"RESOLVED that the Preferred Stock Committee be and hereby is
authorized and empowered to authorize, approve and take such other
action as is deemed advisable in connection with the issuance of one
or more series of the Preferred Shares, including, without limitation,
the following:
"(i) Selecting the underwriters, dealers and
agents, if any, to or through which the Preferred Shares will
be sold and offered;
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"(ii) approving the form and substance, and the
execution and delivery, of any underwriting agreement, agency
agreement, placement agreement or other agreement to be
entered into by the Corporation in connection with the
issuance and sale of the Preferred Shares, including, without
limitation, setting the amount of any underwriting discounts
and other items constituting underwriters' compensation and
any discounts and commissions allowed or paid to dealers or
agents;
"(iii) selecting the bank or trust company which
will act as depositary if Depositary Shares are offered and
approving the form and substance, and the execution and
delivery, of any deposit agreement to be entered into by the
Corporation with such depositary; and
"(iv) appointing a registrar and transfer agent for
the registration, transfer and exchange of the Preferred
Shares and appointing a dividend disbursing agent for the
Preferred Shares;
"RESOLVED that for each series of Preferred Shares a
certificate shall be prepared and filed on behalf of the Corporation
with the Secretary of State of the State of Delaware pursuant to
Section 151 of the General Corporation Law of the State of Delaware (a
"Certificate of Designations"); that each such Certificate of
Designations be in such form as is approved by action of the Board of
Directors or the Preferred Stock Committee; and that the proper
officers of the Corporation be and hereby are authorized to execute
and file each such Certificate of Designations pursuant to the General
Corporation Law of the State of Delaware".
2. The Board of Directors on March 17, 1992 adopted the
following resolution fixing the voting rights of the Preferred Stock authorized
by the preceding resolutions:
"RESOLVED that the Certificate of Designations for each series
of the Preferred Shares shall provide that the shares of such series
shall not have any voting powers either general or special, except
that:
"(i) Unless the vote or consent of the holders of
a greater number of shares shall then be required by law, the
consent of the holders of at least 66-2/3% of all of the
shares of any series at the time outstanding, given in person
or by proxy, either in writing or by a vote at a meeting
called for the purpose at which the holders of shares of such
series shall vote together as a separate class, shall be
necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the
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provisions of the Certificate of Incorporation or of any
certificate amendatory thereof or supplemental thereto
(including any Certificate of Designations or any similar
document relating to any series of Preferred Stock) so as to
affect adversely the preferences, rights, powers or privileges
of such series;
"(ii) Unless the vote or consent of the holders of
a greater number of shares shall then be required by law, the
consent of the holders of at least 66-2/3% of all of the
shares of any such series and all other series of Preferred
Stock ranking on a parity with shares of such series, either
as to dividends or upon liquidation, at the time outstanding,
given in person or by proxy, either in writing or by a vote at
a meeting called for the purpose at which the holders of
shares of such series and such other series of Preferred Stock
shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting or
validating the creation, authorization or issue of any shares
of any class of stock of the Corporation ranking prior to the
shares of such series as to dividends or upon liquidation, or
the reclassification of any authorized stock of the
Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security
convertible into or evidencing the right to purchase any such
prior shares; and
"(iii) If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist) shall have the right at such meeting,
voting together as a single class without regard to series, to
the exclusion of the holders of Common Stock, to elect two
directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director
for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except
by, the vote of the holders of record of the outstanding
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shares of Preferred Stock, voting together as a single class
without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock,
called for the purpose. So long as a default in any
preference dividends on the Preferred Stock shall exist, (a)
any vacancy in the office of a Preferred Director may be
filled (except as provided in the following clause (b)) by an
instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (b) in the case of
the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding shares of
Preferred Stock, voting together as a single class without
regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes
hereof, to be a Preferred Director. Whenever the term of
office of the Preferred Directors shall end and a default in
preference dividends shall no longer exist, the number of
directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes hereof,
a "default in preference dividends" on the Preferred Stock
shall be deemed to have occurred whenever the amount of
accrued dividends upon any series of the Preferred Stock shall
be equivalent to six full quarter-yearly dividends or more,
and, having so occurred, such default shall be deemed to exist
thereafter until, but only until, all accrued dividends on all
shares of Preferred Stock of each and every series then
outstanding shall have been paid to the end of the last
preceding dividend period."
3. The Preferred Stock Committee of the Board of Directors on
September 10, 1992, pursuant to the authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by Section 3.03 of the By-Laws of the
Corporation and by the resolutions of the Board of Directors set forth above,
adopted the following resolution:
"RESOLVED that, pursuant to resolutions of the Board of
Directors of Chemical Banking Corporation (the "Corporation") adopted
on March 17, 1992, the issue of up to 2,000,000 shares of 7.92%
Cumulative Preferred Stock, $100 stated value per share ($1 par
value), of the Corporation ranking on a parity with the series of
Preferred Stock of the Corporation designated as the Corporation's
"Adjustable Rate Cumulative Preferred Stock, Series B", the
Corporation's "Adjustable Rate Cumulative Preferred Stock, Series C",
the Corporation's "10-3/4% Cumulative Preferred Stock", the
Corporation's "Adjustable Rate Cumulative Preferred Stock, Series E",
the Corporation's "Adjustable Rate Cumulative Preferred Stock, Series
F", the
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Corporation's "10.96% Preferred Stock", the Corporation's "10%
Convertible Preferred Stock" and the Corporation's "8-3/8% Preferred
Stock" is hereby authorized and the designation, preferences and
privileges, relative, participating, optional and other special
rights, and qualifications, limitations and restrictions of all
2,000,000 shares of this Series, in addition to those set forth in the
Certificate of Incorporation of the Corporation and, with respect to
voting rights, in the resolutions of the Board of Directors of the
Corporation adopted on March 17, 1992, are hereby fixed as follows:
"1. Designation. The designation of this Series shall be
7.92% Cumulative Preferred Stock (hereinafter referred to as the
"Series") and the number of shares constituting this Series shall be
Two Million (2,000,000). Shares of this Series shall have a stated
value of $100. The number of authorized shares of this Series may be
reduced by further resolution duly adopted by the Board of Directors
of the Corporation or the Preferred Stock Committee of the Board of
Directors and by the filing of a certificate pursuant to the
provisions of the General Corporation Law of the State of Delaware
stating that such reduction has been so authorized, but the number of
authorized shares of this Series shall not be increased.
"2. Dividends. (a) Dividends shall be payable on the shares
of this Series: (i) for the period (the "Initial Dividend Period")
from the date of original issue of shares of this Series to and
including December 31, 1992, and (ii) for each quarterly dividend
period thereafter (the Initial Dividend Period and each quarterly
dividend period thereafter being hereinafter individually referred to
as a "Dividend Period" and collectively referred to as "Dividend
Periods"), which quarterly Dividend Periods shall commence on January
1, April 1, July 1 and October 1 in each year, commencing January 1,
1993, and shall end on and include the day next preceding the first
day of the next Dividend Period, at a rate per annum of the stated
value thereof equal to 7.92% (the "Dividend Rate"). Dividends shall
be cumulative from such date of original issue and shall be payable,
when and as declared by the Board of Directors or by the Preferred
Stock Committee of the Board of Directors, on March 31, June 30,
September 30 and December 31 of each year, commencing on December 31,
1992. Each such dividend shall be paid to the holders of record of
shares of this Series as they appear on the stock register of the
Corporation on such record date, not exceeding 45 days preceding the
payment date thereof, as shall be fixed by the Board of Directors of
the Corporation or by the Preferred Stock Committee of the Board of
Directors. Dividends on account of arrears for any past Dividend
Periods may be declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on such
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date, not exceeding 45 days preceding the payment date thereof, as may
be fixed by the Board of Directors of the Corporation or by the
Preferred Stock Committee of the Board of Directors.
"(b) Dividends payable on this Series for any period greater
or less than a full Dividend Period, including the Initial Dividend Period,
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months and the actual number of days elapsed in the period. Dividends payable
on this Series for each full Dividend Period shall be computed by annualizing
the Dividend Rate and dividing by four.
"(c) No full dividends shall be declared or paid or set apart
for payment on the Preferred Stock of any series ranking, as to dividends, on a
parity with or junior to this Series for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for such payment on this
Series for all Dividend Periods terminating on or prior to the date of payment
of such full cumulative dividends. When dividends are not paid in full, as
aforesaid, upon the shares of this Series and any other series of Preferred
Stock ranking on a parity as to dividends with this Series, all dividends
declared upon shares of this Series and any other series of Preferred Stock
ranking on a parity as to dividends with this Series shall be declared pro rata
so that the amount of dividends declared per share on this Series and such
other Preferred Stock shall in all cases bear to each other the same ratio that
accrued and unpaid dividends per share on the shares of this Series and such
other Preferred Stock bear to each other. Holders of shares of this Series
shall not be entitled to any dividend, whether payable in cash, property or
stocks, in excess of full cumulative dividends, as herein provided, on this
Series. No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on this Series which may be in
arrears.
"(d) So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock ranking
junior to this Series as to dividends and upon liquidation and other than as
provided in paragraph (c) of this Section 2) shall be declared or paid or set
aside for payment or other distribution declared or made upon the Common Stock
or upon any other stock ranking junior to or on a parity with this Series as to
dividends or upon liquidation, nor shall any Common Stock or any other stock of
the Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the Corporation ranking
junior to this Series as to dividends and upon liquidation) unless, in each
case, the full cumulative dividends on all outstanding shares of this Series
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<PAGE> 62
shall have been paid or declared and set aside for payment for all past
Dividend Periods.
"3. Redemption. (a) The shares of this Series are not
redeemable prior to October 1, 1997. The Corporation, at its option, may
redeem shares of this Series, as a whole or in part, at any time or from time
to time on or after October 1, 1997, at a redemption price of $100 per share,
plus accrued and unpaid dividends thereon to the date fixed for redemption.
"(b) In the event that fewer than all the outstanding shares
of this Series are to be redeemed, the number of shares to be redeemed shall be
determined by the Board of Directors of the Corporation or the Preferred Stock
Committee of the Board of Directors and the shares to be redeemed shall be
determined by lot or pro rata as may be determined by the Board of Directors of
the Corporation or the Preferred Stock Committee of the Board of Directors or
by any other method as may be determined by the Board of Directors of the
Corporation or the Preferred Stock Committee of the Board of Directors in its
sole discretion to be equitable, provided that such method satisfies any
applicable requirements of any securities exchange on which this Series is
listed.
"(c) In the event the Corporation shall redeem shares of this
Series, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 or more than 60 days prior to the redemption
date, to each holder of record of the shares to be redeemed, at such holder's
address as the same appears on the stock register of the Corporation. Each
such notice shall state: (i) the redemption date; (ii) the number of shares of
this Series to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (iii) the redemption price; (iv) the place or places where certificates
for such shares are to be surrendered for payment of the redemption price; and
(v) that dividends on the shares to be redeemed will cease to accrue on the
redemption date.
"(d) Notice having been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
shares of this Series so called for redemption shall cease to accrue, and said
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Corporation (except the right to receive
from the Corporation the redemption price) shall cease. Upon surrender in
accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation or the Preferred Stock Committee of the Board of Directors shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid. In case fewer than all the
shares represented by any such
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certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
"(e) Any shares of this Series which shall at any time have
been redeemed shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board of
Directors of the Corporation or the Preferred Stock Committee of the Board of
Directors.
"(f) Notwithstanding the foregoing provisions of this Section
3, if any dividends on this Series are in arrears, no shares of this Series
shall be redeemed unless all outstanding shares of this Series are
simultaneously redeemed, and the Corporation shall not purchase or otherwise
acquire any shares of this Series; provided, however, that the foregoing shall
not prevent the purchase or acquisition of shares of this Series pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
shares of this Series.
"4. Conversion. The holders of shares of this Series shall
not have any rights to convert such shares into shares of any other class or
series of capital stock of the Corporation.
"5. Liquidation Rights.
"(a) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the holders of the shares of this
Series shall be entitled to receive and to be paid out of the assets of the
Corporation available for distribution to its stockholders, before any payment
or distribution shall be made on the Common Stock or on any other class of
stock ranking junior to this Series upon liquidation, the amount of $100 per
share, plus accrued and unpaid dividends thereon.
"(b) After the payment to the holders of the shares of this
Series of the full preferential amounts provided for in this Section 5, the
holders of this Series as such shall have no right or claim to any of the
remaining assets of the Corporation.
"(c) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable with respect
to the stated value of the shares of this Series and any other shares of stock
of the Corporation ranking as to any such distribution on a parity with the
shares of this Series are not paid in full, the holders of the shares of this
Series and of such other shares will share ratably in any such distribution of
assets of the Corporation in proportion to the full respective stated values to
which they are entitled.
"(d) Neither the sale of all or substantially all the
property or business of the Corporation, nor the merger or
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consolidation of the Corporation into or with any other corporation or the
merger or consolidation of any other corporation into or with the Corporation,
shall be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 5.
"(e) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of this Series then outstanding shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders all amounts to which such holders are entitled
pursuant to paragraph (a) of this Section 5 before any payment shall be made to
the holder of any class of capital stock of the Corporation ranking junior to
this Series upon liquidation.
"6. Ranking. For purposes of this resolution, any stock
of any class or classes of the Corporation shall be deemed to rank:
"(a) prior to the shares of this Series, either as to
dividends or upon liquidation, if the holders of such class or classes shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may be,
in preference or priority to the holders of shares of this Series;
"(b) on a parity with shares of this Series, either as to
dividends or upon liquidation, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share or sinking fund
provisions, if any, be different from those of this Series, if the holders of
such stock shall be entitled to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation,
as the case may be, without preference or priority, one over the other, as
between the holders of such stock and the holders of shares of this Series; and
"(c) junior to shares of this Series, either as to dividends
or upon liquidation, if such class shall be Common Stock or if the holders of
shares of this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation,
as the case may be, in preference or priority to the holders of shares of such
class or classes.
"7. Voting Rights. The shares of this Series shall have the
voting rights set forth in the resolutions of the Board of Directors of the
Corporation adopted on March 17, 1992."
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Appendix F
CERTIFICATE OF DESIGNATIONS
OF
7.58% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were duly adopted by the Board of
Directors of the Corporation on March 17, 1992 and September 15, 1992, and by
the Preferred Stock Committee of the Board of Directors on March 16, 1993,
respectively, pursuant to authority conferred upon the Board of Directors by
the provisions of the Certificate of Incorporation of the Corporation which
authorize the issuance of up to 200,000,000 shares of preferred stock, $1 par
value (the "Preferred Stock"), and pursuant to authority conferred upon the
Preferred Stock Committee of the Board of Directors by Section 141(c) of the
General Corporation Law of the State of Delaware, by the By-Laws of the
Corporation and by the resolutions of the Board of Directors adopted at
meetings duly convened and held on March 17, 1992 and September 15, 1992:
1. The Board of Directors on March 17, 1992 adopted the
following resolutions authorizing a Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of the Preferred Stock:
"RESOLVED that the Board of Directors of Chemical Banking
Corporation (the "Board of Directors") deems it advisable and in the
best interests of Chemical Banking Corporation (the "Corporation") to
provide for the issuance and sale by the Corporation from time to time
of shares of preferred stock ($1 par value), in one or more series,
having an aggregate liquidation preference over the Corporation's
common stock, $1 par value (the "Common Stock"), not in excess of
$800,000,000, with such voting powers, designations, preferences, and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions, as are set forth in, or
are determined in accordance with, these resolutions (the "Preferred
Shares");
"RESOLVED that the Board of Directors deems it in the best
interest of the Corporation to delegate to the
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Preferred Stock Committee those powers and duties set forth below;
"RESOLVED that the Preferred Stock Committee may, without the
further action of the Board of Directors, from time to time authorize
the issuance and sale from time to time of one or more series of
Preferred Shares for cash or other property, as shall be determined by
the Preferred Stock Committee, subject to the limitations above, and
any such Preferred Shares may be sold through agents, through
underwriters, through dealers and directly to purchasers, in one or
more offerings registered under the Securities Act of 1933 (the "Act")
or in transactions not required to be registered under the Act, all as
shall be determined by the Preferred Stock Committee; and any such
issuance and sale of Preferred Shares, including the issuance from
time to time of any warrants for such Preferred Shares, common or
preferred stock of the Corporation into which any series of Preferred
Shares may be convertible or exchangeable and the issuance and sale
from time to time of Depositary Shares (as hereinafter defined; it
being intended that, unless the context shall otherwise require, when
used in these resolutions the term "Preferred Shares" shall also
include any warranty or Depositary Shares related thereto) related to
the Preferred Shares, be and hereby is authorized and approved;
"RESOLVED that the Preferred Stock Committee be and hereby is
authorized and empowered to act on behalf and in the stead of the
Board of Directors in connection with the issuance of one or more
series of the Preferred Shares and any common or preferred stock into
which such Preferred Shares may be convertible or exchangeable and, in
connection therewith, is hereby authorized, to the fullest extent
permitted by the Delaware General Corporation Law as it now exists or
is hereafter amended, to determine the price at which the Preferred
Shares of each such series will be sold by the Corporation, to declare
dividends payable on the Preferred Shares, to reserve for issuance on
the books of the Corporation or otherwise a sufficient number of
shares of any common or preferred stock of the Corporation into which
any series of the Preferred Shares may be convertible or exchangeable
and to determine the designation, preferences and privileges, the
relative, participating, optional or other special rights, and the
qualifications, limitations and restrictions thereof;
"RESOLVED that, without limiting the generality of the
preceding resolution, the Preferred Stock Committee is hereby
expressly authorized:
"(i) to determine whether the Preferred Shares will
be issued in one or more series and the number of shares of
any such series;
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"(ii) to fix the dividend rate or rates of such
shares and/or the methods of determining dividends and the
dates on which dividends shall be payable;
"(iii) to determine whether dividends of any series
of Preferred Shares shall be cumulative or noncumulative and,
if cumulative, the dates from which dividends shall commence
to cumulate;
"(iv) to determine the conversion or exchange
provisions, if any, of the shares of any series of the
Preferred Shares, including without limitation, the class and
series of capital stock of the Corporation into which such
shares shall be convertible or exchangeable;
"(v) to determine whether the Corporation shall
elect to offer (a) warrants for such Preferred Shares
("Warrants") or (b) depositary shares evidenced by depositary
receipts, each representing a fraction (to be determined by
the Preferred Stock Committee) of a share of a particular
series of the Preferred Shares ("Depositary Shares"), which
Preferred Shares will be issued and deposited with a
depositary, in each case, in lieu of offering full shares of
such series of the Preferred Shares;
"(vi) to fix the liquidation preference of the
shares of any series of the Preferred Shares, subject to the
limitation that the aggregate liquidation preference of all
the Preferred Shares issued shall not exceed $800,000,000;
"(vii) to determine whether the shares of any series
of the Preferred Shares shall be subject to redemption,
optional or mandatory or pursuant to a sinking fund, and, if
such series shall be subject to redemption, the redemption
provisions of such series; and
"(viii) to fix or determine any additional dividend,
liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions thereof;
"RESOLVED that the Preferred Stock Committee be and hereby is
authorized and empowered to authorize, approve and take such other
action as is deemed advisable in connection with the issuance of one
or more series of the Preferred Shares, including without limitation,
the following:
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"(i) selecting the underwriters, dealers and agents,
if any, to or through which the Preferred Shares will be sold
and offered;
"(ii) approving the form and substance, and the
execution and delivery, of any underwriting agreement, agency
agreement, placement agreement or other agreement to be
entered into by the Corporation in connection with the
issuance and sale of the Preferred Shares, including, without
limitation, setting the amount of any underwriting discounts
and other items constituting underwriters' compensation and
any discounts and commissions allowed or paid to dealers or
agents;
"(iii) selecting the bank or trust company which
will act as depositary if Depositary Shares are offered and
approving the form and substance, and the execution and
delivery, of any deposit agreement to be entered into by the
Corporation with such depositary; and
"(iv) appointing a registrar and transfer agent for
the registration, transfer and exchange of the Preferred
Shares and appointing a dividend disbursing agent for the
Preferred Shares;
"RESOLVED that for each series of Preferred Shares a
certificate shall be prepared and filed on behalf of the Corporation
with the Secretary of State of the State of Delaware pursuant to
Section 151 of the General Corporation Law of the State of Delaware (a
"Certificate of Designations"); that each such Certificate of
Designations be in such form as is approved by action of the Board of
Directors or the Preferred Stock Committee; and that the proper
officers of the Corporation be and hereby are authorized to execute
and file each such Certificate of Designations pursuant to the General
Corporation Law of the State of Delaware."
2. The Board of Directors on September 15, 1992 adopted
the following resolution authorizing a Preferred Stock Committee of the Board
of Directors to act on behalf of the Board of Directors in connection with the
issuance of additional shares of the Preferred Stock:
"RESOLVED that the Board of Directors of Chemical Banking
Corporation (the "Board of Directors") deems it advisable and in the
best interests of Chemical Banking Corporation (the "Corporation") to
amend certain resolutions adopted by the Board of Directors on March
17, 1992 pertaining to the authority of the Preferred Stock Committee
of the Board (the "March 17, 1992 Resolutions") to authorize the
Preferred Stock Committee of the Board of Directors to approve the
issuance and sale by the Corporation from time
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to time of Preferred Shares as defined in the March 17, 1992
Resolutions, in one or more series, having an additional aggregate
liquidation preference over the Corporation's common stock, $1 par
value, not in excess of $1,300,000,000 (an increase of $500,000,000
from the $800,000,000 authorized under the March 17, 1992
Resolutions), with such voting powers, designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions, as are set forth in, or
are determined in accordance with the March 17, 1992 Resolutions which
shall in all other respects remain in full force and effect and are
hereby ratified and affirmed."
3. The Board of Directors on March 17, 1992 adopted the
following resolution fixing the voting rights of the Preferred Stock authorized
by the preceding resolutions:
"RESOLVED that the Certificate of Designations for each series
of the Preferred Shares shall provide that the shares of such series
shall not have any voting powers either general or special except
that:
"(i) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the
consent of the holders of at least 66-2/3% of all of the
shares of any series at the time outstanding, given in person
or by proxy, either in writing or by a vote at a meeting
called for the purpose at which the holders of shares of such
series shall vote together as a separate class, shall be
necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the provisions of
the Certificate of Incorporation or of any certificate
amendatory thereof or supplemental thereto (including any
Certificate of Designations or any similar document relating
to any series of Preferred Stock) so as to affect adversely
the preferences, rights, powers or privileges of such series;
"(ii) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the
consent of the holders of at least 66-2/3% of all of the
shares of any such series and all other series of Preferred
Stock ranking on a parity with shares of such series, either
as to dividends or upon liquidation, at the time outstanding,
given in person or by proxy, either in writing or by a vote at
a meeting called for the purpose at which the holders of
shares of such series and such other series of Preferred Stock
shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting or
validating the creation, authorization or issue of any shares
of any class of
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stock of the Corporation ranking prior to the shares of such
series as to dividends or upon liquidation, or the
reclassification of any authorized stock of the Corporation
into any such prior shares, or the creation, authorization or
issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares; and
"(iii) If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of Common Stock, to
elect two directors of the Corporation to fill such newly
created directorships. Such right shall continue until there
are no dividends in arrears upon the Preferred Stock. Each
director elected by the holders of shares of Preferred Stock
(a "Preferred Director"), shall continue to serve as such
director for the full term for which he shall have been
elected, notwithstanding that prior to the end of such term a
default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed
except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a
single class without regard to series, at a meeting of the
Corporation's stockholders, or of the holders of shares of
Preferred Stock, called for the purpose. So long as a default
in any preference dividends on the Preferred Stock shall
exist, (a) any vacancy in the office of a Preferred Director
may be filled (except as provided in the following clause (b))
by an instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (b) in the case of
the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding shares of
Preferred Stock, voting together as a single class without
regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes
hereof, to be a Preferred Director. Whenever the term of
office of the Preferred Directors shall end and a default in
preference dividends shall no longer exist, the number of
directors constituting the Board of Directors of the
Corporation shall be reduced by
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two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have
occurred whenever the amount of accrued dividends upon any
series of the Preferred Stock shall be equivalent to six full
quarter-yearly dividends or more, and having so occurred, such
default shall be deemed to exist thereafter until, but only
until, all accrued dividends on all shares of Preferred Stock
of each and every series then outstanding shall have been paid
to the end of the last preceding dividend period."
4. The Preferred Stock Committee of the Board of
Directors on March 16, 1993, pursuant to the authority conferred upon the
Preferred Stock Committee of the Board of Directors by Section 141(c) of the
General Corporation Law of the State of Delaware, by Section 3.03 of the
By-Laws of the Corporation and by the resolutions of the Board of Directors set
forth above, adopted the following resolution:
"RESOLVED that, pursuant to resolutions of the Board of
Directors of Chemical Banking Corporation (the "Corporation") adopted
on March 17, 1992 and September 15, 1992, the issue of up to 2,300,000
shares of 7.58% Cumulative Preferred Stock, $100 stated value per
share ($1 par value) of the Corporation ranking on a parity with the
series of Preferred Stock of the Corporation designated as the
Corporation's "Adjustable Rate Cumulative Preferred Stock, Series C",
the Corporation's "10-3/4% Cumulative Preferred Stock", the
Corporation's "Adjustable Rate Cumulative Preferred Stock, Series E",
the Corporation's "Adjustable Rate Cumulative Preferred Stock, Series
F", the Corporation's "10.96% Preferred Stock", the Corporation's "10%
Convertible Preferred Stock", the Corporation's "8-3/8% Preferred
Stock" and the Corporation's "7.92% Cumulative Preferred Stock" is
hereby authorized and the designation, preferences and privileges,
relative, participating, optional and other special rights, and
qualifications, limitations and restrictions of all 2,300,000 shares
of this Series, in addition to those set forth in the Certificate of
Incorporation of the Corporation and, with respect to voting rights,
in the resolutions of the Board of Directors of the Corporation
adopted on March 17, 1992 and September 15, 1992, are hereby fixed as
follows:
"1. Designation. The designation of this Series
shall be 7.58% Cumulative Preferred Stock (hereinafter
referred to as the "Series") and the number of shares
constituting this series shall be 2,300,000. Shares of this
Series shall have a stated value of $100. The number of
authorized shares of this Series may be reduced by further
resolution duly adopted by the Board of Directors of the
Corporation or the Preferred Stock Committee of the Board of
Directors and by the filing of a certificate pursuant to the
provisions of the
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General Corporation Law of the State of Delaware stating that
such reduction has been so authorized, but the number of
authorized shares of this Series shall not be increased.
"2. Dividends. (a) Dividends shall be payable on
the shares of this Series: (i) for the period (the "Initial
Dividend Period") from the date of original issue of shares of
this Series to and including June 30, 1993, and (ii) for each
quarterly dividend period thereafter (the Initial Dividend
Period and each quarterly dividend period thereafter being
hereinafter individually referred to as a "Dividend Period"
and collectively referred to as "Dividend Periods"), which
quarterly Dividend Periods shall commence on January 1, April
1, July 1 and October 1 in each year, commencing July 1, 1993,
and shall end on and include the day next preceding the first
day of the next Dividend Period, at a rate per annum of the
stated value thereof equal to 7.58% (the "Dividend Rate").
Dividends shall be cumulative from such date of original issue
and shall be payable, when and as declared by the Board of
Directors or by the Preferred Stock Committee of the Board of
Directors, on March 31, June 30, September 30 and December 31
of each year, commencing on June 30, 1993. Each such dividend
shall be paid to the holders of record of shares of this
Series as they appear on the stock register of the Corporation
on such record date, not exceeding 45 days preceding the
payment date thereof, as shall be fixed by the Board of
Directors of the Corporation or by the Preferred Stock
Committee of the Board of Directors. Dividends on account of
arrears for any past Dividend Periods may be declared and paid
at any time, without reference to any regular dividend payment
date, to holders on such date, not exceeding 45 days preceding
the payment date thereof, as may be fixed by the Board of
Directors of the Corporation or by the Preferred Stock
Committee of the Board of Directors.
"(b) Dividends payable on this Series for any period
greater or less than a full Dividend Period, including the
Initial Dividend Period, shall be computed on the basis of a
360-day year consisting of twelve 30-day months and the actual
number of days elapsed in the period. Dividends payable on
this Series for each full Dividend Period shall be computed by
annualizing the Dividend Rate and dividing by four.
"(c) No full dividends shall be declared or paid or
set apart for payment on the Preferred Stock of any series
ranking, as to dividends, on a parity with or junior to this
Series for any period unless full cumulative dividends have
been or contemporaneously are
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declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on this Series for
all Dividend Periods terminating on or prior to the date of
payment of such full cumulative dividends. When dividends are
not paid in full, as aforesaid, upon the shares of this Series
and any other series of Preferred Stock ranking on a parity as
to dividends with this Series, all dividends declared upon
shares of this Series and any other series of Preferred Stock
ranking on a parity as to dividends with this Series shall be
declared pro rata so that the amount of dividends declared per
share on this Series and such other Preferred Stock shall in
all cases bear to each other the same ratio that accrued and
unpaid dividends per share on the shares of this Series and
such other Preferred Stock bear to each other. Holders of
shares of this Series shall not be entitled to any dividend,
whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided, on this Series. No
interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on this
Series which may be in arrears.
"(d) So long as any shares of this Series are
outstanding, no dividend (other than a dividend in Common
Stock or in any other stock ranking junior to this Series as
to dividends and upon liquidation and other than as provided
in paragraph (c) of this Section 2) shall be declared or paid
or set aside for payment or other distribution declared or
made upon the Common Stock or upon any other stock ranking
junior to or on a parity with this Series as to dividends or
upon liquidation, nor shall any Common Stock or any other
stock of the Corporation ranking junior to or on a parity with
this Series as to dividends or upon liquidation be redeemed,
purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the
Corporation ranking junior to this Series as to dividends and
upon liquidation) unless, in each case, the full cumulative
dividends on all outstanding shares of this Series shall have
been paid or declared and set aside for payment for all past
Dividend Periods.
"3. Redemption. (a) The shares of this Series are
not redeemable prior to April 1, 1998. The Corporation, at
its option, may redeem shares of this Series, as a whole or in
part, at any time or from time to time on or after April 1,
1998, at a redemption
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price of $100 per share plus accrued and unpaid dividends
thereon to the date fixed for redemption.
"(b) In the event that fewer than all the
outstanding shares of this Series are to be redeemed, the
number of shares to be redeemed shall be determined by the
Board of Directors of the Corporation or the Preferred Stock
Committee of the Board of Directors and the shares to be
redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors of the Corporation or the
Preferred Stock Committee of the Board of Directors or by any
other method as may be determined by the Board of Directors of
the Corporation or the Preferred Stock Committee of the Board
of Directors in its sole discretion to be equitable, provided
that such method satisfies any applicable requirements of any
securities exchange on which this Series is listed.
"(c) In the event the Corporation shall redeem
shares of this Series, notice of such redemption shall be
given by first class mail, postage prepaid, mailed not less
than 30 or more than 60 days prior to the redemption date, to
each holder of record of the shares to be redeemed, at such
holder's address as the same appears on the stock register of
the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the number of shares of this Series to
be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the redemption price; (iv)
the place or places where certificates for such shares are to
be surrendered for payment of the redemption price; and (v)
that dividends on the shares to be redeemed will cease to
accrue on the redemption date.
"(d) Notice having been mailed as aforesaid, from
and after the redemption date (unless default shall be made by
the Corporation in providing money for the payment of the
redemption price) dividends on the shares of this Series so
called for redemption shall cease to accrue, and said shares
shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of the Corporation (except
the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said
notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation or the Preferred Stock Committee
of the Board of Directors shall so require and the notice
shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid. In case fewer
than all the shares represented by any such certificate are
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redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
"(e) Any shares of this Series which shall at any
time have been redeemed shall, after such redemption, have the
status of authorized but unissued shares of Preferred Stock,
without designation as to series until such shares are once
more designated as part of a particular series by the Board of
Directors of the Corporation or the Preferred Stock Committee
of the Board of Directors.
"(f) Notwithstanding the foregoing provisions of
this Section 3, if any dividends on this Series are in
arrears, no shares of this Series shall be redeemed unless all
outstanding shares of this Series are simultaneously redeemed,
and the Corporation shall not purchase or otherwise acquire
any shares of this Series; provided, however, that the
foregoing shall not prevent the purchase or acquisition of
shares of this Series pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding shares of
this Series.
"4. Conversion. The holders of shares of this
Series shall not have any rights to convert such shares into
shares of any other class or series of capital stock of the
Corporation.
"5. Liquidation Rights. (a) Upon the voluntary or
involuntary dissolution, liquidation or winding up of the
Corporation, the holders of the shares of this Series shall be
entitled to receive and to be paid out of the assets of the
Corporation available for distribution to its stockholders,
before any payment or distribution shall be made on the Common
Stock or on any other class of stock ranking junior to this
Series upon liquidation, the amount of $100 per share, plus
accrued and unpaid dividends thereon.
"(b) After the payment to the holders of the shares
of this Series of the full preferential amounts provided for
in this Section 5, the holders of this Series as such shall
have no right or claim to any of the remaining assets of the
Corporation.
"(c) If, upon any voluntary or involuntary
dissolution, liquidation, or winding up of the Corporation,
the amounts payable with respect to the stated value of the
shares of this Series and any other shares of stock of the
Corporation ranking as to any such distribution on a parity
with the Shares of this Series are not paid in full, the
holders of the shares
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of this Series and of such other shares will share ratably in
any such distribution of assets of the Corporation in
proportion to the full respective stated values to which they
are entitled.
"(d) Neither the sale of all or substantially all the
property or business of the Corporation, nor the merger or
consolidation of the Corporation into or with any other
corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to
be a dissolution, liquidation, or winding up, voluntary or
involuntary, for the purposes of this Section 5.
"(e) Upon the dissolution, liquidation or winding up
of the Corporation, the holders of shares of this Series then
outstanding shall be entitled to be paid out of the assets of
the Corporation available for distribution to its stockholders
all amounts to which such holders are entitled pursuant to
paragraph (a) of this Section 5 before any payment shall be
made to the holder of any class of capital stock of the
Corporation ranking junior to this Series upon liquidation.
"6. Ranking. For purposes of this resolution, any
stock of any class or classes of the Corporation shall be
deemed to rank:
"(a) prior to the shares of this Series, either as
to dividends or upon liquidation, if the holders of such class
or classes shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, in preference or
priority to the holders of shares of this Series;
"(b) on a parity with shares of this Series, either
as to dividends or upon liquidation, whether or not the
dividend rates, dividend payment dates or redemption or
liquidation prices per share or sinking fund provisions, if
any, be different from those of this Series, if the holders of
such shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, without preference
or priority, one over the other, as between the holders of
such stock and the holders of shares of this Series; and
"(c) junior to shares of this Series, either as to
dividends or upon liquidation, if such class shall be Common
Stock or if the holders of shares of this Series shall be
entitled to receipt of dividends or of amounts distributable
upon dissolution, liquidation or
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winding up of the Corporation, as the case may be, in
preference or priority to the holders of shares of such class
or classes.
"7. Voting Rights. The shares of this Series shall
have the voting rights set forth in the resolutions of the
Board of Directors of the Corporation adopted on March 17,
1992."
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Appendix G
CERTIFICATE OF DESIGNATIONS
OF
7-1/2% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were duly adopted by the Board of
Directors of the Corporation on March 17, 1992 and September 15, 1992, and by
the Preferred Stock Committee of the Board of Directors on March 16, 1993,
respectively, pursuant to authority conferred upon the Board of Directors by
the provisions of the Certificate of Incorporation of the Corporation which
authorize the issuance of up to 200,000,000 shares of preferred stock, $1 par
value (the "Preferred Stock"), and pursuant to authority conferred upon the
Preferred Stock Committee of the Board of Directors by Section 141(c) of the
General Corporation Law of the State of Delaware, by the By-Laws of the
Corporation and by the resolutions of the Board of Directors adopted at
meetings duly convened and held on March 17, 1992 and September 15, 1992:
1. The Board of Directors on March 17, 1992 adopted the
following resolutions authorizing a Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of the Preferred Stock:
"RESOLVED that the Board of Directors of Chemical
Banking Corporation (the "Board of Directors") deems it
advisable and in the best interests of Chemical Banking
Corporation (the "Corporation") to provide for the issuance
and sale by the Corporation from time to time of shares of
preferred stock ($1 par value), in one or more series, having
an aggregate liquidation preference over the Corporation's
common stock, $1 par value (the "Common Stock"), not in excess
of $800,000,000, with such voting powers, designations,
preferences and relative, participating, optional or other
special rights, and qualifications, limitations or
restrictions, as are set forth in, or are determined in
accordance with, these resolutions (the "Preferred Shares");
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"RESOLVED that the Board of Directors deems it in the best
interests of the Corporation to delegate to the Preferred Stock
Committee those powers and duties set forth below;
"RESOLVED that the Preferred Stock Committee may, without the
further action of the Board of Directors, from time to time authorize
the issuance and sale from time to time of one or more series of
Preferred Shares for cash or other property, as shall be determined by
the Preferred Stock Committee, subject to the limitations above, and
any such Preferred Shares may be sold through agents, through
underwriters, through dealers and directly to purchasers, in one or
more offerings registered under the Securities Act of 1933 (the "Act")
or in transactions not required to be registered under the Act, all as
shall be determined by the Preferred Stock Committee; and any such
issuance and sale of Preferred Shares, including the issuance from
time to time of any warrants for such Preferred Shares, common or
preferred stock of the Corporation into which any series of Preferred
Shares may be convertible or exchangeable and the issuance and sale
from time to time of Depositary Shares (as hereinafter defined; it
being intended that, unless the context shall otherwise require, when
used in these resolutions the term "Preferred Shares" shall also
include any warrants or Depositary Shares related thereto) related to
the Preferred Shares, be and hereby is authorized and approved;
"RESOLVED that the Preferred Stock Committee be and hereby is
authorized and empowered to act on behalf and in the stead of the
Board of Directors in connection with the issuance of one or more
series of the Preferred Shares and any common or preferred stock into
which such Preferred Shares may be convertible or exchangeable and, in
connection therewith, is hereby authorized, to the fullest extent
permitted by the Delaware General Corporation Law as it now exists or
is hereafter amended, to determine the price at which the Preferred
Shares of each such series will be sold by the Corporation, to declare
dividends payable on the Preferred Shares, to reserve for issuance on
the books of the Corporation or otherwise a sufficient number of
shares of any common or preferred stock of the Corporation into which
any series of the Preferred Shares may be convertible or exchangeable
and to determine the designation, preferences and privileges, the
relative, participating, optional or other special rights, and the
qualifications, limitations and restrictions thereof;
"RESOLVED that, without limiting the generality of the
preceding resolution, the Preferred Stock Committee is hereby
expressly authorized:
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"(i) to determine whether the Preferred Shares will
be issued in one or more series and the number of shares of
any such series;
"(ii) to fix the dividend rate or rates of such
shares and/or the methods of determining dividends and the
dates on which dividends shall be payable;
"(iii) to determine whether dividends of any series
of Preferred Shares shall be cumulative or noncumulative and,
if cumulative, the dates from which dividends shall commence
to cumulate;
"(iv) to determine the conversion or exchange
provisions, if any, of the shares of any series of the
Preferred Shares, including without limitation, the class and
series of capital stock of the Corporation into which such
shares shall be convertible or exchangeable;
"(v) to determine whether the Corporation shall
elect to offer (a) warrants for such Preferred Shares
("Warrants") or (b) depositary shares evidenced by depositary
receipts, each representing a fraction (to be determined by
the Preferred Stock Committee) of a share of a particular
series of the Preferred Shares ("Depositary Shares"), which
Preferred Shares will be issued and deposited with a
depositary, in each case, in lieu of offering full shares of
such series of the Preferred Shares;
"(vi) to fix the liquidation preference of the
shares of any series of the Preferred Shares, subject to the
limitation that the aggregate liquidation preference of all
the Preferred Shares issued shall not exceed $800,000,000;
"(vii) to determine whether the shares of any series
of the Preferred Shares shall be subject to redemption,
optional or mandatory or pursuant to a sinking fund, and, if
such series shall be subject to redemption, the redemption
provisions of such series; and
"(viii) to fix or determine any additional dividend,
liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions thereof;
"RESOLVED that the Preferred Stock Committee be and hereby is
authorized and empowered to authorize, approve and take such other
action as is deemed advisable in connection with the issuance of one
or more series of the Preferred Shares, including, without limitation,
the following:
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"(i) selecting the underwriters, dealers and agents,
if any, to or through which the Preferred Shares will be sold
and offered;
"(ii) approving the form and substance, and the
execution and delivery, of any underwriting agreement, agency
agreement, placement agreement or other agreement to be
entered into by the Corporation in connection with the
issuance and sale of the Preferred Shares, including, without
limitation, setting the amount of any underwriting discounts
and other items constituting underwriters' compensation and
any discounts and commissions allowed or paid to dealers or
agents;
"(iii) selecting the bank or trust company which
will act as depositary if Depositary Shares are offered and
approving the form and substance, and the execution and
delivery, of any deposit agreement to be entered into by the
Corporation with such depositary; and
"(iv) appointing a registrar and transfer agent for
the registration, transfer and exchange of the Preferred
Shares and appointing a dividend disbursing agent for the
Preferred Shares;
"RESOLVED that for each series of Preferred Shares a
certificate shall be prepared and filed on behalf of the Corporation
with the Secretary of State of the State of Delaware pursuant to
Section 151 of the General Corporation Law of the State of Delaware (a
"Certificate of Designations"); that each such Certificate of
Designations be in such form as is approved by action of the Board of
Directors or the Preferred Stock Committee; and that the proper
officers of the Corporation be and hereby are authorized to execute
and file each such Certificate of Designations pursuant to the General
Corporation Law of the State of Delaware."
2. The Board of Directors on September 15, 1992 adopted
the following resolution authorizing a Preferred Stock Committee of the Board
of Directors to act on behalf of the Board of Directors in connection with the
issuance of additional shares of the Preferred Stock:
"RESOLVED that the Board of Directors of Chemical Banking
Corporation (the "Board of Directors") deems it advisable and in the
best interests of Chemical Banking Corporation (the "Corporation") to
amend certain resolutions adopted by the Board of Directors on March
17, 1992 pertaining to the authority of the Preferred Stock Committee
of the Board (the "March 17, 1992 Resolutions") to authorize the
Preferred Stock Committee of the Board of Directors to approve the
issuance and sale by the Corporation from time
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to time of Preferred Shares as defined in the March 17, 1992
Resolutions, in one or more series, having an additional aggregate
liquidation preference over the Corporation's Common Stock, $1 par
value, not in excess of $1,300,000,000 (an increase of $500,000,000
from the $800,000,000 authorized under the March 17, 1992
Resolutions), with such voting powers, designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions, as are set forth in, or
are determined in accordance with the March 17, 1992 Resolutions which
shall in all other respects remain in full force and effect and are
hereby ratified and affirmed."
3. The Board of Directors on March 17, 1992 adopted the
following resolution fixing the voting rights of the Preferred Stock authorized
by the preceding resolutions:
"RESOLVED that the Certificate of Designations for
each series of the Preferred Shares shall provide that the shares of
such series shall not have any voting powers either general or special,
except that:
"(i) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the
consent of the holders of at least 66-2/3% of all of the
shares of any series at the time outstanding, given in person
or by proxy, either in writing or by a vote at a meeting
called for the purpose at which the holders of shares of such
series shall vote together as a separate class, shall be
necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the provisions of
the Certificate of Incorporation or of any certificate
amendatory thereof or supplemental thereto (including any
Certificate of Designations or any similar document relating
to any series of Preferred Stock) so as to affect adversely
the preferences, rights, powers or privileges of such series;
"(ii) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the
consent of the holders of at least 66-2/3% of all of the
shares of any such series and all other series of Preferred
Stock ranking on a parity with shares of such series, either
as to dividends or upon liquidation, at the time outstanding,
given in person or by proxy, either in writing or by a vote at
a meeting called for the purpose at which the holders of
shares of such series and such other series of Preferred Stock
shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting or
validating the creation, authorization or issue of any shares
of any class of
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stock of the Corporation ranking prior to the shares of such
series as to dividends or upon liquidation, or the
reclassification of any authorized stock of the Corporation
into any such prior shares, or the creation, authorization or
issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares; and
"(iii) If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of Common Stock, to
elect two directors of the Corporation to fill such newly
created directorships. Such right shall continue until there
are no dividends in arrears upon the Preferred Stock. Each
director elected by the holders of shares of Preferred Stock
(a "Preferred Director"), shall continue to serve as such
director for the full term for which he shall have been
elected, notwithstanding that prior to the end of such term a
default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed
except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a
single class without regard to series, at a meeting of the
Corporation's stockholders, or of the holders of shares of
Preferred Stock, called for the purpose. So long as a default
in any preference dividends on the Preferred Stock shall
exist, (a) any vacancy in the office of a Preferred Director
may be filled (except as provided in the following clause (b))
by an instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (b) in the case of
the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding shares of
Preferred Stock, voting together as a single class without
regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes
hereof, to be a Preferred Director. Whenever the term of
office of the Preferred Directors shall end and a default in
preference dividends shall no longer exist, the number of
directors constituting the Board of Directors of the
Corporation shall be reduced by
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two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have
occurred whenever the amount of accrued dividends upon any
series of the Preferred Stock shall be equivalent to six full
quarter-yearly dividends or more, and, having so occurred,
such default shall be deemed to exist thereafter until, but
only until, all accrued dividends on all shares of Preferred
Stock of each and every series then outstanding shall have
been paid to the end of the last preceding dividend period."
4. The Preferred Stock Committee of the Board of
Directors on May 17, 1993, pursuant to the authority conferred upon the
Preferred Stock Committee of the Board of Directors by Section 141(c) of the
General Corporation Law of the State of Delaware, by Section 3.03 of the
By-Laws of the Corporation and by the resolutions of the Board of Directors set
forth above, adopted the following resolution:
"RESOLVED that, pursuant to resolutions of the Board of
Directors of Chemical Banking Corporation (the "Corporation") adopted
on March 17, 1992 and September 15, 1992, the issue of up to 2,300,000
shares of 7-1/2% Cumulative Preferred Stock, $100 stated value per
share ($1 par value), of the Corporation ranking on a parity with the
series of Preferred Stock of the Corporation designated as the
Corporation's "Adjustable Rate Cumulative Preferred Stock, Series C",
the Corporation's "10-3/4% Cumulative Preferred Stock", the
Corporation's "Adjustable Rate Cumulative Preferred Stock, Series F",
the Corporation's "10.96% Preferred Stock", the Corporation's "10%
Convertible Preferred Stock", the Corporation's "8-3/8% Preferred
Stock", the Corporation's "7.92% Cumulative Preferred Stock" and the
Corporation's "7.58% Cumulative Preferred Stock" is hereby authorized
and the designation, preferences and privileges, relative,
participating, optional and other special rights, and qualifications,
limitations and restrictions of all 2,300,000 shares of this Series,
in addition to those set forth in the Certificate of Incorporation of
the Corporation and, with respect to voting rights, in the resolutions
of the Board of Directors of the Corporation adopted on March 17, 1992
and September 15, 1992, are hereby fixed as follows:
"1. Designation. The designation of this series
shall be 7-1/2% Cumulative Preferred Stock (hereinafter
referred to as the "Series") and the number of shares
constituting this Series shall be 2,300,000. Shares of this
Series shall have a stated value of $100. The number of
authorized shares of this Series may be reduced by further
resolution duly adopted by the Board of Directors of the
Corporation or the Preferred Stock Committee of the Board of
Directors and by the filing of a certificate pursuant to the
provisions of the
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General Corporation Law of the State of Delaware stating that
such reduction has been so authorized, but the number of
authorized shares of this Series shall not be increased.
"2. Dividends. (a) Dividends shall be payable on
the shares of this Series: (i) for the period (the "Initial
Dividend Period") from the date of original issue of shares of
this Series to and including June 30, 1993, and (ii) for each
quarterly dividend period thereafter (the Initial Dividend
Period and each quarterly dividend period thereafter being
hereinafter individually referred to as a "Dividend Period"
and collectively referred to as "Dividend Periods"), which
quarterly Dividend Periods shall commence on January 1, April
1, July 1 and October 1 in each year, commencing June 30,
1993, and shall end on and include the day next preceding the
first day of the next Dividend Period, at a rate per annum of
the stated value thereof equal to 7-1/2% (the "Dividend
Rate"). Dividends shall be cumulative from such date of
original issue and shall be payable, when and as declared by
the Board of Directors or by the Preferred Stock Committee of
the Board of Directors, on March 31, June 30, September 30 and
December 31 of each year, commencing on June 30, 1993. Each
such dividend shall be paid to the holders of record of shares
of this Series as they appear on the stock register of the
Corporation on such record date, not exceeding 45 days
preceding the payment date thereof, as shall be fixed by the
Board of Directors of the Corporation or by the Preferred
Stock Committee of the Board of Directors. Dividends on
account of arrears for any past Dividend Periods may be
declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on such
date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the
Corporation or by the Preferred Stock Committee of the Board
of Directors.
"(b) Dividends payable on this Series for any period
greater or less than a full Dividend Period, including the
Initial Dividend Period, shall be computed on the basis of a
360-day year consisting of twelve 30-day months and the actual
number of days elapsed in the period. Dividends payable on
this Series for each full Dividend Period shall be computed by
annualizing the Dividend Rate and dividing by four.
"(c) No full dividends shall be declared or paid or
set apart for payment on the Preferred Stock of any series
ranking, as to dividends, on a parity with or junior to this
Series for any Period unless full cumulative dividends have
been or contemporaneously are
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declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on this Series for
all Dividend Periods terminating on or prior to the date of
payment of such full cumulative dividends. When dividends are
not paid in full, as aforesaid, upon the shares of this Series
and any other series of Preferred Stock ranking on a parity as
to dividends with this Series, all dividends declared upon
shares of this Series and any other series of Preferred Stock
ranking on a parity as to dividends with this Series shall be
declared pro rata so that the amount of dividends declared per
share on this Series and such other Preferred Stock shall in
all cases bear to each other the same ratio that accrued and
unpaid dividends per share on the shares of this Series and
such other Preferred Stock bear to each other. Holders of
shares of this Series shall not be entitled to any dividend,
whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided, on this Series. No
interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on this
Series which may be in arrears.
"(d) So long as any shares of this Series are
outstanding, no dividend (other than a dividend in Common
Stock or in any other stock ranking junior to this Series as
to dividends and upon liquidation and other than as provided
in paragraph (c) of this Section 2) shall be declared or paid
or set aside for payment or other distribution declared or
made upon the Common Stock or upon any other stock ranking
junior to or on a parity with this Series as to dividends or
upon liquidation, nor shall any Common Stock or any other
stock of the Corporation ranking junior to or on a parity with
this Series as to dividends or upon liquidation be redeemed,
purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the
Corporation ranking junior to this Series as to dividends and
upon liquidation) unless, in each case, the full cumulative
dividends on all outstanding shares of this Series shall have
been paid or declared and set aside for payment for all past
Dividend Periods.
"3. Redemption. (a) The shares of this Series are
not redeemable prior to June 1, 1998. The Corporation, at its
option, may redeem shares of this Series, as a whole or in
part, at any time or from time to time, on or after June 1,
1998, at a redemption
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price of $100 per share plus accrued and unpaid dividends
thereon to the date fixed for redemption.
"(b) In the event that fewer than all the
outstanding shares of this Series are to be redeemed, the
number of shares to be redeemed shall be determined by the
Board of Directors of the Corporation or the Preferred Stock
Committee of the Board of Directors and the shares to be
redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors of the Corporation or the
Preferred Stock Committee of the Board of Directors or by any
other method as may be determined by the Board of Directors of
the Corporation or the Preferred Stock Committee of the Board
of Directors in its sole discretion to be equitable, provided
that such method satisfies any applicable requirements of any
securities exchange on which this Series is listed.
"(c) In the event the Corporation shall redeem
shares of this Series, notice of such redemption shall be
given by first class mail, postage prepaid, mailed not less
than 30 or more than 60 days prior to the redemption date, to
each holder of record of the shares to be redeemed, at such
holder's address as the same appears on the stock register of
the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the number of shares of this Series to
be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the redemption price; (iv)
the place or places where certificates for such shares are to
be surrendered for payment of the redemption price; and (v)
that dividends on the shares to be redeemed will cease to
accrue on the redemption date.
"(d) Notice having been mailed as aforesaid, from
and after the redemption date (unless default shall be made by
the Corporation in providing money for the payment of the
redemption price) dividends on the shares of this Series so
called for redemption shall cease to accrue, and said shares
shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of the Corporation (except
the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said
notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation or the Preferred Stock Committee
of the Board of Directors shall so require and the notice
shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid. In case fewer
than all the shares represented by any such certificate are
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redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
"(e) Any shares of this Series which shall at any
time have been redeemed shall, after such redemption, have the
status of authorized but unissued shares of Preferred Stock,
without designation as to series until such shares are once
more designated as part of a particular series by the Board of
Directors of the Corporation or the Preferred Stock Committee
of the Board of Directors.
"(f) Notwithstanding the foregoing provisions of
this Section 3, if any dividends on this Series are in
arrears, no shares of this Series shall be redeemed unless all
outstanding shares of this Series are simultaneously redeemed,
and the Corporation shall not purchase or otherwise acquire
any shares of this Series; provided, however, that the
foregoing shall not prevent the purchase or acquisition of
shares of this Series pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding shares of
this Series.
"4. Conversion. The holders of shares of this
Series shall not have any rights to convert such shares into
shares of any other class or series of capital stock of the
Corporation.
"5. Liquidation Rights. (a) Upon the voluntary or
involuntary dissolution, liquidation or winding up of the
Corporation, the holders of the shares of this Series shall be
entitled to receive and to be paid out of the assets of the
Corporation available for distribution to its stockholders,
before any payment or distribution shall be made on the Common
Stock or on any other class of stock ranking junior to this
Series upon liquidation, the amount of $100 per share, plus
accrued and unpaid dividends thereon.
"(b) After the payment to the holders of the shares
of this Series of the full preferential amounts provided for
in this Section 5, the holders of this Series as such shall
have no right or claim to any of the remaining assets of the
Corporation.
"(c) If, upon any voluntary or involuntary
dissolution, liquidation, or winding up of the Corporation,
the amounts payable with respect to the stated value of the
shares of this Series and any other shares of stock of the
Corporation ranking as to any such distribution on a parity
with the shares of this Series are not paid in full, the
holders of the shares
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of this Series and of such other shares will share ratably in
any such distribution of assets of the Corporation in
proportion to the full respective stated values to which they
are entitled.
"(d) Neither the sale of all or substantially all
the property or business of the Corporation, nor the merger or
consolidation of the Corporation into or with any other
corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to
be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 5.
"(e) Upon the dissolution, liquidation or winding up
of the Corporation, the holders of shares of this Series then
outstanding shall be entitled to be paid out of the assets of
the Corporation available for distribution to its stockholders
all amounts to which such holders are entitled pursuant to
paragraph (a) of this Section 5 before any payment shall be
made to the holder of any class of capital stock of the
Corporation ranking junior to this Series upon liquidation.
"6. Ranking. For purposes of this resolution, any
stock of any class or classes of the Corporation shall be
deemed to rank:
"(a) prior to the shares of this Series, either as
to dividends or upon liquidation, if the holders of such class
or classes shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, in preference or
priority to the holders of shares of this Series;
"(b) on a parity with shares of this Series, either
as to dividends or upon liquidation, whether or not the
dividend rates, dividend payment dates or redemption or
liquidation prices per share or sinking fund provisions, if
any, be different from those of this Series, if the holders of
such stock shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, without preference
or priority, one over the other, as between the holders of
such stock and the holders of shares of this Series; and
"(c) junior to shares of this Series, either as to
dividends or upon liquidation, if such class shall be Common
Stock or if the holders of shares of this Series shall be
entitled to receipt of dividends or of amounts distributable
upon dissolution, liquidation or
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winding up of the Corporation, as the case may be, in
preference or priority to the holders of shares of such class
or classes.
"7. Voting Rights. The shares of this Series shall
have the voting rights set forth in the resolutions of the
Board of Directors of the Corporation adopted on March 17,
1992."
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EXHIBIT NO. 4.4
CERTIFICATE OF DESIGNATIONS
OF
10-1/2% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were adopted by the Board of Directors
of the Corporation at meetings duly convened and held on August 27, 1995 and
October 17, 1995, and by the Preferred Stock Committee of the Board of
Directors at a meeting duly convened and held on _______ __, 1995, pursuant to
authority conferred upon the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Corporation which authorize the
issuance of up to 200,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"), and pursuant to authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by the By-Laws of the Corporation and
by resolutions of the Board of Directors adopted at a meeting duly convened and
held on August 27, 1995:
1. The Board of Directors on August 27, 1995 adopted the
following resolutions authorizing the Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of Preferred Stock pursuant to the terms and conditions of the
Agreement and Plan of Merger, dated as of August 27, 1995, between The Chase
Manhattan Corporation ("Chase") and the Corporation, which provides for the
merger of Chase with and into the Corporation:
"RESOLVED, that it is advisable and in the best interests of
the Corporation and its stockholders for the Corporation to enter into the
Agreement and Plan of Merger between the Corporation and The Chase Manhattan
Corporation, a Delaware corporation ("Chase"), substantially in the form
presented to this Meeting (the "Merger Agreement"), pursuant to which, among
other things, (i) Chase would merge with and into the Corporation (the
"Merger") and, in accordance with the terms and conditions of the Merger
Agreement, (ii) each then outstanding share of common stock, par value $2.00
per share, of Chase ("Chase Common Stock"), other than shares which would be
cancelled and retired and cease to exist as a result of the Merger, would be
converted into 1.04 fully paid and nonassessable shares of common stock, par
value $1.00 per share, of the Corporation ("Common Stock"), which shares would,
pursuant to the
<PAGE> 2
2
Rights Agreement, dated as of April 13, 1989 (as amended, the "Rights
Agreement"), between the Corporation and Chemical Bank, as Rights Agent, be
accompanied by a corresponding number of Chemical Rights (as defined in the
Merger Agreement), and (iii) each share (other than shares which would be
cancelled and retired and cease to exist as a result of the Merger) of
Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76% Series H; Preferred
Stock, 10.84% Series I; Preferred Stock, 9.08% Series J; Preferred Stock,
8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred Stock, 8.40% Series
M; and Preferred Stock, Adjustable Rate Series N of Chase would be converted
into one share of a series of preferred stock, par value $1.00 per share, of
the Corporation ("Preferred Stock"), as provided for in the Merger Agreement,
in each case having terms substantially identical to the terms of the series of
preferred stock of Chase being so converted (such Preferred Stock of the
Corporation to be so issued being hereinafter referred to as the "Merger
Preferred Stock"); and further
"RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of
Delaware of the certificates of designations referred to below with respect to
each series of Merger Preferred Stock (collectively, the "Certificates of
Designations"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
"RESOLVED, that the maximum number of shares of each series of
Merger Preferred Stock authorized to be so issued in connection with the Merger
shall be as follows: up to 5,600,000 shares upon conversion of Chase's
Preferred Stock, 10-1/2% Series G; up to 4,000,000 shares upon conversion of
Chase's Preferred Stock, 9.76% Series H; up to 8,000,000 shares upon conversion
of Chase's Preferred Stock, 10.84% Series I; up to 6,000,000 shares upon
conversion of Chase's Preferred Stock, 9.08% Series J; up to 6,800,000 shares
upon conversion of Chase's Preferred Stock, 8-1/2% Series K; up to 9,600,000
shares upon conversion of Chase's Preferred Stock, 8.32% Series L; up to
6,900,000 shares upon conversion of Chase's Preferred Stock, 8.40% Series M;
and up to 9,100,000 shares upon conversion of Chase's Preferred Stock,
Adjustable Rate Series N; and further
"RESOLVED, that the voting powers, preferences and special
rights of each series of Merger Preferred Stock shall be substantially
identical to the voting powers, preferences and special rights applicable to,
and specified in the certificate of designations with respect to, the
respective series of preferred stock of Chase to be converted into such series
of Merger Preferred Stock pursuant to the Merger; and further
<PAGE> 3
3
"RESOLVED, that the Preferred Stock Committee of the Board of
Directors be, and it hereby is, authorized to approve, within the limits
specified in the foregoing resolutions, the form, terms and provisions of each
Certificate of Designations and to take such other actions as such committee
deems necessary or desirable to effect the issuance of the Merger Preferred
Stock in accordance with these resolutions."
2. The Board of Directors on October 17, 1995 adopted the
following resolutions fixing the voting rights of the Preferred Stock
authorized by the preceding resolutions:
"RESOLVED, that the Certificate of Designations for each
series of preferred stock, par value $1.00 per share (the "Preferred Stock"),
of the Corporation to be issued in connection with the merger of The Chase
Manhattan Corporation ("Chase") with and into the Corporation, upon the
conversion of the Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76%
Series H; Preferred Stock, 10.84% Series I; Preferred Stock, 9.08% Series J;
Preferred Stock, 8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred
Stock, 8.40% Series M; and Preferred Stock, Adjustable Rate Series N of Chase,
shall be modified to provide that the shares of such series shall not have any
voting powers either general or special, except that:
"If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, the number of directors
constituting the Board of Directors of the Corporation shall be
increased by two, and the holders of the Preferred Stock of all series
(whether or not the holders of such series of Preferred Stock would be
entitled to vote for the election of directors if such default in
preference dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to series,
to the exclusion of the holders of common stock, par value $1.00 per
share, of the Corporation, to elect two directors of the Corporation
to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock.
Each director elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that
prior to the end of such term a default in preference dividends shall
cease to exist. Any Preferred Director may be removed by, and shall
not be removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock, called
for the purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following
<PAGE> 4
4
clause (b)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (b) in the case
of the removal of any Preferred Director, the vacancy may be filled by
the vote of the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at the
same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
dividend period; and
"Without the consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock then outstanding, voting
as a class without regard to series, the holders of shares of this
series being entitled to cast one vote per share thereon, the
Corporation may not: (a) create any class or series of stock which
shall have preference as to dividends or distribution of assets over
any outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or (b) alter
or change the provisions of the Corporation's Certificate of
Incorporation, as amended, so as to adversely affect the voting power,
preferences or special rights of the holders of Preferred Stock;
provided, however, that if such creation or such alteration or change
would adversely affect the voting power, preferences or special rights
of one or more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class,
shall be required in lieu of the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock at the
time outstanding."
3. The Preferred Stock Committee of the Board of Directors on
________ __, 1995, pursuant to the authority conferred upon the Preferred Stock
Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the
<PAGE> 5
5
State of Delaware, by Section 3.03 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, adopted the following
resolution:
"RESOLVED, that pursuant to resolutions of the Board of Directors of
Chemical Banking Corporation (the "Corporation") adopted on August 27, 1995 and
October 17, 1995, the issue of up to Five Million Six Hundred Thousand
(5,600,000) shares of 10-1/2% Cumulative Preferred Stock, $1.00 par value,
of the Corporation is hereby authorized, and the designation, preferences and
privileges, relative, participating, optional and other special rights, and
qualifications, limitations and restrictions of all 5,600,000 shares of this
series, in addition to those set forth in the Certificate of Incorporation of
the Corporation and, with respect to voting rights, in the resolutions of the
Board of Directors of the Corporation adopted on October 17, 1995, are hereby
fixed as follows:
1. Designation. The designation of such series shall be
"10-1/2% Cumulative Preferred Stock" (hereinafter referred to as the
"10-1.2% Preferred Stock") and the number of shares constituting such
series is Five Million Six Hundred Thousand (5,600,000). The number
of authorized shares of 10-1/2% Preferred Stock may be reduced by
further resolution duly adopted by the Board of Directors of the
Corporation or any duly authorized committee thereof and by the filing
of a certificate pursuant to the provisions of the General Corporation
Law of the State of Delaware stating that such reduction has been so
authorized, but the number of authorized shares of 10-1/2% Preferred
Stock shall not be increased. The 10-1/2% Preferred Stock shall rank
on a parity as to dividends and distributions of assets with the
series of Preferred Stock, $1.00 par value, of the Corporation
designated as "10.96% Preferred Stock", "8-3/8% Preferred Stock",
"7.92% Cumulative Preferred Stock", "7.58% Cumulative Preferred
Stock", "7-1/2% Cumulative Preferred Stock", "Adjustable Rate
Cumulative Preferred Stock, Series L", "9.76% Cumulative Preferred
Stock", "10.84% Cumulative Preferred Stock", "9.08% Cumulative
Preferred Stock", "8-1/2% Cumulative Preferred Stock", "8.32%
Cumulative Preferred Stock", "8.40% Cumulative Preferred Stock", and
"Adjustable Rate Cumulative Preferred Stock, Series N".
2. Dividends. The annual dividend rate of the 10-1/2%
Preferred Stock shall be $2.625 on each outstanding share of such
stock, and no more. Dividends shall be payable on the shares of the
10-1/2% Preferred Stock, when and as declared by the Board of
Directors, for the Initial Dividend Period (as defined below) and each
quarterly dividend period (a "Quarterly Dividend Period") thereafter
(the Initial Dividend Period and each such subsequent Quarterly
Dividend Period being hereinafter referred to as a "Dividend Period"
and collectively referred to as "Dividend Periods"), which Quarterly
Dividend Periods shall commence on March 31, June
<PAGE> 6
6
30, September 30 and December 31 in each year, commencing with the
first such date to occur after the effective time of the merger of The
Chase Manhattan Corporation with and into the Corporation (the
"Effective Time"), and shall end on and include the day next preceding
the first day of the next Quarterly Dividend Period. The Initial
Dividend Period is the period commencing on the most recent date next
preceding the Effective Time on which a dividend was paid on the
Preferred Stock, 10-1/2% Series G of Chase (the "Chase 10-1/2%
Preferred Stock") (or commencing on the date of the Effective Time if
such date was such a dividend payment date) and shall end on and
include the date next preceding the first day of the next Quarterly
Dividend Period; provided, however, that in the event the Effective
Time shall occur after the record date for the payment of a regular
quarterly dividend on the Chase 10-1/2% Preferred Stock, but prior to
the payment date for such dividend, then the Initial Dividend Period
shall be the first Quarterly Dividend Period as described in the
preceding sentence. Dividends shall be cumulative from the date on
which the Initial Dividend Period commences and shall be payable, when
and as declared by the Board of Directors, on March 31, June 30,
September 30 and December 31 in each year, commencing with such date
that next follows the end of the Initial Dividend Period. Each such
dividend shall be paid to the holders of record of shares of 10-1/2%
Preferred Stock as they appear on the stock register of the
Corporation on such record date, not exceeding 30 days preceding the
payment date thereof, as shall be fixed by the Board of Directors of
the Corporation. Dividends on account of arrears for any past
dividend periods may be declared and paid at any time, without
reference to any quarterly dividend payment date, to holders of record
on such date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation.
In the event that there shall be outstanding shares of any other
series of Preferred Stock ranking on a parity as to dividends with the
10-1/2% Preferred Stock, the Corporation, in making any dividend
payment on account of arrears on the 10-1/2% Preferred Stock or such
other series of Preferred Stock, shall make payments ratably upon all
outstanding shares of 10-1/2% Preferred Stock and such other series of
Preferred Stock in proportion to the respective amounts of dividends
in arrears upon all such outstanding shares of 10-1/2% Preferred
Stock and such other series of Preferred Stock to the date of such
dividend payment. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments which
may be in arrears. Dividends payable on the 10-1/2% Preferred Stock
for any period less than a full quarter shall be computed on the basis
of a 360 day year.
3. Redemption. On or after September 30, 1998, the
Corporation, at its option, may redeem shares of the 10-1/2%
<PAGE> 7
7
Preferred Stock, as a whole or in part, at any time or from time to
time at a redemption price of $25 per share plus accrued and unpaid
dividends thereon to the date fixed for redemption.
In the event the Corporation shall redeem shares of 10-1/2%
Preferred Stock, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on
the stock register of the Corporation. Each such notice shall state:
(1) the redemption date; (2) the number of shares of 10-1/2% Preferred
Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; (4) the place or places
where certificates for such shares are to be surrendered for payment
of the redemption price; and (5) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. Notice having
been mailed as aforesaid, from and after the redemption date (unless
default shall be made by the Corporation in providing money for the
payment of the redemption price) dividends on the shares of the
10-1/2% Preferred Stock so called for redemption shall cease to
accrue, and said shares shall no longer be deemed to be outstanding,
and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender in accordance with said
notice of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors of the
Corporation or any duly authorized committee thereof shall so require
and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid. If less than all the
outstanding shares of 10-1/2% Preferred Stock are to be redeemed,
shares to be redeemed shall be selected by the Corporation from
outstanding shares of 10-1/2% Preferred Stock not previously called
for redemption by lot or pro rata (as nearly as may be) or by any
other method determined by the Corporation in its sole discretion to
be equitable.
In no event shall the Corporation redeem less than all the
outstanding shares of 10-1/2% Preferred Stock pursuant to the first
paragraph of this Section 3 or purchase or otherwise acquire any
shares of 10-1/2% Preferred Stock unless full cumulative dividends
shall have been paid or declared and set apart for payment upon all
outstanding shares of 10-1/2% Preferred Stock for all past Dividend
Periods; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of 10-1/2% Preferred Stock pursuant
to a purchase or exchange offer
<PAGE> 8
8
made on the same terms to holders of all outstanding shares of 10-1/2%
Preferred Stock.
4. Shares to be Retired. All shares of 10-1/2% Preferred
Stock redeemed or purchased by the Corporation shall be retired and
cancelled and shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
and may thereafter be issued, but not as shares of 10-1/2% Preferred
Stock.
5. Conversion or Exchange. The holders of shares of 10-1/2%
Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of capital
stock of the Corporation.
6. Voting. The shares of 10-1/2% Preferred Stock shall not
have any voting powers either general or special, except that:
If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of common stock, par
value $1.00 per share, of the Corporation, to elect two
directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director
for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except
by, the vote of the holders of record of the outstanding
shares of Preferred Stock, voting together as a single class
without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock,
called for the purpose. So long as a default in any
preference dividends on the Preferred Stock shall exist, (a)
any vacancy in the office of a Preferred Director may be
filled (except as provided in the following clause (b)) by an
instrument in writing signed by the remaining Preferred
Director and filed
<PAGE> 9
9
with the Corporation and (b) in the case of the removal of any
Preferred Director, the vacancy may be filled by the vote of
the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at
the same meeting at which such removal shall be voted. Each
director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a
Preferred Director. Whenever the term of office of the
Preferred Directors shall end and a default in preference
dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall
be reduced by two. For the purposes hereof, a "default in
preference dividends" on the Preferred Stock shall be deemed
to have occurred whenever the amount of accrued dividends upon
any series of the Preferred Stock shall be equivalent to six
full quarter-yearly dividends or more, and, having so
occurred, such default shall be deemed to exist thereafter
until, but only until, all accrued dividends on all shares of
Preferred Stock of each and every series then outstanding
shall have been paid to the end of the last preceding dividend
period; and
Without the consent of the holders of shares entitled
to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred
Stock then outstanding, voting as a class without regard to
series, the holders of shares of this series being entitled to
cast one vote per share thereon, the Corporation may not: (a)
create any class or series of stock which shall have
preference as to dividends or distribution of assets over any
outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or
(b) alter or change the provisions of the Corporation's
Certificate of Incorporation, as amended, so as to adversely
affect the voting power, preferences or special rights of the
holders of Preferred Stock; provided, however, that if such
creation or such alteration or change would adversely affect
the voting power, preferences or special rights of one or
more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the
holders of all of the shares of all such series so affected,
voting as a class, shall be required in lieu of the consent of
the holders of shares entitled to cast at least two-thirds of
the votes entitled to be cast by the holders of the total
number of shares of Preferred Stock at the time outstanding.
<PAGE> 10
10
7. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the holders of the 10-1/2% Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to stockholders, before any distribution of assets shall
be made to the holders of Common Stock or of any other shares of stock
of the Corporation ranking as to such a distribution junior to the
10-1/2% Preferred Stock, an amount equal to $25 per share plus an
amount equal to any accrued and unpaid dividends thereon to the date
fixed for payment of such distribution. If upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the amounts payable with respect to the 10-1/2% Preferred Stock and
any other shares of stock of the Corporation ranking as to any such
distribution on a parity with the 10-1/2% Preferred Stock are not paid
in full, the holders of the 10-1/2% Preferred Stock and of such other
shares shall share ratably in any such distribution of assets of the
Corporation in proportion to the full respective preferential amounts
to which they are entitled. After payment to the holders of the
10-1/2% Preferred Stock of the full preferential amounts provided for
in this Section 7, the holders of the 10-1/2% Preferred Stock shall be
entitled to no further participation in any distribution of assets by
the Corporation. The consolidation or merger of the Corporation with
or into any other corporation, or the sale of substantially all the
assets of the Corporation in consideration for the issuance of equity
securities of another corporation, shall not be regarded as a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 7, but only if such consolidation, merger or
sale of assets shall not in any way impair the voting power,
preferences or special rights of the 10-1/2% Preferred Stock.
8. Limitation on Dividends on Junior Ranking Stock. So long
as any 10-1/2% Preferred Stock shall be outstanding, the Corporation
shall not declare any dividends on the Common Stock of the Corporation
or any other stock of the Corporation ranking as to dividends or
distributions of assets junior to the 10-1/2% Preferred Stock (the
Common Stock and any such other stock being herein referred to as
"Junior Stock"), or make any payment on account of, or set apart money
for, a sinking or other analogous fund for the purchase, redemption or
other retirement of any shares of Junior Stock, or make any
distribution in respect thereof, whether in cash or property or in
obligations or stock of the Corporation, other than Junior Stock (such
dividends, payments, setting apart and distributions being herein
called "Junior Stock Payments"), unless all of the conditions set
forth in the following subsections A and B shall exist at the date of
such declaration in the case of any such dividend, or the date of such
setting apart in the
<PAGE> 11
11
case of any such fund, or the date of such payment or distribution in
the case of any other Junior Stock Payment:
A. Full cumulative dividends shall have been paid or
declared and set apart for payment upon all outstanding shares
of Preferred Stock other than Junior Stock.
B. The Corporation shall not be in default or in
arrears with respect to any sinking or other analogous fund or
any call for tenders obligation or other agreement for the
purchase, redemption or other retirement of any shares of
Preferred Stock other than Junior Stock."
IN WITNESS WHEREOF, CHEMICAL BANKING CORPORATION has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
_______________, its _______________, and attested to by John B. Wynne, its
Secretary, this _______ day of ______________, 199___.
CHEMICAL BANKING CORPORATION
By:
-----------------------------
Name:
Title:
[Corporate Seal]
Attest:
By:
--------------------------
Name: John B. Wynne
Title: Secretary
<PAGE> 1
EXHIBIT NO. 4.5
CERTIFICATE OF DESIGNATIONS
OF
9.76% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were adopted by the Board of Directors
of the Corporation at meetings duly convened and held on August 27, 1995 and
October 17, 1995, and by the Preferred Stock Committee of the Board of
Directors at a meeting duly convened and held on ________ __, 1995, pursuant to
authority conferred upon the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Corporation which authorize the
issuance of up to 200,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"), and pursuant to authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by the By-Laws of the Corporation and
by resolutions of the Board of Directors adopted at a meeting duly convened and
held on August 27, 1995:
1. The Board of Directors on August 27, 1995 adopted the
following resolutions authorizing the Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of Preferred Stock pursuant to the terms and conditions of the
Agreement and Plan of Merger, dated as of August 27, 1995, between The Chase
Manhattan Corporation ("Chase") and the Corporation, which provides for the
merger of Chase with and into the Corporation:
"RESOLVED, that it is advisable and in the best interests of
the Corporation and its stockholders for the Corporation to enter into the
Agreement and Plan of Merger between the Corporation and The Chase Manhattan
Corporation, a Delaware corporation ("Chase"), substantially in the form
presented to this Meeting (the "Merger Agreement"), pursuant to which, among
other things, (i) Chase would merge with and into the Corporation (the
"Merger") and, in accordance with the terms and conditions of the Merger
Agreement, (ii) each then outstanding share of common stock, par value $2.00
per share, of Chase ("Chase Common Stock"), other than shares which would be
cancelled and retired and cease to exist as a result of the Merger, would be
converted into 1.04 fully paid and nonassessable shares of common stock, par
value $1.00 per share, of the Corporation ("Common Stock"), which shares would,
pursuant to the
<PAGE> 2
2
Rights Agreement, dated as of April 13, 1989 (as amended, the "Rights
Agreement"), between the Corporation and Chemical Bank, as Rights Agent, be
accompanied by a corresponding number of Chemical Rights (as defined in the
Merger Agreement), and (iii) each share (other than shares which would be
cancelled and retired and cease to exist as a result of the Merger) of
Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76% Series H; Preferred
Stock, 10.84% Series I; Preferred Stock, 9.08% Series J; Preferred Stock,
8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred Stock, 8.40% Series
M; and Preferred Stock, Adjustable Rate Series N of Chase would be converted
into one share of a series of preferred stock, par value $1.00 per share, of
the Corporation ("Preferred Stock"), as provided for in the Merger Agreement,
in each case having terms substantially identical to the terms of the series of
preferred stock of Chase being so converted (such Preferred Stock of the
Corporation to be so issued being hereinafter referred to as the "Merger
Preferred Stock"); and further
"RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of
Delaware of the certificates of designations referred to below with respect to
each series of Merger Preferred Stock (collectively, the "Certificates of
Designations"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
"RESOLVED, that the maximum number of shares of each series of
Merger Preferred Stock authorized to be so issued in connection with the Merger
shall be as follows: up to 5,600,000 shares upon conversion of Chase's
Preferred Stock, 10-1/2% Series G; up to 4,000,000 shares upon conversion of
Chase's Preferred Stock, 9.76% Series H; up to 8,000,000 shares upon conversion
of Chase's Preferred Stock, 10.84% Series I; up to 6,000,000 shares upon
conversion of Chase's Preferred Stock, 9.08% Series J; up to 6,800,000 shares
upon conversion of Chase's Preferred Stock, 8-1/2% Series K; up to 9,600,000
shares upon conversion of Chase's Preferred Stock, 8.32% Series L; up to
6,900,000 shares upon conversion of Chase's Preferred Stock, 8.40% Series M;
and up to 9,100,000 shares upon conversion of Chase's Preferred Stock,
Adjustable Rate Series N; and further
"RESOLVED, that the voting powers, preferences and special
rights of each series of Merger Preferred Stock shall be substantially
identical to the voting powers, preferences and special rights applicable to,
and specified in the certificate of designations with respect to, the
respective series of preferred stock of Chase to be converted into such series
of Merger Preferred Stock pursuant to the Merger; and further
<PAGE> 3
3
"RESOLVED, that the Preferred Stock Committee of the Board of
Directors be, and it hereby is, authorized to approve, within the limits
specified in the foregoing resolutions, the form, terms and provisions of each
Certificate of Designations and to take such other actions as such committee
deems necessary or desirable to effect the issuance of the Merger Preferred
Stock in accordance with these resolutions."
2. The Board of Directors on October 17, 1995 adopted the
following resolutions fixing the voting rights of the Preferred Stock
authorized by the preceding resolutions:
"RESOLVED, that the Certificate of Designations for each
series of preferred stock, par value $1.00 per share (the "Preferred Stock"),
of the Corporation to be issued in connection with the merger of The Chase
Manhattan Corporation ("Chase") with and into the Corporation, upon the
conversion of the Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76%
Series H; Preferred Stock, 10.84% Series I; Preferred Stock, 9.08% Series J;
Preferred Stock, 8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred
Stock, 8.40% Series M; and Preferred Stock, Adjustable Rate Series N of Chase,
shall be modified to provide that the shares of such series shall not have any
voting powers either general or special, except that:
"If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, the number of directors
constituting the Board of Directors of the Corporation shall be
increased by two, and the holders of the Preferred Stock of all series
(whether or not the holders of such series of Preferred Stock would be
entitled to vote for the election of directors if such default in
preference dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to series,
to the exclusion of the holders of common stock, par value $1.00 per
share, of the Corporation, to elect two directors of the Corporation
to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock.
Each director elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that
prior to the end of such term a default in preference dividends shall
cease to exist. Any Preferred Director may be removed by, and shall
not be removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock, called
for the purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following
<PAGE> 4
4
clause (b)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (b) in the case
of the removal of any Preferred Director, the vacancy may be filled by
the vote of the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at the
same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
dividend period; and
"Without the consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock then outstanding, voting
as a class without regard to series, the holders of shares of this
series being entitled to cast one vote per share thereon, the
Corporation may not: (a) create any class or series of stock which
shall have preference as to dividends or distribution of assets over
any outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or (b) alter
or change the provisions of the Corporation's Certificate of
Incorporation, as amended, so as to adversely affect the voting power,
preferences or special rights of the holders of Preferred Stock;
provided, however, that if such creation or such alteration or change
would adversely affect the voting power, preferences or special rights
of one or more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class,
shall be required in lieu of the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock at the
time outstanding."
3. The Preferred Stock Committee of the Board of Directors on
________ __, 1995, pursuant to the authority conferred upon the Preferred Stock
Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the
<PAGE> 5
5
State of Delaware, by Section 3.03 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, adopted the following
resolution:
"RESOLVED, that pursuant to resolutions of the Board of Directors of
Chemical Banking Corporation (the "Corporation") adopted on August 27, 1995 and
October 17, 1995, the issue of up to Four Million (4,000,000) shares of 9.76%
Cumulative Preferred Stock, $1.00 par value, of the Corporation is hereby
authorized, and the designation, preferences and privileges, relative,
participating, optional and other special rights, and qualifications,
limitations and restrictions of all 4,000,000 shares of this series, in
addition to those set forth in the Certificate of Incorporation of the
Corporation and, with respect to voting rights, in the resolutions of the Board
of Directors of the Corporation adopted on October 17, 1995, are hereby fixed
as follows:
1. Designation. The designation of such series shall be
"9.76% Cumulative Preferred Stock" (hereinafter referred to as the
"9.76% Preferred Stock") and the number of shares constituting such
series is Four Million (4,000,000). The number of authorized shares of
9.76% Preferred Stock may be reduced by further resolution duly
adopted by the Board of Directors of the Corporation or any duly
authorized committee thereof and by the filing of a certificate
pursuant to the provisions of the General Corporation Law of the State
of Delaware stating that such reduction has been so authorized, but
the number of authorized shares of 9.76% Preferred Stock shall not be
increased. The 9.76% Preferred Stock shall rank on a parity as to
dividends and distributions of assets with the series of Preferred
Stock, $1.00 par value, of the Corporation designated as "10.96%
Preferred Stock", "8-3/8% Preferred Stock", "7.92% Cumulative
Preferred Stock", "7.58% Cumulative Preferred Stock", "7-1/2%
Cumulative Preferred Stock", "Adjustable Rate Cumulative Preferred
Stock, Series L", "10-1/2% Cumulative Preferred Stock", "10.84%
Cumulative Preferred Stock", "9.08% Cumulative Preferred Stock",
"8-1/2% Cumulative Preferred Stock", "8.32% Cumulative Preferred
Stock", "8.40% Cumulative Preferred Stock" and "Adustable Rate
Cumulative Preferred Stock, Series N". The 9.76% Preferred Stock
shall rank senior as to dividends and distributions of assets to the
series of Preferred Stock, $1.00 par value, of the Corporation
designated as Junior Participating Preferred Stock.
2. Dividends. The annual dividend rate of the 9.76%
Preferred Stock shall be $2.44 on each outstanding share of such
stock, and no more. Dividends shall be payable on the shares of the
9.76% Preferred Stock, when and as declared by the Board of Directors,
for the Initial Dividend Period (as defined below) and each quarterly
dividend period (a "Quarterly Dividend Period") thereafter (the
Initial
<PAGE> 6
6
Dividend Period and each such subsequent Quarterly Dividend Period
being hereinafter referred to as a "Dividend Period" and collectively
referred to as "Dividend Periods"), which Quarterly Dividend Periods
shall commence on March 31, June 30, September 30 and December 31 in
each year, commencing with the first such date to occur after the
effective time of the merger of The Chase Manhattan Corporation
("Chase") with and into the Corporation (the "Effective Time"), and
shall end on and include the day next preceding the first day of the
next Quarterly Dividend Period. The Initial Dividend Period is the
period commencing on the most recent date next preceding the Effective
Time on which a dividend was paid on the Preferred Stock, 9.76% Series
H of Chase (the "Chase 9.76% Preferred Stock") (or commencing on the
date of the Effective Time if such date was such a dividend payment
date) and shall end on and include the date next preceding the first
day of the next Quarterly Dividend Period; provided, however, that in
the event the Effective Time shall occur after the record date for the
payment of a regular quarterly dividend on the Chase 9.76% Preferred
Stock, but prior to the payment date for such dividend, then the
Initial Dividend Period shall be the first Quarterly Dividend Period
as described in the preceding sentence. Dividends shall be cumulative
from the date on which the Initial Dividend Period commences and shall
be payable, when and as declared by the Board of Directors, on March
31, June 30, September 30 and December 31 in each year, commencing
with such date that next follows the end of the Initial Dividend
Period. Each such dividend shall be paid to the holders of record of
shares of 9.76% Preferred Stock as they appear on the stock register
of the Corporation on such record date, not exceeding 30 days
preceding the payment date thereof, as shall be fixed by the Board of
Directors of the Corporation. Dividends on account of arrears for any
past dividend periods may be declared and paid at any time, without
reference to any quarterly dividend payment date, to holders of record
on such date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation.
In the event that there shall be outstanding shares of any other
series of Preferred Stock ranking on a parity as to dividends with the
9.76% Preferred Stock, the Corporation, in making any dividend payment
on account of arrears on the 9.76% Preferred Stock or such other
series of Preferred Stock, shall make payments ratably upon all
outstanding shares of 9.76% Preferred Stock and such other series of
Preferred Stock in proportion to the respective amounts of dividends
in arrears upon all such outstanding shares of 9.76% Preferred Stock
and such other series of Preferred Stock to the date of such dividend
payment. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments which may be in
arrears. Dividends payable on the 9.76% Preferred Stock for any
<PAGE> 7
7
period less than a full quarter (after the initial dividend period)
shall be computed on the basis of a 360 day year.
3. Redemption. On or after September 30, 1999, the
Corporation, at its option, may redeem shares of the 9.76% Preferred
Stock, as a whole or in part, at any time or from time to time at a
redemption price of $25 per share plus accrued and unpaid dividends
thereon to the date fixed for redemption.
In the event the Corporation shall redeem shares of 9.76%
Preferred Stock, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on
the stock register of the Corporation. Each such notice shall state:
(1) the redemption date; (2) the number of shares of 9.76% Preferred
Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; (4) the place or places
where certificates for such shares are to be surrendered for payment
of the redemption price; and (5) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. Notice having
been mailed as aforesaid, from and after the redemption date (unless
default shall be made by the Corporation in providing money for the
payment of the redemption price) dividends on the shares of the 9.76%
Preferred Stock so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation or
any duly authorized committee thereof shall so require and the notice
shall so state), such shares shall be redeemed by the Corporation at
the redemption price aforesaid. If less than all the outstanding
shares of 9.76% Preferred Stock are to be redeemed, shares to be
redeemed shall be selected by the Corporation from outstanding shares
of 9.76% Preferred Stock not previously called for redemption by lot
or pro rata (as nearly as may be) or by any other method determined by
the Corporation in its sole discretion to be equitable.
In no event shall the Corporation redeem less than all the
outstanding shares of 9.76% Preferred Stock pursuant to the first
paragraph of this Section 3 or purchase or otherwise acquire any
shares of 9.76% Preferred Stock unless full cumulative dividends shall
have been paid or declared and set apart for payment upon all
outstanding shares of
<PAGE> 8
8
9.76% Preferred Stock for all past Dividend Periods; provided,
however, that the foregoing shall not prevent the purchase or
acquisition of shares of 9.76% Preferred Stock pursuant to a purchase
or exchange offer made on the same terms to holders of all outstanding
shares of 9.76% Preferred Stock.
4. Shares to be Retired. All shares of 9.76% Preferred Stock
redeemed or purchased by the Corporation shall be retired and
cancelled and shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
and may thereafter be issued, but not as shares of 9.76% Preferred
Stock.
5. Conversion or Exchange. The holders of shares of 9.76%
Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of capital
stock of the Corporation.
6. Voting. The shares of 9.76% Preferred Stock shall not
have any voting powers either general or special, except that:
If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of common stock, par
value $1.00 per share, of the Corporation, to elect two
directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director
for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except
by, the vote of the holders of record of the outstanding
shares of Preferred Stock, voting together as a single class
without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock,
called for the purpose. So long as a default in any
preference dividends on the Preferred
<PAGE> 9
9
Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the
following clause (b)) by an instrument in writing signed by
the remaining Preferred Director and filed with the
Corporation and (b) in the case of the removal of any
Preferred Director, the vacancy may be filled by the vote of
the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at
the same meeting at which such removal shall be voted. Each
director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a
Preferred Director. Whenever the term of office of the
Preferred Directors shall end and a default in preference
dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall
be reduced by two. For the purposes hereof, a "default in
preference dividends" on the Preferred Stock shall be deemed
to have occurred whenever the amount of accrued dividends upon
any series of the Preferred Stock shall be equivalent to six
full quarter-yearly dividends or more, and, having so
occurred, such default shall be deemed to exist thereafter
until, but only until, all accrued dividends on all shares of
Preferred Stock of each and every series then outstanding
shall have been paid to the end of the last preceding dividend
period; and
Without the consent of the holders of shares entitled
to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred
Stock then outstanding, voting as a class without regard to
series, the holders of shares of this series being entitled to
cast one vote per share thereon, the Corporation may not: (a)
create any class or series of stock which shall have
preference as to dividends or distribution of assets over any
outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or
(b) alter or change the provisions of the Corporation's
Certificate of Incorporation, as amended, so as to adversely
affect the voting power, preferences or special rights of the
holders of Preferred Stock; provided, however, that if such
creation or such alteration or change would adversely affect
the voting power, preferences or special rights of one or
more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the
holders of all of the shares of all such series so affected,
voting as a class, shall be required in lieu of the consent of
the holders of shares entitled to cast at least two-thirds of
the votes entitled to be cast by the holders
<PAGE> 10
10
of the total number of shares of Preferred Stock at the time
outstanding.
7. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the holders of the 9.76% Preferred Stock shall be entitled to receive
out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets shall be made to the
holders of Common Stock or of any other shares of stock of the
Corporation ranking as to such a distribution junior to the 9.76%
Preferred Stock, an amount equal to $25 per share plus an amount equal
to any accrued and unpaid dividends thereon to the date fixed for
payment of such distribution. If upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the amounts
payable with respect to the 9.76% Preferred Stock and any other shares
of stock of the Corporation ranking as to any such distribution on a
parity with the 9.76% Preferred Stock are not paid in full, the
holders of the 9.76% Preferred Stock and of such other shares shall
share ratably in any such distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they
are entitled. After payment to the holders of the 9.76% Preferred
Stock of the full preferential amounts provided for in this Section 7,
the holders of the 9.76% Preferred Stock shall be entitled to no
further participation in any distribution of assets by the
Corporation. The consolidation or merger of the Corporation with or
into any other corporation, or the sale of substantially all the
assets of the Corporation in consideration for the issuance of equity
securities of another corporation, shall not be regarded as a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 7, but only if such consolidation, merger or
sale of assets shall not in any way impair the voting power,
preferences or special rights of the 9.76% Preferred Stock.
8. Limitation on Dividends on Junior Ranking Stock. So long
as any 9.76% Preferred Stock shall be outstanding, the Corporation
shall not declare any dividends on the Common Stock or any other stock
of the Corporation ranking as to dividends or distributions of assets
junior to the 9.76% Preferred Stock (the Common Stock and any such
other stock being herein referred to as "Junior Stock"), or make any
payment on account of, or set apart money for, a sinking or other
analogous fund for the purchase, redemption or other retirement of any
shares of Junior Stock, or make any distribution in respect thereof,
whether in cash or property or in obligations or stock of the
Corporation, other than Junior Stock (such dividends, payments,
setting apart and distributions being herein called "Junior Stock
Payments"), unless all of the conditions set forth in the following
subsections A and B shall exist at the date of such
<PAGE> 11
11
declaration in the case of any such dividend, or the date of such
setting apart in the case of any such fund, or the date of such
payment or distribution in the case of any other Junior Stock Payment:
A. Full cumulative dividends shall have been paid or
declared and set apart for payment upon all outstanding shares
of Preferred Stock other than Junior Stock.
B. The Corporation shall not be in default or in
arrears with respect to any sinking or other analogous fund or
any call for tenders obligation or other agreement for the
purchase, redemption or other retirement of any shares of
Preferred Stock other than Junior Stock."
IN WITNESS WHEREOF, CHEMICAL BANKING CORPORATION has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
____________, its ____________, and attested to by John B. Wynne, its
Secretary, this ____ day of _______ ___, 199___.
CHEMICAL BANKING CORPORATION
By:
-----------------------------
Name:
Title:
[Corporate Seal]
Attest:
By:
--------------------------
Name: John B. Wynne
Title: Secretary
<PAGE> 1
EXHIBIT NO. 4.6
CERTIFICATE OF DESIGNATIONS
OF
10.84% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were adopted by the Board of Directors
of the Corporation at meetings duly convened and held on August 27, 1995 and
October 17, 1995, and by the Preferred Stock Committee of the Board of
Directors at a meeting duly convened and held on ________ __, 1995, pursuant to
authority conferred upon the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Corporation which authorize the
issuance of up to 200,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"), and pursuant to authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by the By-Laws of the Corporation and
by resolutions of the Board of Directors adopted at a meeting duly convened and
held on August 27, 1995:
1. The Board of Directors on August 27, 1995 adopted the
following resolutions authorizing the Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of Preferred Stock pursuant to the terms and conditions of the
Agreement and Plan of Merger, dated as of August 27, 1995, between The Chase
Manhattan Corporation ("Chase") and the Corporation, which provides for the
merger of Chase with and into the Corporation:
"RESOLVED, that it is advisable and in the best interests of
the Corporation and its stockholders for the Corporation to enter into the
Agreement and Plan of Merger between the Corporation and The Chase Manhattan
Corporation, a Delaware corporation ("Chase"), substantially in the form
presented to this Meeting (the "Merger Agreement"), pursuant to which, among
other things, (i) Chase would merge with and into the Corporation (the
"Merger") and, in accordance with the terms and conditions of the Merger
Agreement, (ii) each then outstanding share of common stock, par value $2.00
per share, of Chase ("Chase Common Stock"), other than shares which would be
cancelled and retired and cease to exist as a result of the Merger, would be
converted into 1.04 fully paid and nonassessable
<PAGE> 2
2
shares of common stock, par value $1.00 per share, of the Corporation ("Common
Stock"), which shares would, pursuant to the Rights Agreement, dated as of
April 13, 1989 (as amended, the "Rights Agreement"), between the Corporation
and Chemical Bank, as Rights Agent, be accompanied by a corresponding number of
Chemical Rights (as defined in the Merger Agreement), and (iii) each share
(other than shares which would be cancelled and retired and cease to exist as a
result of the Merger) of Preferred Stock, 10-1/2% Series G; Preferred Stock,
9.76% Series H; Preferred Stock, 10.84% Series I; Preferred Stock, 9.08% Series
J; Preferred Stock, 8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred
Stock, 8.40% Series M; and Preferred Stock, Adjustable Rate Series N of Chase
would be converted into one share of a series of preferred stock, par value
$1.00 per share, of the Corporation ("Preferred Stock"), as provided for in the
Merger Agreement, in each case having terms substantially identical to the
terms of the series of preferred stock of Chase being so converted (such
Preferred Stock of the Corporation to be so issued being hereinafter referred
to as the "Merger Preferred Stock"); and further
"RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of
Delaware of the certificates of designations referred to below with respect to
each series of Merger Preferred Stock (collectively, the "Certificates of
Designations"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
"RESOLVED, that the maximum number of shares of each series of
Merger Preferred Stock authorized to be so issued in connection with the Merger
shall be as follows: up to 5,600,000 shares upon conversion of Chase's
Preferred Stock, 10-1/2% Series G; up to 4,000,000 shares upon conversion of
Chase's Preferred Stock, 9.76% Series H; up to 8,000,000 shares upon conversion
of Chase's Preferred Stock, 10.84% Series I; up to 6,000,000 shares upon
conversion of Chase's Preferred Stock, 9.08% Series J; up to 6,800,000 shares
upon conversion of Chase's Preferred Stock, 8-1/2% Series K; up to 9,600,000
shares upon conversion of Chase's Preferred Stock, 8.32% Series L; up to
6,900,000 shares upon conversion of Chase's Preferred Stock, 8.40% Series M;
and up to 9,100,000 shares upon conversion of Chase's Preferred Stock,
Adjustable Rate Series N; and further
"RESOLVED, that the voting powers, preferences and special
rights of each series of Merger Preferred Stock shall be substantially
identical to the voting powers, preferences and special rights applicable to,
and specified in the certificate of designations with respect to, the
respective series of preferred stock of Chase to be converted into such series
of Merger Preferred Stock pursuant to the Merger; and further
<PAGE> 3
3
"RESOLVED, that the Preferred Stock Committee of the Board of
Directors be, and it hereby is, authorized to approve, within the limits
specified in the foregoing resolutions, the form, terms and provisions of each
Certificate of Designations and to take such other actions as such committee
deems necessary or desirable to effect the issuance of the Merger Preferred
Stock in accordance with these resolutions."
2. The Board of Directors on October 17, 1995 adopted the
following resolutions fixing the voting rights of the Preferred Stock
authorized by the preceding resolutions:
"RESOLVED, that the Certificate of Designations for each
series of preferred stock, par value $1.00 per share (the "Preferred Stock"),
of the Corporation to be issued in connection with the merger of The Chase
Manhattan Corporation ("Chase") with and into the Corporation, upon the
conversion of the Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76%
Series H; Preferred Stock, 10.84% Series I; Preferred Stock, 9.08% Series J;
Preferred Stock, 8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred
Stock, 8.40% Series M; and Preferred Stock, Adjustable Rate Series N of Chase,
shall be modified to provide that the shares of such series shall not have any
voting powers either general or special, except that:
"If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, the number of directors
constituting the Board of Directors of the Corporation shall be
increased by two, and the holders of the Preferred Stock of all series
(whether or not the holders of such series of Preferred Stock would be
entitled to vote for the election of directors if such default in
preference dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to series,
to the exclusion of the holders of common stock, par value $1.00 per
share, of the Corporation, to elect two directors of the Corporation
to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock.
Each director elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that
prior to the end of such term a default in preference dividends shall
cease to exist. Any Preferred Director may be removed by, and shall
not be removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock, called
for the purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following
<PAGE> 4
4
clause (b)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (b) in the case
of the removal of any Preferred Director, the vacancy may be filled by
the vote of the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at the
same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
dividend period; and
"Without the consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock then outstanding, voting
as a class without regard to series, the holders of shares of this
series being entitled to cast one vote per share thereon, the
Corporation may not: (a) create any class or series of stock which
shall have preference as to dividends or distribution of assets over
any outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or (b) alter
or change the provisions of the Corporation's Certificate of
Incorporation, as amended, so as to adversely affect the voting power,
preferences or special rights of the holders of Preferred Stock;
provided, however, that if such creation or such alteration or change
would adversely affect the voting power, preferences or special rights
of one or more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class,
shall be required in lieu of the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock at the
time outstanding."
3. The Preferred Stock Committee of the Board of Directors on
_________ __, 1995, pursuant to the authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the
<PAGE> 5
5
State of Delaware, by Section 3.03 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, adopted the following
resolution:
"RESOLVED, that pursuant to resolutions of the Board of Directors of
Chemical Banking Corporation (the "Corporation") adopted on August 27, 1995 and
October 17, 1995, the issue of up to Eight Million (8,000,000) shares of 10.84%
Cumulative Preferred Stock, $1.00 par value, of the Corporation is hereby
authorized, and the designation, preferences and privileges, relative,
participating, optional and other special rights, and qualifications,
limitations and restrictions of all 8,000,000 shares of this series, in
addition to those set forth in the Certificate of Incorporation of the
Corporation and, with respect to voting rights, in the resolutions of the Board
of Directors of the Corporation adopted on October 17, 1995, are hereby fixed
as follows:
1. Designation. The designation of such series shall be
"10.84% Cumulative Preferred Stock" (hereinafter referred to as the
"10.84% Preferred Stock") and the number of shares constituting such
series is Eight Million (8,000,000). The number of authorized shares
of 10.84% Preferred Stock may be reduced by further resolution duly
adopted by the Board of Directors of the Corporation or any duly
authorized committee thereof and by the filing of a certificate
pursuant to the provisions of the General Corporation Law of the State
of Delaware stating that such reduction has been so authorized, but
the number of authorized shares of 10.84% Preferred Stock shall not be
increased. The 10.84% Preferred Stock shall rank on a parity as to
dividends and distributions of assets with the series of Preferred
Stock, $1.00 par value, of the Corporation designated as "10.96%
Preferred Stock", "8-3/8% Preferred Stock", "7.92% Cumulative
Preferred Stock", "7.58% Cumulative Preferred Stock", "7-1/2%
Cumulative Preferred Stock", "Adjustable Rate Cumulative Preferred
Stock, Series L", "10-1/2% Cumulative Preferred Stock", "9.76%
Cumulative Preferred Stock", "9.08% Cumulative Preferred Stock",
"8-1/2% Cumulative Preferred Stock", "8.32% Cumulative Preferred
Stock", "8.40% Cumulative Preferred Stock", and "Adjustable Rate
Cumulative Preferred Stock, Series N". The 10.84% Preferred Stock
shall rank senior as to dividends and distributions of assets to the
series of Preferred Stock, $1.00 par value, of the Corporation
designated as Junior Participating Preferred Stock.
2. Dividends. The annual dividend rate of the 10.84%
Preferred Stock shall be $2.71 on each outstanding share of such
stock, and no more. Dividends shall be payable on the shares of the
10.84% Preferred Stock, when and as declared by the Board of
Directors, for the Initial Dividend Period (as defined below) and each
quarterly dividend period (a "Quarterly Dividend Period") thereafter
(the Initial
<PAGE> 6
6
Dividend Period and each such subsequent Quarterly Dividend Period
being hereinafter referred to as a "Dividend Period" and collectively
referred to as "Dividend Periods"), which Quarterly Dividend Periods
shall commence on March 31, June 30, September 30 and December 31 in
each year, commencing with the first such date to occur after the
effective time of the merger of The Chase Manhattan Corporation
("Chase") with and into the Corporation (the "Effective Time"), and
shall end on and include the day next preceding the first day of the
next Quarterly Dividend Period. The Initial Dividend Period is the
period commencing on the most recent date next preceding the Effective
Time on which a dividend was paid on the Preferred Stock, 10.84%
Series I of Chase (the "Chase 10.84% Preferred Stock") (or commencing
on the date of the Effective Time if such date was such a dividend
payment date) and shall end on and include the date next preceding the
first day of the next Quarterly Dividend Period; provided, however,
that in the event the Effective Time shall occur after the record date
for the payment of a regular quarterly dividend on the Chase 10.84%
Preferred Stock, but prior to the payment date for such dividend, then
the Initial Dividend Period shall be the first Quarterly Dividend
Period as described in the preceding sentence. Dividends shall be
cumulative from the date on which the Initial Dividend Period
commences and shall be payable, when and as declared by the Board of
Directors, on March 31, June 30, September 30 and December 31 in each
year, commencing with such date that next follows the end of the
Initial Dividend Period. Each such dividend shall be paid to the
holders of record of shares of 10.84% Preferred Stock as they appear
on the stock register of the Corporation on such record date, not
exceeding 30 days preceding the payment date thereof, as shall be
fixed by the Board of Directors of the Corporation. Dividends on
account of arrears for any past dividend periods may be declared and
paid at any time, without reference to any quarterly dividend payment
date, to holders of record on such date, not exceeding 45 days
preceding the payment date thereof, as may be fixed by the Board of
Directors of the Corporation. In the event that there shall be
outstanding shares of any other series of Preferred Stock ranking on a
parity as to dividends with the 10.84% Preferred Stock, the
Corporation, in making any dividend payment on account of arrears on
the 10.84% Preferred Stock or such other series of Preferred Stock,
shall make payments ratably upon all outstanding shares of 10.84%
Preferred Stock and such other series of Preferred Stock in proportion
to the respective amounts of dividends in arrears upon all such
outstanding shares of 10.84% Preferred Stock and such other series of
Preferred Stock to the date of such dividend payment. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments which may be in arrears. Dividends
payable on the 10.84% Preferred Stock for any period less than a full
quarter (after the initial
<PAGE> 7
7
dividend period) shall be computed on the basis of a 360 day year.
3. Redemption. On or after June 30, 2001, the Corporation,
at its option, may redeem shares of the 10.84% Preferred Stock, as a
whole or in part, at any time or from time to time at a redemption
price of $25 per share plus accrued and unpaid dividends thereon to
the date fixed for redemption.
In the event the Corporation shall redeem shares of 10.84%
Preferred Stock, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on
the stock register of the Corporation. Each such notice shall state:
(1) the redemption date; (2) the number of shares of 10.84% Preferred
Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; (4) the place or places
where certificates for such shares are to be surrendered for payment
of the redemption price; and (5) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. Notice having
been mailed as aforesaid, from and after the redemption date (unless
default shall be made by the Corporation in providing money for the
payment of the redemption price) dividends on the shares of the 10.84%
Preferred Stock so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation or
any duly authorized committee thereof shall so require and the notice
shall so state), such shares shall be redeemed by the Corporation at
the redemption price aforesaid. If less than all the outstanding
shares of 10.84% Preferred Stock are to be redeemed, shares to be
redeemed shall be selected by the Corporation from outstanding shares
of 10.84% Preferred Stock not previously called for redemption by lot
or pro rata (as nearly as may be) or by any other method determined by
the Corporation in its sole discretion to be equitable.
In no event shall the Corporation redeem less than all the
outstanding shares of 10.84% Preferred Stock pursuant to the first
paragraph of this Section 3 or purchase or otherwise acquire any
shares of 10.84% Preferred Stock unless full cumulative dividends
shall have been paid or declared and set apart for payment upon all
outstanding
<PAGE> 8
8
shares of 10.84% Preferred Stock for all past Dividend Periods;
provided, however, that the foregoing shall not prevent the purchase
or acquisition of shares of 10.84% Preferred Stock pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding shares of 10.84% Preferred Stock.
4. Shares to be Retired. All shares of 10.84% Preferred
Stock redeemed or purchased by the Corporation shall be retired and
cancelled and shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
and may thereafter be issued, but not as shares of 10.84% Preferred
Stock.
5. Conversion or Exchange. The holders of shares of 10.84%
Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of capital
stock of the Corporation.
6. Voting. The shares of 10.84% Preferred Stock shall not
have any voting powers either general or special, except that:
If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of common stock, par
value $1.00 per share, of the Corporation, to elect two
directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director
for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except
by, the vote of the holders of record of the outstanding
shares of Preferred Stock, voting together as a single class
without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock,
called for the purpose. So long as a default in any
preference dividends on the Preferred
<PAGE> 9
9
Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the
following clause (b)) by an instrument in writing signed by
the remaining Preferred Director and filed with the
Corporation and (b) in the case of the removal of any
Preferred Director, the vacancy may be filled by the vote of
the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at
the same meeting at which such removal shall be voted. Each
director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a
Preferred Director. Whenever the term of office of the
Preferred Directors shall end and a default in preference
dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall
be reduced by two. For the purposes hereof, a "default in
preference dividends" on the Preferred Stock shall be deemed
to have occurred whenever the amount of accrued dividends upon
any series of the Preferred Stock shall be equivalent to six
full quarter-yearly dividends or more, and, having so
occurred, such default shall be deemed to exist thereafter
until, but only until, all accrued dividends on all shares of
Preferred Stock of each and every series then outstanding
shall have been paid to the end of the last preceding dividend
period; and
Without the consent of the holders of shares entitled
to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred
Stock then outstanding, voting as a class without regard to
series, the holders of shares of this series being entitled to
cast one vote per share thereon, the Corporation may not: (a)
create any class or series of stock which shall have
preference as to dividends or distribution of assets over any
outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or
(b) alter or change the provisions of the Corporation's
Certificate of Incorporation, as amended, so as to adversely
affect the voting power, preferences or special rights of the
holders of Preferred Stock; provided, however, that if such
creation or such alteration or change would adversely affect
the voting power, preferences or special rights of one or
more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the
holders of all of the shares of all such series so affected,
voting as a class, shall be required in lieu of the consent of
the holders of shares entitled to cast at least two-thirds of
the votes entitled to be cast by the holders
<PAGE> 10
10
of the total number of shares of Preferred Stock at the time
outstanding.
7. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the holders of the 10.84% Preferred Stock shall be entitled to receive
out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets shall be made to the
holders of Common Stock or of any other shares of stock of the
Corporation ranking as to such a distribution junior to the 10.84%
Preferred Stock, an amount equal to $25 per share plus an amount equal
to any accrued and unpaid dividends thereon to the date fixed for
payment of such distribution. If upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the amounts
payable with respect to the 10.84% Preferred Stock and any other
shares of stock of the Corporation ranking as to any such distribution
on a parity with the 10.84% Preferred Stock are not paid in full, the
holders of the 10.84% Preferred Stock and of such other shares shall
share ratably in any such distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they
are entitled. After payment to the holders of the 10.84% Preferred
Stock of the full preferential amounts provided for in this Section 7,
the holders of the 10.84% Preferred Stock shall be entitled to no
further participation in any distribution of assets by the
Corporation. The consolidation or merger of the Corporation with or
into any other corporation, or the sale of substantially all the
assets of the Corporation in consideration for the issuance of equity
securities of another corporation, shall not be regarded as a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 7, but only if such consolidation, merger or
sale of assets shall not in any way impair the voting power,
preferences or special rights of the 10.84% Preferred Stock.
8. Limitation on Dividends on Junior Ranking Stock. So long
as any 10.84% Preferred Stock shall be outstanding, the Corporation
shall not declare any dividends on the Common Stock or any other stock
of the Corporation ranking as to dividends or distributions of assets
junior to the 10.84% Preferred Stock (the Common Stock and any such
other stock being herein referred to as "Junior Stock"), or make any
payment on account of, or set apart money for, a sinking or other
analogous fund for the purchase, redemption or other retirement of any
shares of Junior Stock, or make any distribution in respect thereof,
whether in cash or property or in obligations or stock of the
Corporation, other than Junior Stock (such dividends, payments, setting
apart and distributions being herein called "Junior Stock Payments"),
unless all of the
<PAGE> 11
11
conditions set forth in the following subsections A and B shall exist
at the date of such declaration in the case of any such dividend, or
the date of such setting apart in the case of any such fund, or the
date of such payment or distribution in the case of any other Junior
Stock Payment:
A. Full cumulative dividends shall have been paid or
declared and set apart for payment upon all outstanding shares
of Preferred Stock other than Junior Stock.
B. The Corporation shall not be in default or in
arrears with respect to any sinking or other analogous fund or
any call for tenders obligation or other agreement for the
purchase, redemption or other retirement of any shares of
Preferred Stock other than Junior Stock."
IN WITNESS WHEREOF, CHEMICAL BANKING CORPORATION has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
_________________, its ____________________________, and attested to by John B.
Wynne, its Secretary, this __ day of __________, 199_.
CHEMICAL BANKING CORPORATION
By:
-----------------------------
Name:
Title:
[Corporate Seal]
Attest:
By:
--------------------------
Name: John B. Wynne
Title: Secretary
<PAGE> 1
EXHIBIT NO. 4.7
CERTIFICATE OF DESIGNATIONS
OF
9.08% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were adopted by the Board of Directors
of the Corporation at meetings duly convened and held on August 27, 1995 and
October 17, 1995, and by the Preferred Stock Committee of the Board of
Directors at a meeting duly convened and held on _________ __, 1995, pursuant
to authority conferred upon the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Corporation which authorize the
issuance of up to 200,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"), and pursuant to authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by the By-Laws of the Corporation and
by resolutions of the Board of Directors adopted at a meeting duly convened and
held on August 27, 1995:
1. The Board of Directors on August 27, 1995 adopted the
following resolutions authorizing the Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of Preferred Stock pursuant to the terms and conditions of the
Agreement and Plan of Merger, dated as of August 27, 1995, between The Chase
Manhattan Corporation ("Chase") and the Corporation, which provides for the
merger of Chase with and into the Corporation:
"RESOLVED, that it is advisable and in the best interests of
the Corporation and its stockholders for the Corporation to enter into the
Agreement and Plan of Merger between the Corporation and The Chase Manhattan
Corporation, a Delaware corporation ("Chase"), substantially in the form
presented to this Meeting (the "Merger Agreement"), pursuant to which, among
other things, (i) Chase would merge with and into the Corporation (the
"Merger") and, in accordance with the terms and conditions of the Merger
Agreement, (ii) each then outstanding share of common stock, par value $2.00
per share, of Chase ("Chase Common Stock"), other than shares which would be
cancelled and retired and cease to exist as a result of the Merger, would be
converted into 1.04 fully paid and nonassessable shares of common stock, par
value $1.00 per share, of the
<PAGE> 2
2
Corporation ("Common Stock"), which shares would, pursuant to the Rights
Agreement, dated as of April 13, 1989 (as amended, the "Rights Agreement"),
between the Corporation and Chemical Bank, as Rights Agent, be accompanied by a
corresponding number of Chemical Rights (as defined in the Merger Agreement),
and (iii) each share (other than shares which would be cancelled and retired
and cease to exist as a result of the Merger) of Preferred Stock, 10-1/2%
Series G; Preferred Stock, 9.76% Series H; Preferred Stock, 10.84% Series I;
Preferred Stock, 9.08% Series J; Preferred Stock, 8-1/2% Series K; Preferred
Stock, 8.32% Series L; Preferred Stock, 8.40% Series M; and Preferred Stock,
Adjustable Rate Series N of Chase would be converted into one share of a series
of preferred stock, par value $1.00 per share, of the Corporation ("Preferred
Stock"), as provided for in the Merger Agreement, in each case having terms
substantially identical to the terms of the series of preferred stock of Chase
being so converted (such Preferred Stock of the Corporation to be so issued
being hereinafter referred to as the "Merger Preferred Stock"); and further
"RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of
Delaware of the certificates of designations referred to below with respect to
each series of Merger Preferred Stock (collectively, the "Certificates of
Designations"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
"RESOLVED, that the maximum number of shares of each series of
Merger Preferred Stock authorized to be so issued in connection with the Merger
shall be as follows: up to 5,600,000 shares upon conversion of Chase's
Preferred Stock, 10-1/2% Series G; up to 4,000,000 shares upon conversion of
Chase's Preferred Stock, 9.76% Series H; up to 8,000,000 shares upon conversion
of Chase's Preferred Stock, 10.84% Series I; up to 6,000,000 shares upon
conversion of Chase's Preferred Stock, 9.08% Series J; up to 6,800,000 shares
upon conversion of Chase's Preferred Stock, 8-1/2% Series K; up to 9,600,000
shares upon conversion of Chase's Preferred Stock, 8.32% Series L; up to
6,900,000 shares upon conversion of Chase's Preferred Stock, 8.40% Series M;
and up to 9,100,000 shares upon conversion of Chase's Preferred Stock,
Adjustable Rate Series N; and further
"RESOLVED, that the voting powers, preferences and special
rights of each series of Merger Preferred Stock shall be substantially
identical to the voting powers, preferences and special rights applicable to,
and specified in the certificate of designations with respect to, the
respective series of preferred stock of Chase to be converted into such series
of Merger Preferred Stock pursuant to the Merger; and further
<PAGE> 3
3
"RESOLVED, that the Preferred Stock Committee of the Board of
Directors be, and it hereby is, authorized to approve, within the limits
specified in the foregoing resolutions, the form, terms and provisions of each
Certificate of Designations and to take such other actions as such committee
deems necessary or desirable to effect the issuance of the Merger Preferred
Stock in accordance with these resolutions."
2. The Board of Directors on October 17, 1995 adopted the
following resolutions fixing the voting rights of the Preferred Stock
authorized by the preceding resolutions:
"RESOLVED, that the Certificate of Designations for each
series of preferred stock, par value $1.00 per share (the "Preferred Stock"),
of the Corporation to be issued in connection with the merger of The Chase
Manhattan Corporation ("Chase") with and into the Corporation, upon the
conversion of the Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76%
Series H; Preferred Stock, 10.84% Series I; Preferred Stock, 9.08% Series J;
Preferred Stock, 8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred
Stock, 8.40% Series M; and Preferred Stock, Adjustable Rate Series N of Chase,
shall be modified to provide that the shares of such series shall not have any
voting powers either general or special, except that:
"If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, the number of directors
constituting the Board of Directors of the Corporation shall be
increased by two, and the holders of the Preferred Stock of all series
(whether or not the holders of such series of Preferred Stock would be
entitled to vote for the election of directors if such default in
preference dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to series,
to the exclusion of the holders of common stock, par value $1.00 per
share, of the Corporation, to elect two directors of the Corporation
to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock.
Each director elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that
prior to the end of such term a default in preference dividends shall
cease to exist. Any Preferred Director may be removed by, and shall
not be removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock, called
for the purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following
<PAGE> 4
4
clause (b)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (b) in the case
of the removal of any Preferred Director, the vacancy may be filled by
the vote of the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at the
same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
dividend period; and
"Without the consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock then outstanding, voting
as a class without regard to series, the holders of shares of this
series being entitled to cast one vote per share thereon, the
Corporation may not: (a) create any class or series of stock which
shall have preference as to dividends or distribution of assets over
any outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or (b) alter
or change the provisions of the Corporation's Certificate of
Incorporation, as amended, so as to adversely affect the voting power,
preferences or special rights of the holders of Preferred Stock;
provided, however, that if such creation or such alteration or change
would adversely affect the voting power, preferences or special rights
of one or more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class,
shall be required in lieu of the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock at the
time outstanding."
3. The Preferred Stock Committee of the Board of Directors on
_________ __, 1995, pursuant to the authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the
<PAGE> 5
5
State of Delaware, by Section 3.03 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, adopted the following
resolution:
"RESOLVED, that pursuant to resolutions of the Board of Directors of
Chemical Banking Corporation (the "Corporation") adopted on August 27, 1995 and
October 17, 1995, the issue of up to Six Million (6,000,000) shares of 9.08%
Cumulative Preferred Stock, $1.00 par value, of the Corporation is hereby
authorized, and the designation, preferences and privileges, relative,
participating, optional and other special rights, and qualifications,
limitations and restrictions of all 6,000,000 shares of this series, in
addition to those set forth in the Certificate of Incorporation of the
Corporation and, with respect to voting rights, in the resolutions of the Board
of Directors of the Corporation adopted on October 17, 1995, are hereby fixed
as follows:
1. Designation. The designation of such series shall be
"9.08% Cumulative Preferred Stock" (hereinafter referred to as the
"9.08% Preferred Stock") and the number of shares constituting such
series is Six Million (6,000,000). The number of authorized shares of
9.08% Preferred Stock may be reduced by further resolution duly
adopted by the Board of Directors of the Corporation or any duly
authorized committee thereof and by the filing of a certificate
pursuant to the provisions of the General Corporation Law of the State
of Delaware stating that such reduction has been so authorized, but
the number of authorized shares of 9.08% Preferred Stock shall not be
increased. The 9.08% Preferred Stock shall rank on a parity as to
dividends and distributions of assets with the series of Preferred
Stock, $1.00 par value, of the Corporation designated as "10.96%
Preferred Stock", "8-3/8% Preferred Stock", "7.92% Cumulative
Preferred Stock", "7.58% Cumulative Preferred Stock", "7-1/2%
Cumulative Preferred Stock", "Adjustable Rate Cumulative Preferred
Stock, Series L", "10-1/2% Cumulative Preferred Stock", "9.76%
Cumulative Preferred Stock", "10.84% Cumulative Preferred Stock",
"8-1/2% Cumulative Preferred Stock", "8.32% Cumulative Preferred
Stock", "8.40% Cumulative Preferred Stock", and "Adjustable Rate
Cumulative Preferred Stock, Series N". The 9.08% Preferred Stock
shall rank senior as to dividends and distributions of assets to the
series of Preferred Stock, $1.00 par value, of the Corporation
designated as Junior Participating Preferred Stock.
2. Dividends. The annual dividend rate of the 9.08%
Preferred Stock shall be $2.27 on each outstanding share of such
stock, and no more. Dividends shall be payable on the shares of the
9.08% Preferred Stock, when and as declared by the Board of Directors,
for the Initial Dividend Period (as defined below) and each quarterly
dividend period (a "Quarterly Dividend Period") thereafter (the
Initial
<PAGE> 6
6
Dividend Period and each such subsequent Quarterly Dividend Period
being hereinafter referred to as a "Dividend Period" and collectively
referred to as "Dividend Periods"), which Quarterly Dividend Periods
shall commence on March 31, June 30, September 30 and December 31 in
each year, commencing with the first such date to occur after the
effective time of the merger of The Chase Manhattan Corporation
("Chase") with and into the Corporation (the "Effective Time"), and
shall end on and include the day next preceding the first day of the
next Quarterly Dividend Period. The Initial Dividend Period is the
period commencing on the most recent date next preceding the Effective
Time on which a dividend was paid on the Preferred Stock, 9.08% Series
J of Chase (the "Chase 9.08% Preferred Stock") (or commencing on the
date of the Effective Time if such date was such a dividend payment
date) and shall end on and include the date next preceding the first
day of the next Quarterly Dividend Period; provided, however, that in
the event the Effective Time shall occur after the record date for the
payment of a regular quarterly dividend on the Chase 9.08% Preferred
Stock, but prior to the payment date for such dividend, then the
Initial Dividend Period shall be the first Quarterly Dividend Period
as described in the preceding sentence. Dividends shall be cumulative
from the date on which the Initial Dividend Period commences and shall
be payable, when and as declared by the Board of Directors, on March
31, June 30, September 30 and December 31 in each year, commencing
with such date that next follows the end of the Initial Dividend
Period. Each such dividend shall be paid to the holders of record of
shares of 9.08% Preferred Stock as they appear on the stock register
of the Corporation on such record date, not exceeding 30 days
preceding the payment date thereof, as shall be fixed by the Board of
Directors of the Corporation. Dividends on account of arrears for any
past dividend periods may be declared and paid at any time, without
reference to any quarterly dividend payment date, to holders of record
on such date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation.
In the event that there shall be outstanding shares of any other
series of Preferred Stock ranking on a parity as to dividends with the
9.08% Preferred Stock, the Corporation, in making any dividend payment
on account of arrears on the 9.08% Preferred Stock or such other
series of Preferred Stock, shall make payments ratably upon all
outstanding shares of 9.08% Preferred Stock and such other series of
Preferred Stock in proportion to the respective amounts of dividends
in arrears upon all such outstanding shares of 9.08% Preferred Stock
and such other series of Preferred Stock to the date of such dividend
payment. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments which may be in
arrears. Dividends payable on the 9.08% Preferred Stock for any
period less than a full quarter (after the initial
<PAGE> 7
7
dividend period) shall be computed on the basis of a 360 day year.
3. Redemption. On or after March 31, 1997, the Corporation,
at its option, may redeem shares of the 9.08% Preferred Stock, as a
whole or in part, at any time or from time to time at a redemption
price of $25 per share plus accrued and unpaid dividends thereon to
the date fixed for redemption. To permit the 9.08% Preferred Stock to
qualify as Tier 1 capital of the Corporation, any such redemption
shall be subject to the prior approval of the Board of Governors of
the Federal Reserve System.
In the event the Corporation shall redeem shares of 9.08%
Preferred Stock, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on
the stock register of the Corporation. Each such notice shall state:
(1) the redemption date; (2) the number of shares of 9.08% Preferred
Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; (4) the place or places
where certificates for such shares are to be surrendered for payment
of the redemption price; and (5) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. Notice having
been mailed as aforesaid, from and after the redemption date (unless
default shall be made by the Corporation in providing money for the
payment of the redemption price) dividends on the shares of the 9.08%
Preferred Stock so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation or
any duly authorized committee thereof shall so require and the notice
shall so state), such shares shall be redeemed by the Corporation at
the redemption price aforesaid. If less than all the outstanding
shares of 9.08% Preferred Stock are to be redeemed, shares to be
redeemed shall be selected by the Corporation from outstanding shares
of 9.08% Preferred Stock not previously called for redemption by lot
or pro rata (as nearly as may be) or by any other method determined by
the Corporation in its sole discretion to be equitable.
In no event shall the Corporation redeem less than all the
outstanding shares of 9.08% Preferred Stock pursuant to the first
paragraph of this Section 3 or purchase or
<PAGE> 8
8
otherwise acquire any shares of 9.08% Preferred Stock unless full
cumulative dividends shall have been paid or declared and set apart
for payment upon all outstanding shares of 9.08% Preferred Stock for
all past Dividend Periods; provided, however, that the foregoing shall
not prevent the purchase or acquisition of shares of 9.08% Preferred
Stock pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of 9.08% Preferred Stock.
4. Shares to be Retired. All shares of 9.08% Preferred Stock
redeemed or purchased by the Corporation shall be retired and
cancelled and shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
and may thereafter be issued, but not as shares of 9.08% Preferred
Stock.
5. Conversion or Exchange. The holders of shares of 9.08%
Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of capital
stock of the Corporation.
6. Voting. The shares of 9.08% Preferred Stock shall not
have any voting powers either general or special, except that:
If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of common stock, par
value $1.00 per share, of the Corporation, to elect two
directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director
for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except
by, the vote of the holders of record of the outstanding
shares of Preferred Stock, voting together as a single class
without regard to series, at a meeting of the
<PAGE> 9
9
Corporation's stockholders, or of the holders of shares of
Preferred Stock, called for the purpose. So long as a default
in any preference dividends on the Preferred Stock shall
exist, (a) any vacancy in the office of a Preferred Director
may be filled (except as provided in the following clause (b))
by an instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (b) in the case of
the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding shares of
Preferred Stock, voting together as a single class without
regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes
hereof, to be a Preferred Director. Whenever the term of
office of the Preferred Directors shall end and a default in
preference dividends shall no longer exist, the number of
directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes hereof,
a "default in preference dividends" on the Preferred Stock
shall be deemed to have occurred whenever the amount of
accrued dividends upon any series of the Preferred Stock shall
be equivalent to six full quarter-yearly dividends or more,
and, having so occurred, such default shall be deemed to exist
thereafter until, but only until, all accrued dividends on all
shares of Preferred Stock of each and every series then
outstanding shall have been paid to the end of the last
preceding dividend period; and
Without the consent of the holders of shares entitled
to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred
Stock then outstanding, voting as a class without regard to
series, the holders of shares of this series being entitled to
cast one vote per share thereon, the Corporation may not: (a)
create any class or series of stock which shall have
preference as to dividends or distribution of assets over any
outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or
(b) alter or change the provisions of the Corporation's
Certificate of Incorporation, as amended, so as to adversely
affect the voting power, preferences or special rights of the
holders of Preferred Stock; provided, however, that if such
creation or such alteration or change would adversely affect
the voting power, preferences or special rights of one or
more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the
holders of all of the shares of all such series so affected,
voting as
<PAGE> 10
10
a class, shall be required in lieu of the consent of the
holders of shares entitled to cast at least two-thirds of the
votes entitled to be cast by the holders of the total number
of shares of Preferred Stock at the time outstanding.
7. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the holders of the 9.08% Preferred Stock shall be entitled to receive
out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets shall be made to the
holders of Common Stock or of any other shares of stock of the
Corporation ranking as to such a distribution junior to the 9.08%
Preferred Stock, an amount equal to $25 per share plus an amount equal
to any accrued and unpaid dividends thereon to the date fixed for
payment of such distribution. If upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the amounts
payable with respect to the 9.08% Preferred Stock and any other shares
of stock of the Corporation ranking as to any such distribution on a
parity with the 9.08% Preferred Stock are not paid in full, the
holders of the 9.08% Preferred Stock and of such other shares shall
share ratably in any such distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they
are entitled. After payment to the holders of the 9.08% Preferred
Stock of the full preferential amounts provided for in this Section 7,
the holders of the 9.08% Preferred Stock shall be entitled to no
further participation in any distribution of assets by the
Corporation. The consolidation or merger of the Corporation with or
into any other corporation, or the sale of substantially all the
assets of the Corporation in consideration for the issuance of equity
securities of another corporation, shall not be regarded as a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 7, but only if such consolidation, merger or
sale of assets shall not in any way impair the voting power,
preferences or special rights of the 9.08% Preferred Stock.
8. Limitation on Dividends on Junior Ranking Stock. So long
as any 9.08% Preferred Stock shall be outstanding, the Corporation
shall not declare any dividends on the Common Stock or any other stock
of the Corporation ranking as to dividends or distributions of assets
junior to the 9.08% Preferred Stock (the Common Stock and any such
other stock being herein referred to as "Junior Stock"), or make any
payment on account of, or set apart money for, a sinking or other
analogous fund for the purchase, redemption or other retirement of any
shares of Junior Stock, or make any distribution in respect thereof,
whether in cash or property or in obligations or stock of the
Corporation, other than Junior Stock (such dividends, payments,
setting apart and
<PAGE> 11
11
distributions being herein called "Junior Stock Payments"), unless all
of the conditions set forth in the following subsections A and B shall
exist at the date of such declaration in the case of any such
dividend, or the date of such setting apart in the case of any such
fund, or the date of such payment or distribution in the case of any
other Junior Stock Payment:
A. Full cumulative dividends shall have been paid or
declared and set apart for payment upon all outstanding shares
of Preferred Stock other than Junior Stock.
B. The Corporation shall not be in default or in
arrears with respect to any sinking or other analogous fund or
any call for tenders obligation or other agreement for the
purchase, redemption or other retirement of any shares of
Preferred Stock other than Junior Stock."
IN WITNESS WHEREOF, CHEMICAL BANKING CORPORATION has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
_________________, its ____________________, and attested to by John B. Wynne,
its Secretary, this __ day of __________, 199_.
CHEMICAL BANKING CORPORATION
By:
-----------------------------
Name:
Title:
[Corporate Seal]
Attest:
By:
--------------------------
Name: John B. Wynne
Title: Secretary
<PAGE> 1
EXHIBIT NO. 4.8
CERTIFICATE OF DESIGNATIONS
OF
8-1/2% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were adopted by the Board of Directors
of the Corporation at meetings duly convened and held on August 27, 1995 and
October 17, 1995, and by the Preferred Stock Committee of the Board of
Directors at a meeting duly convened and held on __________ __, 1995, pursuant
to authority conferred upon the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Corporation which authorize the
issuance of up to 200,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"), and pursuant to authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by the By-Laws of the Corporation and
by resolutions of the Board of Directors adopted at a meeting duly convened and
held on August 27, 1995:
1. The Board of Directors on August 27, 1995 adopted the
following resolutions authorizing the Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of Preferred Stock pursuant to the terms and conditions of the
Agreement and Plan of Merger, dated as of August 27, 1995, between The Chase
Manhattan Corporation ("Chase") and the Corporation, which provides for the
merger of Chase with and into the Corporation:
"RESOLVED, that it is advisable and in the best interests of
the Corporation and its stockholders for the Corporation to enter into the
Agreement and Plan of Merger between the Corporation and The Chase Manhattan
Corporation, a Delaware corporation ("Chase"), substantially in the form
presented to this Meeting (the "Merger Agreement"), pursuant to which, among
other things, (i) Chase would merge with and into the Corporation (the
"Merger") and, in accordance with the terms and conditions of the Merger
Agreement, (ii) each then outstanding share of common stock, par value $2.00
per share, of Chase ("Chase Common Stock"), other than shares which would be
cancelled and retired and cease to exist as a result of the Merger, would be
converted into 1.04 fully paid and nonassessable shares of common stock, par
value $1.00 per share, of the Corporation ("Common Stock"), which shares would,
pursuant to the
<PAGE> 2
2
Rights Agreement, dated as of April 13, 1989 (as amended, the "Rights
Agreement"), between the Corporation and Chemical Bank, as Rights Agent, be
accompanied by a corresponding number of Chemical Rights (as defined in the
Merger Agreement), and (iii) each share (other than shares which would be
cancelled and retired and cease to exist as a result of the Merger) of
Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76% Series H; Preferred
Stock, 10.84% Series I; Preferred Stock, 9.08% Series J; Preferred Stock,
8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred Stock, 8.40% Series
M; and Preferred Stock, Adjustable Rate Series N of Chase would be converted
into one share of a series of preferred stock, par value $1.00 per share, of
the Corporation ("Preferred Stock"), as provided for in the Merger Agreement,
in each case having terms substantially identical to the terms of the series of
preferred stock of Chase being so converted (such Preferred Stock of the
Corporation to be so issued being hereinafter referred to as the "Merger
Preferred Stock"); and further
"RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of
Delaware of the certificates of designations referred to below with respect to
each series of Merger Preferred Stock (collectively, the "Certificates of
Designations"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
"RESOLVED, that the maximum number of shares of each series of
Merger Preferred Stock authorized to be so issued in connection with the Merger
shall be as follows: up to 5,600,000 shares upon conversion of Chase's
Preferred Stock, 10-1/2% Series G; up to 4,000,000 shares upon conversion of
Chase's Preferred Stock, 9.76% Series H; up to 8,000,000 shares upon conversion
of Chase's Preferred Stock, 10.84% Series I; up to 6,000,000 shares upon
conversion of Chase's Preferred Stock, 9.08% Series J; up to 6,800,000 shares
upon conversion of Chase's Preferred Stock, 8-1/2% Series K; up to 9,600,000
shares upon conversion of Chase's Preferred Stock, 8.32% Series L; up to
6,900,000 shares upon conversion of Chase's Preferred Stock, 8.40% Series M;
and up to 9,100,000 shares upon conversion of Chase's Preferred Stock,
Adjustable Rate Series N; and further
"RESOLVED, that the voting powers, preferences and special
rights of each series of Merger Preferred Stock shall be substantially
identical to the voting powers, preferences and special rights applicable to,
and specified in the certificate of designations with respect to, the
respective series of preferred stock of Chase to be converted into such series
of Merger Preferred Stock pursuant to the Merger; and further
<PAGE> 3
3
"RESOLVED, that the Preferred Stock Committee of the Board of
Directors be, and it hereby is, authorized to approve, within the limits
specified in the foregoing resolutions, the form, terms and provisions of each
Certificate of Designations and to take such other actions as such committee
deems necessary or desirable to effect the issuance of the Merger Preferred
Stock in accordance with these resolutions."
2. The Board of Directors on October 17, 1995 adopted the
following resolutions fixing the voting rights of the Preferred Stock
authorized by the preceding resolutions:
"RESOLVED, that the Certificate of Designations for each
series of preferred stock, par value $1.00 per share (the "Preferred Stock"),
of the Corporation to be issued in connection with the merger of The Chase
Manhattan Corporation ("Chase") with and into the Corporation, upon the
conversion of the Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76%
Series H; Preferred Stock, 10.84% Series I; Preferred Stock, 9.08% Series J;
Preferred Stock, 8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred
Stock, 8.40% Series M; and Preferred Stock, Adjustable Rate Series N of Chase,
shall be modified to provide that the shares of such series shall not have any
voting powers either general or special, except that:
"If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, the number of directors
constituting the Board of Directors of the Corporation shall be
increased by two, and the holders of the Preferred Stock of all series
(whether or not the holders of such series of Preferred Stock would be
entitled to vote for the election of directors if such default in
preference dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to series,
to the exclusion of the holders of common stock, par value $1.00 per
share, of the Corporation, to elect two directors of the Corporation
to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock.
Each director elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that
prior to the end of such term a default in preference dividends shall
cease to exist. Any Preferred Director may be removed by, and shall
not be removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock, called
for the purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following
<PAGE> 4
4
clause (b)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (b) in the case
of the removal of any Preferred Director, the vacancy may be filled by
the vote of the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at the
same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
dividend period; and
"Without the consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock then outstanding, voting
as a class without regard to series, the holders of shares of this
series being entitled to cast one vote per share thereon, the
Corporation may not: (a) create any class or series of stock which
shall have preference as to dividends or distribution of assets over
any outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or (b) alter
or change the provisions of the Corporation's Certificate of
Incorporation, as amended, so as to adversely affect the voting power,
preferences or special rights of the holders of Preferred Stock;
provided, however, that if such creation or such alteration or change
would adversely affect the voting power, preferences or special rights
of one or more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class,
shall be required in lieu of the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock at the
time outstanding."
3. The Preferred Stock Committee of the Board of Directors on
_______ __, 1995, pursuant to the authority conferred upon the Preferred Stock
Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the
<PAGE> 5
5
State of Delaware, by Section 3.03 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, adopted the following
resolution:
"RESOLVED, that pursuant to resolutions of the Board of Directors of
Chemical Banking Corporation (the "Corporation") adopted on August 27, 1995 and
October 17, 1995, the issue of up to Six Million Eight Hundred Thousand
(6,800,000) shares of 8-1/2% Cumulative Preferred Stock, $1.00 par value, of
the Corporation is hereby authorized, and the designation, preferences and
privileges, relative, participating, optional and other special rights, and
qualifications, limitations and restrictions of all 6,800,000 shares of this
series, in addition to those set forth in the Certificate of Incorporation of
the Corporation and, with respect to voting rights, in the resolutions of the
Board of Directors of the Corporation adopted on October 17, 1995, are hereby
fixed as follows:
1. Designation. The designation of such series shall be
"8-1/2% Cumulative Preferred Stock" (hereinafter referred to as the
"8-1/2% Preferred Stock") and the number of shares constituting such
series is Six Million Eight Hundred Thousand (6,800,000). The number
of authorized shares of 8-1/2% Preferred Stock may be reduced by
further resolution duly adopted by the Board of Directors of the
Corporation or any duly authorized committee thereof and by the filing
of a certificate pursuant to the provisions of the General Corporation
Law of the State of Delaware stating that such reduction has been so
authorized, but the number of authorized shares of 8-1/2% Preferred
Stock shall not be increased. The 8-1/2% Preferred Stock shall rank
on a parity as to dividends and distributions of assets with the
series of Preferred Stock, $1.00 par value, of the Corporation
designated as "10.96% Preferred Stock", "8-3/8% Preferred Stock",
"7.92% Cumulative Preferred Stock", "7.58% Cumulative Preferred
Stock", "7-1/2% Cumulative Preferred Stock", "Adjustable Rate
Cumulative Preferred Stock, Series L", "10-1/2% Cumulative Preferred
Stock", "9.76% Cumulative Preferred Stock", "10.84% Cumulative
Preferred Stock", "9.08% Cumulative Preferred Stock", "8.32%
Cumulative Preferred Stock", "8.40% Cumulative Preferred Stock", and
"Adjustable Rate Cumulative Preferred Stock, Series N". The 8-1/2%
Preferred Stock shall rank senior as to dividends and distributions of
assets to the series of Preferred Stock, $1.00 par value, of the
Corporation designated as Junior Participating Preferred Stock.
2. Dividends. The annual dividend rate of the 8-1/2%
Preferred Stock shall be $2.125 on each outstanding share of such
stock, and no more. Dividends shall be payable on the shares of the
8-1/2% Preferred Stock, when and as declared by the Board of
Directors, for the Initial Dividend Period (as defined below) and each
quarterly dividend period (a "Quarterly Dividend Period") thereafter
(the Initial
<PAGE> 6
6
Dividend Period and each such subsequent Quarterly Dividend Period
being hereinafter referred to as a "Dividend Period" and collectively
referred to as "Dividend Periods"), which Quarterly Dividend Periods
shall commence on March 31, June 30, September 30 and December 31 in
each year, commencing with the first such date to occur after the
effective time of the merger of The Chase Manhattan Corporation
("Chase") with and into the Corporation (the "Effective Time"), and
shall end on and include the day next preceding the first day of the
next Quarterly Dividend Period. The Initial Dividend Period is the
period commencing on the most recent date next preceding the Effective
Time on which a dividend was paid on the Preferred Stock, 8-1/2%
Series K of Chase (the "Chase 8-1/2% Preferred Stock") (or commencing
on the date of the Effective Time if such date was such a dividend
payment date) and shall end on and include the date next preceding the
first day of the next Quarterly Dividend Period; provided, however,
that in the event the Effective Time shall occur after the record date
for the payment of a regular quarterly dividend on the Chase 8-1/2%
Preferred Stock, but prior to the payment date for such dividend, then
the Initial Dividend Period shall be the first Quarterly Dividend
Period as described in the preceding sentence. Dividends shall be
cumulative from the date on which the Initial Dividend Period
commences and shall be payable, when and as declared by the Board of
Directors, on March 31, June 30, September 30 and December 31 in each
year, commencing with such date that next follows the end of the
Initial Dividend Period. Each such dividend shall be paid to the
holders of record of shares of 8-1/2% Preferred Stock as they appear
on the stock register of the Corporation on such record date, not
exceeding 30 days preceding the payment date thereof, as shall be
fixed by the Board of Directors of the Corporation. Dividends on
account of arrears for any past dividend periods may be declared and
paid at any time, without reference to any quarterly dividend payment
date, to holders of record on such date, not exceeding 45 days
preceding the payment date thereof, as may be fixed by the Board of
Directors of the Corporation. In the event that there shall be
outstanding shares of any other series of Preferred Stock ranking on a
parity as to dividends with the 8-1/2% Preferred Stock, the
Corporation, in making any dividend payment on account of arrears on
the 8-1/2% Preferred Stock or such other series of Preferred Stock,
shall make payments ratably upon all outstanding shares of 8-1/2%
Preferred Stock and such other series of Preferred Stock in proportion
to the respective amounts of dividends in arrears upon all such
outstanding shares of 8-1/2% Preferred Stock and such other series of
Preferred Stock to the date of such dividend payment. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments which may be in arrears. Dividends
payable on the 8-1/2% Preferred Stock for any
<PAGE> 7
7
period less than a full quarter (after the initial dividend period)
shall be computed on the basis of a 360 day year.
3. Redemption. On or after June 30, 1997, the Corporation,
at its option, may redeem shares of the 8-1/2% Preferred Stock, as a
whole or in part, at any time or from time to time at a redemption
price of $25 per share plus accrued and unpaid dividends thereon to
the date fixed for redemption. To permit the 8-1/2% Preferred Stock
to qualify as Tier 1 capital of the Corporation, any such redemption
shall be subject to the prior approval of the Board of Governors of
the Federal Reserve System.
In the event the Corporation shall redeem shares of 8-1/2%
Preferred Stock, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on
the stock register of the Corporation. Each such notice shall state:
(1) the redemption date; (2) the number of shares of 8-1/2% Preferred
Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; (4) the place or places
where certificates for such shares are to be surrendered for payment
of the redemption price; and (5) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. Notice having
been mailed as aforesaid, from and after the redemption date (unless
default shall be made by the Corporation in providing money for the
payment of the redemption price) dividends on the shares of the 8-1/2%
Preferred Stock so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation or
any duly authorized committee thereof shall so require and the notice
shall so state), such shares shall be redeemed by the Corporation at
the redemption price aforesaid. If less than all the outstanding
shares of 8-1/2% Preferred Stock are to be redeemed, shares to be
redeemed shall be selected by the Corporation from outstanding shares
of 8-1/2% Preferred Stock not previously called for redemption by lot
or pro rata (as nearly as may be) or by any other method determined by
the Corporation in its sole discretion to be equitable.
In no event shall the Corporation redeem less than all the
outstanding shares of 8-1/2% Preferred Stock pursuant to the first
paragraph of this Section 3 or purchase or
<PAGE> 8
8
otherwise acquire any shares of 8-1/2% Preferred Stock unless full
cumulative dividends shall have been paid or declared and set apart
for payment upon all outstanding shares of 8-1/2% Preferred Stock for
all past Dividend Periods; provided, however, that the foregoing shall
not prevent the purchase or acquisition of shares of 8-1/2% Preferred
Stock pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of 8-1/2% Preferred Stock.
4. Shares to be Retired. All shares of 8-1/2% Preferred
Stock redeemed or purchased by the Corporation shall be retired and
cancelled and shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
and may thereafter be issued, but not as shares of 8-1/2% Preferred
Stock.
5. Conversion or Exchange. The holders of shares of 8-1/2%
Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of capital
stock of the Corporation.
6. Voting. The shares of 8-1/2% Preferred Stock shall not
have any voting powers either general or special, except that:
If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of common stock, par
value $1.00 per share, of the Corporation, to elect two
directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director
for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except
by, the vote of the holders of record of the outstanding
shares of Preferred Stock, voting together as a single class
without regard to series, at a meeting of the
<PAGE> 9
9
Corporation's stockholders, or of the holders of shares of
Preferred Stock, called for the purpose. So long as a default
in any preference dividends on the Preferred Stock shall
exist, (a) any vacancy in the office of a Preferred Director
may be filled (except as provided in the following clause (b))
by an instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (b) in the case of
the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding shares of
Preferred Stock, voting together as a single class without
regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes
hereof, to be a Preferred Director. Whenever the term of
office of the Preferred Directors shall end and a default in
preference dividends shall no longer exist, the number of
directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes hereof,
a "default in preference dividends" on the Preferred Stock
shall be deemed to have occurred whenever the amount of
accrued dividends upon any series of the Preferred Stock shall
be equivalent to six full quarter-yearly dividends or more,
and, having so occurred, such default shall be deemed to exist
thereafter until, but only until, all accrued dividends on all
shares of Preferred Stock of each and every series then
outstanding shall have been paid to the end of the last
preceding dividend period; and
Without the consent of the holders of shares entitled
to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred
Stock then outstanding, voting as a class without regard to
series, the holders of shares of this series being entitled to
cast one vote per share thereon, the Corporation may not: (a)
create any class or series of stock which shall have
preference as to dividends or distribution of assets over any
outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or
(b) alter or change the provisions of the Corporation's
Certificate of Incorporation, as amended, so as to adversely
affect the voting power, preferences or special rights of the
holders of Preferred Stock; provided, however, that if such
creation or such alteration or change would adversely affect
the voting power, preferences or special rights of one or
more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the
holders of all of the shares of all such series so affected,
voting as
<PAGE> 10
10
a class, shall be required in lieu of the consent of the
holders of shares entitled to cast at least two-thirds of the
votes entitled to be cast by the holders of the total number
of shares of Preferred Stock at the time outstanding.
7. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the holders of the 8-1/2% Preferred Stock shall be entitled to receive
out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets shall be made to the
holders of Common Stock or of any other shares of stock of the
Corporation ranking as to such a distribution junior to the 8-1/2%
Preferred Stock, an amount equal to $25 per share plus an amount equal
to any accrued and unpaid dividends thereon to the date fixed for
payment of such distribution. If upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the amounts
payable with respect to the 8-1/2% Preferred Stock and any other
shares of stock of the Corporation ranking as to any such distribution
on a parity with the 8-1/2% Preferred Stock are not paid in full, the
holders of the 8-1/2% Preferred Stock and of such other shares shall
share ratably in any such distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they
are entitled. After payment to the holders of the 8-1/2% Preferred
Stock of the full preferential amounts provided for in this Section 7,
the holders of the 8-1/2% Preferred Stock shall be entitled to no
further participation in any distribution of assets by the
Corporation. The consolidation or merger of the Corporation with or
into any other corporation, or the sale of substantially all the
assets of the Corporation in consideration for the issuance of equity
securities of another corporation, shall not be regarded as a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 7, but only if such consolidation, merger or
sale of assets shall not in any way impair the voting power,
preferences or special rights of the 8-1/2% Preferred Stock.
8. Limitation on Dividends on Junior Ranking Stock. So long
as any 8-1/2% Preferred Stock shall be outstanding, the Corporation
shall not declare any dividends on the Common Stock or any other stock
of the Corporation ranking as to dividends or distributions of assets
junior to the 8-1/2% Preferred Stock (the Common Stock and any such
other stock being herein referred to as "Junior Stock"), or make any
payment on account of, or set apart money for, a sinking or other
analogous fund for the purchase, redemption or other retirement of any
shares of Junior Stock, or make any distribution in respect thereof,
whether in cash or property or in obligations or stock of
<PAGE> 11
11
the Corporation, other than Junior Stock (such dividends, payments,
setting apart and distributions being herein called "Junior Stock
Payments"), unless all of the conditions set forth in the following
subsections A and B shall exist at the date of such declaration in the
case of any such dividend, or the date of such setting apart in the
case of any such fund, or the date of such payment or distribution in
the case of any other Junior Stock Payment:
A. Full cumulative dividends shall have been paid or
declared and set apart for payment upon all outstanding shares
of Preferred Stock other than Junior Stock.
B. The Corporation shall not be in default or in
arrears with respect to any sinking or other analogous fund or
any call for tenders obligation or other agreement for the
purchase, redemption or other retirement of any shares of
Preferred Stock other than Junior Stock."
IN WITNESS WHEREOF, CHEMICAL BANKING CORPORATION has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
_______________, its Chairman and Chief Executive Officer, and attested to by
John B. Wynne, its Secretary, this __ day of __________, 199_.
CHEMICAL BANKING CORPORATION
By:
------------------------------
Name:
Title:
[Corporate Seal]
Attest:
By:
--------------------------
Name: John B. Wynne
Title: Secretary
<PAGE> 1
EXHIBIT NO. 4.9
CERTIFICATE OF DESIGNATIONS
OF
8.32% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were adopted by the Board of Directors
of the Corporation at meetings duly convened and held on August 27, 1995 and
October 17, 1995, and by the Preferred Stock Committee of the Board of
Directors at a meeting duly convened and held on _________ __, 1995, pursuant
to authority conferred upon the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Corporation which authorize the
issuance of up to 200,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"), and pursuant to authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by the By-Laws of the Corporation and
by resolutions of the Board of Directors adopted at a meeting duly convened and
held on August 27, 1995:
1. The Board of Directors on August 27, 1995 adopted the
following resolutions authorizing the Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of Preferred Stock pursuant to the terms and conditions of the
Agreement and Plan of Merger, dated as of August 27, 1995, between The Chase
Manhattan Corporation ("Chase") and the Corporation, which provides for the
merger of Chase with and into the Corporation:
"RESOLVED, that it is advisable and in the best interests of
the Corporation and its stockholders for the Corporation to enter into the
Agreement and Plan of Merger between the Corporation and The Chase Manhattan
Corporation, a Delaware corporation ("Chase"), substantially in the form
presented to this Meeting (the "Merger Agreement"), pursuant to which, among
other things, (i) Chase would merge with and into the Corporation (the
"Merger") and, in accordance with the terms and conditions of the Merger
Agreement, (ii) each then outstanding share of common stock, par value $2.00
per share, of Chase ("Chase Common Stock"), other than shares which would be
cancelled and retired and cease to exist as a result of the Merger, would be
converted into 1.04 fully paid and nonassessable shares of common stock, par
value $1.00 per share, of the Corporation ("Common Stock"), which shares would,
pursuant to the
<PAGE> 2
2
Rights Agreement, dated as of April 13, 1989 (as amended, the "Rights
Agreement"), between the Corporation and Chemical Bank, as Rights Agent, be
accompanied by a corresponding number of Chemical Rights (as defined in the
Merger Agreement), and (iii) each share (other than shares which would be
cancelled and retired and cease to exist as a result of the Merger) of
Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76% Series H; Preferred
Stock, 10.84% Series I; Preferred Stock, 9.08% Series J; Preferred Stock,
8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred Stock, 8.40% Series
M; and Preferred Stock, Adjustable Rate Series N of Chase would be converted
into one share of a series of preferred stock, par value $1.00 per share, of
the Corporation ("Preferred Stock"), as provided for in the Merger Agreement,
in each case having terms substantially identical to the terms of the series of
preferred stock of Chase being so converted (such Preferred Stock of the
Corporation to be so issued being hereinafter referred to as the "Merger
Preferred Stock"); and further
"RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of
Delaware of the certificates of designations referred to below with respect to
each series of Merger Preferred Stock (collectively, the "Certificates of
Designations"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
"RESOLVED, that the maximum number of shares of each series of
Merger Preferred Stock authorized to be so issued in connection with the Merger
shall be as follows: up to 5,600,000 shares upon conversion of Chase's
Preferred Stock, 10-1/2% Series G; up to 4,000,000 shares upon conversion of
Chase's Preferred Stock, 9.76% Series H; up to 8,000,000 shares upon conversion
of Chase's Preferred Stock, 10.84% Series I; up to 6,000,000 shares upon
conversion of Chase's Preferred Stock, 9.08% Series J; up to 6,800,000 shares
upon conversion of Chase's Preferred Stock, 8-1/2% Series K; up to 9,600,000
shares upon conversion of Chase's Preferred Stock, 8.32% Series L; up to
6,900,000 shares upon conversion of Chase's Preferred Stock, 8.40% Series M;
and up to 9,100,000 shares upon conversion of Chase's Preferred Stock,
Adjustable Rate Series N; and further
"RESOLVED, that the voting powers, preferences and special
rights of each series of Merger Preferred Stock shall be substantially
identical to the voting powers, preferences and special rights applicable to,
and specified in the certificate of designations with respect to, the
respective series of preferred stock of Chase to be converted into such series
of Merger Preferred Stock pursuant to the Merger; and further
<PAGE> 3
3
"RESOLVED, that the Preferred Stock Committee of the Board of
Directors be, and it hereby is, authorized to approve, within the limits
specified in the foregoing resolutions, the form, terms and provisions of each
Certificate of Designations and to take such other actions as such committee
deems necessary or desirable to effect the issuance of the Merger Preferred
Stock in accordance with these resolutions."
2. The Board of Directors on October 17, 1995 adopted the
following resolutions fixing the voting rights of the Preferred Stock
authorized by the preceding resolutions:
"RESOLVED, that the Certificate of Designations for each
series of preferred stock, par value $1.00 per share (the "Preferred Stock"),
of the Corporation to be issued in connection with the merger of The Chase
Manhattan Corporation ("Chase") with and into the Corporation, upon the
conversion of the Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76%
Series H; Preferred Stock, 10.84% Series I; Preferred Stock, 9.08% Series J;
Preferred Stock, 8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred
Stock, 8.40% Series M; and Preferred Stock, Adjustable Rate Series N of Chase,
shall be modified to provide that the shares of such series shall not have any
voting powers either general or special, except that:
"If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, the number of directors
constituting the Board of Directors of the Corporation shall be
increased by two, and the holders of the Preferred Stock of all series
(whether or not the holders of such series of Preferred Stock would be
entitled to vote for the election of directors if such default in
preference dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to series,
to the exclusion of the holders of common stock, par value $1.00 per
share, of the Corporation, to elect two directors of the Corporation
to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock.
Each director elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that
prior to the end of such term a default in preference dividends shall
cease to exist. Any Preferred Director may be removed by, and shall
not be removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock, called
for the purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following
<PAGE> 4
4
clause (b)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (b) in the case
of the removal of any Preferred Director, the vacancy may be filled by
the vote of the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at the
same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
dividend period; and
"Without the consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock then outstanding, voting
as a class without regard to series, the holders of shares of this
series being entitled to cast one vote per share thereon, the
Corporation may not: (a) create any class or series of stock which
shall have preference as to dividends or distribution of assets over
any outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or (b) alter
or change the provisions of the Corporation's Certificate of
Incorporation, as amended, so as to adversely affect the voting power,
preferences or special rights of the holders of Preferred Stock;
provided, however, that if such creation or such alteration or change
would adversely affect the voting power, preferences or special rights
of one or more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class,
shall be required in lieu of the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock at the
time outstanding; and further
"RESOLVED, that the foregoing resolution shall be deemed to
supplement and to modify the resolutions adopted at the
<PAGE> 5
5
August 27, 1995 meeting of the Board of Directors of the Corporation."
3. The Preferred Stock Committee of the Board of Directors on
_________ __, 1995, pursuant to the authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by Section 3.03 of the By-Laws of the
Corporation and by the resolutions of the Board of Directors set forth above,
adopted the following resolution:
"RESOLVED, that pursuant to resolutions of the Board of Directors of
Chemical Banking Corporation (the "Corporation") adopted on August 27, 1995 and
October 17, 1995, the issue of up to Nine Million Six Hundred Thousand
(9,600,000) shares of 8.32% Cumulative Preferred Stock, $1.00 par value, of the
Corporation is hereby authorized, and the designation, preferences and
privileges, relative, participating, optional and other special rights, and
qualifications, limitations and restrictions of all 9,600,000 shares of this
series, in addition to those set forth in the Certificate of Incorporation of
the Corporation and, with respect to voting rights, in the resolutions of the
Board of Directors of the Corporation adopted on October 17, 1995, are hereby
fixed as follows:
1. Designation. The designation of such series shall be
"8.32% Cumulative Preferred Stock" (hereinafter referred to as the
"8.32% Preferred Stock") and the number of shares constituting such
series is Nine Million Six Hundred Thousand (9,600,000). The number
of authorized shares of 8.32% Preferred Stock may be reduced by
further resolution duly adopted by the Board of Directors of the
Corporation or any duly authorized committee thereof and by the filing
of a certificate pursuant to the provisions of the General Corporation
Law of the State of Delaware stating that such reduction has been so
authorized, but the number of authorized shares of 8.32% Preferred
Stock shall not be increased. The 8.32% Preferred Stock shall rank on
a parity as to dividends and distributions of assets with the series
of Preferred Stock, $1.00 par value, of the Corporation designated as
"10.96% Preferred Stock", "8-3/8% Preferred Stock", "7.92% Cumulative
Preferred Stock", "7.58% Cumulative Preferred Stock", "7-1/2%
Cumulative Preferred Stock", "Adjustable Rate Cumulative Preferred
Stock, Series L", "10-1/2% Cumulative Preferred Stock", "9.76%
Cumulative Preferred Stock", "10.84% Cumulative Preferred Stock",
"9.08% Cumulative Preferred Stock", "8-1/2% Cumulative Preferred
Stock", "8.40% Cumulative Preferred Stock" and "Adjustable Rate
Cumulative Preferred Stock, Series N". The 8.32% Preferred Stock
shall rank senior as to dividends and distributions of assets to the
series of Preferred Stock, $1.00 par value, of the Corporation
designated as Junior Participating Preferred Stock.
<PAGE> 6
6
2. Dividends. The annual dividend rate of the 8.32%
Preferred Stock shall be $2.08 on each outstanding share of such
stock, and no more. Dividends shall be payable on the shares of the
8.32% Preferred Stock, when and as declared by the Board of Directors,
for the Initial Dividend Period (as defined below) and each quarterly
dividend period (a "Quarterly Dividend Period") thereafter (the
Initial Dividend Period and each such subsequent Quarterly Dividend
Period being hereinafter referred to as a "Dividend Period" and
collectively referred to as "Dividend Periods"), which Quarterly
Dividend Periods shall commence on March 31, June 30, September 30 and
December 31 in each year, commencing with the first such date to occur
after the effective time of the merger of The Chase Manhattan
Corporation ("Chase") with and into the Corporation (the "Effective
Time"), and shall end on and include the day next preceding the first
day of the next Quarterly Dividend Period. The Initial Dividend
Period is the period commencing on the most recent date next preceding
the Effective Time on which a dividend was paid on the Preferred
Stock, 8.32% of Chase (the "Chase 8.32% Preferred Stock") (or
commencing on the date of the Effective Time if such date was such a
dividend payment date) and shall end on and include the date next
preceding the first day of the next Quarterly Dividend Period;
provided, however, that in the event the Effective Time shall occur
after the record date for the payment of a regular quarterly dividend
on the Chase 8.32% Preferred Stock, but prior to the payment date for
such dividend, then the Initial Dividend Period shall be the first
Quarterly Dividend Period as described in the preceding sentence.
Dividends shall be cumulative from the date on which the Initial
Dividend Period commences and shall be payable, when and as declared
by the Board of Directors, on March 31, June 30, September 30 and
December 31 in each year, commencing with such date that next follows
the end of the Initial Dividend Period. Each such dividend shall be
paid to the holders of record of shares of 8.32% Preferred Stock as
they appear on the stock register of the Corporation on such record
date, not exceeding 30 days preceding the payment date thereof, as
shall be fixed by the Board of Directors of the Corporation.
Dividends on account of arrears for any past dividend periods may be
declared and paid at any time, without reference to any quarterly
dividend payment date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof, as may be fixed
by the Board of Directors of the Corporation. In the event that there
shall be outstanding shares of any other series of Preferred Stock
ranking on a parity as to dividends with the 8.32% Preferred Stock,
the Corporation, in making any dividend payment on account of arrears
on the 8.32% Preferred Stock or such other series of Preferred Stock,
shall make payments ratably upon all outstanding shares of 8.32%
Preferred Stock and such other series of Preferred Stock in proportion
to the respective amounts of dividends
<PAGE> 7
7
in arrears upon all such outstanding shares of 8.32% Preferred Stock
and such other series of Preferred Stock to the date of such dividend
payment. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments which may be in
arrears. Dividends payable on the 8.32% Preferred Stock for any
period less than a full quarter (after the initial dividend period)
shall be computed on the basis of a 360 day year consisting of twelve
30- day months.
3. Redemption. On or after September 30, 1997, the
Corporation, at its option, may redeem shares of the 8.32% Preferred
Stock, as a whole or in part, at any time or from time to time at a
redemption price of $25 per share plus an amount equal to the accrued
and unpaid dividends thereon to the date fixed for redemption (whether
or not such dividends have been declared). To permit the 8.32%
Preferred Stock to qualify as Tier 1 capital of the Corporation, any
such redemption shall be subject to the prior approval of the Board of
Governors of the Federal Reserve System.
In the event the Corporation shall redeem shares of 8.32%
Preferred Stock, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on
the stock register of the Corporation. Each such notice shall state:
(1) the redemption date; (2) the number of shares of 8.32% Preferred
Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; (4) the place or places
where certificates for such shares are to be surrendered for payment
of the redemption price; and (5) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. Notice having
been mailed as aforesaid, from and after the redemption date (unless
default shall be made by the Corporation in providing money for the
payment of the redemption price) dividends on the shares of the 8.32%
Preferred Stock so called for redemption shall cease to accrue, and
notwithstanding the fact that any certificates for such shares shall
not have been surrendered for payment of the redemption price, said
shares shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of the Corporation (except the
right to receive from the Corporation the redemption price) shall
cease. Upon surrender in accordance with said notice of the
certificates for any shares so redeemed (properly endorsed or assigned
for transfer, if the Board of Directors of the Corporation or any duly
authorized committee thereof shall so require and the notice shall so
state), such shares shall be redeemed by the Corporation at the
redemption price aforesaid. If less than all the outstanding shares
of 8.32%
<PAGE> 8
8
Preferred Stock are to be redeemed, shares to be redeemed shall be
selected by the Corporation from outstanding shares of 8.32% Preferred
Stock not previously called for redemption by lot or pro rata (as
nearly as may be) or by any other method determined by the Corporation
in its sole discretion to be equitable.
In no event shall the Corporation redeem less than all the
outstanding shares of 8.32% Preferred Stock pursuant to the first
paragraph of this Section 3 or purchase or otherwise acquire any
shares of 8.32% Preferred Stock unless full cumulative dividends shall
have been paid or declared and set apart for payment upon all
outstanding shares of 8.32% Preferred Stock for all past Dividend
Periods; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of 8.32% Preferred Stock pursuant to
a purchase or exchange offer made on the same terms to holders of all
outstanding shares of 8.32% Preferred Stock.
4. Shares to be Retired. All shares of 8.32% Preferred Stock
redeemed or purchased by the Corporation shall be retired and
cancelled and shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
and may thereafter be issued, but not as shares of 8.32% Preferred
Stock.
5. Conversion or Exchange. The holders of shares of 8.32%
Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of capital
stock of the Corporation.
6. Voting. The shares of 8.32% Preferred Stock shall not
have any voting powers either general or special, except that:
If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of common stock, par
value $1.00 per share, of the Corporation, to elect two
directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock.
<PAGE> 9
9
Each director elected by the holders of shares of Preferred
Stock (a "Preferred Director") shall continue to serve as such
director for the full term for which he shall have been
elected, notwithstanding that prior to the end of such term a
default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed
except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a
single class without regard to series, at a meeting of the
Corporation's stockholders, or of the holders of shares of
Preferred Stock, called for the purpose. So long as a default
in any preference dividends on the Preferred Stock shall
exist, (a) any vacancy in the office of a Preferred Director
may be filled (except as provided in the following clause (b))
by an instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (b) in the case of
the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding shares of
Preferred Stock, voting together as a single class without
regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes
hereof, to be a Preferred Director. Whenever the term of
office of the Preferred Directors shall end and a default in
preference dividends shall no longer exist, the number of
directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes hereof,
a "default in preference dividends" on the Preferred Stock
shall be deemed to have occurred whenever the amount of
accrued dividends upon any series of the Preferred Stock shall
be equivalent to six full quarter-yearly dividends or more,
and, having so occurred, such default shall be deemed to exist
thereafter until, but only until, all accrued dividends on all
shares of Preferred Stock of each and every series then
outstanding shall have been paid to the end of the last
preceding dividend period; and
Without the consent of the holders of shares entitled
to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred
Stock then outstanding, voting as a class without regard to
series, the holders of shares of this series being entitled to
cast one vote per share thereon, the Corporation may not: (a)
create any class or series of stock which shall have
preference as to dividends or distribution of assets over any
outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or
(b) alter or change the provisions of the Corporation's
Certificate of
<PAGE> 10
10
Incorporation, as amended, so as to adversely affect the
voting power, preferences or special rights of the holders of
Preferred Stock; provided, however, that if such creation or
such alteration or change would adversely affect the voting
power, preferences or special rights of one or more, but not
all, series of Preferred Stock at the time outstanding,
consent of the holders of shares entitled to cast at least
two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a
class, shall be required in lieu of the consent of the holders
of shares entitled to cast at least two-thirds of the votes
entitled to be cast by the holders of the total number of
shares of Preferred Stock at the time outstanding.
7. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the holders of the 8.32% Preferred Stock shall be entitled to receive
out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets shall be made to the
holders of Common Stock or of any other shares of stock of the
Corporation ranking as to such a distribution junior to the 8.32%
Preferred Stock, an amount equal to $25 per share plus an amount equal
to any accrued and unpaid dividends thereon to the date fixed for
payment of such distribution (whether or not such dividends have been
declared). If upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the amounts payable with
respect to the 8.32% Preferred Stock and any other shares of stock of
the Corporation ranking as to any such distribution on a parity with
the 8.32% Preferred Stock are not paid in full, the holders of the
8.32% Preferred Stock and of such other shares shall share ratably in
any such distribution of assets of the Corporation in proportion to
the full respective preferential amounts to which they are entitled.
After payment to the holders of the 8.32% Preferred Stock of the full
preferential amounts provided for in this Section 7, the holders of
the 8.32% Preferred Stock shall be entitled to no further
participation in any distribution of assets by the Corporation. The
consolidation or merger of the Corporation with or into any other
corporation, or the sale of substantially all the assets of the
Corporation in consideration for the issuance of equity securities of
another corporation, shall not be regarded as a liquidation,
dissolution or winding up of the Corporation within the meaning of
this Section 7, but only if such consolidation, merger or sale of
assets shall not in any way impair the voting power, preferences or
special rights of the 8.32% Preferred Stock.
8. Limitation on Dividends on Junior Ranking Stock. So long
as any 8.32% Preferred Stock shall be outstanding,
<PAGE> 11
11
the Corporation shall not declare any dividends on the Common Stock or
any other stock of the Corporation ranking as to dividends or
distributions of assets junior to the 8.32% Preferred Stock (the
Common Stock and any such other stock being herein referred to as
"Junior Stock"), or make any payment on account of, or set apart money
for, a sinking or other analogous fund for the purchase, redemption or
other retirement of any shares of Junior Stock, or make any
distribution in respect thereof, whether in cash or property or in
obligations or stock of the Corporation, other than Junior Stock (such
dividends, payments, setting apart and distributions being herein
called "Junior Stock Payments"), unless all of the conditions set
forth in the following subsections A and B shall exist at the date of
such declaration in the case of any such dividend, or the date of such
setting apart in the case of any such fund, or the date of such
payment or distribution in the case of any other Junior Stock Payment:
A. Full cumulative dividends shall have been paid or
declared and set apart for payment upon all outstanding shares
of Preferred Stock other than Junior Stock.
B. The Corporation shall not be in default or in
arrears with respect to any sinking or other analogous fund or
any call for tenders obligation or other agreement for the
purchase, redemption or other retirement of any shares of
Preferred Stock other than Junior Stock."
<PAGE> 12
12
IN WITNESS WHEREOF, CHEMICAL BANKING CORPORATION has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
_________________, its ________________________, and attested to by John B.
Wynne, its Secretary, this __ day of __________, 199_.
CHEMICAL BANKING CORPORATION
By:
-----------------------------
Name:
Title:
[Corporate Seal]
Attest:
By:
--------------------------
Name: John B. Wynne
Title: Secretary
<PAGE> 1
EXHIBIT 4.10
CERTIFICATE OF DESIGNATIONS
OF
8.40% CUMULATIVE PREFERRED STOCK
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), HEREBY CERTIFIES
that the following resolutions were adopted by the Board of Directors of the
Corporation at meetings duly convened and held on August 27, 1995 and October
17, 1995, and by the Preferred Stock Committee of the Board of Directors at a
meeting duly convened and held on __________ __, 1995, pursuant to authority
conferred upon the Board of Directors by the provisions of the Restated
Certificate of Incorporation of the Corporation which authorize the issuance of
up to 200,000,000 shares of preferred stock, $1 par value (the "Preferred
Stock"), and pursuant to authority conferred upon the Preferred Stock Committee
of the Board of Directors by Section 141(c) of the General Corporation Law of
the State of Delaware, by the By-Laws of the Corporation and by resolutions of
the Board of Directors adopted at a meeting duly convened and held on August 27,
1995:
1. The Board of Directors on August 27, 1995 adopted the following
resolutions authorizing the Preferred Stock Committee of the Board of Directors
to act on behalf of the Board of Directors in connection with the issuance of
Preferred Stock pursuant to the terms and conditions of the Agreement and Plan
of Merger, dated as of August 27, 1995, between The Chase Manhattan Corporation
("Chase") and the Corporation, which provides for the merger of Chase with and
into the Corporation:
"RESOLVED, that it is advisable and in the best interests of the
Corporation and its stockholders for the Corporation to enter into the Agreement
and Plan of Merger between the Corporation and The Chase Manhattan Corporation,
a Delaware corporation ("Chase"), substantially in the form presented to this
Meeting (the "Merger Agreement"), pursuant to
<PAGE> 2
2
which, among other things, (i) Chase would merge with and into the Corporation
(the "Merger") and, in accordance with the terms and conditions of the Merger
Agreement, (ii) each then outstanding share of common stock, par value $2.00
per share, of Chase ("Chase Common Stock"), other than shares which would be
cancelled and retired and cease to exist as a result of the Merger, would be
converted into 1.04 fully paid and nonassessable shares of common stock, par
value $1.00 per share, of the Corporation ("Common Stock"), which shares would,
pursuant to the Rights Agreement, dated as of April 13, 1989 (as amended, the
"Rights Agreement"), between the Corporation and Chemical Bank, as Rights
Agent, be accompanied by a corresponding number of Chemical Rights (as defined
in the Merger Agreement), and (iii) each share (other than shares which would
be cancelled and retired and cease to exist as a result of the Merger) of
Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76% Series H; Preferred
Stock, 10.84% Series I; Preferred Stock, 9.08% Series J; Preferred Stock,
8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred Stock, 8.40% Series
M; and Preferred Stock, Adjustable Rate Series N of Chase would be converted
into one share of a series of preferred stock, par value $1.00 per share, of
the Corporation ("Preferred Stock"), as provided for in the Merger Agreement,
in each case having terms substantially identical to the terms of the series of
preferred stock of Chase being so converted (such Preferred Stock of the
Corporation to be so issued being hereinafter referred to as the "Merger
Preferred Stock"); and further
"RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of Delaware
of the certificates of designations referred to below with respect to each
series of Merger Preferred Stock (collectively, the "Certificates of
Designations"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
"RESOLVED, that the maximum number of shares of each series of Merger
Preferred Stock authorized to be so issued in connection with the Merger shall
be as follows: up to 5,600,000 shares upon conversion of Chase's Preferred
Stock, 10-1/2% Series G; up to 4,000,000 shares upon conversion of Chase's
Preferred
<PAGE> 3
3
Stock, 9.76% Series H; up to 8,000,000 shares upon conversion of Chase's
Preferred Stock, 10.84% Series I; up to 6,000,000 shares upon conversion of
Chase's Preferred Stock, 9.08% Series J; up to 6,800,000 shares upon conversion
of Chase's Preferred Stock, 8- 1/2% Series K; up to 9,600,000 shares upon
conversion of Chase's Preferred Stock, 8.32% Series L; up to 6,900,000 shares
upon conversion of Chase's Preferred Stock, 8.40% Series M; and up to 9,100,000
shares upon conversion of Chase's Preferred Stock, Adjustable Rate Series N;
and further
"RESOLVED, that the voting powers, preferences and special rights of
each series of Merger Preferred Stock shall be substantially identical to the
voting powers, preferences and special rights applicable to, and specified in
the certificate of designations with respect to, the respective series of
preferred stock of Chase to be converted into such series of Merger Preferred
Stock pursuant to the Merger; and further
"RESOLVED, that the Preferred Stock Committee of the Board of
Directors be, and it hereby is, authorized to approve, within the limits
specified in the foregoing resolutions, the form, terms and provisions of each
Certificate of Designations and to take such other actions as such committee
deems necessary or desirable to effect the issuance of the Merger Preferred
Stock in accordance with these resolutions."
2. The Board of Directors on October 17, 1995 adopted the following
resolutions fixing the voting rights of the Preferred Stock authorized by the
preceding resolutions:
"RESOLVED, that the Certificate of Designations for each series of
preferred stock, par value $1.00 per share (the "Preferred Stock"), of the
Corporation to be issued in connection with the merger of The Chase Manhattan
Corporation ("Chase") with and into the Corporation, upon the conversion of the
Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76% Series H; Preferred
Stock, 10.84% Series I; Preferred Stock, 9.08% Series J; Preferred Stock, 8-1/2%
Series K; Preferred Stock, 8.32% Series L; Preferred Stock, 8.40% Series M; and
Preferred Stock, Adjustable Rate Series N of Chase, shall be modified to provide
that the shares of such series shall not have any voting powers either general
or special, except that:
<PAGE> 4
4
"If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, the number of directors
constituting the Board of Directors of the Corporation shall be increased
by two, and the holders of the Preferred Stock of all series (whether or
not the holders of such series of Preferred Stock would be entitled to
vote for the election of directors if such default in preference dividends
did not exist), shall have the right at such meeting, voting together as a
single class without regard to series, to the exclusion of the holders of
common stock, par value $1.00 per share, of the Corporation, to elect two
directors of the Corporation to fill such newly created directorships.
Such right shall continue until there are no dividends in arrears upon the
Preferred Stock. Each director elected by the holders of shares of
Preferred Stock (a "Preferred Director") shall continue to serve as such
director for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by,
and shall not be removed except by, the vote of the holders of record of
the outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock, called for
the purpose. So long as a default in any preference dividends on the
Preferred Stock shall exist, (a) any vacancy in the office of a Preferred
Director may be filled (except as provided in the following clause (b)) by
an instrument in writing signed by the remaining Preferred Director and
filed with the Corporation and (b) in the case of the removal of any
Preferred Director, the vacancy may be filled by the vote of the holders
of the outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the remaining
Preferred Director shall be deemed, for all purposes hereof, to be a
Preferred Director. Whenever the term of office of the Preferred Directors
shall end and a default in preference dividends shall no longer exist, the
number of directors constituting the Board of Directors of the Corporation
shall be reduced by two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed
<PAGE> 5
5
to have occurred whenever the amount of accrued dividends upon any series
of the Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be deemed
to exist thereafter until, but only until, all accrued dividends on all
shares of Preferred Stock of each and every series then outstanding shall
have been paid to the end of the last preceding dividend period; and
"Without the consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of the
total number of shares of Preferred Stock then outstanding, voting as a
class without regard to series, the holders of shares of this series being
entitled to cast one vote per share thereon, the Corporation may not: (a)
create any class or series of stock which shall have preference as to
dividends or distribution of assets over any outstanding series of the
Preferred Stock other than a series which shall not have any right to
object to such creation or (b) alter or change the provisions of the
Corporation's Certificate of Incorporation, as amended, so as to adversely
affect the voting power, preferences or special rights of the holders of
Preferred Stock; provided, however, that if such creation or such
alteration or change would adversely affect the voting power, preferences
or special rights of one or more, but not all, series of Preferred Stock
at the time outstanding, consent of the holders of shares entitled to cast
at least two- thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class, shall
be required in lieu of the consent of the holders of shares entitled to
cast at least two-thirds of the votes entitled to be cast by the holders
of the total number of shares of Preferred Stock at the time outstanding."
3. The Preferred Stock Committee of the Board of Directors on _______
__, 1995, pursuant to the authority conferred upon the Preferred Stock Committee
of the Board of Directors by Section 141(c) of the General Corporation Law of
the State of Delaware, by Section 3.03 of the By-Laws of the Corporation and by
the resolutions of the Board of Directors set forth above, adopted the following
resolution:
<PAGE> 6
6
"RESOLVED, that pursuant to resolutions of the Board of Directors of
Chemical Banking Corporation (the "Corporation") adopted on August 27, 1995 and
October 17, 1995, the issue of up to Six Million Nine Hundred Thousand
(6,900,000) shares of 8.40% Cumulative Preferred Stock, $1.00 par value, of the
Corporation is hereby authorized, and the designation, preferences and
privileges, relative, participating, optional and other special rights, and
qualifications, limitations and restrictions of all 6,900,000 shares of this
series, in addition to those set forth in the Certificate of Incorporation of
the Corporation and, with respect to voting rights, in the resolutions of the
Board of Directors of the Corporation adopted on October 17, 1995, are hereby
fixed as follows:
1. Designation. The designation of such series shall be "8.40%
Cumulative Preferred Stock" (hereinafter referred to as the "8.40%
Preferred Stock") and the number of shares constituting such series is Six
Million Nine Hundred Thousand (6,900,000). The number of authorized shares
of 8.40% Preferred Stock may be reduced by further resolution duly adopted
by the Board of Directors of the Corporation or any duly authorized
committee thereof and by the filing of a certificate pursuant to the
provisions of the General Corporation Law of the State of Delaware stating
that such reduction has been so authorized, but the number of authorized
shares of 8.40% Preferred Stock shall not be increased. The 8.40%
Preferred Stock shall rank on a parity as to dividends and distributions
of assets with the series of Preferred Stock, $1.00 par value, of the
Corporation designated as "10.96% Preferred Stock", "8-3/8% Preferred
Stock", "7.92% Cumulative Preferred Stock", "7.58% Cumulative Preferred
Stock", "7-1/2% Cumulative Preferred Stock", "Adjustable Rate Cumulative
Preferred Stock, Series L", "10-1/2% Cumulative Preferred Stock", "9.76%
Cumulative Preferred Stock", "10.84% Cumulative Preferred Stock", "9.08%
Cumulative Preferred Stock", "8-1/2% Cumulative Preferred Stock", "8.32%
Cumulative Preferred Stock" and "Adjustable Rate Cumulative Preferred
Stock, Series N". The 8.40% Preferred Stock shall rank senior as to
dividends and distributions of assets to the series of Preferred Stock,
$1.00 par value, of the Corporation designated as Junior Participating
Preferred Stock.
<PAGE> 7
7
2. Dividends. The annual dividend rate of the 8.40% Preferred Stock
shall be $2.10 on each outstanding share of such stock, and no more.
Dividends shall be payable on the shares of the 8.40% Preferred Stock,
when and as declared by the Board of Directors, for the Initial Dividend
Period (as defined below) and each quarterly dividend period (a "Quarterly
Dividend Period") thereafter (the Initial Dividend Period and each such
subsequent Quarterly Dividend Period being hereinafter referred to as a
"Dividend Period" and collectively referred to as "Dividend Periods"),
which Quarterly Dividend Periods shall commence on March 31, June 30,
September 30 and December 31 in each year, commencing with the first such
date to occur after the effective time of the merger of The Chase
Manhattan Corporation ("Chase") with and into the Corporation (the
"Effective Time"), and shall end on and include the day next preceding the
first day of the next Quarterly Dividend Period. The Initial Dividend
Period is the period commencing on the most recent date next preceding the
Effective Time on which a dividend was paid on the Preferred Stock, 8.40%
Series M of Chase (the "Chase 8.40% Preferred Stock") (or commencing on
the date of the Effective Time if such date was such a dividend payment
date) and shall end on and include the date next preceding the first day
of the next Quarterly Dividend Period; provided, however, that in the
event the Effective Time shall occur after the record date for the payment
of a regular quarterly dividend on the Chase 8.40% Preferred Stock, but
prior to the payment date for such dividend, then the Initial Dividend
Period shall be the first Quarterly Dividend Period as described in the
preceding sentence. Dividends shall be cumulative from the date on which
the Initial Dividend Period commences and shall be payable, when and as
declared by the Board of Directors, on March 31, June 30, September 30 and
December 31 in each year, commencing with such date that next follows the
end of the Initial Dividend Period. Each such dividend shall be paid to
the holders of record of shares of 8.40% Preferred Stock as they appear on
the stock register of the Corporation on such record date, not exceeding
30 days preceding the payment date thereof, as shall be fixed by the Board
of Directors of the Corporation. Dividends on account of arrears for any
past dividend periods may be declared and paid at any time, without
reference to any quarterly dividend payment date, to holders of record on
such date, not exceeding 45 days
<PAGE> 8
8
preceding the payment date thereof, as may be fixed by the Board of
Directors of the Corporation. In the event that there shall be outstanding
shares of any other series of Preferred Stock ranking on a parity as to
dividends with the 8.40% Preferred Stock, the Corporation, in making any
dividend payment on account of arrears on the 8.40% Preferred Stock or
such other series of Preferred Stock, shall make payments ratably upon all
outstanding shares of 8.40% Preferred Stock and such other series of
Preferred Stock in proportion to the respective amounts of dividends in
arrears upon all such outstanding shares of 8.40% Preferred Stock and such
other series of Preferred Stock to the date of such dividend payment. No
interest, or sum of money in lieu of interest, shall be payable in respect
of any dividend payment or payments which may be in arrears. Dividends
payable on the 8.40% Preferred Stock for any period less than a full
quarter (after the initial dividend period) shall be computed on the basis
of a 360 day year consisting of twelve 30-day months.
3. Redemption. On or after March 31, 1998, the Corporation, at its
option, may redeem shares of the 8.40% Preferred Stock, as a whole or in
part, at any time or from time to time at a redemption price of $25 per
share plus an amount equal to the accrued and unpaid dividends thereon to
the date fixed for redemption (whether or not such dividends have been
declared). To permit the 8.40% Preferred Stock to qualify as Tier 1
capital of the Corporation, any such redemption shall be subject to the
prior approval of the Board of Governors of the Federal Reserve System.
In the event the Corporation shall redeem shares of 8.40% Preferred
Stock, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to
the redemption date, to each holder of record of the shares to be
redeemed, at such holder's address as the same appears on the stock
register of the Corporation. Each such notice shall state: (1) the
redemption date; (2) the number of shares of 8.40% Preferred Stock to be
redeemed and, if less than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (3)
the redemption price; (4) the place or places where certificates for such
shares are to be surrendered for payment of the
<PAGE> 9
9
redemption price; and (5) that dividends on the shares to be redeemed
will cease to accrue on such redemption date. Notice having been mailed as
aforesaid, from and after the redemption date (unless default shall be
made by the Corporation in providing money for the payment of the
redemption price) dividends on the shares of the 8.40% Preferred Stock so
called for redemption shall cease to accrue, and notwithstanding the fact
that any certificates for such shares shall not have been surrendered for
payment of the redemption price, said shares shall no longer be deemed to
be outstanding, and all rights of the holders thereof as stockholders of
the Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender in accordance with said
notice of the certificates for any shares so redeemed (properly endorsed
or assigned for transfer, if the Board of Directors of the Corporation or
any duly authorized committee thereof shall so require and the notice
shall so state), such shares shall be redeemed by the Corporation at the
redemption price aforesaid. If less than all the outstanding shares of
8.40% Preferred Stock are to be redeemed, shares to be redeemed shall be
selected by the Corporation from outstanding shares of 8.40% Preferred
Stock not previously called for redemption by lot or pro rata (as nearly
as may be) or by any other method determined by the Corporation in its
sole discretion to be equitable.
In no event shall the Corporation redeem less than all the
outstanding shares of 8.40% Preferred Stock pursuant to the first
paragraph of this Section 3 or purchase or otherwise acquire any shares of
8.40% Preferred Stock unless full cumulative dividends shall have been
paid or declared and set apart for payment upon all outstanding shares of
8.40% Preferred Stock for all past Dividend Periods; provided, however,
that the foregoing shall not prevent the purchase or acquisition of shares
of 8.40% Preferred Stock pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding shares of 8.40% Preferred
Stock.
4. Shares to be Retired. All shares of 8.40% Preferred Stock redeemed
or purchased by the Corporation shall be retired and cancelled and shall
be restored to the status of authorized but unissued shares of Preferred
Stock,
<PAGE> 10
10
without designation as to series, and may thereafter be issued, but not as
shares of 8.40% Preferred Stock.
5. Conversion or Exchange. The holders of shares of 8.40% Preferred
Stock shall not have any rights herein to convert such shares into or
exchange such shares for shares of any other class or classes or of any
other series of any class or classes of capital stock of the Corporation.
6. Voting. The shares of 8.40% Preferred Stock shall not have any
voting powers either general or special, except that:
If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, the number of directors
constituting the Board of Directors of the Corporation shall be
increased by two, and the holders of the Preferred Stock of all
series (whether or not the holders of such series of Preferred Stock
would be entitled to vote for the election of directors if such
default in preference dividends did not exist), shall have the right
at such meeting, voting together as a single class without regard to
series, to the exclusion of the holders of common stock, par value
$1.00 per share, of the Corporation, to elect two directors of the
Corporation to fill such newly created directorships. Such right
shall continue until there are no dividends in arrears upon the
Preferred Stock. Each director elected by the holders of shares of
Preferred Stock (a "Preferred Director") shall continue to serve as
such director for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default in
preference dividends shall cease to exist. Any Preferred Director may
be removed by, and shall not be removed except by, the vote of the
holders of record of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at a
meeting of the Corporation's stockholders, or of the holders of
shares of Preferred Stock, called for the purpose. So long as a
default in any preference dividends on the Preferred Stock shall
exist, (a) any vacancy in the office of a
<PAGE> 11
11
Preferred Director may be filled (except as provided in the following
clause (b)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (b) in the case
of the removal of any Preferred Director, the vacancy may be filled
by the vote of the holders of the outstanding shares of Preferred
Stock, voting together as a single class without regard to series, at
the same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of
directors constituting the Board of Directors of the Corporation
shall be reduced by two. For the purposes hereof, a "default in
preference dividends" on the Preferred Stock shall be deemed to have
occurred whenever the amount of accrued dividends upon any series of
the Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last
preceding dividend period; and
Without the consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock then outstanding,
voting as a class without regard to series, the holders of shares of
this series being entitled to cast one vote per share thereon, the
Corporation may not: (a) create any class or series of stock which
shall have preference as to dividends or distribution of assets over
any outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or (b)
alter or change the provisions of the Corporation's Certificate of
Incorporation, as amended, so as to adversely affect the voting
power, preferences or special rights of the holders of Preferred
Stock; provided, however, that if such creation or such alteration or
change would
<PAGE> 12
12
adversely affect the voting power, preferences or special rights of
one or more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class,
shall be required in lieu of the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock at
the time outstanding.
7. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, the
holders of the 8.40% Preferred Stock shall be entitled to receive out of
the assets of the Corporation available for distribution to stockholders,
before any distribution of assets shall be made to the holders of Common
Stock or of any other shares of stock of the Corporation ranking as to
such a distribution junior to the 8.40% Preferred Stock, an amount equal
to $25 per share plus an amount equal to any accrued and unpaid dividends
thereon to the date fixed for payment of such distribution (whether or not
such dividends have been declared). If upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the amounts
payable with respect to the 8.40% Preferred Stock and any other shares of
stock of the Corporation ranking as to any such distribution on a parity
with the 8.40% Preferred Stock are not paid in full, the holders of the
8.40% Preferred Stock and of such other shares shall share ratably in any
such distribution of assets of the Corporation in proportion to the full
respective preferential amounts to which they are entitled. After payment
to the holders of the 8.40% Preferred Stock of the full preferential
amounts provided for in this Section 7, the holders of the 8.40% Preferred
Stock shall be entitled to no further participation in any distribution of
assets by the Corporation. The consolidation or merger of the Corporation
with or into any other corporation, or the sale of substantially all the
assets of the Corporation in consideration for the issuance of equity
securities of another corporation, shall not be regarded as a liquidation,
dissolution or winding up of the Corporation within the meaning of this
Section 7, but only if such consolidation,
<PAGE> 13
13
merger or sale of assets shall not in any way impair the voting power,
preferences or special rights of the 8.40% Preferred Stock.
8. Limitation on Dividends on Junior Ranking Stock. So long as any
8.40% Preferred Stock shall be outstanding, the Corporation shall not
declare any dividends on the Common Stock or any other stock of the
Corporation ranking as to dividends or distributions of assets junior to
the 8.40% Preferred Stock (the Common Stock and any such other stock being
herein referred to as "Junior Stock"), or make any payment on account of,
or set apart money for, a sinking or other analogous fund for the
purchase, redemption or other retirement of any shares of Junior Stock, or
make any distribution in respect thereof, whether in cash or property or
in obligations or stock of the Corporation, other than Junior Stock (such
dividends, payments, setting apart and distributions being herein called
"Junior Stock Payments"), unless all of the conditions set forth in the
following subsections A and B shall exist at the date of such declaration
in the case of any such dividend, or the date of such setting apart in the
case of any such fund, or the date of such payment or distribution in the
case of any other Junior Stock Payment:
A. Full cumulative dividends shall have been paid or declared and
set apart for payment upon all outstanding shares of Preferred Stock
other than Junior Stock.
B. The Corporation shall not be in default or in arrears with
respect to any sinking or other analogous fund or any call for
tenders obligation or other agreement for the purchase, redemption or
other retirement of any shares of Preferred Stock other than Junior
Stock."
<PAGE> 14
14
IN WITNESS WHEREOF, CHEMICAL BANKING CORPORATION has caused its
corporate seal to be hereunto affixed and this certificate to be signed by
_____________, its _____________, and attested to by John B. Wynne, its
Secretary, this __ day of __________, 199_.
CHEMICAL BANKING CORPORATION
By:
------------------------------
Name:
Title:
[Corporate Seal]
Attest:
By:
------------------------------
Name: John B. Wynne
Title: Secretary
<PAGE> 1
EXHIBIT NO. 4.11
CERTIFICATE OF DESIGNATIONS
OF
ADJUSTABLE RATE CUMULATIVE PREFERRED STOCK, SERIES N
OF
CHEMICAL BANKING CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHEMICAL BANKING CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), HEREBY
CERTIFIES that the following resolutions were adopted by the Board of Directors
of the Corporation at meetings duly convened and held on August 27, 1995 and
October 17, 1995, and by the Preferred Stock Committee of the Board of
Directors at a meeting duly convened and held on ________ __, 1995, pursuant to
authority conferred upon the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Corporation which authorize the
issuance of up to 200,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"), and pursuant to authority conferred upon the Preferred
Stock Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the State of Delaware, by the By-Laws of the Corporation and
by resolutions of the Board of Directors adopted at a meeting duly convened and
held on August 27, 1995:
1. The Board of Directors on August 27, 1995 adopted the
following resolutions authorizing the Preferred Stock Committee of the Board of
Directors to act on behalf of the Board of Directors in connection with the
issuance of Preferred Stock pursuant to the terms and conditions of the
Agreement and Plan of Merger, dated as of August 27, 1995, between The Chase
Manhattan Corporation ("Chase") and the Corporation, which provides for the
merger of Chase with and into the Corporation:
"RESOLVED, that it is advisable and in the best interests of
the Corporation and its stockholders for the Corporation to enter into the
Agreement and Plan of Merger between the Corporation and The Chase Manhattan
Corporation, a Delaware corporation ("Chase"), substantially in the form
presented to this Meeting (the "Merger Agreement"), pursuant to which, among
other things, (i) Chase would merge with and into the Corporation (the
"Merger") and, in accordance with the terms and conditions of the Merger
Agreement, (ii) each then outstanding share of common stock, par value $2.00
per share, of Chase ("Chase Common Stock"), other than shares which would be
cancelled and retired and cease to exist as a result of the Merger, would be
converted into 1.04 fully paid and nonassessable shares of common stock, par
value $1.00 per share, of the Corporation ("Common Stock"), which shares would,
pursuant to the
<PAGE> 2
2
Rights Agreement, dated as of April 13, 1989 (as amended, the "Rights
Agreement"), between the Corporation and Chemical Bank, as Rights Agent, be
accompanied by a corresponding number of Chemical Rights (as defined in the
Merger Agreement), and (iii) each share (other than shares which would be
cancelled and retired and cease to exist as a result of the Merger) of
Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76% Series H; Preferred
Stock, 10.84% Series I; Preferred Stock, 9.08% Series J; Preferred Stock,
8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred Stock, 8.40% Series
M; and Preferred Stock, Adjustable Rate Series N of Chase would be converted
into one share of a series of preferred stock, par value $1.00 per share, of
the Corporation ("Preferred Stock"), as provided for in the Merger Agreement,
in each case having terms substantially identical to the terms of the series of
preferred stock of Chase being so converted (such Preferred Stock of the
Corporation to be so issued being hereinafter referred to as the "Merger
Preferred Stock"); and further
"RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of
Delaware of the certificates of designations referred to below with respect to
each series of Merger Preferred Stock (collectively, the "Certificates of
Designations"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
"RESOLVED, that the maximum number of shares of each series of
Merger Preferred Stock authorized to be so issued in connection with the Merger
shall be as follows: up to 5,600,000 shares upon conversion of Chase's
Preferred Stock, 10-1/2% Series G; up to 4,000,000 shares upon conversion of
Chase's Preferred Stock, 9.76% Series H; up to 8,000,000 shares upon conversion
of Chase's Preferred Stock, 10.84% Series I; up to 6,000,000 shares upon
conversion of Chase's Preferred Stock, 9.08% Series J; up to 6,800,000 shares
upon conversion of Chase's Preferred Stock, 8-1/2% Series K; up to 9,600,000
shares upon conversion of Chase's Preferred Stock, 8.32% Series L; up to
6,900,000 shares upon conversion of Chase's Preferred Stock, 8.40% Series M;
and up to 9,100,000 shares upon conversion of Chase's Preferred Stock,
Adjustable Rate Series N; and further
"RESOLVED, that the voting powers, preferences and special
rights of each series of Merger Preferred Stock shall be substantially
identical to the voting powers, preferences and special rights applicable to,
and specified in the certificate of designations with respect to, the
respective series of preferred stock of Chase to be converted into such series
of Merger Preferred Stock pursuant to the Merger; and further
<PAGE> 3
3
"RESOLVED, that the Preferred Stock Committee of the Board of
Directors be, and it hereby is, authorized to approve, within the limits
specified in the foregoing resolutions, the form, terms and provisions of each
Certificate of Designations and to take such other actions as such committee
deems necessary or desirable to effect the issuance of the Merger Preferred
Stock in accordance with these resolutions."
2. The Board of Directors on October 17, 1995 adopted the
following resolutions fixing the voting rights of the Preferred Stock
authorized by the preceding resolutions:
"RESOLVED, that the Certificate of Designations for each
series of preferred stock, par value $1.00 per share (the "Preferred Stock"),
of the Corporation to be issued in connection with the merger of The Chase
Manhattan Corporation ("Chase") with and into the Corporation, upon the
conversion of the Preferred Stock, 10-1/2% Series G; Preferred Stock, 9.76%
Series H; Preferred Stock, 10.84% Series I; Preferred Stock, 9.08% Series J;
Preferred Stock, 8-1/2% Series K; Preferred Stock, 8.32% Series L; Preferred
Stock, 8.40% Series M; and Preferred Stock, Adjustable Rate Series N of Chase,
shall be modified to provide that the shares of such series shall not have any
voting powers either general or special, except that:
"If at the time of any annual meeting of the Corporation's
stockholders for the election of directors there is a default in
preference dividends on the Preferred Stock, the number of directors
constituting the Board of Directors of the Corporation shall be
increased by two, and the holders of the Preferred Stock of all series
(whether or not the holders of such series of Preferred Stock would be
entitled to vote for the election of directors if such default in
preference dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to series,
to the exclusion of the holders of common stock, par value $1.00 per
share, of the Corporation, to elect two directors of the Corporation
to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock.
Each director elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that
prior to the end of such term a default in preference dividends shall
cease to exist. Any Preferred Director may be removed by, and shall
not be removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the Corporation's
stockholders, or of the holders of shares of Preferred Stock, called
for the purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following
<PAGE> 4
4
clause (b)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (b) in the case
of the removal of any Preferred Director, the vacancy may be filled by
the vote of the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at the
same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly
dividends or more, and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
dividend period; and
"Without the consent of the holders of shares entitled to cast
at least two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock then outstanding, voting
as a class without regard to series, the holders of shares of this
series being entitled to cast one vote per share thereon, the
Corporation may not: (a) create any class or series of stock which
shall have preference as to dividends or distribution of assets over
any outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or (b) alter
or change the provisions of the Corporation's Certificate of
Incorporation, as amended, so as to adversely affect the voting power,
preferences or special rights of the holders of Preferred Stock;
provided, however, that if such creation or such alteration or change
would adversely affect the voting power, preferences or special rights
of one or more, but not all, series of Preferred Stock at the time
outstanding, consent of the holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast by the holders of
all of the shares of all such series so affected, voting as a class,
shall be required in lieu of the consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred Stock at the
time outstanding."
3. The Preferred Stock Committee of the Board of Directors on
________ __, 1995, pursuant to the authority conferred upon the Preferred Stock
Committee of the Board of Directors by Section 141(c) of the General
Corporation Law of the
<PAGE> 5
5
State of Delaware, by Section 3.03 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, adopted the following
resolution:
"RESOLVED, that pursuant to resolutions of the Board of Directors of
Chemical Banking Corporation (the "Corporation") adopted on August 27, 1995 and
October 17, 1995, the issue of up to Nine Million One Hundred Thousand
(9,100,000) shares of Adjustable Rate Cumulative Preferred Stock, Series N,
$1.00 par value, of the Corporation is hereby authorized, and the designation,
preferences and privileges, relative, participating, optional and other special
rights, and qualifications, limitations and restrictions of all 9,100,000
shares of this series, in addition to those set forth in the Certificate of
Incorporation of the Corporation and, with respect to voting rights, in the
resolutions of the Board of Directors of the Corporation adopted on October 17,
1995, are hereby fixed as follows:
1. Designation. The designation of such series shall be
"Adjustable Rate Cumulative Preferred Stock, Series N" (hereinafter
referred to as the "Series N Preferred Stock") and the number of
shares constituting such series is Nine Million One Hundred Thousand
(9,100,000). Shares of Series N Preferred Stock shall have a stated
value of $25.00 per share. The number of authorized shares of Series
N Preferred Stock may be reduced by further resolution duly adopted by
the Board of Directors of the Corporation or any duly authorized
committee thereof and by the filing of a certificate pursuant to the
provisions of the General Corporation Law of the State of Delaware
stating that such reduction has been so authorized, but the number of
authorized shares of Series N Preferred Stock shall not be increased.
The Series N Preferred Stock shall rank on a parity as to dividends
and distributions of assets with the series of Preferred Stock, $1.00
par value, of the Corporation designated as "10.96% Preferred Stock",
"8-3/8% Preferred Stock", "7.92% Cumulative Preferred Stock", "7.58%
Cumulative Preferred Stock", "7-1/2% Cumulative Preferred Stock",
"Adjustable Rate Cumulative Preferred Stock, Series L", "10-1/2%
Cumulative Preferred Stock", "9.76% Cumulative Preferred Stock",
"10.84% Cumulative Preferred Stock", "9.08% Cumulative Preferred
Stock", "8-1/2% Cumulative Preferred Stock", "8.32% Cumulative
Preferred Stock" and "8.40% Cumulative Preferred Stock". The Series N
Preferred Stock shall rank senior as to dividends and distributions of
assets to the series of Preferred Stock, $1.00 par value, of the
Corporation designated as Junior Participating Preferred Stock.
2. Dividends. Dividends shall be payable on the shares of
the Series N Preferred Stock, when and as declared by the Board of
Directors, for the Initial Dividend Period (as defined below) and each
quarterly dividend period (a
<PAGE> 6
6
"Quarterly Dividend Period"; the Initial Dividend Period and each such
Quarterly Dividend Period being hereinafter referred to as "Dividend
Periods") thereafter, which Quarterly Dividend Periods shall commence
on January 1, April 1, July 1 and October 1 in each year, commencing
with the first such date to occur after the effective time (the
"Effective Time") of the merger of The Chase Manhattan Corporation
("Chase") with and into the Corporation, and shall end on and include
the day next preceding the first day of the next Dividend Period, at a
rate per annum of the stated value thereof equal to the Applicable
Rate (as defined in Section 3) in respect of such Dividend Period,
expressed as a percentage to the nearest ten thousandth of a
percentage point. The amount of dividends per share for each Dividend
Period shall be computed by dividing the Applicable Rate for such
Quarterly Dividend Period by four and applying the resulting rate to
the stated value per share of the Series N Preferred Stock. The
Initial Dividend Period is the period commencing on the day following
the most recent date next preceding the Effective Time on which a
dividend was paid on the Preferred Stock, Adjustable Rate Series N, of
Chase (the "Chase Adjustable Rate Preferred")(or commencing on the
date of the Effective Time if such date was such a dividend payment
date) and shall end on and include the date next preceding the first
day of the next Quarterly Dividend Period; provided, however, that in
the event the Effective Time shall occur after the record date for the
payment of a regular quarterly dividend on the Chase Adjustable Rate
Preferred but prior to the payment date for such dividend, then the
Initial Dividend Period shall be the first Quarterly Dividend Period
as described in the preceding sentence. Dividends shall be cumulative
from the date on which the Initial Dividend Period commences and shall
be payable, when and as declared by the Board of Directors, on the
last day of March, June, September and December of each year,
commencing with the last day of the Initial Dividend Period. Each
such dividend shall be paid to the holders of record of shares of
Series N Preferred Stock as they appear on the stock register of the
Corporation on such record date, not exceeding 30 days preceding the
payment date thereof, as shall be fixed by the Board of Directors of
the Corporation. Dividends on account of arrears for any past
dividend periods may be declared and paid at any time, without
reference to any quarterly dividend payment date, to holders of record
on such date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation.
In the event that there shall be outstanding shares of any other
series of Preferred Stock ranking on a parity as to dividends with the
Series N Preferred Stock, the Corporation, in making any dividend
payment on account of arrears on the Series N Preferred Stock or such
other series of Preferred Stock, shall make payments ratably upon all
outstanding shares of Series N Preferred Stock and such
<PAGE> 7
7
other series of Preferred Stock in proportion to the respective
amounts of dividends in arrears upon all such outstanding shares of
Series N Preferred Stock and such other series of Preferred Stock to
the date of such dividend payment. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment
or payments which may be in arrears. Dividends payable on the Series
N Preferred Stock for any period which is less than a full Quarterly
Dividend Period shall be computed on the basis of a 360 day year
consisting of twelve 30-day months.
3. Definition of Applicable Rate, etc.
Except as provided below in this paragraph, the "Applicable
Rate" for the Initial Dividend Period (if it commences prior to the
date of the Effective Time) shall be the Applicable Rate of the Chase
Adjustable Rate Prefered immediately prior to the Effective Time, and
for any Quarterly Dividend Period (including the Initial Dividend
Period if it commences on or after the date of the Effective Time)
will be equal to 85% of the Effective Rate (as hereinafter defined).
The "Effective Rate" for any Quarterly Dividend Period will be equal
to the highest of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate (each as
hereinafter defined) for such Dividend Period. In the event that the
Corporation determines in good faith that for any reason:
(i) any one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty
Year Constant Maturity Rate cannot be
determined for any Quarterly Dividend Period,
then the Effective Rate for such Quarterly
Dividend Period will be equal to the higher
of whichever two of such Rates can be so
determined;
(ii) only one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty
Year Constant Maturity Rate can be determined
for any Quarterly Dividend Period, then the
Effective Rate for such Quarterly Dividend
Period will be equal to whichever such Rate
can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate or the Thirty Year
Constant Maturity Rate can be determined for
any Quarterly Dividend Period, then the
Effective Rate for the preceding dividend
period will be continued for such Quarterly
Dividend Period.
Anything herein to the contrary notwithstanding, the Applicable Rate
for any Quarterly Dividend Period shall in
<PAGE> 8
8
no event be less than 4.50% per annum or greater than 10.50% per
annum.
Except as described below in this paragraph, the "Treasury
Bill Rate" for each Quarterly Dividend Period will be the arithmetic
average of the two most recent weekly per annum market discount rates
(or the one weekly per annum market discount rate, if only one such
rate is published during the relevant Calendar Period (as hereinafter
defined)) for three-month U.S. Treasury bills, as published weekly by
the Federal Reserve Board (as hereinafter defined) during the Calendar
Period immediately preceding the last ten calendar days preceding the
Quarterly Dividend Period for which the dividend rate on the Series N
Preferred Stock is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum market discount
rate during such Calendar Period, then the Treasury Bill Rate for such
Quarterly Dividend Period will be the arithmetic average of the two
most recent weekly per annum market discount rates (or the one weekly
per annum market discount rate, if only one such rate is published
during the relevant Calendar Period) for three-month U.S. Treasury
bills, as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. In the event that a per annum market discount
rate for three-month U.S. Treasury bills is not published by the
Federal Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period, then the
Treasury Bill Rate for such Quarterly Dividend Period will be the
arithmetic average of the two most recent weekly per annum market
discount rates (or the one weekly per annum market discount rate, if
only one such rate is published during the relevant Calendar Period)
for all of the U.S. Treasury bills then having remaining maturities of
not less than 80 or more than 100 days, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such rates, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good
faith that for any reason no such U.S. Treasury bill rates are
published as provided above during such Calendar Period, then the
Treasury Bill Rate for such Quarterly Dividend Period will be the
arithmetic average of the per annum market discount rates based upon
the closing bids during such Calendar Period for each of the issues of
marketable non-interest-bearing U.S. Treasury securities with a
remaining maturity of not less than 80 nor more than 100 days from the
date of each such quotation, as chosen and quoted daily for each
business day in New York City (or less frequently if daily quotations
are not generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the
Corporation. In the event that the
<PAGE> 9
9
Corporation determines in good faith that for any reason the
Corporation cannot determine the Treasury Bill Rate for any Quarterly
Dividend Period as provided above in this paragraph, the Treasury Bill
Rate for such Quarterly Dividend Period will be the arithmetic average
of the per annum market discount rates based upon the closing bids
during such Calendar Period for each of the issues of marketable
interest-bearing U.S. Treasury securities with a remaining maturity of
not less than 80 nor more than 100 days, as chosen and quoted daily
for each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at least
three recognized dealers in U.S. Government securities selected by the
Corporation.
Except as described below in this paragraph, the "Ten Year
Constant Maturity Rate" for each Quarterly Dividend Period will be the
arithmetic average of the two most recent weekly per annum Ten Year
Average Yields (as hereinafter defined) (or the one weekly per annum
Ten Year Average Yield, if only one such yield is published during the
relevant Calendar Period), as published weekly by the Federal Reserve
Board during the Calendar Period immediately preceding the last ten
calendar days preceding the Quarterly Dividend Period for which the
dividend rate on the Series N Preferred Stock is being determined. In
the event that the Federal Reserve Board does not publish such a
weekly per annum Ten Year Average Yield during such Calendar Period,
then the Ten Year Constant Maturity Rate for such Quarterly Dividend
Period will be the arithmetic average of the two most recent weekly
per annum Ten Year Average Yields (or the one weekly per annum Ten
Year Average Yield, if only one such yield is published during the
relevant Calendar Period), as published weekly during such Calendar
Period by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that a
per annum Ten Year Average Yield is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Ten Year
Constant Maturity Rate for such Quarterly Dividend Period will be the
arithmetic average of the two most recent weekly per annum average
yields to maturity (or the one weekly per annum average yield to
maturity, if only one such yield is published during the relevant
Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities
(as hereinafter defined)) then having remaining maturities of not less
than eight nor more than twelve years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good
faith that for
<PAGE> 10
10
any reason the Corporation cannot determine the Ten Year Constant
Maturity Rate for any Quarterly Dividend Period as provided above in
this paragraph, then the Ten Year Constant Maturity Rate for such
Quarterly Dividend Period will be the arithmetic average of the per
annum average yields to maturity based upon the closing bids during
such Calendar Period for each of the issues of actively traded
marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than eight nor
more than twelve years from the date of each such quotation, as chosen
and quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to the
Corporation by at least three recognized dealers in U.S. Government
securities selected by the Corporation.
Except as described below in this paragraph, the "Thirty Year
Constant Maturity Rate" for each Quarterly Dividend Period will be the
arithmetic average of the two most recent weekly per annum Thirty Year
Average Yields (as hereinafter defined) (or the one weekly per annum
Thirty Year Average Yield, if only one such yield is published during
the relevant Calendar Period), as published weekly by the Federal
Reserve Board during the Calendar Period immediately preceding the
last ten calendar days preceding the Quarterly Dividend Period for
which the dividend rate on the Series N Preferred Stock is being
determined. In the event that the Federal Reserve Board does not
publish such a weekly per annum Thirty Year Average Yield during such
Calendar Period, then the Thirty Year Constant Maturity Rate for such
Quarterly Dividend Period will be the arithmetic average of the two
most recent weekly per annum Thirty Year Average Yields (or the one
weekly per annum Thirty Year Average Yield, if only one such yield is
published during the relevant Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the
event that a per annum Thirty Year Average Yield is not published by
the Federal Reserve Board or by any Federal Reserve Bank or by any
U.S. Government department or agency during such Calendar Period, then
the Thirty Year Constant Maturity Rate for such Quarterly Dividend
Period will be the arithmetic average of the two most recent weekly
per annum average yields to maturity (or the one weekly per annum
average yield to maturity, if only one such yield is published during
the relevant Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) then having remaining maturities of not less than
twenty-eight nor more than thirty years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the
Corporation. In the
<PAGE> 11
11
event that the Corporation determines in good faith that for any
reason the Corporation cannot determine the Thirty Year Constant
Maturity Rate for any Quarterly Dividend Period as provided above in
this paragraph, then the Thirty Year Constant Maturity Rate for such
Quarterly Dividend Period will be the arithmetic average of the per
annum average yields to maturity based upon the closing bids during
such Calendar Period for each of the issues of actively traded
marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than
twenty-eight nor more than thirty years from the date of each such
quotation, as chosen and quoted daily for each business day in New
York City (or less frequently if daily quotations are not generally
available) to the Corporation by at least three recognized dealers in
U.S. Government securities selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate
and the Thirty Year Constant Maturity Rate shall each be rounded to
the nearest five hundredths of a percent.
The Applicable Rate with respect to each Quarterly Dividend
Period will be calculated as promptly as practicable by the
Corporation according to the appropriate method described above. The
Corporation will cause each Applicable Rate to be published in a
newspaper of general circulation in New York City before the
commencement of the Quarterly Dividend Period to which it applies and
will cause notice of such Applicable Rate to be enclosed with the
dividend payment checks next mailed to the holders of Series N
Preferred Stock.
For purposes of this Section,
(i) "Calendar Period" means a period of fourteen
calendar days;
(ii) "Federal Reserve Board" means the Board of
Governors of the Federal Reserve System;
(iii) "Special Securities" means securities which
can, at the option of the holder, be
surrendered at face value in payment of any
Federal estate tax or which provide tax
benefits to the holder and are priced to
reflect such tax benefits or which were
originally issued at a deep or substantial
discount;
(iv) "Ten Year Average Yield" means the average
yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities
of ten years); and
<PAGE> 12
12
(v) "Thirty Year Average Yield" means the average
yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities
of thirty years).
4. Redemption. On or after June 30, 1999, the Corporation,
at its option, may redeem shares of the Series N Preferred Stock, as a
whole or in part, at any time or from time to time at a redemption
price of $25 per share plus an amount equal to the accrued and unpaid
dividends thereon to the date fixed for redemption (whether or not
such dividends have been declared). To permit the Series N Preferred
Stock to qualify as Tier 1 capital of the Corporation, any such
redemption shall be subject to the prior approval of the Board of
Governors of the Federal Reserve System.
In the event the Corporation shall redeem shares of Series N
Preferred Stock, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on
the stock register of the Corporation. Each such notice shall state:
(1) the redemption date; (2) the number of shares of Series N
Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (3) the redemption price; (4) the place or
places where certificates for such shares are to be surrendered for
payment of the redemption price; and (5) that dividends on the shares
to be redeemed will cease to accrue on such redemption date. Notice
having been mailed as aforesaid, from and after the redemption date
(unless default shall be made by the Corporation in providing money
for the payment of the redemption price) dividends on the shares of
the Series N Preferred Stock so called for redemption shall cease to
accrue, and notwithstanding the fact that any certificates for such
shares shall not have been surrendered for payment of the redemption
price, said shares shall no longer be deemed to be outstanding, and
all rights of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation or
any duly authorized committee thereof shall so require and the notice
shall so state), such shares shall be redeemed by the Corporation at
the redemption price aforesaid. If less than all the outstanding
shares of Series N Preferred Stock are to be redeemed, shares to be
redeemed shall be selected by the Corporation from outstanding shares
of Series N Preferred Stock not previously called for redemption by
lot or pro rata (as
<PAGE> 13
13
nearly as may be) or by any other method determined by the Corporation
in its sole discretion to be equitable.
In no event shall the Corporation redeem less than all the
outstanding shares of Series N Preferred Stock pursuant to the first
paragraph of this Section 4 or purchase or otherwise acquire any
shares of Series N Preferred Stock unless full cumulative dividends
shall have been paid or declared and set apart for payment upon all
outstanding shares of Series N Preferred Stock for all past Dividend
Periods; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of Series N Preferred Stock pursuant
to a purchase or exchange offer made on the same terms to holders of
all outstanding shares of Series N Preferred Stock.
5. Shares to be Retired. All shares of Series N Preferred
Stock redeemed or purchased by the Corporation shall be retired and
canceled and shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
and may thereafter be issued, but not as shares of Series N Preferred
Stock.
6. Conversion or Exchange. The holders of shares of Series N
Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of capital
stock of the Corporation.
7. Voting. The shares of Series N Preferred Stock shall not
have any voting powers either general or special, except that:
If at the time of any annual meeting of the
Corporation's stockholders for the election of directors there
is a default in preference dividends on the Preferred Stock,
the number of directors constituting the Board of Directors of
the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the holders
of such series of Preferred Stock would be entitled to vote
for the election of directors if such default in preference
dividends did not exist), shall have the right at such
meeting, voting together as a single class without regard to
series, to the exclusion of the holders of common stock, par
value $1.00 per share, of the Corporation, to elect two
directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (a
"Preferred Director") shall continue to serve as such director
for the full term for which he shall have been elected,
notwithstanding that prior
<PAGE> 14
14
to the end of such term a default in preference dividends
shall cease to exist. Any Preferred Director may be removed
by, and shall not be removed except by, the vote of the
holders of record of the outstanding shares of Preferred
Stock, voting together as a single class without regard to
series, at a meeting of the Corporation's stockholders, or of
the holders of shares of Preferred Stock, called for the
purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office
of a Preferred Director may be filled (except as provided in
the following clause (b)) by an instrument in writing signed
by the remaining Preferred Director and filed with the
Corporation and (b) in the case of the removal of any
Preferred Director, the vacancy may be filled by the vote of
the holders of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at
the same meeting at which such removal shall be voted. Each
director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a
Preferred Director. Whenever the term of office of the
Preferred Directors shall end and a default in preference
dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall
be reduced by two. For the purposes hereof, a "default in
preference dividends" on the Preferred Stock shall be deemed
to have occurred whenever the amount of accrued dividends upon
any series of the Preferred Stock shall be equivalent to six
full quarter-yearly dividends or more, and, having so
occurred, such default shall be deemed to exist thereafter
until, but only until, all accrued dividends on all shares of
Preferred Stock of each and every series then outstanding
shall have been paid to the end of the last preceding dividend
period; and
Without the consent of the holders of shares entitled
to cast at least two-thirds of the votes entitled to be cast
by the holders of the total number of shares of Preferred
Stock then outstanding, voting as a class without regard to
series, the holders of shares of this series being entitled to
cast one vote per share thereon, the Corporation may not: (a)
create any class or series of stock which shall have
preference as to dividends or distribution of assets over any
outstanding series of the Preferred Stock other than a series
which shall not have any right to object to such creation or
(b) alter or change the provisions of the Corporation's
Certificate of Incorporation, as amended, so as to adversely
affect the voting power, preferences or special rights of the
holders of Preferred Stock; provided, however, that if such
creation or such alteration or change would
<PAGE> 15
15
adversely affect the voting power, preferences or special
rights of one or more, but not all, series of Preferred Stock
at the time outstanding, consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to
be cast by the holders of all of the shares of all such series
so affected, voting as a class, shall be required in lieu of
the consent of the holders of shares entitled to cast at least
two-thirds of the votes entitled to be cast by the holders of
the total number of shares of Preferred Stock at the time
outstanding.
8. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the holders of the Series N Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to stockholders, before any distribution of assets shall
be made to the holders of Common Stock or of any other shares of stock
of the Corporation ranking as to such a distribution junior to the
Series N Preferred Stock, an amount equal to $25 per share plus an
amount equal to any accrued and unpaid dividends thereon to the date
fixed for payment of such distribution (whether or not such dividends
have been declared). If upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the amounts
payable with respect to the Series N Preferred Stock and any other
shares of stock of the Corporation ranking as to any such distribution
on a parity with the Series N Preferred Stock are not paid in full,
the holders of the Series N Preferred Stock and of such other shares
shall share ratably in any such distribution of assets of the
Corporation in proportion to the full respective preferential amounts
to which they are entitled. After payment to the holders of the
Series N Preferred Stock of the full preferential amounts provided for
in this Section 8, the holders of the Series N Preferred Stock shall
be entitled to no further participation in any distribution of assets
by the Corporation. The consolidation or merger of the Corporation
with or into any other corporation, or the sale of substantially all
the assets of the Corporation in consideration for the issuance of
equity securities of another corporation, shall not be regarded as a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 8, but only if such consolidation, merger or
sale of assets shall not in any way impair the voting power,
preferences or special rights of the Series N Preferred Stock.
9. Limitation on Dividends on Junior Ranking Stock. So long
as any Series N Preferred Stock shall be outstanding, the Corporation
shall not declare any dividends on the Common Stock or any other stock
of the Corporation ranking as to dividends or distributions of assets
junior to
<PAGE> 16
16
the Series N Preferred Stock (the Common Stock and any such other
stock being herein referred to as "Junior Stock"), or make any payment
on account of, or set apart money for, a sinking or other analogous
fund for the purchase, redemption or other retirement of any shares of
Junior Stock, or make any distribution in respect thereof, whether in
cash or property or in obligations or stock of the Corporation, other
than Junior Stock (such dividends, payments, setting apart and
distributions being herein called "Junior Stock Payments"), unless all
of the conditions set forth in the following subsections A and B shall
exist at the date of such declaration in the case of any such
dividend, or the date of such setting apart in the case of any such
fund, or the date of such payment or distribution in the case of any
other Junior Stock Payment:
A. Full cumulative dividends shall have been paid or declared
and set apart for payment upon all outstanding shares of Preferred
Stock other than Junior Stock.
B. The Corporation shall not be in default or in arrears with
respect to any sinking or other analogous fund or any call for tenders
obligation or other agreement for the purchase, redemption or other
retirement of any shares of Preferred Stock other than Junior Stock."
IN WITNESS WHEREOF, CHEMICAL BANKING CORPORATION has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
_________________, its _____________________, and attested to by John B. Wynne,
its Secretary, this __ day of __________, 199_.
CHEMICAL BANKING CORPORATION
By:
---------------------------
Name:
Title:
[Corporate Seal]
Attest:
By:
--------------------------
Name: John B. Wynne
Title: Secretary
<PAGE> 1
EXHIBIT NO. 5
SIMPSON THACHER & BARTLETT
(a partnership which includes professional corporations)
425 Lexington Avenue
New York, N.Y. 10017-3954
October 31, 1995
Chemical Banking Corporation
270 Park Avenue
New York, NY 10017
Dear Sirs:
We have acted as counsel to Chemical Banking Corporation, a
Delaware corporation (the "Company"), in connection with the Registration
Statement on Form S-4 of the Company (the "Registration Statement"), being
filed today with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, relating to the proposed issuance of shares of Common
Stock, par value $1.00 per share ("Common Stock"), of the Company, in
connection with the Agreement and Plan of Merger dated as of August 27, 1995
(the "Merger Agreement") between the Company and The Chase Manhattan
Corporation ("Chase"). Following a special meeting of stockholders of the
Company at which such stockholders will be asked to approve a proposal to
approve and adopt the Merger Agreement and a proposal to amend and restate the
Company's Restated Certificate of Incorporation to, among other things,
increase the Company's authorized Common Stock to 750 million shares (the
"Charter Amendment") and, subject to receipt of such stockholder approval of
the Merger Agreement and the Charter Amendment and satisfaction or waiver of
the other conditions to the Merger set forth in the Merger Agreement, Chase
will be merged with and into the Company (the "Merger") and each outstanding
share of common stock of Chase will be converted into 1.04 shares
<PAGE> 2
Chemical Banking Corporation -2- October 31, 1995
of the Common Stock (in the aggregate, the "Shares"), all as more fully
described in the Registration Statement.
We have examined such documents, corporate records and other
instruments, and have made such other and further investigations, as we have
deemed relevant and necessary as a basis for the opinion hereinafter set forth.
Based upon the foregoing, we are of the opinion that, upon
approval of the Merger Agreement and the Charter Amendment by the stockholders
of the Company, the Shares will be duly authorized and, when the Charter
Amendment shall have been filed with the Secretary of State of the State of
Delaware and the Shares shall have been issued in accordance with the terms of
the Merger Agreement, the Shares will be validly issued, fully paid and
nonassessable.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the federal law of the
United States and the Delaware General Corporation Law.
<PAGE> 3
Chemical Banking Corporation -3- October 31, 1995
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to this firm under the caption
"Legal Opinions" in the Registration Statement.
Very truly yours,
/s/ SIMPSON THACHER & BARTLETT
SIMPSON THACHER & BARTLETT
<PAGE> 1
EXHIBIT 8.1
SIMPSON THACHER & BARTLETT
(a partnership which includes professional corporations)
425 Lexington Avenue
New York, N.Y. 10017-3954
October 31, 1995
Re: Agreement and Plan of Merger
dated as of August 27, 1995 between Chemical
Banking Corporation and The Chase Manhattan
Corporation
Chemical Banking Corporation
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
You have requested our opinion with respect to certain federal income
tax consequences of the proposed transaction in which The Chase Manhattan
Corporation ("Chase") will merge (the "Merger") with and into Chemical Banking
Corporation ("Chemical"). All capitalized terms used but not defined herein have
the meanings ascribed to them in the Agreement and Plan of Merger, dated as of
August 27, 1995, by and between Chemical and Chase (the "Merger Agreement").
Chase is a Delaware corporation registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHC Act"). The
capital structure of Chase as of July 31, 1995 is described in Section 3.1(b) of
the Merger Agreement.
<PAGE> 2
Chemical Banking Corporation -2- October 31, 1995
Chemical is a Delaware corporation registered as a bank holding
company under the BHC Act. The capital structure of Chemical as of July 31, 1995
is described in Section 3.2(b) of the Merger Agreement.
Upon receipt of all required approvals and the expiration of all
required waiting periods, and upon the satisfaction or waiver of all other
conditions precedent set forth in the Merger Agreement, the Merger will be
effected as set forth in the following summary:
(i) Chase will merge with and into Chemical under Delaware law,
with Chemical being the surviving entity.
(ii) Subject to certain exceptions set forth in the Merger
Agreement, each holder of Chase Common Stock (other than Chemical or any
wholly-owned subsidiary of Chemical) will receive, for each share of Chase
Common Stock held, the number of shares of Chemical Common Stock
determined pursuant to Section 2.1(b) of the Merger Agreement (together
with the appropriate number of Chemical Rights attached thereto).
(iii) Each holder of Chase Preferred Stock (other than Chemical or
any wholly-owned subsidiary of Chemical) will receive, for each share of
Chase Preferred Stock held, one share of Chemical Merger Preferred Stock
determined pursuant to Section 2.1(c) of the Merger Agreement.
(iv) The rights of holders of the Chase Stock Options, Chase SARs,
and Chase Units shall be converted into the right to acquire shares of
Chemical Common Stock or Chemical SARs, as the case may be, under
the same economic terms, as provided in Section 5.8 of the Merger
Agreement.
(v) No fractional shares of Chemical Common Stock will be issued in
the Merger. Instead, the fractional share interests in Chemical Common
Stock that would otherwise be received by the Chase common stockholders
will be paid for in cash as provided in Section 2.2(e) of the Merger
Agreement.
<PAGE> 3
Chemical Banking Corporation -3- October 31, 1995
(vi) The stockholders of Chase and Chemical are not entitled to
exercise dissenters' rights in connection with the Merger.
In acting as counsel to Chemical in connection with the Merger, we
have, in preparing our opinion, as hereinafter set forth, participated in the
preparation of the Merger Agreement and the preparation and filing with the
Securities and Exchange Commission of a Joint Proxy Statement of Chemical and
Chase and Prospectus of Chemical relating to the proposed Merger and to the
shares of Chemical Common Stock to be issued to Chase stockholders in the Merger
pursuant to the Merger Agreement (the "Proxy Statement/Prospectus").
You have requested that we render the opinion set forth below. In
rendering such opinion, we have assumed with your consent that the Merger will
be effected in accordance with the Merger Agreement and that the Letters of
Representation, dated as of the date hereof, that Chemical and Chase have
provided to us and to Sullivan & Cromwell, special counsel to Chase, will be
true as of the Effective Time. We have examined the documents referred to above
and the originals, or copies certified or otherwise identified to our
satisfaction, of such records, documents, certificates or other instruments and
made such other inquiries as in our judgment are necessary or appropriate to
enable us to render the opinions set forth below. We have not, however,
undertaken any independent investigation of any factual matter set forth in any
of the foregoing.
<PAGE> 4
Chemical Banking Corporation -4- October 31, 1995
If the Merger is effected on a factual basis different from that
contemplated above, any or all of the opinions expressed herein may be
inapplicable. Further, our opinion is based on the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations, administrative
interpretations, and judicial precedents as of the date hereof. If there is any
subsequent change in the applicable law or regulations, or if there are
subsequently any new administrative or judicial interpretations of the law or
regulations, any or all of the individual opinions expressed herein may become
inapplicable.
Subject to the foregoing and to the qualifications and limitations
set forth herein, and assuming that the Merger is consummated in accordance with
the Merger Agreement (and exhibits thereto) and the Delaware General Corporation
Law and as described in the Proxy Statement/Prospectus, we are of the opinion
that for federal income tax purposes:
1. The Merger will be treated for federal income tax purposes as a
reorganization within the meaning of section 368(a) of the Code, and Chase and
Chemical will each be party to that reorganization within the meaning of section
368(b) of the Code.
2. No income, gain or loss will be recognized for federal income tax
purposes by either Chase or Chemical as a result of the consummation of the
Merger.
3. No income, gain or loss will be recognized for federal income tax
purposes by stockholders of Chase upon the exchange in the Merger of shares of
Chase
<PAGE> 5
Chemical Banking Corporation -5- October 31, 1995
for shares of Chemical (except to the extent of any cash received in lieu of
fractional share interests).
In connection with the opinion set forth in paragraph 3 above, no
opinion is expressed as to the federal income tax treatment of any real property
transfer or gains taxes paid by Chemical pursuant to Section 5.9 of the Merger
Agreement.
We express our opinion herein only as to those matters specifically
set forth above and no opinion should be inferred as to the tax consequences of
the Merger with respect to other areas of federal taxation. We hereby consent to
the filing of this opinion as an exhibit to the Proxy Statement/Prospectus and
to the use of our name under the captions "The Merger - Certain Federal Income
Tax Consequences" and "Legal Opinions" in the Proxy Statement/Prospectus.
Very truly yours,
/s/ SIMPSON THACHER & BARTLETT
SIMPSON THACHER & BARTLETT
<PAGE> 1
EXHIBIT 8.2
SULLIVAN & CROMWELL
125 Broad Street
New York, New York 10004-2498
October 31, 1995
The Chase Manhattan Corporation,
1 Chase Manhattan Plaza,
New York, New York 10081.
Re: Agreement and Plan of Merger
dated as of August 27, 1995, between
Chemical Banking Corporation and The
Chase Manhattan Corporation
------------------------------------
Ladies and Gentlemen:
You have requested our opinion with respect to certain federal income
tax consequences of the proposed transaction in which The Chase Manhattan
Corporation ("Chase") will merge (the "Merger") with and into Chemical Banking
Corporation ("Chemical"). All capitalized terms used but not defined herein have
the meanings ascribed to them in the Agreement and Plan of Merger, dated as of
August 27, 1995, by and between Chemical and Chase (the "Merger Agreement").
<PAGE> 2
The Chase Manhattan Corporation -2-
Chase is a Delaware corporation registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHC Act"). The
capital structure of Chase as of July 31, 1995 is described in Section 3.1(b) of
the Merger Agreement.
Chemical is a Delaware corporation registered as a bank holding
company under the BHC Act. The capital structure of Chemical as of July 31, 1995
is described in Section 3.2(b) of the Merger Agreement.
Upon receipt of all required approvals and the expiration of all
required waiting periods, and upon the satisfaction or waiver of all other
conditions precedent set forth in the Merger Agreement, the Merger will be
effected as set forth in the following summary:
(i) Chase will merge with and into Chemical under Delaware law,
with Chemical being the surviving entity.
(ii) Subject to certain exceptions set forth in the Merger
Agreement, each holder of Chase Common Stock (other than Chemical or any
wholly-owned subsidiary of Chemical) will receive, for each share of Chase
Common Stock held, the number of shares of Chemical Common Stock
determined pursuant to Section 2.1(b) of the Merger Agreement (together
with the appropriate number of Chemical Rights attached thereto).
<PAGE> 3
The Chase Manhattan Corporation -3-
(iii) Each holder of Chase Preferred Stock (other than Chemical or
any wholly-owned subsidiary of Chemical) will receive, for each share of
Chase Preferred Stock held, one share of Chemical Merger Preferred Stock
determined pursuant to Section 2.1(c) of the Merger Agreement.
(iv) The rights of holders of the Chase Stock Options, Chase SARs,
and Chase Units shall be converted into the right to acquire shares of
Chemical Common Stock or Chemical SARs, as the case may be, under
the same economic terms, as provided in Section 5.8 of the
Merger Agreement.
(v) No fractional shares of Chemical Common Stock will be issued in
the Merger. Instead, the fractional share interests in Chemical Common
Stock that would otherwise be received by the Chase common stockholders
will be paid for in cash as provided in Section 2.2(e) of the Merger
Agreement.
(vi) The stockholders of Chase and Chemical are not entitled to
exercise dissenters' rights in connection with the Merger.
In acting as special counsel to Chase in connection with the Merger,
we have, in preparing our opinion, as hereinafter set forth, participated in the
preparation of the Merger Agreement and the preparation and filing with the
Securities and Exchange Commission of a Joint Proxy Statement of Chemical and
Chase and Prospectus of Chemical relating to the proposed Merger and to the
shares of Chemical Common Stock to be issued to Chase
<PAGE> 4
Chase Manhattan Corporation -4-
stockholders in the Merger pursuant to the Merger Agreement (the "Proxy
Statement/Prospectus").
You have requested that we render the opinion set forth below. In
rendering such opinion, we have assumed with your consent that the Merger will
be effected in accordance with the Merger Agreement and that the Letters of
Representation, dated as of the date hereof, that Chemical and Chase have
provided to us and to Simpson Thacher & Bartlett, counsel to Chemical, will be
true as of the Effective Time. We have examined the documents referred to above
and the originals, or copies certified or otherwise identified to our
satisfaction, of such records, documents, certificates or other instruments and
made such other inquiries as in our judgment are necessary or appropriate to
enable us to render the opinions set forth below. We have not, however,
undertaken any independent investigation of any factual matter set forth in any
of the foregoing.
If the Merger is effected on a factual basis different from that
contemplated above, any or all of the opinions expressed herein may be
inapplicable. Further, our
<PAGE> 5
Chase Manhattan Corporation -5-
opinion is based on the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury Regulations, administrative interpretations, and judicial precedents
as of the date hereof. If there is any subsequent change in the applicable law
or regulations, or if there are subsequently any new administrative or judicial
interpretations of the law or regulations, any or all of the individual
opinions expressed herein may become inapplicable.
Subject to the foregoing and to the qualifications and limitations
set forth herein, and assuming that the Merger is consummated in accordance with
the Merger Agreement (and exhibits thereto) and the Delaware General Corporation
law and as described in the Proxy Statement/Prospectus, we are of the opinion
that for federal income tax purposes:
1. The Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, and Chase and
Chemical will each be party to that reorganization within the meaning of Section
368(b) of the Code.
<PAGE> 6
The Chase Manhattan Corporation -6-
2. No income, gain or loss will be recognized for federal income tax
purposes by either Chase or Chemical as a result of the consummation of the
Merger.
3. No income, gain or loss will be recognized for federal income tax
purposes by stockholders of Chase upon the exchange in the Merger of shares of
Chase for shares of Chemical (except to the extent of any cash received in lieu
of fractional share interests).
In connection with the opinion set forth in paragraph 3 above, no
opinion is expressed as to the federal income tax treatment of any real property
transfer or gain taxes paid by Chemical pursuant to Section 5.9 of the Merger
Agreement.
We express our opinion herein only as to those matters specifically
set forth above and no opinion should be inferred as to the tax consequences of
the Merger with respect to other areas of federal taxation.
We hereby consent to the filing of this opinion as an exhibit to the
Proxy Statement/Prospectus and to the use of our name under the captions "The
Merger -- Certain
<PAGE> 7
The Chase Manhattan Corporation -7-
Federal Income Tax Consequences" and "Legal Opinions" in the Proxy
Statement/Prospectus. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ SULLIVAN & CROMWELL
SULLIVAN & CROMWELL
<PAGE> 1
EXHIBIT 23.1
1177 Avenue of the Americas Telephone 212 596 7000
New York, NY 10036 Facsimile 212 596 8910
Price Waterhouse LLP (LOGO)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of Chemical
Banking Corporation of our report dated January 17, 1995 appearing on
page 43 of Chemical Banking Corporation's Annual Report on Form 10-K for the
year ended December 31, 1994. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
- ----------------------------------
PRICE WATERHOUSE LLP
New York, New York
October 31, 1995
<PAGE> 1
EXHIBIT NO. 23.2
1177 Avenue of the Americas Telephone 212-596-7000
New York, NY 10036 Facsimile 212-596-8910
Price Waterhouse LLP (LOGO)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on Form S-4 of The
Chase Manhattan Corporation of our report dated January 17, 1995 appearing on
page 50 of The Chase Manhattan Corporation's Annual Report on Form 10-K for the
year ended December 31, 1994. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
- ---------------------------
PRICE WATERHOUSE LLP
New York, New York
October 31, 1995
<PAGE> 1
EXHIBIT 23.5
MORGAN STANLEY
MORGAN STANLEY & CO.
INCORPORATED
1585 BROADWAY
NEW YORK, NEW YORK 10036
(212) 761-4000
CONSENT OF MORGAN STANLEY & CO. INCORPORATED
October 31, 1995
Chemical Banking Corporation
270 Park Avenue
New York, NY 10017
Dear Sirs:
We hereby consent to the inclusion in the Registration
Statement on Form S-4, relating to the proposed merger of Chase Manhattan
Corporation with Chemical Banking Corporation, of our opinion letter appearing
as Annex IV to the Proxy Statement/Prospectus which is a part of the
Registration Statement, and to the references of our firm name therein. In
giving such consent, we do not thereby admit that we come within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933 or the rules and regulations adopted by the Securities and Exchange
Commission thereunder nor do we admit that we are experts with respect to any
part of such Registration Statement within the meaning of the term "experts" as
used in the Securities Act of 1933, as amended, or the rules and regulations of
the Securities and Exchange Commission thereunder.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Donald A. Moore, Jr.
--------------------------------
Donald A. Moore, Jr.
Managing Director
<PAGE> 1
EXHIBIT 23.6
JAMES D. WOLFENSOHN
INCORPORATED
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
PHONE: (212) 909-8100
FAX: (212) 909-8158
October 31, 1995
Board of Directors
The Chase Manhattan Corporation
One Chase Manhattan Plaza
New York, New York 10081
Re: Joint Proxy Statement of
Chemical Banking Corporation and
The Chase Manhattan Corporation
and Registration Statement on
Form S-4 of Chemical Banking Corporation
Gentlemen and Madame:
We hereby consent to the use of our opinion letter dated
October 31, 1995 to the Board of Directors of The Chase Manhattan
Corporation as Annex V to the Joint Proxy Statement referred to above included
in the above mentioned Registration Statement and to the references therein to
our opinion. In giving this consent, we do not admit and we hereby disclaim
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder, nor do we
thereby admit that we are experts with respect to any part of such Registration
Statement within the meaning of the term "experts" as used in the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder.
JAMES D. WOLFENSOHN INCORPORATED
By: /s/ JAMES D. WOLFENSOHN INCORPORATED
------------------------------------
<PAGE> 1
EXHIBIT NO. 23.7
Goldman, Sachs & Co. | 85 Broad Street | New York, New York 10004
Tel: 212-902-1000
October 31, 1995 (LOGO)
Board of Directors
The Chase Manhattan Corporation
One Chase Manhattan Plaza
New York, New York 10081
Re: Joint Proxy Statement of
Chemical Banking Corporation and
The Chase Manhattan Corporation
and Registration Statement on
Form S-4 of Chemical Banking Corporation
Gentlemen and Madame:
We hereby consent to the use of our opinion letter dated October 31, 1995 to the
Board of Directors of The Chase Manhattan Corporation as Annex VI to the Joint
Proxy Statement referred to above included in the above mentioned Registration
Statement and to the references therein to our opinion. In giving this
consent, we do not admit and we hereby disclaim that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder, nor do we thereby admit that we are experts
with respect to any part of such Registration Statement within the meaning of
the term "experts" as used in the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ GOLDMAN, SACHS & CO.
- ---------------------------
GOLDMAN, SACHS & CO.
<PAGE> 1
EXHIBIT NO. 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Frank A. Bennack, Jr.
-------------------------
Frank A. Bennack, Jr.
Director
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Michel C. Bergerac
------------------------
Michel C. Bergerac
Director
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Randolph W. Bromery
------------------------
Randolph W. Bromery
Director
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Charles W. Duncan, Jr.
--------------------------
Charles W. Duncan, Jr.
Director
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Melvin R. Goodes
------------------------
Melvin R. Goodes
Director
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ George V. Grune
------------------------
George V. Grune
Director
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ William B. Harrison, Jr.
----------------------------
William B. Harrison, Jr.
Vice Chairman and Director
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Harold S. Hook
------------------------
Harold S. Hook
Director
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Helene L. Kaplan
------------------------
Helene L. Kaplan
Director
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ J. Bruce Llewellyn
------------------------
J. Bruce Llewellyn
Director
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ John P. Mascotte
------------------------
John P. Mascotte
Director
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ John F. McGillicuddy
------------------------
John F. McGillicuddy
Director
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Edward D. Miller
------------------------
Edward D. Miller
President and Director
<PAGE> 14
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Joseph L. Sclafani
------------------------
Joseph L. Sclafani
Controller
(Principal Accounting Officer)
<PAGE> 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Walter V. Shipley
------------------------
Walter V. Shipley
Chairman, Chief Executive
Officer and Director
<PAGE> 16
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Andrew C. Sigler
------------------------
Andrew C. Sigler
Director
<PAGE> 17
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Michael I. Sovern
------------------------
Michael I. Sovern
Director
<PAGE> 18
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ John R. Stafford
------------------------
John R. Stafford
Director
<PAGE> 19
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in- fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ W. Bruce Thomas
------------------------
W. Bruce Thomas
Director
<PAGE> 20
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Peter J. Tobin
------------------------
Peter J. Tobin
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
<PAGE> 21
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Marina v.N. Whitman
------------------------
Marina v.N. Whitman
Director
<PAGE> 22
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned in his or her
capacity as an officer or director of Chemical Banking Corporation, a Delaware
corporation (the "Corporation"), hereby constitutes and appoints WALTER V.
SHIPLEY, EDWARD D. MILLER, WILLIAM B. HARRISON JR., PETER J. TOBIN, DINA DUBLON
AND JOHN B. WYNNE, and each of them severally, his or her true and lawful
attorneys-in-fact and agents, with the power to act with or without the others
and with full power of substitution and resubstitution, for and on behalf of
him or her and in his or her name, place and stead, in any and all capacities,
to perform any and all acts and do all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission")
thereunder in connection with the registration under the Act of equity
securities of the Corporation pursuant to resolutions adopted by the Board of
Directors of the Corporation on August 27, 1995, authorizing the preparation
and filing of Registration Statements, on Form S-4 and/or such other Form or
Forms as shall be appropriate, for the registration under the Act of equity
securities of the Corporation issuable pursuant to the Agreement and Plan of
Merger, dated as of August 27, 1995, between the Corporation and The Chase
Manhattan Corporation, a Delaware Corporation, as the same may be amended,
including without limiting the generality of the foregoing, power and authority
to sign each or any such registration statement, including without limitation,
the prospectuses and prospectus supplements contained therein, and any and all
amendments, including post-effective amendments, and exhibits thereto
(collectively, the "Registration Statement") to be filed with the Commission,
and to sign any and all instruments or documents to be filed as a part of or in
connection with said Registration Statement, whether such instruments or
documents are filed before or after the effective date of such Registration
Statement, to file such Registration Statement so signed, together with any and
all instruments or documents to be filed as a part of or in connection with
such Registration Statement, with the Commission, to appear before the
Commission in connection with any matter relating to such Registration
Statement; and to do any and all acts and all things and to execute any and all
instruments which said attorneys-in-fact and agents and each of them may deem
necessary or desirable to enable the Corporation to comply with the Act and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Commission thereunder, including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of each undersigned director or officer in such capacity, to any application,
report, instrument, certificate, form or other documents, and any and all
supplements and amendments thereto, to be filed on behalf of said Corporation
with the Commission, hereby granting to such attorneys-in-fact and agents, and
each of them, full power to do and perform any and all acts and things
requisite and necessary to be done as he or she might or could do in person,
and hereby ratifying and confirming all that said attorneys-in-fact and agents
and each of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 17th day of October 1995.
/s/ Richard D. Wood
------------------------
Richard D. Wood
Director
<PAGE> 1
EXHIBIT NO. 99.1
CONSENT
I, Susan V. Berresford, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ Susan V. Berresford
------------------------
Susan V. Berresford
<PAGE> 2
CONSENT
I, M. Anthony Burns, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ M. Anthony Burns
------------------------
M. Anthony Burns
<PAGE> 3
CONSENT
I, James L. Ferguson, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ James L. Ferguson
------------------------
James L. Ferguson
<PAGE> 4
CONSENT
I, H. Laurance Fuller, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ H. Laurance Fuller
------------------------
H. Laurance Fuller
<PAGE> 5
CONSENT
I, William H. Gray, III, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ William H. Gray, III
------------------------
William H. Gray, III
<PAGE> 6
CONSENT
I, David T. Kearns, hereby consent to being named in the Joint
Proxy Statement/Prospectus included in the Registration Statement on Form S-4
filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ David T. Kearns
------------------------
David T. Kearns
<PAGE> 7
CONSENT
I, E. Michel Kruse, hereby consent to being named in the Joint
Proxy Statement/Prospectus included in the Registration Statement on Form S-4
filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ E. Michel Kruse
------------------------
E. Michel Kruse
<PAGE> 8
CONSENT
I, Thomas G. Labrecque, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ Thomas G. Labrecque
------------------------
Thomas G. Labrecque
<PAGE> 9
CONSENT
I, Delano E. Lewis, hereby consent to being named in the Joint
Proxy Statement/Prospectus included in the Registration Statement on Form S-4
filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ Delano E. Lewis
------------------------
Delano E. Lewis
<PAGE> 10
CONSENT
I, Paul W. MacAvoy, hereby consent to being named in the Joint
Proxy Statement/Prospectus included in the Registration Statement on Form S-4
filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ Paul W. MacAvoy
------------------------
Paul W. MacAvoy
<PAGE> 11
CONSENT
I, John H. McArthur, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 25, 1995
/s/ John H. McArthur
------------------------
John H. McArthur
<PAGE> 12
CONSENT
I, David T. McLaughlin, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ David T. McLaughlin
------------------------
David T. McLaughlin
<PAGE> 13
CONSENT
I, Edmund T. Pratt, Jr., hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ Edmund T. Pratt, Jr.
------------------------
Edmund T. Pratt, Jr.
<PAGE> 14
CONSENT
I, Henry B. Schacht, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ Henry B. Schacht
------------------------
Henry B. Schacht
<PAGE> 15
CONSENT
I, Donald H. Trautlein, hereby consent to being named in the
Joint Proxy Statement/Prospectus included in the Registration Statement on Form
S-4 filed by Chemical Banking Corporation ("Chemical") in connection with the
Agreement and Plan of Merger, dated as of August 27, 1995, between Chemical and
The Chase Manhattan Corporation ("Chase") as a person who will become a
director of the surviving corporation of the merger of Chase with and into
Chemical.
Dated: October 16, 1995
/s/ Donald H. Trautlein
------------------------
Donald H. Trautlein
<PAGE> 1
Exhibit 99.5
[CHEMICAL LOGO]
CHEMICAL BANKING CORPORATION
270 Park Avenue, New York, New York 10017-2036
October 31, 1995
Dear Stockholder:
You are cordially invited to attend a special meeting of stockholders of
Chemical Banking Corporation which will be held at the Starlight Roof of The
Waldorf-Astoria Hotel, located at 301 Park Avenue, New York, New York, at 10:00
a.m., New York time, on December 11, 1995.
At the special meeting, stockholders will be asked to approve and adopt an
Agreement and Plan of Merger providing for a merger of The Chase Manhattan
Corporation with and into Chemical, with the combined entity adopting the Chase
name.
The merger will create a premier global financial services company that
will rank as the largest banking institution in the United States, with
approximately $300 billion in assets, an estimated 25 million retail customers
and leadership positions in corporate banking, global finance and other major
business lines. We believe that the combination of the two companies represents
a unique strategic fit, with complementary product capabilities and market
coverage and with the scale necessary to support expansion and technological
enhancements in all major service areas. By consolidating operations and
eliminating redundant costs, the combined entity will also be able to achieve
significant cost savings which will enhance earnings.
The proposed merger is described in the accompanying Joint Proxy
Statement/Prospectus and its annexes. Please read all of these materials
carefully.
THE CHEMICAL BOARD OF DIRECTORS HAS DETERMINED THAT THE MERGER IS IN THE
BEST INTERESTS OF CHEMICAL AND ITS STOCKHOLDERS. ACCORDINGLY, THE BOARD HAS, BY
UNANIMOUS VOTE OF ALL DIRECTORS PRESENT, APPROVED THE MERGER AND RELATED
TRANSACTIONS AND RECOMMENDS THAT YOU VOTE IN FAVOR OF THE MERGER AT THE SPECIAL
MEETING.
At the special meeting, you will also be asked to approve an amendment and
restatement of Chemical's certificate of incorporation to increase the number of
authorized shares of Chemical's common stock from 400 million to 750 million
shares (in order to have a sufficient number of shares of common stock to effect
the merger and for other corporate purposes) and to make certain other technical
amendments. The Board of Directors of Chemical recommends that you also vote in
favor of this proposal.
Because of the significance of these matters to Chemical, your
participation in the special meeting, in person or by proxy, is especially
important. We hope you will be able to attend the meeting. However, whether or
not you anticipate attending in person, we urge you to complete, sign and return
the enclosed proxy card promptly to ensure that your shares will be represented
at the special meeting. Please note that an abstention or failure to vote will
have the same effect as a vote against the merger and the other matters
described above.
If you do attend the special meeting, you will, of course, be entitled to
vote in person. You may obtain an admission ticket for the meeting by using the
ticket request form on the last page of the Joint Proxy Statement/Prospectus.
Thank you and I look forward to seeing you at the meeting.
Sincerely,
/s/ Walter V. Shipley
Walter V. Shipley
Chairman of the Board and
Chief Executive Officer
<PAGE> 1
Exhibit 99.6
CHEMICAL BANKING CORPORATION
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 270-6000
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 11, 1995
A Special Meeting of Stockholders (including any adjournment or
postponement, the "Chemical Special Meeting") of CHEMICAL BANKING CORPORATION
("Chemical") will be held at the Starlight Roof of The Waldorf-Astoria Hotel,
located at 301 Park Avenue, New York, New York, at 10:00 a.m., New York time, on
December 11, 1995, to consider the following matters:
(1) the approval and adoption of the Agreement and Plan of Merger,
dated as of August 27, 1995 (the "Merger Agreement"), by and between
Chemical and The Chase Manhattan Corporation ("Chase"), pursuant to which
Chase will merge with and into Chemical (the "Merger"), upon the terms and
subject to the conditions set forth in the Merger Agreement, as more fully
described in the enclosed Joint Proxy Statement/Prospectus;
(2) the approval of a proposal to amend and restate the Restated
Certificate of Incorporation of Chemical (the "Chemical Charter") to
increase the number of authorized shares of Common Stock, par value $1.00
per share, of Chemical (the "Chemical Common Stock") from 400 million to
750 million shares and to make certain other technical amendments; and
(3) the transaction of such other business as may properly be brought
before the Chemical Special Meeting.
The approval and adoption of the Merger Agreement and the approval of the
amendment and restatement of the Chemical Charter are each contingent upon
approval of both such proposals by stockholders. Unless both proposals are
approved, neither will be effected by Chemical and the Merger will not be
consummated. Therefore, a vote against the proposal to amend and restate the
Chemical Charter will have the same effect as a vote against the Merger.
Pursuant to the By-laws of Chemical, the Board of Directors has fixed the
close of business on October 30, 1995, as the time for determining stockholders
of record entitled to notice of, and to vote at, the Chemical Special Meeting.
Each share of Chemical Common Stock will entitle the holder thereof to one
vote on each matter which may properly come before the Chemical Special Meeting.
Holders of Chemical's preferred stock will not be entitled to vote at the
Chemical Special Meeting.
By order of the Board of Directors,
John B. Wynne
Secretary
October 31, 1995
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE. IF YOU PLAN TO ATTEND THE CHEMICAL SPECIAL MEETING,
PLEASE USE THE TICKET REQUEST FORM PRINTED ON THE LAST PAGE OF THE JOINT PROXY
STATEMENT/PROSPECTUS. IF YOU ATTEND THE CHEMICAL SPECIAL MEETING, YOU MAY VOTE
IN PERSON EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE> 1
Exhibit 99.7
THE CHASE MANHATTAN CORPORATION
1 Chase Manhattan Plaza
New York, New York 10081-0001
[CHASE LOGO]
October 31, 1995
Dear Stockholder:
You are cordially invited to attend a special meeting of stockholders of
The Chase Manhattan Corporation, to be held in the auditorium in Chase's
headquarters building, located at 1 Chase Manhattan Plaza, New York, New York,
at 1:30 p.m., New York time, on December 11, 1995.
At the special meeting, holders of Chase's common stock will be asked to
adopt an Agreement and Plan of Merger providing for a merger with Chemical
Banking Corporation. In the Merger, (1) each outstanding share of Chase Common
Stock would be exchanged for 1.04 shares of Chemical Common Stock and (2) each
outstanding share of Chase Preferred Stock would be exchanged for one share of
Chemical Preferred Stock having substantially the same terms. The name of the
combined corporation will be "The Chase Manhattan Corporation".
The merger will create a premier global financial services company that
will rank as the largest banking institution in the United States, with
approximately $300 billion in assets, an estimated 25 million retail customers
and leadership positions in corporate banking, global finance and other major
business lines. Your Board of Directors and management believe that the
combination of the two companies represents a unique strategic fit, with
complementary product capabilities and market coverage and with the scale
necessary to support expansion and technological enhancements necessary to grow
revenue in all major service areas. By consolidating operations and eliminating
redundant costs, the combined entity will also be able to achieve significant
cost savings which will enhance earnings.
The proposed merger is described in the accompanying Joint Proxy
Statement/Prospectus and its annexes. You are urged to read all of these
important materials carefully.
THE BOARD OF DIRECTORS HAS DETERMINED THAT THE MERGER IS IN THE BEST
INTERESTS OF CHASE AND ITS STOCKHOLDERS. ACCORDINGLY, THE BOARD HAS, BY
UNANIMOUS VOTE OF ALL DIRECTORS PRESENT, APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
MERGER AT THE SPECIAL MEETING.
Because of the significance of these matters to Chase, your participation
in the special meeting, in person or by proxy, is especially important. I hope
you will be able to attend the meeting. However, whether or not you anticipate
attending in person, on behalf of Chase and your fellow stockholders, I urge you
to complete, sign and return the enclosed proxy card promptly to ensure that
your shares will be represented at the special meeting. If you do attend the
special meeting, you will, of course, be entitled to vote in person. Please note
that an abstention or failure to vote will have the same effect as a vote
against the merger.
I look forward to seeing you at the meeting.
Thank you.
Sincerely,
/s/ Thomas G. Labrecque
Thomas G. Labrecque
Chairman of the Board and
Chief Executive Officer
<PAGE> 1
Exhibit 99.8
THE CHASE MANHATTAN CORPORATION
1 CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10081
(212) 552-2222
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 11, 1995
A Special Meeting of Stockholders (including any adjournment or
postponement, the "Chase Special Meeting") of THE CHASE MANHATTAN CORPORATION
("Chase") will be held in the auditorium in Chase's headquarters building,
located at 1 Chase Manhattan Plaza, New York, New York, at 1:30 p.m., New York
time, on December 11, 1995, to consider the following matters:
(1) the adoption of the Agreement and Plan of Merger, dated as of
August 27, 1995 (the "Merger Agreement"), by and between Chemical Banking
Corporation ("Chemical") and Chase, pursuant to which Chase will merge with
and into Chemical (the "Merger"), upon the terms and subject to the
conditions set forth in the Merger Agreement, as more fully described in
the attached Joint Proxy Statement/Prospectus; and
(2) transacting such other business, including a motion to adjourn, as
may properly be brought before the Chase Special Meeting.
In accordance with the By-laws of Chase, the Board of Directors has fixed
the close of business on October 30, 1995, as the time for determining
stockholders of record entitled to notice of, and to vote at, the Chase Special
Meeting. Only holders of record, as of such date, of shares of Chase Common
Stock will be entitled to vote at the Chase Special Meeting. Holders of Chase
Preferred Stock will not have any right to vote or to exercise appraisal rights
in connection with the Merger or any other matters that may be considered at the
Chase Special Meeting.
Each share of Chase Common Stock will entitle the record holder thereof to
one vote on each matter put to a vote at the Chase Special Meeting.
By order of the Board of Directors,
Ronald C. Mayer
Secretary
October 31, 1995
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE. IF YOU ATTEND THE CHASE SPECIAL MEETING, YOU MAY VOTE
IN PERSON EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE> 1
Exhibit 99.9
CHEMICAL BANKING CORPORATION
SPECIAL MEETING OF STOCKHOLDERS -- DECEMBER 11, 1995 AT 10:00 A.M.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Chemical Banking Corporation ("Chemical") hereby
appoints Shirley Strum Kenny, John J. Lynagh and Stanley van den Heuvel the
proxies of the undersigned (each with power of substitution and with all powers
the undersigned would possess if personally present) to vote at the Special
Meeting of Stockholders of Chemical to be held December 11, 1995, and at any
adjournment or postponement thereof (the "Meeting"), all the shares of Common
Stock of Chemical which the undersigned would be entitled to vote on the
following proposals more fully described in the Joint Proxy
Statement/Prospectus for the Meeting in the manner specified and in the
discretion of the named proxies on any other business that may properly come
before the Meeting.
------------------------------
Please indicate on the reverse side of this card how your stock is to be voted.
UNLESS YOU SPECIFICALLY DIRECT OTHERWISE, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED "FOR" PROPOSALS (1) AND (2). UNLESS EACH OF PROPOSAL (1) AND
PROPOSAL (2) ARE APPROVED BY THE STOCKHOLDERS OF CHEMICAL, NEITHER PROPOSAL
WILL BE ADOPTED.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
- --------------------------------------------------------------------------
Fold and Detach Here
<PAGE> 2
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
(1) Approval and adoption of the Agreement and Plan For Against Abstain
of Merger, dated as of August 27, 1995, relating
to the merger of The Chase Manhattan Corporation / / / / / /
with and into Chemical.
(2) Approval of the amendment and restatement of For Against Abstain
Chemical's Restated Certificate of Incorporation
to provide that Chemical will have the authority
to issue an aggregate of up to 750,000,000 shares / / / / / /
of Common Stock and to make certain other technical
amendments described in the Joint Proxy Statement/
Prospectus.
NOTE: Your signature should appear as your name appears hereon. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Pleas sign, date and return the proxy card promptly using the enclosed envelope.
Dated: -------------------------------------------------------------------, 1995
- --------------------------------------------------------------------------------
Signature
- --------------------------------------------------------------------------------
(Signature if held jointly)
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
FOLD AND DETACH HERE
<PAGE> 1
Exhibit 99.10
PROXY
THE CHASE MANHATTAN CORPORATION
Special Meeting of Stockholders -- December 11, 1995 at 1:30 p.m.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of The Chase Manhattan Corporation ("Chase") hereby
appoints Kathy A. Magaw and Robert B. Adams the proxies of the undersigned (each
with power of substitution and with all powers the undersigned would possess if
personally present) to vote at the Special Meeting of Stockholders of Chase to
be held on December 11, 1995, and at any adjournment or postponement thereof
(the "Meeting"), all the shares of Common Stock of Chase which the undersigned
would be entitled to vote on the following proposal more fully described in the
Joint Proxy Statement/Prospectus for the Meeting in the manner specified and in
the discretion of the named proxies on any other business that may properly
come before the Meeting.
--------------------------------------
Please indicate on the reverse side of this card how your stock is to be voted.
UNLESS YOU SPECIFICALLY DIRECT OTHERWISE, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED "FOR" THE FOLLOWING PROPOSAL.
(continued and to be signed on reverse side)
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 2
The DIRECTORS recommend a vote FOR
Approval and adoption of the Agreement and Plan of
Merger, dated as of August 27, 1995, relating to the
merger of Chase with and into Chemical Banking
Corporation.
FOR AGAINST ABSTAIN
/ / / / / /
NOTE: Your signature should appear as your name appears hereon. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Please sign, date and return the proxy card promptly using the enclosed
envelope.
Dated: , 1995
------------------------------------
- ------------------------------------------------
(Signature)
- ------------------------------------------------
(Signature if held jointly)
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
FOLD AND DETACH HERE
