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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-4
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
MICHIGAN NATIONAL CORPORATION
(Name of Issuer)
MICHIGAN NATIONAL CORPORATION
(Name of Person(s) Filing Statement)
CANCELLABLE MANDATORY STOCK PURCHASE CONTRACTS
(Title of Class of Securities)
594563 AA6
(Cusip Number of Class of Securities)
LAWRENCE L. GLADCHUN, ESQ.
SENIOR VICE PRESIDENT
GENERAL COUNSEL AND SECRETARY
MICHIGAN NATIONAL CORPORATION
27777 INKSTER ROAD
FARMINGTON HILLS, MI 48334
(810) 473-3000
(Name, Address and Telephone Number of Person Authorized
to receive Notices and Communications on Behalf of the Person(s) Filing
Statement)
COPY TO:
EDWARD D. HERLIHY, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
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NOVEMBER 3, 1994
(Date Tender Offer First Published, Sent or Given to Security Holders)
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CALCULATION OF FILING FEE
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TRANSACTION VALUATION: * $21,043,850 AMOUNT OF FILING FEE: * $4,208.77
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/ / Check box if any part of the fee is offset as provided by Rule 0-11(A)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by Registration Statement Number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
</TABLE>
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* Based upon purchase of Contracts exercisable for 973,126 Shares at the tender
offer price, $21.625 per Share
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ITEM 1. SECURITY AND ISSUER.
(a) The Issuer of the securities to which this Issuer Tender Offer
Statement on Schedule 13E-4 (the "Statement") relates is Michigan National
Corporation, a Michigan corporation (the "Company"), and the address of its
principal executive office is 27777 Inkster Road, Farmington Hills, MI
48334.
(b) This Statement relates to a tender offer by the Company to
purchase any or all of its Cancellable Mandatory Stock Purchase Contracts
upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated November 3, 1994 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which together constitute the "Offer"),
copies of which are filed as Exhibits (a)(1) and (a)(2), respectively. The
information set forth in the "Introduction," "Section 1. Number of
Contracts" "Section 7. Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning the Contracts," "Section 9.
Certain Information About the Company; Background and Purpose of the Offer"
and "Section 14. Extension of the Offer; Termination; Amendments" of the
Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "Section 6. Market for the Contracts;
Price Range of Shares; Dividends" of the Offer to Purchase is incorporated
herein by reference.
(d) This Statement is being filed by the Issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Section 8. Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
The information set forth in the "Introduction" and "Section 9. Certain
Information About the Company; Background and Purpose of the Offer" of the Offer
to Purchase is incorporated herein by reference.
(a)-(j) The information set forth in the "Introduction," "Section 7.
Interest of Directors and Executive Officers; Transactions and Arrangements
Concerning the Contracts," "Section 8. Source and Amount of Funds,"
"Section 9. Certain Information About the Company; Background and Purpose
of the Offer" and "Section 11. Certain Effects of the Offer and the Share
Offer" of the Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Section 7. Interest of Directors and
Executive Officers; Transactions and Arrangements Concerning the Contracts" of
the Offer to Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
The information set forth in the "Introduction" and "Section 7. Interest of
Directors and Executive Officers; Transactions and Arrangements Concerning the
Contracts" of the Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the "Introduction" and "Section 15. Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in "Section 9. Certain Information
About the Company; Background and Purpose of the Offer" of the Offer to
Purchase is incorporated herein by reference.
2
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ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in "Section 12. Regulatory Approvals" of
the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "Section 11. Certain Effects of the
Offer and the Share Offer" of the Offer to Purchase is incorporated herein
by reference.
(d) Not applicable.
(e) Reference is hereby made to the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively, and incorporated in their entirety herein
by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
99.(a)(1) Offer to Purchase, dated November 3, 1994
99.(a)(2) Letter of Transmittal
99.(a)(3) Notice of Guaranteed Delivery
99.(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
99.(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9
99.(a)(7) Press Release issued by the Company on November 3, 1994
99.(a)(8) Letter to the Company's Contract Holders from Robert J. Mylod, Chairman of the
Board and Chief Executive Officer, of the Company, dated November 3, 1994
99.(a)(9) Summary Advertisement dated November 3, 1994
99.(c)(1) Dealer Manager Agreement dated as of November 3, 1994, among the Company, Keefe,
Bruyette & Woods, Inc. and CS First Boston Corporation
99.(d) Not applicable
99.(e) Not applicable
99.(f) Not applicable
</TABLE>
3
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: November 3, 1994
MICHIGAN NATIONAL CORPORATION
/s/ ROBERT J. MYLOD
----------------------------------------
NAME: ROBERT J. MYLOD
TITLE: CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
4
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EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE IN
SEQUENTIALLY
EXHIBIT NO. DESCRIPTION NUMBERED COPY
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<S> <C> <C>
99.(a)(1) Offer to Purchase, dated November 3, 1994.........................
99.(a)(2) Letter of Transmittal.............................................
99.(a)(3) Notice of Guaranteed Delivery.....................................
99.(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees....................................................
99.(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees................................
99.(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9...............................................
99.(a)(7) Press Release issued by the Company on November 3, 1994...........
99.(a)(8) Letter to the Company's Contract Holders from Robert J. Mylod,
Chairman of the Board and Chief Executive Officer, of the Company,
dated November 3, 1994............................................
99.(a)(9) Summary Advertisement dated November 3, 1994......................
99.(c)(1) Dealer Manager Agreement dated as of November 3, 1994, among the
Company, Keefe, Bruyette & Woods, Inc. and CS First Boston
Corporation.......................................................
</TABLE>
<PAGE> 1
EXHIBIT 99.(a)(1)
MICHIGAN NATIONAL CORPORATION
OFFER TO PURCHASE FOR CASH
ANY AND ALL
CANCELLABLE MANDATORY STOCK PURCHASE CONTRACTS
AT A PURCHASE PRICE OF $21.625
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 2, 1994, UNLESS THE OFFER IS EXTENDED.
Michigan National Corporation, a Michigan corporation (the "Company"),
hereby invites holders of its Cancellable Mandatory Stock Purchase Contracts
("Contracts") issued by the Company in conjunction with issuance of the
Company's 8% Subordinated Debentures due November 10, 1998 ("8% Debentures"), to
tender their Contracts, at a price of $21.625 per Contract, net to the seller in
cash, subject to increase as described below, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer"). The Company will purchase
any and all Contracts validly tendered and not withdrawn, upon the terms and
subject to the conditions of the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF CONTRACTS BEING
TENDERED. The Offer is, however, subject to certain other conditions. See
Section 5.
Simultaneously with the Offer, the Company is making a separate offer (the
"Share Offer") to purchase for cash up to 1,858,650 shares (the "Shares") of the
Company's common stock, par value $10.00 per share (including the associated
preferred share purchase rights), at prices not greater than $90 and not less
than $78 per Share, specified by the Company's shareholders, upon the terms and
subject to the conditions of the Share Offer. The Company will determine a
single per Share price (not greater than $90 and not less than $78 per Share)
that it will pay for Shares validly tendered pursuant to the Share Offer, taking
into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the purchase price that will
allow it to buy 1,858,650 Shares pursuant to the Share Offer. See Section 10. IF
THE FINAL PURCHASE PRICE IN THE SHARE OFFER IS GREATER THAN $78 PER SHARE, THE
COMPANY WILL INCREASE THE PURCHASE PRICE FOR THE CONTRACTS UNDER THE OFFER TO
EQUAL THE SHARE OFFER PURCHASE PRICE LESS THE EXERCISE PRICE ("EXERCISE PRICE")
OF THE CONTRACTS, WHICH IS CURRENTLY $56.375. In such event, the Company will
extend the Offer (but not the Share Offer) for an additional ten business days.
Commencement of the Share Offer will require the Company to adjust the
Exercise Price under the Contracts if the purchase price in the Share Offer is
$86.25 or more. Assuming acceptance of 100% of the Shares sought in the Share
Offer, the Exercise Price as adjusted will be between approximately $55.372 (in
the event the purchase price in the Share Offer is $86.25) and $54.987 (in the
event the purchase price in the Share Offer is $90). Adjustment may also be made
to the number of Shares for which each Contract is exercisable. See Section 11.
IF THE EXERCISE PRICE IS ADJUSTED, THE COMPANY WILL INCREASE THE PURCHASE PRICE
FOR THE CONTRACTS UNDER THE OFFER BY THE AMOUNT OF THE ADJUSTMENT, AND EXTEND
THE OFFER FOR TEN BUSINESS DAYS.
HOLDERS OF CONTRACTS MUST SURRENDER ANY CORRESPONDING 8% DEBENTURES IN
TENDERING THEIR CONTRACTS. Such 8% Debentures will as soon as practicable after
acceptance of Contracts pursuant to this Offer, such 8% Debentures will be
exchanged for new 8% Debentures of equal principal value. See Section 2.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, NEITHER
THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY CONTRACT
HOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING CONTRACTS. CONTRACT
HOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER CONTRACTS AND, IF SO,
HOW MANY CONTRACTS TO TENDER.
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THE DEALER MANAGERS FOR THE OFFER ARE:
KEEFE, BRUYETTE & WOODS, INC. CS FIRST BOSTON
NOVEMBER 3, 1994
<PAGE> 2
IMPORTANT
Any Contract holder desiring to tender all or any portion of his Contracts
should either (1) complete and sign the Letter of Transmittal or a facsimile
copy thereof in accordance with the instructions in the Letter of Transmittal,
mail or deliver it, all corresponding 8% Debentures, and any other required
documents to First Chicago Trust Company of New York (the "Depositary"), and
mail or deliver his Contracts to the Depositary, or (2) request his broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for him. NEITHER CONTRACTS NOR CORRESPONDING 8% DEBENTURES ARE
ELIGIBLE FOR BOOK-ENTRY DELIVERY, THROUGH THE DEPOSITARY TRUST COMPANY OR
OTHERWISE. A Contract holder having Contracts registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
that broker, dealer, commercial bank, trust company or other nominee if such
holder desires to tender such Contracts. Contract holders who desire to tender
Contracts or surrender corresponding 8% Debentures and whose Contracts or
corresponding 8% Debentures are not immediately available must tender such
Contracts or corresponding 8% Debentures by following the procedures for
guaranteed delivery set forth in Section 2. CONTRACT HOLDERS MUST PROPERLY
COMPLETE THE LETTER OF TRANSMITTAL IN ORDER TO EFFECT A VALID TENDER OF THEIR
CONTRACTS.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent or either Dealer Manager at
their respective addresses and telephone numbers set forth on the back cover of
this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER CONTRACT HOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
CONTRACTS PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL.
IF GIVEN OR MADE, SUCH RECOMMENDATION, INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
2
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TABLE OF CONTENTS
<TABLE>
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SECTION PAGE
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Introduction.................................................................. 3
1. Number of Contracts........................................................... 5
2. Procedure for Tendering Contracts............................................. 5
3. Withdrawal Rights............................................................. 7
4. Purchase of Contracts and Payment of Purchase Price........................... 7
5. Certain Conditions of the Offer............................................... 8
6. Market for Contracts; Price Range of Shares; Dividends........................ 9
7. Interest of Directors and Executive Officers; Transactions and Arrangements
Concerning the Contracts...................................................... 10
8. Source and Amount of Funds.................................................... 10
9. Certain Information About the Company; Background and Purpose of the Offer.... 11
10. The Share Offer............................................................... 18
11. Certain Effects of the Offer and the Share Offer.............................. 18
12. Regulatory Approvals.......................................................... 19
13. Certain Federal Income Tax Consequences....................................... 19
14. Extension of the Offer; Termination; Amendments............................... 20
15. Fees and Expenses............................................................. 21
16. Miscellaneous................................................................. 21
</TABLE>
TO THE HOLDERS OF CONTRACTS OF
MICHIGAN NATIONAL CORPORATION:
The Company hereby invites holders of its Cancellable Mandatory Stock
Purchase Contracts ("Contracts") issued by the Company in conjunction with
issuance of the Company's 8% Subordinated Debentures due November 10, 1998 ("8%
Debentures"), to tender their Contracts, at a price of $21.625 per Contract, net
to the seller in cash, subject to increase as described below, upon the terms
and subject to the conditions set forth in the Offer. The Company will purchase
any and all Contracts validly tendered and not withdrawn, upon the terms and
subject to the conditions of the Offer.
Simultaneously with the Offer, the Company is making a separate offer to
purchase for cash up to 1,858,650 Shares at prices not greater than $90 and not
less than $78 per Share, specified by the Company's shareholders, upon the terms
and subject to the conditions of the Share Offer. The Company will determine a
single per Share price (not greater than $90 and not less than $78 per Share)
that it will pay for Shares validly tendered pursuant to the Share Offer, taking
into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the purchase price that will
allow it to buy 1,858,650 Shares pursuant to the Share Offer. If the final
purchase price in the Share Offer is greater than $78.00 per Share, the Company
will increase the Purchase Price for the Contracts under the Offer to equal the
Share Offer purchase price less $56.375, which is the exercise price of the
Contracts. In such event, the Company will extend the Contract Offer (but not
the Offer) for an additional ten business days.
The Contracts were initially issued as units together with corresponding 8%
Debentures. The Equity Contract Agency Agreement and the Indenture governing the
Contracts and 8% Debentures restrict the transfer of these securities other than
as units. IN ORDER FOR CONTRACTS TO BE CORRECTLY AND VALIDLY TENDERED PURSUANT
TO THIS OFFER, CONTRACT HOLDERS MUST SURRENDER CORRESPONDING 8% DEBENTURES
SIMULTANEOUSLY WITH THE TENDER OF CONTRACTS AND SUBMISSION OF THE LETTER OF
TRANSMITTAL AND OTHER DOCUMENTS REQUIRED BY THE OFFER. As soon as practicable
after acceptance of Contracts pursuant to the Offer, 8% Debentures so
surrendered will be exchanged for 8% Debentures of equal principal amount and
redelivered to the holder. Thereafter, the transfer of such redelivered 8%
Debentures will not be restricted by the terms of the Indenture.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF CONTRACTS BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 5.
3
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Tendering holders will not be obligated to pay brokerage fees or
commissions, solicitation fees or, subject to Instruction 7 of the Letter of
Transmittal, transfer taxes on the Company's purchase of Contracts pursuant to
the Offer. In addition, the Company will pay all fees and expenses of Keefe,
Bruyette & Woods, Inc. and CS First Boston Corporation (each, a "Dealer
Manager," and collectively, the "Dealer Managers"), First Chicago Trust Company
of New York (the "Depositary") and Georgeson & Company Inc. (the "Information
Agent") in connection with the Offer. See Section 15.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY CONTRACT HOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING CONTRACTS.
Contract holders must make their own decisions whether to tender Contracts and,
if so, how many Contracts to tender and the price or prices at which Contracts
should be tendered. The Company has been advised that none of its directors or
executive officers intends to tender any Contracts pursuant to the Offer.
The Company is making the Offer as part of a comprehensive restructuring
developed by the Company to enhance shareholder value. As discussed in "Section
9. Certain Information About the Company; Background and Purpose of the Offer",
the restructuring is intended to enhance shareholder value by focusing the
Company's resources on its Michigan-based, core banking business, by
streamlining and enhancing the efficiency and profitability of that core
business, and by repositioning the Company's balance sheet to increase return on
equity by redeploying the portion of the Company's equity capital that is not
necessary for the Company's Michigan-based, core banking business. Following
completion of the Offer and the Share Offer, the Company and Michigan National
Bank, a national banking corporation and the Company's principal operating
subsidiary ("MNB") will continue to have strong capital positions and will
continue to qualify as "well capitalized" institutions under the prompt
corrective action scheme enacted by the Federal Deposit Insurance Corporation
Improvements Act of 1991. On a pro forma basis as of September 30, 1994, giving
effect to the Offer and the Share Offer at the maximum purchase price of $90 per
Share (or, in the case of this Offer, $90 per Share equivalent), and assuming
acceptance of the maximum number of Shares in the Share Offer and Contracts in
the Offer, the Company would have had an equity to asset ratio of 8.60%, a Total
risk-based capital ratio of 10.39% and a leverage ratio of 6.98%. See Section 9.
The Offer will allow Contract holders to sell their Contracts at a price
representing a premium over the spread between the exercise price under the
Contracts and recent market prices for the Shares for which the Contracts are
exercisable, without the transaction costs that would be associated with an
exercise of the Contracts and subsequent market sale of the underlying Shares.
The Offer and the Share Offer will increase the Company's leverage, with an
attendant increase in the risks and rewards for persons who retain a continuing
equity interest in the Company. In addition, persons who determine not to accept
the Offer or the Share Offer will realize a proportionate increase in their
relative equity interest in the Company, and thus in the Company's future
earnings and assets, subject to increased risks resulting from higher leverage
and to the Company's ability to issue additional Shares or other equity
securities in the future.
As of October 29, 1994, there were 15,324,241 Shares outstanding, 507,225
Shares issuable upon exercise of stock options under the Company's stock option
plans and 973,126 Shares issuable pursuant to the Stock Purchase Contracts. The
1,858,650 Shares that the Company is offering to purchase represent
approximately 12% of the Shares outstanding as of October 29, 1994 and
approximately 11% of the fully diluted Shares outstanding as of such date.
The Company plans to obtain the funds needed for the Offer and the Share
Offer from cash on hand of approximately $235 million. See Section 8.
Commencement of the Share Offer will require the Company to adjust the
Exercise Price under the Contracts if the purchase price in the Share Offer is
$86.25 or more. Assuming acceptance of 100% of the Shares sought in the Share
Offer, the Exercise Price as adjusted will be between $55.372 (in the event the
purchase price in the Share Offer is $86.25) and $54.987 (in the event the
purchase price in the Share Offer is $90.00). Adjustment may also be made to the
number of Shares for which each Contract is exercisable. See Section 11. If the
Exercise Price is adjusted, the Company will increase the Purchase Price for the
Contracts under the Offer by the amount of the adjustment, and extend the Offer
for ten business days.
4
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1. NUMBER OF CONTRACTS.
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment and purchase any and all Contracts validly tendered on or
prior to the Expiration Date at a price of $21.625 per Contract, subject to
increase as described below. The term "Expiration Date" means 5:00 p.m., New
York City time, on Friday, December 2, 1994, unless the Company, in its sole
discretion, shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall refer to the latest time
and date at which the Offer, as so extended by the Company, shall expire. See
Section 14 for a description of the Company's right to extend the time during
which the Offer is open and to delay, terminate or amend the Offer. See also
Section 5. The Company will purchase any and all Contracts validly tendered and
not withdrawn, upon the terms and subject to the conditions of the Offer.
Simultaneously with the Offer, the Company is making a separate offer (the
"Share Offer") to purchase for cash up to 1,858,650 shares (the "Shares") of the
Company's common stock, par value $10.00 per share (including the associated
Preferred Share Purchase Rights), at prices not greater than $90 and not less
than $78 per Share, specified by the Company's shareholders, upon the terms and
subject to the conditions of the Share Offer. The Company will determine a
single per Share price (not greater than $90 and not less than $78 per Share)
that it will pay for Shares validly tendered pursuant to the Share Offer, taking
into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the purchase price that will
allow it to buy 1,858,650 Shares pursuant to the Share Offer. See Section 10. If
the final purchase price in the Share Offer is greater than $78.00 per Share,
the Company will increase the Purchase Price for the Contracts under the Offer
to equal the Share Offer purchase price less $56.375, which is the exercise
price of the Contracts. In such event, the Company will extend the Contract
Offer (but not the Offer) for an additional ten business days.
If (i) the Company increases or decreases the price to be paid for
Contracts, or decreases the number of Contracts being sought, and (ii) the Offer
is scheduled to expire less than ten business days from and including the date
that notice of such increase or decrease is first published, sent or given in
the manner specified in Section 15, the Offer will be extended for ten business
days from and including the date of such notice. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
All Contracts not purchased pursuant to the Offer will be returned to the
tendering holders at the Company's expense as promptly as practicable following
the Expiration Date.
2. PROCEDURE FOR TENDERING CONTRACTS.
PROPER TENDER OF CONTRACTS. For Contracts to be validly tendered pursuant
to the Offer:
(a) the certificates for such Contracts (or confirmation of receipt of
such Contracts pursuant to the procedures for book-entry transfer set forth
below), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees,
and any other documents required by the Letter of Transmittal, must be
received on or before the Expiration Date by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase; or
(b) the tendering holder must comply with the guaranteed delivery
procedure set forth below.
The Contracts were initially issued as units together with corresponding 8%
Debentures. The Equity Contract Agency Agreement and the Indenture governing the
Contracts and 8% Debentures restrict the transfer of these securities other than
as units. IN ORDER FOR CONTRACTS TO BE CORRECTLY AND VALIDLY TENDERED PURSUANT
TO THIS OFFER, CONTRACT HOLDERS MUST SURRENDER CORRESPONDING 8% DEBENTURES
SIMULTANEOUSLY WITH THE TENDER OF CONTRACTS AND SUBMISSION OF THE LETTER OF
TRANSMITTAL AND OTHER DOCUMENTS REQUIRED BY THE OFFER. As soon as practicable
after acceptance of Contracts pursuant to the Offer, 8% Debentures so
surrendered will be exchanged for 8% Debentures of equal principal amount and
redelivered to the holder. Thereafter, the transfer of such redelivered 8%
Debentures will not be restricted by the terms of the Indenture.
5
<PAGE> 6
SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is
required on the Letter of Transmittal (i) if the Letter of Transmittal is signed
by the registered holder of the Contracts exactly as the name of the registered
holder appears on the certificate tendered therewith, and payment and delivery
are to be made directly to such registered holder, or (ii) if Contracts are
tendered for the account of a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office, branch or agency in the
United States (each such entity, an "Eligible Institution"). In all other cases,
all signatures on the Letter of Transmittal must be Medallion guaranteed by an
Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a
Contract is registered in the name of a person other than the signer of a Letter
of Transmittal, or if payment is to be made, or Contracts not purchased or
tendered are to be issued, to a person other than the registered holder, the
Contract must be endorsed or accompanied by an appropriate assignment, in either
case signed exactly as the name of the registered holder appears on the
Contract, with the signature on the Contract or assignment Medallion guaranteed
by an Eligible Institution. In all cases, payment for Contracts tendered and
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for such Contracts, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required signature guarantees and any other documents required by the Letter
of Transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CONTRACTS,
CORRESPONDING 8% DEBENTURES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER. IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
FEDERAL INCOME TAX BACKUP WITHHOLDING. To prevent federal income tax backup
withholding equal to 31% of the gross payments made pursuant to the Offer, each
holder who does not otherwise establish an exemption from such withholding must
notify the Depositary of such holder's correct taxpayer identification number
(or certify that such taxpayer is awaiting a taxpayer identification number) and
provide certain other information by completing a Substitute Form W-9 (included
in the Letter of Transmittal). Foreign holders may be required to submit Form
W-8, certifying non-United States status, in order to avoid backup withholding.
See the instructions in the Letter of Transmittal.
EACH HOLDER SHOULD CONSULT HIS OWN TAX ADVISOR AS TO WHETHER SUCH HOLDER IS
SUBJECT TO OR EXEMPT FROM FEDERAL INCOME TAX WITHHOLDING.
For a discussion of certain other federal income tax consequences to
tendering holders, see Section 13.
NOT ELIGIBLE FOR BOOK-ENTRY DELIVERY. NEITHER CONTACTS NOR CORRESPONDING 8%
DEBENTURES ARE ELIGIBLE FOR BOOK-ENTRY DELIVERY, THROUGH THE DEPOSITARY TRUST
COMPANY OR OTHERWISE.
GUARANTEED DELIVERY. If a holder desires to tender Contracts or surrender
8% Debentures pursuant to the Offer and such holder's certificates are not
immediately available or time will not permit all required documents to reach
the Depositary by the Expiration Date, such Contracts or 8% Debentures may
nevertheless be tendered provided that all of the following conditions are
satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail, telegram or facsimile
transmission), on or prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the form the
Company has provided with this Offer to Purchase and includes a guarantee
by an Eligible Institution in the form set forth in such Notice; and
(c) all tendered Contracts or 8% Debentures in proper form for
transfer, together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), corresponding 8% Debentures, and any
other documents required by the Letter of Transmittal, are received by the
Depositary within five OTC trading days after the date the Depositary
receives such Notice of Guaranteed Delivery.
6
<PAGE> 7
DETERMINATION OF VALIDITY; REJECTION OF CONTRACTS; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of
Contracts to be accepted, the price to be paid therefor, the form of documents
and the validity, form, eligibility (including the time of receipt) and
acceptance for payment of any tender of Contracts will be determined by the
Company, in its sole discretion, which determination shall be final and binding
on all parties. The Company reserves the absolute right to reject any or all
tenders it determines not to be in proper form or the acceptance of or payment
for which may be unlawful. The Company also reserves the absolute right to waive
any of the conditions of the Offer or any defect or irregularity in the tender
of any particular Contracts or surrender for exchange of the corresponding
debentures. No tender or surrender for exchange of the corresponding debentures
of Contracts will be deemed to be validly made until all defects and
irregularities have been cured or waived. None of the Company, either Dealer
Manager, the Depositary, the Information Agent or any other person is or will be
obligated to give notice of any defects or irregularities in tenders or
surrenders, and none of them will incur any liability for failure to give such
notice.
3. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 3, the tender of Contracts
pursuant to the Offer is irrevocable. Contracts tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment by the Company, may also be withdrawn after
5:00 p.m., New York City time, on Tuesday, January 3, 1995.
For a withdrawal to be effective, the Depositary must timely receive (at
one of its addresses set forth on the back cover of this Offer to Purchase) a
written, telegraphic or facsimile transmission notice of withdrawal. Such notice
of withdrawal must specify the name of the person who tendered the Contracts to
be withdrawn, the number of Contracts to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Contracts. If the certificates have been delivered or otherwise identified to
the Depositary, then, prior to the release of such Contracts, the tendering
shareholder must also submit the serial numbers shown on the particular
Contracts to be withdrawn and the signature on the notice of withdrawal must be
Medallion guaranteed by an Eligible Institution (except in the case of Contracts
tendered by an Eligible Institution). All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Company, in its sole discretion, which determination shall be final and binding
on all parties. None of the Company, either Dealer Manager, the Depositary, the
Information Agent or any other person is or will be obligated to give notice of
any defects or irregularities in any notice of withdrawal, and none of them will
incur any liability for failure to give such notice. Any Contracts properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. Withdrawn Contracts may, however, be retendered by the Expiration Date by
again following any of the procedures described in Section 2.
If the Company extends the Offer, is delayed in its purchase of Contracts
or is unable to purchase Shares pursuant to the Offer for any reason, then,
without prejudice to the Company's rights under the Offer, the Depositary may,
subject to applicable law, retain on behalf of the Company all tendered
Contracts, and the Contracts may not be withdrawn except to the extent tendering
shareholders are entitled to withdrawal rights as described in this Section 3.
4. PURCHASE OF CONTRACTS AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and thereby purchase) Contracts validly tendered as soon as
practicable after the Expiration Date. For purposes of the Offer, the Company
will be deemed to have accepted for payment (and therefore purchased), subject
to proration, Contracts which are tendered and not withdrawn when, as and if it
gives oral or written notice to the Depositary of its acceptance of such
Contracts for payment pursuant to the Offer.
Payment for Contracts purchased pursuant to the Offer will be made by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering holders for the purpose of receiving payment from the
Company and transmitting payment to the tendering holders. All Contracts not
purchased will be returned as soon as practicable after the Expiration Date or
termination of the Offer without
7
<PAGE> 8
expense to the tendering holder. Under no circumstances will the Company pay
interest on the Purchase Price. In addition, if certain events occur, the
Company may not be obligated to purchase Contracts pursuant to the Offer. See
Section 5.
The Company will pay all transfer taxes, if any, payable on the transfer to
it of Contracts purchased pursuant to the Offer; provided, however, that (i) if
payment of the Purchase Price is to be made to, or (ii) (in the circumstances
permitted by the Offer) if unpurchased Contracts are to be registered in the
name of, any person other than the registered owner, or if tendered certificates
are registered in the name of any person other than the person signing the
Letter of Transmittal, the amount of all stock transfer taxes, if any (whether
imposed on the registered owner or such other person), payable on account of the
transfer to such person will be deducted from the Purchase Price unless evidence
satisfactory to the Company of the payment of such taxes or exemption therefrom
is submitted. See Instruction 7 of the Letter of Transmittal.
THE COMPANY MAY BE REQUIRED TO WITHHOLD AND REMIT TO THE INTERNAL REVENUE
SERVICE (THE "IRS"), 31% OF THE GROSS PROCEEDS PAID TO ANY TENDERING HOLDER OR
OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND SIGN THE SUBSTITUTE FORM W-9
INCLUDED IN THE LETTER OF TRANSMITTAL. SEE SECTION 2.
5. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Contracts tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment of,
the purchase of and the payment for, Contracts tendered, subject to Rule
13e-4(f) under the Exchange Act (see Section 14), if, in the sole judgment of
the Company, at any time on or after November 3, 1994, and at or before the time
of purchase of any such Contracts, any of the following events shall have
occurred (or shall have been determined by the Company to have occurred) which,
regardless of the circumstances (including any action or omission to act by the
Company), makes it inadvisable to proceed with the Offer or with such purchase
or payment:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, or before any court or governmental, regulatory or
administrative authority or agency or tribunal, domestic or foreign, which:
(1) challenges the making of the Offer, the acquisition of Contracts
pursuant to the Offer or otherwise relates in any manner to the Offer or
(2) in the Company's sole judgment, could materially affect the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the business of the
Company or any of its subsidiaries or materially impair the Offer's
contemplated benefits to the Company; or
(b) there shall have been any action threatened or taken, or approval
withheld, or any statute, rule, regulation, judgment, order or injunction
threatened, proposed, sought, promulgated, enacted, entered, amended,
enforced or deemed to be applicable to the Offer or the Company or any of
its subsidiaries, by any court or any government or governmental,
regulatory or administrative authority or agency or tribunal, domestic or
foreign, which, in the Company's sole judgment, would or might directly or
indirectly: (1) make the acceptance for payment of, or payment for, some or
all of the Contracts illegal or otherwise restrict or prohibit consummation
of the Offer, (2) delay or restrict the ability of the Company, or render
the Company unable, to accept for payment or pay for some or all of the
Shares, (3) materially impair the contemplated benefits of the Offer to the
Company or (4) materially affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company or any of
its subsidiaries; or
(c) there shall have occurred: (1) the declaration of any banking
moratorium or suspension of payments in respect of banks in the United
States, (2) any general suspension of trading in, or limitation on prices
for, securities on any United States national securities exchange or in the
over-the-counter market, (3) the commencement or escalation of a war, armed
hostilities or any other national or
8
<PAGE> 9
international crisis directly or indirectly involving the United States,
(4) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event which, in
the Company's sole judgment, might affect, the extension of credit by banks
or other lending institutions in the United States, (5) any significant
decrease in the market price of the Contracts or in the general level of
market prices of equity securities in the United States or abroad or any
change in the general political, market, economic or financial conditions
in the United States or abroad that could have a material adverse effect on
the Company's business, operations or prospects or the trading in the
Contracts or that, in the sole judgment of the Company, makes it
inadvisable to proceed with the Offer or (6) in the case of any of the
foregoing existing at the time of the commencement of the Offer, in the
Company's sole judgment, a material acceleration or worsening thereof; or
(d) any change shall have occurred or be threatened in the business,
condition (financial or other), income, operations, ownership or prospects
of the Company and its subsidiaries, taken as a whole, which, in the
Company's sole judgment, is or may be material to the Company or any other
event shall have occurred which, in the Company's sole judgment, materially
impairs the Offer's contemplated benefits; or
(e) a tender or exchange offer for any or all of the Contracts (other
than the Offer) or the Shares (other than the Share Offer), or any merger,
business combination or other similar transaction with or involving the
Company or any subsidiary, shall have been proposed, announced or made by
any person; or
(f) (i) any entity, "group" (as that term is used in Section 13(d)(3)
of the Exchange Act) or person shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding Shares (other than
any such person, entity or group who have filed a Schedule 13D or Schedule
13G with the Securities and Exchange Commission (the "Commission") on or
before January 3, 1994), (ii) any such entity, group or person who have
filed a Schedule 13D or Schedule 13G with the Commission on or before
January 3, 1994 shall have acquired or proposed to acquire beneficial
ownership of an additional 2% or more of the outstanding Shares or (iii)
any person, entity or group shall have filed a Notification and Report Form
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or made a
public announcement reflecting an intent to acquire the Company or any of
its subsidiaries or any of their respective assets or securities other than
in connection with a transaction authorized by the Board of Directors of
the Company.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition (including any action or inaction by the Company) or may be waived by
the Company in whole or in part. The Company's failure at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination by the Company concerning the
events described in this Section 5 shall be final and shall be binding on all
parties.
6. MARKET FOR CONTRACTS; PRICE RANGE OF SHARES; DIVIDENDS.
The Contracts are not listed on any securities exchange nor are they quoted
on any national or other reporting system.
The Shares are traded in the OTC market and quoted on the NASDAQ/NMS under
the symbol "MNCO." The following table sets forth for the calendar periods
indicated the high and low closing per Share sales prices on the NASDAQ/NMS as
reported in published financial sources and the dividends paid per Share:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
---- ---- ---------
<S> <C> <C> <C>
1992:
4th Quarter......................................... $52 1/4 $ 44 $0.50
1993:
1st Quarter......................................... 64 1/4 50 0.50
2nd Quarter......................................... 61 5/8 52 0.50
3rd Quarter......................................... 59 7/8 54 1/4 0.50
4th Quarter......................................... 62 3/4 57 1/2 --(a)
</TABLE>
9
<PAGE> 10
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
---- ---- ---------
<S> <C> <C> <C>
1994:
1st Quarter......................................... 65 1/4 55 0.50(a)
2nd Quarter......................................... 79 59 5/8 0.50
3rd Quarter......................................... 79 1/4 72 1/4 0.50
4th Quarter (through November 2, 1994).............. 80 3/4 74 1/2 0.50(b)
</TABLE>
- -------------------------
(a) A fourth quarter 1993 dividend of $0.50 per Share was declared January 19,
1994, payable to holders of record on February 1, 1994. This reflected a
change in the timing of the Company's dividend declaration and not in the
Company's dividend policy.
(b) A fourth quarter 1994 dividend was declared on October 19, 1994, payable on
November 15, 1994, to holders of record on November 1, 1994.
On November 2, 1994, the last trading day prior to the announcement and
commencement of the Offer, the closing per Share sales price as reported on the
NASDAQ/NMS was $77 3/4. CONTRACT HOLDERS ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR THE SHARES.
7. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING THE CONTRACTS.
As of October 29, 1994, the Company's directors and executive officers as a
group beneficially owned no Contracts and (including pursuant to options) an
aggregate of 520,832 Shares (approximately 3.3% of the outstanding Shares
including Shares issuable upon the exercise of options). Such ownership includes
246,916 Shares (approximately 1.6% of the outstanding Shares including Shares
issuable upon the exercise of options) as of October 29, 1994 subject to stock
options which are held by executive officers. In addition, as of October 29,
1994, the Company's ESOP and Deferred Compensation Plan owned 1,170,958 Shares
and 1,080,625 Shares, respectively, representing approximately 7.4% and 6.8%,
respectively. If the Company purchases 1,858,650 Shares (or approximately 12% of
the Shares outstanding at October 29, 1994) pursuant to the Share Offer and all
of the outstanding Contracts, and no executive officer or director tenders
Shares pursuant to the Share Offer, then immediately thereafter, the Company's
executive officers and directors as a group would beneficially own approximately
3.7% of the outstanding Shares including Shares issuable upon the exercise of
options and, assuming that none of the Shares held in the ESOP and the Deferred
Compensation Plan are tendered, such plans would own approximately 8.4% and 7.7%
of the outstanding Shares including Shares issuable upon exercise of options,
respectively. The Company has been advised that no director or executive officer
of the Company intends to tender any Shares pursuant to the Share Offer.
Except as set forth on Schedule A, based upon the Company's records and
upon information provided to the Company by its directors, executive officers
and affiliates, neither the Company nor any of its subsidiaries nor, to the best
of the Company's knowledge, any of the directors or executive officers of the
Company, nor any associates of any of the foregoing, has effected any
transactions in the Shares or the Contracts during the 40 business day period
prior to the date hereof.
Except as set forth in this Offer to Purchase, neither the Company nor, to
the best of the Company's knowledge, any of its affiliates, directors or
executive officers, or any of the executive officers or directors of its
subsidiaries, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Offer with respect to any securities of the Company (including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies, consents or authorizations).
8. SOURCE AND AMOUNT OF FUNDS.
Assuming that the Company purchases 1,858,650 Shares in the Share Offer at
a purchase price of $90 per Share and all of the outstanding Contracts in the
Offer at a purchase price of $90 per Share equivalent, the Company expects the
maximum aggregate cost, including all fees and expenses applicable to the Share
Offer and the Offer, to be approximately $202 million.
The Company plans to obtain the funds needed for the Offer and the Share
Offer from cash on hand of approximately $235 million.
See "Pro Forma Financial Information" for information concerning the
assumed cost of funds for the Offer.
10
<PAGE> 11
9. CERTAIN INFORMATION ABOUT THE COMPANY; BACKGROUND AND PURPOSE OF THE OFFER.
THE COMPANY. Michigan National Corporation, a Michigan corporation, owns
100% of Michigan National Bank, a national banking association and the Company's
principal operating subsidiary, and 100% of Independence One Bank of California
("IOBOC"), a federal savings bank. As of September 30, 1994, the Company had
total assets of $9.2 billion, total deposits of $7.5 billion, and shareholders'
equity of $998 million. As of September 30, 1994, MNB constituted approximately
90% of the consolidated assets of the Company.
As a bank holding company registered under the Bank Holding Company Act of
1956, as amended, the Company is subject to supervision and regulation by the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board").
As a savings and loan holding company, the Company is also subject to
examination by the Office of Thrift Supervision.
The Company's principal executive offices are located at 27777 Inkster
Road, Farmington Hills, MI 48334, and the Company's telephone number is (810)
473-3000.
THE RESTRUCTURING. The Offer is a part of a comprehensive restructuring
developed by the Company to enhance shareholder value. The restructuring
consists of three major components: first, to focus the Company's resources on
its Michigan-based, core banking business; second, to streamline and enhance the
efficiency and profitability of that core business; and third, to reposition the
Company's balance sheet to increase return on equity by redeploying that portion
of the Company's equity capital that is not necessary for the Company's
Michigan-based, core banking business.
Over the past several months, the Company has with the assistance of its
financial advisors undertaken a comprehensive analysis of the Company's
strategic strengths and weaknesses, with a view to the disposition by the
Company of those businesses not meeting the Company's requirements for
profitability and long-term strategic value. Based on this analysis, the Company
decided to focus on its Michigan-based, core banking business. While this aspect
of the restructuring is still in the process of being implemented, the Company
has already consummated several significant dispositions described below under
the subtitle "Recent and Planned Dispositions."
On October 20, 1994, the Company announced the implementation phase of
"Project Streamline," a comprehensive program to re-engineer the internal
operating processes of the Company and its Michigan-based core banking business.
Once fully implemented, Project Streamline is expected to result in a $85
million improvement in the Company's pre-tax income from a reduction in
operating expenses and increases in non-interest income. Developed and overseen
by management of the Company with the assistance of Tandon Capital Associates,
Inc., a New York-based advisory firm, the program is also expected to improve
the Company's efficiency ratio to less than 55% by the end of the fourth quarter
of 1995. The Company expects to record up-front charges of approximately $62
million in the fourth quarter of 1994 to reflect severance and other costs
associated with Project Streamline.
As of September 30, 1994, the Company had accumulated equity capital of
approximately $998 million, representing 10.83% of its total assets. Together
with the Share Offer (see Section 10), the Offer is designed to reposition the
Company's balance sheet to increase return on equity by redeploying that portion
of the Company's equity capital that is not necessary for the Company's
Michigan-based, core banking business. Following completion of the Offer and the
Share Offer, the Company and MNB will continue to have strong capital positions
and will continue to qualify as "well capitalized" institutions under the prompt
corrective action scheme enacted by the Federal Deposit Insurance Corporation
Improvements Act of 1991. On a pro forma basis as of September 30, 1994, giving
effect to the Offer and the Share Offer at the maximum purchase prices, and
assuming acceptance of the maximum number of Shares in the Share Offer and
Contracts in the Offer, the Company would have had an equity to asset ratio of
8.60%, a Total risk-based capital ratio of 10.39% and a leverage ratio of 6.98%.
RECENT AND PLANNED DISPOSITIONS. In the third quarter of 1994, the Company
has closed or entered into agreements for the disposition of three subsidiary
businesses. Together, these dispositions and related actions have to date
resulted in one-time aggregate after-tax net gains of approximately $91.0
million.
11
<PAGE> 12
On August 4, 1994, the Company completed the sale of Lockwood Banc Group,
Inc., a bank holding company with operations in Houston, Texas. On August 31,
1994, the Company completed the sale of First State Bank and Trust, a bank with
operations in Port Lavaca and Bay City, Texas. As a result of these two sales,
the Company had a $13 million after-tax gain and core capital increase.
On August 11, 1994, the Company's mortgage banking subsidiary, Independence
One Mortgage Corporation, agreed to sell its $8.6 billion mortgage servicing
rights portfolio, its mortgage servicing operation and its non-Michigan loan
origination business. This sale, which was fully completed on October 18, 1994,
resulted in a $27 million after-tax gain and core capital increase.
On October 4, 1994, the Company announced that it plans to sell
substantially all of the assets and liabilities of IOBOC and its subsidiaries.
IOBOC has assets of approximately $500 million operates five branches in
Southern California.
The Company also announced a negotiated prepayment by the Federal Deposit
Insurance Corporation of a ten-year note received by the Company and the
termination of an assistance agreement entered into in connection with the
acquisition of IOBOC by the Company. As a result of this prepayment and
termination of the assistance agreement, the Company recognized a one-time $51
million after-tax gain and capital increase in the third quarter of 1994.
In the second quarter of 1994, tax benefits of $42.8 million associated
with the acquisition of IOBOC were recognized, $40.2 million of which were
reflected in earnings and $2.6 million of which were added directly to the
Company's shareholders' equity.
THE OFFER. As described above, the Offer is part of a comprehensive
restructuring intended to enhance shareholder value. The Offer will allow
Contract holders to sell their Contracts at a price representing a premium over
the spread between the exercise price under the Contracts and recent market
prices for the Shares for which the Contracts are exercisable, without the
transaction costs that would be associated with an exercise of the Contracts and
subsequent market sale of the underlying Shares. The Offer and the Share Offer
will increase the Company's leverage, with an attendant increase in the risks
and rewards for persons who retain a continuing equity interest in the Company.
In addition, persons who determine not to accept the Offer or the Share Offer
will realize a proportionate increase in their relative equity interest in the
Company, and thus in the Company's future earnings and assets, subject to
increased risks resulting from higher leverage and to the Company's ability to
issue additional Shares or other equity securities in the future.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, NEITHER
THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY CONTRACT
HOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH
HOLDER'S CONTRACTS AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY SUCH
RECOMMENDATION. CONTRACT HOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION
IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER CONTRACTS AND, IF SO, HOW MANY CONTRACTS TO TENDER.
Following completion of the Offer, the Company may repurchase additional
Contracts or Shares in the open market, in privately negotiated transactions or
otherwise. Any such purchases may be on the same terms or on terms which are
more or less favorable to shareholders or Contract holders than the terms of the
Share Offer or the Offer. Rule 13e-4 under the Exchange Act prohibits the
Company and its affiliates from purchasing any Shares or Contracts, other than
pursuant to the Share Offer or the Offer, until at least ten business days after
the Expiration Date. Any possible future purchases by the Company will depend on
many factors, including the market price of the Contracts or Shares, the results
of the Offer and the Share Offer, the Company's business and financial position
and general economic and market conditions.
Contracts acquired by the Company pursuant to the Offer will be cancelled.
12
<PAGE> 13
MICHIGAN NATIONAL CORPORATION
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
Set forth below is certain summary historical consolidated financial
information of the Company. The summary financial information is derived from
the audited consolidated financial statements as reported in the Company's
Annual Report and Form 10-K for the years ended December 31, 1993 and December
31, 1992 and the unaudited consolidated financial statements as reported in the
Company's Quarterly Report on Form 10-Q for the period ended September 30, 1994.
More comprehensive financial information is included in such reports, and the
financial information that follows is qualified by reference to such documents
and all of the financial statements and related notes contained therein.
<TABLE>
<CAPTION>
AT OR FOR
AT OR FOR THE YEAR ENDED
THE NINE MONTHS ENDED ----------------------------
------------------------------ DECEMBER 31, DECEMBER 31,
SEPTEMBER 30, SEPTEMBER 30, 1993 1992
1994 1993 ------------ ------------
------------- -------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO AMOUNTS)
<S> <C> <C> <C> <C>
SUMMARY INCOME DATA:
Interest income............................. $ 485,680 $ 524,786 $ 694,236 $ 779,073
Interest expense............................ 189,740 225,006 292,625 377,962
Net interest income......................... 295,940 299,780 401,611 401,111
Provision for credit losses................. 18,000 33,000 40,000 70,670
Net interest income after provision for
credit losses............................. 277,940 266,780 361,611 330,441
Noninterest income.......................... 215,103 173,067 240,830 224,793
Noninterest expense......................... 341,034 450,222 580,685 488,776
Income (loss) from continuing operations
before income taxes and cumulative effect
of accounting change...................... 152,009 (10,375) 21,756 66,458
Provision (credit) for income taxes......... (39,617) (1,506) (2,007) 6,625
------------- ------------- ------------ ------------
Income, before cumulative effect of a change
in accounting principle................... 191,626 (8,869) 23,763 59,806
Cumulative effect of a change in accounting
principle(2).............................. 0 0 0 6,265
------------- ------------- ------------ ------------
Net income (loss)........................... $ 191,626 $ (8,869) $ 23,763 $ 66,071
========== ========== ========== ==========
SUMMARY BALANCE SHEET DATA:
Total assets................................ $ 9,207,306 $ 10,395,410 $ 10,172,808 $ 10,663,324
Loans (net of unearned income and allowance
for possible credit losses)............... 5,990,673 6,507,527 6,480,274 6,555,577
Deposits.................................... 7,512,949 8,656,246 8,725,079 8,975,293
Long-term debt.............................. 70,779 77,998 77,122 82,651
Shareholders' equity........................ 997,541 781,397 815,590 805,775
PER SHARE DATA:
Net income(1)............................... $ 12.22 $ (0.59) $ 1.56 $ 4.38
Book value.................................. 65.14 51.66 53.74 53.65
Weighted average number of common shares
outstanding (thousands)................... 15,681 15,057 15,230 15,079
SELECTED RATIOS:
Ratio of earnings to fixed charges(3):
Excluding interest on deposits......... 8.5x 0.5x 1.9x 2.9x
Including interest on deposits......... 1.8x 1.0x 1.1x 1.2x
Equity to asset ratio....................... 10.83% 7.50% 8.02% 7.56%
Leverage ratio.............................. 9.13% 7.09% 7.56% 7.24%
Total risk-based capital ratio.............. 13.12% 11.16% 11.73% 11.91%
</TABLE>
- -------------------------
(1) Net income per share reflects the use of the "treasury stock" method to
calculate the common stock equivalents attributable to the Company's 8%
Redeemable Subordinated Debentures (the "Debentures"), which were issued in
conjunction with the Stock Purchase Contracts. Increasing rates during 1994
have resulted in a significant narrowing of the premium value of the fixed
income feature of the Debentures and it appears likely that the fixed income
feature could be valued at a discount in the near future. If and when that
occurs, the "if converted" method will be used to calculate the common stock
equivalents of the Debentures and the associated Stock Purchase Contracts.
The "if converted" method would result in an approximately 800,000 share
increase in common stock equivalents. In addition, interest expense on the
Debentures would be added back to income for purposes of calculating net
income per share under the "if converted" method.
(2) Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes" which
superceded SFAS No. 96.
(3) The ratio of earnings to fixed charges is computed by dividing (i) net
income less nonrecurring income plus income taxes plus fixed charges by (ii)
fixed charges. Fixed charges consist of appropriate interest expense and
one-third of rent expense.
13
<PAGE> 14
MICHIGAN NATIONAL CORPORATION
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited Pro Forma financial information reflects
transactions regarding the restructuring program described above, including
consummation of the Offer on the basis of Purchase Prices of $78 and $90 per
Share, consummation of the Contract Offer on the basis of a per Share equivalent
repurchase price of $78 and $90, assuming in each case acceptance of the maximum
number of Shares in the Offer and Stock Purchase Contracts in the Contract
Offer. The unaudited Pro Forma Statement of Income data give effect to such
transactions as if they had occurred at the beginning of the periods presented.
The unaudited Pro Forma balance sheet data give effect to the transactions as if
they had occurred on the respective dates indicated. The Pro Forma information
should be read in conjunction with the summary historical financial information
and does not purport to be indicative of the results which may be obtained in
the future or which would actually have been obtained had the Offer and the
Contract Offer occurred as of the dates indicated.
<TABLE>
<CAPTION>
AT OR FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
----------------------------------------------------------------------------
CONTRACT
OFFER AT
$78 PER OFFER AT
UNAUDITED SHARE PRO $78 PER PRO
HISTORICAL EQUIVALENT(3) FORMA SHARE(5) FORMA
---------- ------------- ---------- --------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Interest income.................................. $ 485,680 $ 0 $ 485,680 $ 0 $ 485,680
Interest expense................................. (189,740) (712)(4) (190,452) (4,902)(4) (195,354)
---------- ------ ---------- --------- ----------
Net interest income............................ 295,940 (712) 295,228 (4,902) 290,326
Provision for credit losses...................... 18,000 0 18,000 0 18,000
---------- ------ ---------- --------- ----------
Net interest income after provision for credit
losses....................................... 277,940 (712) 277,228 (4,902) 272,326
Noninterest income............................... 215,103 0 215,103 0 215,103
Noninterest expense.............................. 341,034 0 341,034 0 341,034
Provision (credit) for income taxes.............. (39,617) (249) (39,866) (1,716) (41,582)
---------- ------ ---------- --------- ----------
Net income (loss)................................ $ 191,626 $(463) $ 191,163 $ (3,186) $ 187,977
========= =========== ========= ========= =========
PER SHARE DATA:
Net income per share............................. $12.22(2) $12.39 $13.85
Book value per share............................. $65.14 $65.10 $61.52
CONSOLIDATED BALANCE SHEET DATA:
Total assets..................................... $9,207,306 $9,207,306 $9,207,306
Loans (net of unearned income and allowance for
possible credit losses)........................ 5,990,673 5,990,673 5,990,673
Deposits......................................... 7,512,949 7,512,949 7,512,949
Long-term debt................................... 70,779 70,779 70,779
Shareholders' equity............................. 997,541 $(463) 997,078 $(169,205) 827,873
SELECTED RATIOS:
Ratio of earnings to fixed charges:(1)
Excluding interest on deposits................. 8.5x 8.2x 6.7x
Including interest on deposits................. 1.8x 1.8x 1.7x
Equity to asset ratio............................ 10.83% 10.83% 8.99%
Leverage ratio................................... 9.13% 9.13% 7.35%
Total risk based capital ratio................... 13.12% 12.98% 10.85%
</TABLE>
- -------------------------
(1) The ratio of earnings to fixed charges is computed by dividing (i) net
income less nonrecurring income plus income taxes plus fixed charges by (ii)
fixed charges. Fixed charges consist of appropriate interest expense and
one-third of rent expense.
(2) For the historical data only, net income per share reflects the use of the
"treasury stock" method to calculate the common stock equivalents
attributable to the 8% Debentures, which were issued in conjunction with the
Contracts. Increasing rates during 1994 have resulted in a significant
narrowing of the premium value of the fixed income feature of the 8%
Debentures and it appears likely that the fixed income feature could be
valued at a discount in the near future. If and when that occurs, the "if
converted" method will be used to calculate the common stock equivalents of
the 8% Debentures and the associated Contracts. The "if converted" method
would result in an approximately 800,000 share increase in common stock
equivalents. In addition, interest expense on the 8% Debentures would be
added back to income for purposes of calculating net income per share under
the "if converted" method. To the extent Contracts are acquired in the
Offer, the foregoing will not apply.
(3) Assumes acceptance of 100% of the Contracts sought in the Offer.
(4) The adjustment reflects replacing the Stock Purchase Contracts and Shares
assumed to be acquired in the Contract Offer and the Offer, respectively,
with a liability with an assumed cost equal to the average Fed Funds rate
for the period.
(5) See Section 10. Assumes acceptance of 100% of the Shares sought in the
Offer.
14
<PAGE> 15
MICHIGAN NATIONAL CORPORATION
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
AT OR FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
--------------------------------------------------------------------------
CONTRACT OFFER
AT $90 PER OFFER AT
UNAUDITED SHARE PRO $90 PER PRO
HISTORICAL EQUIVALENT(3) FORMA SHARE(5) FORMA
---------- -------------- ---------- ----------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF INCOME DATA:
Interest income................................ $ 485,680 $ 0 $ 485,680 $ 0 $ 485,680
Interest expense............................... (189,740) (1,152)(4) (190,892) (5,656)(4) (196,549)
---------- ------- ---------- ----------- ----------
Net interest income.......................... 295,940 (1,152) 294,788 (5,656) 289,131
Provision for credit losses.................... 18,000 0 18,000 0 18,000
---------- ------- ---------- ----------- ----------
Net interest income after provision for
credit losses.............................. 277,940 (1,152) 276,788 (5,656) 271,131
Noninterest income............................. 215,103 0 215,103 0 215,103
Noninterest expense............................ 341,034 0 341,034 0 341,034
Provision (credit) for income taxes............ (39,617) (403) (40,020) (1,980) (42,000)
---------- ------- ---------- ----------- ----------
Net income (loss).............................. $ 191,626 $ (749) $ 190,877 $ (3,677) $ 187,200
========= ============= ========== ========== ==========
PER SHARE DATA:
Net income per share........................... $12.22(2) $12.37 $13.75
Book value per share........................... $65.14 $65.09 $58.84
CONSOLIDATED BALANCE SHEET DATA:
Total assets................................... $9,207,306 $9,207,306 $9,207,306
Loans (net of unearned income and allowance for
possible credit losses)...................... 5,990,673 5,990,673 5,990,673
Deposits....................................... 7,512,949 7,512,949 7,512,949
Long-term debt................................. 70,779 70,779 70,779
Shareholders' equity........................... 997,541 $ (749) 996,792 $(205,027) 791,765
SELECTED RATIOS:
Ratio of earnings to fixed charges:(1)
Excluding interest on deposits............... 8.5x 8.1 x 6.5 x
Including interest on deposits............... 1.8x 1.8 x 1.7 x
Equity to asset ratio.......................... 10.83% 10.83 % 8.60 %
Leverage ratio................................. 9.13% 9.12 % 6.98 %
Total risk based capital ratio................. 13.12% 12.98 % 10.39 %
</TABLE>
- -------------------------
(1) The ratio of earnings to fixed charges is computed by dividing (i) net
income less nonrecurring income plus income taxes plus fixed charges by (ii)
fixed charges. Fixed charges consist of appropriate interest expense and
one-third of rent expense.
(2) For the historical data only, net income per share reflects the use of the
"treasury stock" method to calculate the common stock equivalents
attributable to the 8% Debentures, which were issued in conjunction with the
Contracts. Increasing rates during 1994 have resulted in a significant
narrowing of the premium value of the fixed income feature of the 8%
Debentures and it appears likely that the fixed income feature could be
valued at a discount in the near future. If and when that occurs, the "if
converted" method will be used to calculate the common stock equivalents of
the 8% Debentures and the associated Contracts. The "if converted" method
would result in an approximately 800,000 share increase in common stock
equivalents. In addition, interest expense on the 8% Debentures would be
added back to income for purposes of calculating net income per share under
the "if converted" method. To the extent Contracts are acquired in the
Offer, the foregoing will not apply.
(3) Assumes acceptance of 100% of the Contracts sought in the Offer.
(4) The adjustment reflects replacing the Stock Purchase Contracts and Shares
assumed to be acquired in the Contract Offer and the Offer, respectively,
with a liability with an assumed cost equal to the average Fed Funds rate
for the period.
(5) See Section 10. Assumes acceptance of 100% of the Shares sought in the
Offer.
15
<PAGE> 16
MICHIGAN NATIONAL CORPORATION
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31, 1993
-------------------------------------------------------------------
CONTRACT
OFFER AT OFFER AT
$78 PER SHARE PRO $78 PER PRO
HISTORICAL EQUIVALENT(3) FORMA SHARE(5) FORMA
----------- ------------- ----------- --------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Interest income............................................ $694,236 $ 0 $694,236 $0 $694,236
Interest expense........................................... (292,625) (636)(4) (293,261) (4,378)(4) (297,639)
----------- ------ ----------- --------- -----------
Net interest income...................................... 401,611 (636) 400,975 (4,378) 396,597
Provision for credit losses................................ 40,000 0 40,000 0 40,000
----------- ------ ----------- --------- -----------
Net interest income after provision for credit losses.... 361,611 (636) 360,975 (4,378) 356,597
Noninterest income......................................... 240,830 0 240,830 0 240,830
Noninterest expense........................................ 580,685 0 580,685 0 580,685
Provision (credit) for income taxes........................ (2,007) (222) (2,229) (1,532) (3,762)
----------- ------ ----------- --------- -----------
Net income (loss).......................................... $23,763 $(413) $23,350 $(2,846) $20,504
========== =========== ========== ========= ==========
PER SHARE DATA:
Net income per share....................................... $1.56(2) $1.54 $1.52
Book value per share....................................... $53.74 $53.71 $48.53
CONSOLIDATED BALANCE SHEET DATA:
Total assets............................................... $10,172,808 $10,172,808 $10,172,808
Loans (net of unearned income and allowance for possible
credit losses)........................................... 6,480,274 6,480,274 6,480,274
Deposits................................................... 8,725,079 8,725,079 8,725,079
Long-term debt............................................. 77,122 77,122 77,122
Shareholders' equity....................................... 815,590 $(413) 815,177 $(168,864) 646,313
SELECTED RATIOS:
Ratio of earnings to fixed charges(1):
Excluding interest on deposits........................... 1.9x 1.8x 1.6x
Including interest on deposits........................... 1.1x 1.1x 1.1x
Equity to asset ratio...................................... 8.02% 8.01% 6.35%
Leverage ratio............................................. 7.56% 7.56% 5.96%
Total risk based capital ratio............................. 11.73% 11.59% 9.52%
</TABLE>
- -------------------------
(1) The ratio of earnings to fixed charges is computed by dividing (i) net
income less nonrecurring income plus income taxes plus fixed charges by (ii)
fixed charges. Fixed charges consist of appropriate interest expense and
one-third of rent expense.
(2) For the historical data only, net income per share reflects the use of the
"treasury stock" method to calculate the common stock equivalents
attributable to the 8% Debentures, which were issued in conjunction with the
Contracts. Increasing rates during 1994 have resulted in a significant
narrowing of the premium value of the fixed income feature of the 8%
Debentures and it appears likely that the fixed income feature could be
valued at a discount in the near future. If and when that occurs, the "if
converted" method will be used to calculate the common stock equivalents of
the 8% Debentures and the associated Contracts. The "if converted" method
would result in an approximately 800,000 share increase in common stock
equivalents. In addition, interest expense on the 8% Debentures would be
added back to income for purposes of calculating net income per share under
the "if converted" method. To the extent Contracts are acquired in the
Offer, the foregoing will not apply.
(3) Assumes acceptance of 100% of the Contracts sought in the Offer.
(4) The adjustment reflects replacing the Stock Purchase Contracts and Shares
assumed to be acquired in the Contract Offer and the Offer, respectively,
with a liability with an assumed cost equal to the average Fed Funds rate
for the period.
(5) See Section 10. Assumes acceptance of 100% of the Shares sought in the
Offer.
16
<PAGE> 17
MICHIGAN NATIONAL CORPORATION
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31, 1993
----------------------------------------------------------------------------
CONTRACT
OFFER AT
$90 PER OFFER AT
SHARE PRO $90 PER PRO
HISTORICAL EQUIVALENT(3) FORMA SHARE(5) FORMA
------------ ------------- ----------- --------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Interest income.................................. $ 694,236 $ 0 $ 694,236 $ 0 $ 694,236
Interest expense................................. (292,625 ) (1,029)(4) (293,654) (5,052)(4) (298,706)
------------ ------------- ----------- --------- -----------
Net interest income............................ 401,611 (1,029) 400,582 (5,052) 395,530
Provision for credit losses...................... 40,000 0 40,000 0 40,000
------------ ------------- ----------- --------- -----------
Net interest income after provision for credit
losses....................................... 361,611 (1,029) 360,582 (5,052) 355,530
Noninterest income............................... 240,830 0 240,830 0 240,830
Noninterest expense.............................. 580,685 0 580,685 0 580,685
Provision (credit) for income taxes.............. (2,007 ) (360) (2,367) (1,768) (4,135)
------------ ------------- ----------- --------- -----------
Net income (loss)................................ $ 23,763 $ (669) $ 23,094 $ (3,284) $ 19,810
========== =========== ========== ========= ==========
PER SHARE DATA:
Net income per share............................. $1.56 (2) $1.52 $1.46
Book value per share............................. $53.74 $53.69 $45.82
CONSOLIDATED BALANCE SHEET DATA:
Total assets..................................... $10,172,808 $10,172,808 $10,172,808
Loans (net of unearned income and allowance for
possible credit losses)........................ 6,480,274 6,480,274 6,480,274
Deposit.......................................... 8,725,079 8,725,079 8,725,079
Long-term debt................................... 77,122 77,122 77,122
Shareholders' equity............................. 815,590 (669) 814,921 (204,634) 610,287
SELECTED RATIOS:
Ratio of earnings to fixed charges:(1)
Excluding interest on deposit.................. 1.9 x 1.8x 1.6x
Including interest on deposits................. 1.1 x 1.1x 1.1x
Equity to asset ratio............................ 8.02 % 8.01% 6.00%
Leverage ratio................................... 7.56 % 7.55% 5.62%
Total risk based capital ratio................... 11.73 % 11.59% 9.08%
</TABLE>
- -------------------------
(1) The ratio of earnings to fixed charges is computed by dividing (i) net
income less nonrecurring income plus income taxes plus fixed charges by (ii)
fixed charges. Fixed charges consist of appropriate interest expense and
one-third of rent expense.
(2) For the historical data only, net income per share reflects the use of the
"treasury stock" method to calculate the common stock equivalents
attributable to the 8% Debentures, which were issued in conjunction with the
Contracts. Increasing rates during 1994 have resulted in a significant
narrowing of the premium value of the fixed income feature of the 8%
Debentures and it appears likely that the fixed income feature could be
valued at a discount in the near future. If and when that occurs, the "if
converted" method will be used to calculate the common stock equivalents of
the 8% Debentures and the associated Contracts. The "if converted" method
would result in an approximately 800,000 share increase in common stock
equivalents. In addition, interest expense on the 8% Debentures would be
added back to income for purposes of calculating net income per share under
the "if converted" method. To the extent Contracts are acquired in the
Offer, the foregoing will not apply.
(3) Assumes acceptance of 100% of the Contracts sought in the Offer.
(4) The adjustment reflects replacing the Stock Purchase Contracts and Shares
assumed to be acquired in the Contract Offer and the Offer, respectively,
with a liability with an assumed cost equal to the average Fed Funds rate
for the period.
(5) See Section 10. Assumes acceptance of 100% of the Shares sought in the
Offer.
17
<PAGE> 18
ADDITIONAL INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. The Company is required to
disclose in such proxy statements and reports certain information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal owners of the
Company's securities and any material interest of such persons in transactions
with the Company. The Company has also filed an Issuer Tender Offer Statement on
Schedule 13E-4 (the "Schedule 13E-4") with the Commission, which includes
certain additional information relating to the Offer.
Such material may be inspected at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and also should be available for inspection and copying at the
following regional offices of the Commission: Seven World Trade Center, New
York, New York 10048 and Northwestern Atrium Center, 500 West Madison, Suite
1400, Chicago, Illinois 60661. Copies may also be obtained by mail for
prescribed rates from the Commission's Public Reference Room, 450 Fifth Street,
N.W., Washington, D.C. 20549. The Schedule 13E-4 will not be available at the
Commission's regional offices.
10. THE SHARE OFFER.
Simultaneously with the Offer, the Company is making a separate offer to
purchase for cash up to 1,858,650 Shares at prices not greater than $90 and not
less than $78 per Share, specified by the Company's shareholders, upon the terms
and subject to the conditions of the Share Offer. The Company will determine a
single per Share price (not greater than $90 and not less than $78 per Share)
that it will pay for Shares validly tendered pursuant to the Share Offer, taking
into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the purchase price that will
allow it to buy 1,858,650 Shares pursuant to the Share Offer. If the final
purchase price in the Share Offer is greater than $78.00 per Share, the Company
will increase the Purchase Price for the Contracts under the Offer to equal the
Share Offer purchase price less $56.375, which is the exercise price of the
Contracts. In such event, the Company will extend the Offer (but not the Share
Offer) for an additional ten business days.
Neither the Company nor its Board of Directors make any recommendation to
any holder of Contracts or Shares as to whether to exercise the Contracts or as
to whether to tender or refrain from tendering pursuant to the Offer or the
Share Offer. To the extent holders of Contracts receive Shares upon exercise
thereof such exercises will be irrevocable. If any such Shares are not purchased
pursuant to the Share Offer, holders of such Shares will no longer be owner of
the related Contracts entitled to the rights and subject to the obligations
thereunder.
11. CERTAIN EFFECTS OF THE OFFER AND THE SHARE OFFER.
As discussed in Section 6, the Contracts are not listed on any securities
exchange nor are they quoted on any national or other reporting system. The
Company's purchase of Contracts pursuant to the Offer will reduce the number of
Contracts that might otherwise trade publicly and is likely to reduce the number
of holders.
Pursuant to the terms of the Contracts and the Equity Contract Agency
Agreement (the "Contract Agency Agreement") that governs the Contracts,
commencement of the Share Offer may require the Company to adjust the Exercise
Price under the Contracts. Currently the Exercise Price is $56.375. Depending
upon the purchase price in the Share Offer, the Exercise Price will be adjusted
to equal between approximately $55.372 (in the event the purchase price in the
Share Offer is $86.25) and $54.987 (in the event the purchase price in the Share
Offer is $90.00), in each case assuming that the Company receives valid tenders
for and accepts 100% of the Shares sought in the Share Offer. In addition, upon
such adjustment, each Contract will represent the obligation and the right to
purchase, at the adjusted Exercise Price, the number of Shares obtained by (i)
multiplying the number of Shares purchasable thereunder prior to such adjustment
by $56.375 and (ii) dividing that product by the Exercise Price as so adjusted,
rounding to the nearest one-hundredth of a Share. For example, if a Contract
were currently exercisable for one Share, following such
18
<PAGE> 19
adjustment, the Contract would be exercisable for between 1.02 Shares (in the
event the purchase price in the Share Offer is $86.25) and 1.03 Shares (in the
event the purchase price in the Share Offer is $90.00).
If the Exercise Price is adjusted, the Company will increase the Purchase
Price for the Contracts under the Offer by the amount of the adjustment, and
extend the Offer for ten business days.
Following consummation of the Share Offer, the Company will notify each
holder of outstanding Contracts at that time of the adjustments to the Exercise
Price and number of Shares for which Contracts are exercisable. Delivery of this
Offer constitutes notice of the commencement of the Share Offer pursuant to the
Contract Agency Agreement.
The foregoing information is qualified in its entirety by reference to the
Contracts and the Contract Agency Agreement, forms of which are exhibits to the
Company's Registration Statement No. 33-24751.
Contracts acquired by the Company pursuant to the Offer will be cancelled.
The Contracts were initially issued as units together with corresponding 8%
Debentures. The Equity Contract Agency Agreement and the Indenture governing the
Contracts and 8% Debentures restrict the transfer of these securities other than
as units. IN ORDER FOR CONTRACTS TO BE CORRECTLY AND VALIDLY TENDERED PURSUANT
TO THIS OFFER, CONTRACT HOLDERS MUST SURRENDER CORRESPONDING 8% DEBENTURES
SIMULTANEOUSLY WITH THE TENDER OF CONTRACTS AND SUBMISSION OF THE LETTER OF
TRANSMITTAL AND OTHER DOCUMENTS REQUIRED BY THE OFFER. As soon as practicable
after acceptance of Contracts pursuant to the Offer, 8% Debentures so
surrendered will be exchanged for 8% Debentures of equal principal amount and
redelivered to the holder. Thereafter, the transfer of such redelivered 8%
Debentures will not be restricted by the terms of the Indenture.
12. REGULATORY APPROVALS.
As a registered bank holding company, the Company is subject to the
supervision of the Federal Reserve Board. In addition, because of its ownership
of IOBOC, the Company is also regulated as a savings and loan holding company by
the OTS.
MNB is a member of the Federal Reserve System and is a member of the
Federal Deposit Insurance Corporation. The electronic funds transfer services of
MNB are governed by both state and federal laws.
The Company does not require prior regulatory approval to consummate the
Offer or the Share Offer.
The Bank Holding Company Act of 1956 and the Change in Bank Control Act
each set forth thresholds with respect to the ownership of voting shares of a
bank holding company of 5% and 10%, respectively, over which the owner of such
voting shares may be determined to control such bank holding company. If, as a
result of the Offer or the Share Offer, the ownership interest of any
shareholder in the Company is increased over these thresholds, such shareholder
may be required to reduce its ownership interest in the Company. Each
shareholder whose ownership interest may be so increased is urged to consult the
shareholder's own legal counsel with respect to the consequences to the
shareholder of the Offer and the Share Offer.
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The summary of tax consequences set forth below is for general information
only and is based on the law as currently in effect. The tax treatment of each
Contract holder will depend in part upon such Contract holder's particular
situation. Special tax consequences not described herein may be applicable to
particular classes of taxpayers, such as insurance companies, tax-exempt
organizations, financial institutions, broker-dealers and persons who are not
citizens or residents of the United States. For purposes of this discussion,
Contract holders are assumed to hold their Contracts as capital assets. No
ruling as to any matter discussed in this summary has been requested or received
from the IRS.
EACH CONTRACT HOLDER IS URGED TO CONSULT AND RELY ON THE CONTRACT HOLDER'S
OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO THE
19
<PAGE> 20
CONTRACT HOLDER OF TENDERING CONTRACTS PURSUANT TO THE OFFER, INCLUDING THE
APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX, AND ANY STATE, LOCAL OR
FOREIGN INCOME AND OTHER TAX LAWS AND OF CHANGES IN SUCH TAX LAWS.
The receipt of cash in exchange for Contracts pursuant to the Offer will be
a taxable transaction for Federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be a taxable transaction
under applicable state, local or foreign income and other tax laws. Generally,
for Federal income tax purposes a tendering Contract holder will recognize gain
or loss in an amount equal to the difference between the cash received by the
Contract holder pursuant to the Offer and the Contract holder's adjusted tax
basis in the Contracts tendered by the Contract holder and purchased pursuant to
the Offer. For Federal income tax purposes, such gain or loss will be a capital
gain or loss if the Contracts are a capital asset in the hands of the Contract
holder, and a long-term capital gain or loss if the Contract holder's holding
period is more than one year.
BACKUP WITHHOLDING. See Section 2 concerning the potential application of
federal backup withholding.
14. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS.
The Company expressly reserves the right, at any time or from time to time,
in its sole discretion, to extend the period of time during which the Offer is
open by giving oral or written notice of such extension to the Depositary and
making a public announcement thereof. The Company also expressly reserves the
right, in its sole discretion, to terminate the Offer and not accept for payment
or pay for any Contracts not theretofore accepted for payment or paid for or,
subject to applicable law, to postpone payment for Contracts upon the occurrence
of any of the conditions specified in Section 5 by giving oral or written notice
of such termination or postponement to the Depositary and making a public
announcement thereof. The Company's reservation of the right to delay payment
for Contracts which it has accepted for payment is limited by Rules 13e-4(f)(2)
and 13e-4(f)(5) promulgated under the Exchange Act. Rule 13e-4(f)(2) requires
that the Company permit Contracts tendered pursuant to the Offer to be
withdrawn: (i) at any time during the period the Offer remains open; and (ii) if
not yet accepted for payment, after the expiration of forty business days from
the commencement of the Offer. Rule 13e-4(f)(5) requires that the Company must
either pay the consideration offered or return the Contracts tendered promptly
after the termination or withdrawal of the Offer. Subject to compliance with
applicable law, the Company further reserves the right, in its sole discretion,
at any time or from time to time to amend the Offer in any respect, including
increasing or decreasing the number of Contracts the Company may purchase or the
price it may pay pursuant to the Offer. Amendments to the Offer may be made at
any time or from time to time effected by public announcement thereof, such
announcement, in the case of an extension, to be issued no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Any public announcement made pursuant to the Offer will be
disseminated promptly to holders in a manner reasonably designed to inform
holders of such change. Without limiting the manner in which the Company may
choose to make a public announcement, except as required by applicable law, the
Company shall have no obligation to publish, advertise or otherwise communicate
any such public announcement other than by making a release to the Dow Jones
News Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules require that the
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of such terms or
information. If (i) the Company increases or decreases the price to be paid for
Contracts, or the Company decreases the number of Contracts being sought and
(ii) the Offer is scheduled to expire at any time earlier than the expiration of
a period ending on the tenth business day from, and including, the date that
notice of such increase or decrease is first published, sent or given, the Offer
will be extended until the expiration of such period of ten business days.
20
<PAGE> 21
15. FEES AND EXPENSES.
The Company has retained Keefe, Bruyette & Woods, Inc. ("KBW") and CS First
Boston Corporation ("FB") as Dealer Managers in connection with the Offer and
the Share Offer. The Dealer Managers will each receive a fee of $.05 per Share
purchased by the Company pursuant to the Share Offer and a fee of $.05 per
Contract purchased by the Company pursuant to the Offer. The Company will also
reimburse KBW and FB for their reasonable out-of-pocket expenses relating to the
Offer, including reasonable fees and expenses of counsel. The Company has agreed
to indemnify KBW and FB against certain liabilities in connection with the
Offer, including certain liabilities under the federal securities laws. The
Dealer Managers have also rendered various investment banking and other advisory
services to the Company in the past, for which they have received customary
compensation.
The Company has retained Georgeson & Company Inc. as Information Agent and
First Chicago Trust Company of New York as Depositary in connection with the
Offer. The Information Agent may contact shareholders by mail, telephone, telex,
telegraph and personal interviews, and may request brokers, dealers and other
nominee shareholders to forward materials relating to the Offer to beneficial
owners. The Depositary and the Information Agent will receive reasonable and
customary compensation for their services. The Company will also reimburse the
Depositary and the Information Agent for out-of-pocket expenses, including
reasonable attorneys' fees, and has agreed to indemnify the Depositary and the
Information Agent against certain liabilities in connection with the Offer,
including certain liabilities under the federal securities laws. Neither the
Information Agent nor the Depositary has been retained to make solicitations or
recommendations in connection with the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person (other than the Dealer Managers)
for soliciting any Shares pursuant to the Offer. The Company will, however, on
request through the Information Agent, reimburse such persons for customary
handling and mailing expenses incurred in forwarding materials in respect of the
Offer to the beneficial owners for which they act as nominees. No such broker,
dealer, commercial bank or trust company has been authorized to act as the
Company's agent for purposes of this Offer. The Company will pay (or cause to be
paid) any transfer taxes on its purchase of Contracts, except as otherwise
provided in the instructions in the Letter of Transmittal.
16. MISCELLANEOUS.
The Offer is not being made to, nor will the Company accept tenders from,
holders of Contracts in any jurisdiction in which the Offer or its acceptance
would not comply with the securities or Blue Sky laws of such jurisdiction. The
Company is not aware of any jurisdiction in which the making of the Offer or the
tender of Shares would not be in compliance with the laws of such jurisdiction.
However, the Company reserves the right to exclude holders in any jurisdiction
in which it is asserted that the Offer cannot lawfully be made. So long as the
Company makes a good faith effort to comply with any state law deemed applicable
to the Offer, if it cannot do so, the Company believes that the exclusion of
holders residing in such jurisdiction is permitted under Rule 13e-4(f)(9)
promulgated under the Exchange Act. In any jurisdiction the securities or Blue
Sky laws of which require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on the Company's behalf by KBW or FB, each
as Dealer Manager, or one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
MICHIGAN NATIONAL CORPORATION
November 3, 1994
21
<PAGE> 22
SCHEDULE A
TRANSACTIONS EFFECTED BY DIRECTORS OR OFFICERS
Transactions since September 15, 1994, in the Shares or Contracts, effected
by, or for the benefit of, directors or officers:
1. 172 Shares were allocated to accounts of certain officers who participate in
Deferred Compensation Plan ("DCP"), on September 30, 1994. Allocation was
made as follows:
<TABLE>
<CAPTION>
DCP
---
<S> <C>
Lawrence L. Gladchun............................................................... 24
B. Matt Morris, III................................................................ 11
Robert V. Pannizzi................................................................. 13
William D. Ritsema................................................................. 8
Edward H. Sondker.................................................................. 3
Richard C. Webb.................................................................... 62
Richard E. Blough.................................................................. 51
---
172
</TABLE>
2. 38 Shares were received on September 15, 1994, and 28 Shares were received
on October 15, 1994, by Stanton Kinnie Smith, Jr., pursuant to a previous
election to defer director fees pursuant to the Company's Directors Deferred
Compensation Plan.
22
<PAGE> 23
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and Contracts and any other required documents should be sent or
delivered by each shareholder or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its addresses set forth
below:
THE DEPOSITARY:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
P.O. Box 2560 (201) 222-4720 or 14 Wall Street, 8th Floor
Mail Suite 4660 MNC (201) 222-4721 Attn: Tenders and Exchanges
Jersey City, New Jersey Confirmation of Facsimile Suite 4680 MNC
07303-2560 Transmission ONLY: New York, New York 10005
(201) 222-4707
</TABLE>
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
addresses below. You may also contact either Dealer Manager or your broker,
dealer, commercial bank or trust company for assistance concerning the Offer. To
confirm delivery of your Contracts, you are directed to contact the Depositary.
THE INFORMATION AGENT:
(LOGO)
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT:
(212) 440-9800
ALL OTHERS CALL TOLL-FREE:
1-800-223-2064
THE DEALER MANAGERS FOR THE OFFER ARE:
<TABLE>
<S> <C>
KEEFE, BRUYETTE & WOODS, INC. CS FIRST BOSTON CORPORATION
(212) 323-8450 (212) 909-2000
</TABLE>
<PAGE> 1
EXHIBIT 99.(a)(2)
LETTER OF TRANSMITTAL
TO ACCOMPANY STOCK PURCHASE CONTRACTS
OF
MICHIGAN NATIONAL CORPORATION
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 3, 1994
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME,
ON FRIDAY, DECEMBER 2, 1994, UNLESS THE OFFER IS EXTENDED.
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY
By Mail: By Hand or Overnight Courier:
P.O. Box 2560 14 Wall Street
Mail Suite 4660 MNC Attn: Tenders and Exchanges
Jersey City, New Jersey 07303-2560 8th Floor, Suite 4680 MNC
New York, New York 10005
<TABLE>
<CAPTION>
DESCRIPTION OF CONTRACTS TENDERED AND 8% DEBENTURES SURRENDERED FOR EXCHANGE
(SEE INSTRUCTIONS 3, 4 AND 11)
- ------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN EXACTLY AS CONTRACT(S) TENDERED CORRESPONDING 8% DEBENTURES
NAME(S) APPEAR(S) ON CONTRACT(S)) (Attach signed list if necessary) SURRENDERED FOR EXCHANGE
------------------------------------------------------------------------------------------------------------------------------
NUMBER
CONTRACT OF CONTRACTS 8% DEBENTURE PRINCIPAL AMOUNT
NUMBER(S) TENDERED* NUMBER(S) OF 8% DEBENTURE(S)
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
TOTAL
TOTAL DEBENTURES
CONTRACTS SUBMITTED
TENDERED FOR EXCHANGE
------------------------------------------------------------------------------------------------------------------------------
* If you desire to tender fewer than all the Contracts listed above, please indicate in this column the number of
Contracts you wish to tender. Otherwise, all Contracts will be deemed tendered. See Instruction 4.
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.
THIS LETTER OF TRANSMITTAL IS TO BE USED ONLY IF CONTRACTS (AS DEFINED
BELOW) AND CORRESPONDING 8% DEBENTURES (AS DEFINED BELOW) ARE TO BE FORWARDED
WITH IT, PURSUANT TO SECTION 3 OF THE OFFER TO PURCHASE. NEITHER CONTRACTS NOR
8% DEBENTURES ARE ELIGIBLE FOR BOOK-ENTRY DELIVERY, THROUGH THE DEPOSITARY TRUST
COMPANY OR OTHERWISE.
<PAGE> 2
HOLDERS WHOSE CONTRACTS OR 8% DEBENTURES ARE NOT IMMEDIATELY AVAILABLE OR
WHO CANNOT DELIVER THEIR CONTRACTS, CORRESPONDING 8% DEBENTURES AND ALL OTHER
DOCUMENTS THIS LETTER OF TRANSMITTAL REQUIRES TO THE DEPOSITARY AT OR BEFORE THE
EXPIRATION DATE MUST TENDER THEIR CONTRACTS AND/OR SURRENDER FOR EXCHANGE THEIR
8% DEBENTURES ACCORDING TO THE GUARANTEED DELIVERY PROCEDURE SET FORTH IN
SECTION 2 OF THE OFFER TO PURCHASE. SEE INSTRUCTION 2.
/ / CHECK HERE IF CERTIFICATES FOR TENDERED CONTRACTS OR CORRESPONDING
DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution Which Guaranteed Delivery:
To FIRST CHICAGO TRUST COMPANY OF NEW YORK:
The undersigned hereby tenders to Michigan National Corporation, a Michigan
corporation (the "Company"), the above-described Cancellable Mandatory Stock
Purchase Contracts (the "Contracts"), at the price per Contract of $21.625, net
to the seller in cash, upon the terms and subject to the conditions set forth in
the Company's Offer to Purchase dated November 3, 1994, receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer"). The undersigned simultaneously surrenders for exchange
commonly registered Subordinated Debentures due November 10, 1998 ("8%
Debentures") corresponding to the Contracts tendered by this Letter of
Transmittal. The undersigned understands that as soon as practicable after
acceptance of the Contracts, the Company will send or cause to send to
undersigned Unrestricted 8% Debentures (as defined in the Equity Contract Agency
Agreement governing the Contracts) of equal principal value to those
surrendered.
Subject to and effective on acceptance for payment of the Contracts
tendered hereby in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms or conditions of any such extension or
amendment), the undersigned hereby sells, assigns, and transfers to or upon the
order of the Company all right, title and interest in and to all Contracts
tendered hereby that are purchased pursuant to the Offer to or upon the order of
the Company and hereby irrevocably constitutes and appoints the Depositary as
attorney-in-fact of the undersigned with respect to such Contracts, with full
power of substitution (such power of attorney being an irrevocable power coupled
with interest), to:
(a) deliver such Contracts, together in either such case with all
accompanying evidences of transfer and authenticity, to or upon the order
of the Company, upon receipt by the Depositary, as the undersigned's agent,
of the Purchase Price (as defined below) with respect to such Contracts;
(b) present such Contracts for cancellation and transfer on the
Company's books; and
(c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Contracts, all in accordance with the terms of
the Offer.
The undersigned hereby represents and warrants to the Company that:
(a) the undersigned understands that tenders of Contracts and
surrenders for exchange of 8% Debentures pursuant to any one of the
procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute the undersigned's acceptance of the
terms and conditions of the Offer;
(b) when and to the extent the Company accepts the Contracts for
purchase, the Company will acquire good, marketable and unencumbered title
to them, free and clear of all security interests, liens, charges,
encumbrances, conditional sales agreements or other obligations relating to
their sale or transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any
additional documents the Depositary or the Company deems necessary or
desirable to complete the assignment, transfer and purchase of the
Contracts tendered hereby or the exchange of 8% Debentures surrendered for
exchange hereby; and
(d) the undersigned has read and agrees to all of the terms of the
Offer.
The names and addresses of the registered owners should be printed, if they
are not already printed above, exactly as they appear on the Contracts tendered
hereby. The Contract numbers and the number of Contracts that the undersigned
wishes to tender, and the 8% Debenture numbers and principal amount of 8%
Debentures that the undersigned wishes to surrender for exchange should be
indicated in the appropriate boxes above.
The undersigned and the Company agree that acceptance by the Company of
Contracts pursuant to the terms and subject to the conditions of this Letter of
Transmittal shall satisfy, in all respects, any and all requirements and
obligations
<PAGE> 3
imposed in respect of the transfer of such Contracts from the undersigned to the
Company by the Equity Contract Agency Agreement by and between the Company and
Bankers Trust Company, as Equity Contract Agent, including without limitation
Section 6.01(d) thereof. The undersigned and the Company agree that no further
form of Assignment (as described to in the Equity Contract Agency Agreement)
shall be required to be executed, nor shall any Collateral (as defined in the
Equity Contract Agency Agreement) be required to be posted, nor shall any Form
of Collateral Agreement (as described to in the Equity Contract Agency
Agreement) be required to be executed with respect to any Contracts accepted by
the Company pursuant to this Letter of Transmittal.
The undersigned recognizes that under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may not
be required to purchase any of the Contracts tendered hereby or may accept for
payment fewer than all of the Contracts tendered hereby. The undersigned
understands that Contracts not tendered or not purchased (together with any
corresponding 8% Debentures) will be returned to the undersigned at the address
indicated above, unless otherwise indicated under the "Special Payment
Instructions" or "Special Delivery Instructions" below. The undersigned
recognizes that the Company has no obligation, pursuant to the "Special Payment
Instructions," to transfer any Contracts (or corresponding 8% Debentures) from
the name of their registered owner, or to order the registration or transfer of
such Contracts, if the Company purchases none of the Contracts tendered.
The undersigned understands that acceptance of Contracts by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the Purchase Price for such of the tendered Contracts as are
purchased and the unrestricted 8% Debentures to be issued in exchange for such
of the corresponding 8% Debentures will be issued to the order of the
undersigned and mailed to the address indicated above unless otherwise indicated
under the "Special Payment Instructions" or the "Special Delivery Instructions"
below.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligations of the undersigned under this Letter of Transmittal shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable.
<PAGE> 4
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 9)
To be completed ONLY if Contracts not tendered or not purchased (and the
corresponding 8% Debentures) and/or any check for the Purchase Price of
Contracts purchased and/or the unrestricted 8% Debentures issued upon exchange
for corresponding 8% Debentures are to be issued in the name of and sent to
someone other than the undersigned.
Issue: / / check / / Contract(s) / / 8% Debentures
to:
Name
(PLEASE PRINT)
Address
(INCLUDE ZIP CODE)
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 9)
To be completed ONLY if Contracts not tendered or not purchased (and the
corresponding 8% Debentures) and/or any check for the Purchase Price of
Contracts purchased and/or the unrestricted 8% Debentures issued upon exchange
for corresponding 8% Debentures, issued in the name of the undersigned, are to
be sent to someone other than the undersigned, or to the undersigned at an
address other than that shown above.
Mail: / / check / / Contract(s) / / 8% Debentures
to:
Name
(PLEASE PRINT)
Address
(INCLUDE ZIP CODE)
<PAGE> 5
HOLDER(S) SIGN HERE
(See Instructions 1 and 5)
(Please Complete Substitute Form W-9 Contained Herein)
SIGNATURE(S) OF OWNER(S)
Must be signed by registered owner(s) exactly as name(s) appear(s) on
Contract(s) or on a security position listing or by person(s) authorized to
become registered owner(s) by Contract(s) and documents transmitted with this
Letter of Transmittal. If signature is by attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary or representative capacity, please set forth the full title. See
Instruction 6.
PLEASE PRINT OR TYPE.
Dated: , 1994
Name(s)
(PLEASE PRINT)
Capacity (Full Title)
Area Code and
Telephone Number
Tax Identification or
Social Security Number(s)
MEDALLION GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Authorized Signature
Name
(PLEASE PRINT)
Title
Name of Firm
Address
(INCLUDE ZIP CODE)
Area Code and
Telephone Number
Dated: , 1994
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS OF THE OFFER
(1) Guarantee of Signatures. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered owner of
the Contracts exactly as the name of the registered holder appears on the
Contract tendered with this Letter of Transmittal and payment and delivery
are to be made directly to such owner unless such owner has completed
either the box entitled "Special Payment Instructions" or "Special Delivery
Instructions" above; or
(b) such Contracts are tendered for the account of a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office, branch or agency in the United States (each such
entity an "Eligible Institution").
In all other cases, an Eligible Institution must Medallion guarantee all
signatures on this Letter of Transmittal. See Instruction 6.
(2) Delivery of Letter of Transmittal and Contracts: Guaranteed Delivery
Procedures. This Letter of Transmittal is to be used only if Contracts and
corresponding 8% Debentures are delivered with it to the Depositary (or such
Contracts and corresponding 8% Debentures will be delivered pursuant to a Notice
of Guaranteed Delivery previously sent to the Depositary). All physically
tendered Contracts and corresponding 8% Debentures together with a properly
completed and duly executed Letter of Transmittal or facsimile of it, and any
other documents required by this Letter of Transmittal, should be mailed or
delivered to the Depositary at the appropriate address set forth herein and must
be delivered to the Depositary on or before the Expiration Date (as defined in
the Offer to Purchase).
Neither Contracts nor 8% Debentures are eligible for book-entry delivery,
through the Depositary Trust Company or otherwise.
Holders whose Contracts or 8% Debentures are not immediately available or
who cannot deliver Contracts and corresponding 8% Debentures and all other
required documents to the Depositary on or before the Expiration Date may tender
their Contracts and surrender for exchange their 8% Debentures by or through any
Eligible Institution by properly completing and duly executing and delivering a
Notice of Guaranteed Delivery (or facsimile of it) and by otherwise complying
with the guaranteed delivery procedure set forth in Section 2 of the Offer to
Purchase. Pursuant to such procedure, all physically tendered Contracts and
corresponding 8% Debentures, as well as a properly completed and duly executed
Letter of Transmittal and all other documents required by this Letter of
Transmittal, must be received by the Depositary within five over-the-counter
trading days after receipt by the Depositary of such Notice of Guaranteed
Delivery, all as provided in Section 2 of the Offer to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
signature guarantee by an Eligible Institution in the form set forth in such
Notice. For Contracts to be validly tendered and 8% Debentures to be validly
surrendered for exchange pursuant to the guaranteed delivery procedure, the
Depositary must receive the Notice of Guaranteed Delivery on or before the
Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CONTRACTS AND 8%
DEBENTURES, IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER. IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
The Company will not accept any alternative, conditional or contingent
tenders, nor will it purchase any fractional Contracts. All tendering
shareholders, by execution of this Letter of Transmittal (or a facsimile of it),
waive any right to receive any notice of the acceptance of their tender.
<PAGE> 7
(3) Inadequate Space. If the space provided in the box captioned
"Description of Contracts Tendered and 8% Debentures Surrendered for Exchange"
is inadequate, the numbers of Contracts and corresponding 8% Debentures should
be listed on a separate signed schedule and attached to this Letter of
Transmittal.
(4) Partial Tenders and Unpurchased Contracts. If fewer than all of the
Contracts are to be tendered, fill in the number of Contracts which are to be
tendered in the column entitled "Number of Contracts Tendered." In such case, if
any tendered Contracts are purchased, a new Contract will be issued and sent to
the registered holders, unless otherwise specified in either the "Special
Payment Instructions" or "Special Delivery Instructions" boxes on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Contracts
listed and delivered to the Depositary are deemed to have been tendered unless
otherwise indicated.
(5) Signatures on Letter of Transmittal, Assignments and Endorsements.
(a) If this Letter of Transmittal is signed by the registered owner(s)
of the Contracts tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Contracts without any change
whatsoever.
(b) If the Contracts are registered in the names of two or more joint
owners, each such owner must sign this Letter of Transmittal.
(c) If any tendered Contracts are registered in different names, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal (or facsimiles thereof) as there are different registrations of
Contracts.
(d) When this Letter of Transmittal is signed by the registered
owner(s) of the Contracts listed and transmitted hereby, no endorsements of
Contracts or separate assignments are required unless payment is to be
made, or the Contracts not tendered or not purchased are to be issued, or
8% Debentures are to be issued, to a person other than the registered
owner(s). Signatures on such Contracts, 8% Debentures or assignments must
be Medallion guaranteed by an Eligible Institution. If this Letter of
Transmittal is signed by a person other than the registered owner of the
Contracts listed, however, the Contracts must be endorsed or accompanied by
appropriate assignments, in either case signed exactly as the name(s) of
the registered owner(s) appear(s) on the Contract(s), and the signatures on
such Contract(s) or assignment(s) must be Medallion guaranteed by an
Eligible Institution. See Instruction 1.
(e) If this Letter of Transmittal or any Contracts, 8% Debentures or
assignments are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing
and must submit proper evidence satisfactory to the Company of their
authority so to act.
(6) Transfer Taxes. Except as provided in this Instruction 6, no transfer
tax stamps or funds to cover such stamps need accompany this Letter of
Transmittal. The Company will pay or cause to be paid any transfer taxes payable
on the transfer to it of Contracts purchased pursuant to the Offer. If, however:
(a) payment of the Purchase Price is to be made to any person(s) other
than the registered owner(s);
(b) Contracts not tendered or not accepted for purchase are to be
registered or 8% Debentures are to be issued, in the name of any person(s)
other than the registered owner(s); or
(c) tendered Contracts or surrendered Debentures are registered in the
name(s) of any person(s) other than the person(s) signing this Letter of
Transmittal,
then the Depositary will deduct from the Purchase Price the amount of any
transfer taxes (whether imposed on the registered owner, such other person or
otherwise) payable on account of the transfer to such person unless satisfactory
evidence of the payment of such taxes or an exemption from them is submitted.
(7) Special Payment and Delivery Instructions. If Contracts not purchased,
by the Company are to be issued and/or checks are to be issued or 8% Debentures
are to be issued in the name of a person other than the
<PAGE> 8
person signing the Letter of Transmittal or if such Contracts, 8% Debentures
and/or checks are to be sent to someone other than the person signing the Letter
of Transmittal or to the signer at a different address, the boxes captioned
"Special Payment Instructions" and/or "Special Delivery Instructions" on this
Letter of Transmittal should be completed as applicable and signatures must be
Medallion guaranteed as described in Instruction 1.
(8) Irregularities. The Company will determine, in its sole discretion, all
questions as to the number of Contracts to be accepted, the price to be paid
therefor and the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Contracts or surrender for exchange of
8% Debentures and its determination shall be final and binding on all parties.
The Company reserves the absolute right to reject any or all tenders of
Contracts or surrender for exchange of 8% Debentures determined by it not to be
in proper form or the acceptance of or payment for which may be unlawful. The
Company also reserves the absolute right to waive any of the conditions of the
Offer or any defect or irregularity in the tender of any particular Contracts or
surrender for exchange of 8% Debentures and the Company's interpretation of the
terms of the Offer (including these instructions) will be final and binding on
all parties. No tender of Contracts or surrender for exchange of 8% Debentures
will be deemed to be validly made until all defects and irregularities have been
cured or waived. Unless waived, any defects or irregularities in connection with
tenders or surrenders for exchange must be cured within such time as the Company
shall determine. None of the Company, the Dealer Managers, the Depositary, the
Information Agent nor any other person is or will be obligated to give notice of
defects or irregularities in tenders, nor shall any of them incur any liability
for failure to give any such notice.
(9) Questions and Requests for Assistance and Additional Copies. Questions
and request for assistance may be directed to, or additional copies of the Offer
to Purchase, the Notice of Guaranteed Delivery and this Letter of Transmittal
may be obtained from, the Information Agent at the address and telephone number
set forth at the end of this Letter of Transmittal or from your broker, dealer,
commercial bank or trust company.
(10) Substitute Form W-9. Each tendering holder (see "Important Tax
Information" below) is required to provide the Depositary with a correct
taxpayer identification number ("TIN") on Substitute Form W-9 (the "Form W-9")
which is provided under "Important Tax Information" below, and, if applicable,
to indicate that the shareholder is not subject to backup withholding by
checking the box in Part 2 of the form. Failure to provide the information on
the form or to check the box in Part 2 of the form may subject the tendering
holder to 31% federal income tax withholding on the payments made to the holder
or other payee with respect to Contracts purchased pursuant to the Offer. The
box in Part 3 of the form may be checked if the tendering holder has not been
issued a TIN and has applied for a TIN or intends to apply for a TIN in the near
future. If the box in Part 3 is checked and the Depositary is not provided with
a TIN within sixty (60) days, the Depositary will withhold 31% on all such
payments thereafter until a TIN is provided to the Depositary.
(11) The Contracts were initially issued as units together with
corresponding 8% Debentures. The Equity Contract Agency Agreement and the
Indenture governing the Contracts and 8% Debentures restrict the transfer of
these securities other than as units. IN ORDER FOR CONTRACTS TO BE CORRECTLY AND
VALIDLY TENDERED PURSUANT TO THIS OFFER, CONTRACT HOLDERS MUST SURRENDER
CORRESPONDING 8% DEBENTURES SIMULTANEOUSLY WITH THE TENDER OF CONTRACTS AND
SUBMISSION OF THE LETTER OF TRANSMITTAL AND OTHER DOCUMENTS REQUIRED BY THE
OFFER. As soon as practicable after acceptance of Contracts pursuant to the
Offer, 8% Debentures so surrendered will be exchanged for 8% Debentures of equal
principal amount and redelivered to the holder. Thereafter, the transfer of such
redelivered 8% Debentures will not be restricted by the terms of the Indenture.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE OF IT
(TOGETHER WITH CONTRACTS, CORRESPONDING 8% DEBENTURES AND ALL OTHER REQUIRED
DOCUMENTS) OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
DEPOSITARY ON OR BEFORE THE EXPIRATION DATE.
<PAGE> 9
IMPORTANT TAX INFORMATION
Under federal income tax law, a holder whose tendered Contracts are
accepted for payment is required to provide the Depositary with such holder's
correct TIN on Form W-9 below. If the Depositary is not provided with the
correct TIN, the Internal Revenue Service may subject the holder or other payee
to a $50.00 penalty. In addition, payments that are made to such holder or other
payee with respect to Contracts purchased pursuant to the Offer may be subject
to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign individuals) are considered "exempt recipients" and are not subject to
these backup withholding and reporting requirements. In order for a foreign
individual to qualify as an exempt recipient, the holder must submit a Form W-8,
signed under penalties of perjury, attesting to that individual's exempt status.
A Form W-8 can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the holder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
PURPOSE OF FORM W-9
To prevent backup withholding on payment made to a holder or other payee
with respect to Contracts purchased pursuant to the Offer, the holder is
required to notify the Depositary of the holder's correct TIN by completing the
form below, certifying that the TIN provided on Form W-9 is correct (or that
such holder is awaiting a TIN) and that:
(a) the holder has not been notified by the Internal Revenue Service
that the holder is subject to backup withholding as a result of failure to
report all interest or dividends; or
(b) the Internal Revenue Service has notified the holder that the
holder is no longer subject to backup withholding.
The holder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Contracts. If the Contracts are in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Form W-9" for additional guidance on which number to
report.
<PAGE> 10
PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
- ----------------------------------
<S> <C>
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX Social Security Number or
SUBSTITUTE AT RIGHT AND CERTIFY BY SIGNING AND DATING
BELOW.
Employee Identification Number
FORM W-9 --------------------------------------------------------------------------------
PART 2--Check the box if you are NOT subject to backup withholding under the
Internal Revenue Code because (a) I am (we are) exempt from backup withholding,
or (b) I (we) have not been notified that I am (we are) subject to backup
withholding as a result of failure to report all interest or dividends or (c)
the Internal Revenue Service has notified me (us) that I am (we are) no longer
subject to backup withholding.
/ / Correct / / Not Correct
--------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY
INTERNAL REVENUE SERVICE THAT THE INFORMATION PROVIDED ON THIS FORM IS TRUE,
PAYER'S REQUEST FOR TAXPAYER CORRECT, AND COMPLETE. PART 3--
IDENTIFICATION NUMBER ("TIN")
Signature Awaiting TIN / /
Date
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3
OF FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within sixty (60) days, 31%
of all reportable payments made to me thereafter will be withheld, until I
provide a number.
- ---------------------------------------- -----------------------------
Signature Date
<PAGE> 11
THE INFORMATION AGENT:
(LOGO)
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT:
(212) 440-9800
ALL OTHERS CALL TOLL-FREE:
1-800-223-2064
THE DEALER MANAGERS FOR THE OFFER ARE:
KEEFE, BRUYETTE & WOODS, INC. CS FIRST BOSTON CORPORATION
TWO WORLD TRADE CENTER 55 EAST 52ND STREET
NEW YORK, NEW YORK 10048 NEW YORK, NEW YORK 10055
(212) 323-8450 (212) 909-2000
(CALL COLLECT) (CALL COLLECT)
<PAGE> 1
EXHIBIT 99.(a)(3)
NOT VALID UNLESS SIGNED BY AN ELIGIBLE INSTITUTION.
MICHIGAN NATIONAL CORPORATION
NOTICE OF GUARANTEED DELIVERY
OF CANCELLABLE MANDATORY STOCK PURCHASE CONTRACTS
OFFER TO PURCHASE FOR CASH
ANY AND ALL
CANCELLABLE MANDATORY STOCK PURCHASE CONTRACTS
AT A PURCHASE PRICE OF $21.625
This form or a facsimile copy of it must be used to accept the Offer (as
defined below) if:
(a) Cancellable Mandatory Stock Purchase Contracts ("Contracts") or the
corresponding 8% Subordinated Debentures due November 10, 1998 ("8%
Debentures") of Michigan National Corporation, a Michigan corporation,
are not immediately available; or
(b) time will not permit the Letter of Transmittal or other required
documents to reach the Depositary before the Expiration Date (as
defined in Section 1 of the Offer to Purchase, as defined below).
This form or a facsimile of it, signed and properly completed, may be
delivered by hand, mail, telegram or facsimile transmission to the Depositary by
the Expiration Date. See Section 2 of the Offer to Purchase.
FIRST CHICAGO TRUST COMPANY OF NEW YORK, Depositary
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
P.O. Box 2560 (201) 222-4720 14 Wall Street
Mail Suite 4660 MNC (201) 222-4721 Attn: Tenders and Exchanges
Jersey City, New Jersey 07303-2560 Confirmation of 8th Floor, Suite 4680 MNC
Facsimile New York, New York 10005
Transmission ONLY:
(201) 222-4707
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THOSE LISTED ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.
NEITHER CONTRACTS NOR DEBENTURES ARE ELIGIBLE FOR BOOK-ENTRY DELIVERY,
THROUGH THE DEPOSITARY TRUST COMPANY OR OTHERWISE.
Ladies and Gentlemen:
The undersigned hereby tenders to Michigan National Corporation, at the
price per Contract of $21.625, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated November 3,
1994 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together with the Offer to Purchase constitute the "Offer"), receipt of which is
hereby acknowledged, Contracts, and hereby surrenders for exchange
the corresponding 8% Debentures, pursuant to the guaranteed delivery procedure
set forth in Section 2 of the Offer to Purchase.
<PAGE> 2
Contract Nos. (if available):
...............................................................................
...............................................................................
Name(s):
...............................................................................
...............................................................................
PLEASE TYPE OR PRINT
Address(es):
...............................................................................
...............................................................................
Area Code and
Telephone Number: ..............................................................
Sign Here: .....................................................................
...............................................................................
Dated: ..................................................................., 1994
2
<PAGE> 3
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the United
States (each, an "Eligible Institution"), hereby represents that such tender of
Contracts complies with Rule 14e-4, and guarantees that the certificates
representing the Contracts tendered hereby in proper form for transfer, together
with a properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantee and any other documents required
by the Letter of Transmittal, will be received by the Depositary at one of its
addresses set forth above within five New York Stock Exchange, Inc. trading days
after the date of execution hereof.
Name of Firm: ..................................................................
Address: .......................................................................
...............................................................................
Zip Code
Area Code and
Telephone Number: ..............................................................
...............................................................................
AUTHORIZED SIGNATURE
Name: ..........................................................................
Title: .........................................................................
Dated: .....................................................................1994
DO NOT SEND CONTRACTS OR 8% DEBENTURES WITH THIS NOTICE. CONTRACTS AND 8%
DEBENTURES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
EXHIBIT 99.(a)(4)
Keefe, Bruyette & Woods, Inc.
Two World Trade Center
85th floor
New York, New York 10048
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
MICHIGAN NATIONAL CORPORATION
OFFER TO PURCHASE FOR CASH
ANY AND ALL
CANCELLABLE MANDATORY STOCK PURCHASE CONTRACTS
AT A PURCHASE PRICE OF $21.625
November 3, 1994
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Michigan National Corporation, a Michigan corporation (the "Company"), has
appointed us to act as Dealer Managers in connection with its offer to purchase
for cash any or all of its Cancellable Mandatory Stock Purchase Contracts
("Contracts"), upon the terms and subject to the conditions set forth in its
Offer to Purchase dated November 3, 1994 and in the related Letter of
Transmittal (which together constitute the "Offer"). We enclose the materials
listed below relating to the Offer.
The Offer is not conditioned on any minimum number of Contracts being
tendered. The Offer is, however, subject to certain other conditions set forth
in the Offer. See Section 5 of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold
Contracts registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. Offer to Purchase dated November 3, 1994;
2. Letter to Clients which may be sent to your clients for whose
accounts you hold Contracts registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
3. Letter, dated November 3, 1994, from Robert J. Mylod, Chairman of
the Board and Chief Executive Officer of the Company, to holders of
Contracts.
4. Letter of Transmittal for your use and for the information of your
clients (together with Substitute Form W-9 and guidelines);
5. Notice of Guaranteed Delivery to be used to accept the Offer if
Contracts and all other required documents cannot be delivered to the
Depositary by the Expiration Date; and
6. Return envelope addressed to First Chicago Trust Company of New
York, the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY,
DECEMBER 2, 1994, UNLESS THE OFFER IS EXTENDED.
IN ORDER FOR CONTRACTS TO BE CORRECTLY AND VALIDLY TENDERED PURSUANT TO
THIS OFFER, CONTRACT HOLDERS MUST SURRENDER CORRESPONDING 8% SUBORDINATED
DEBENTURES DUE NOVEMBER 10, 1998 SIMULTANEOUSLY WITH THE TENDER OF CONTRACTS AND
SUBMISSION OF THE LETTER OF TRANSMITTAL AND OTHER DOCUMENTS REQUIRED BY THE
OFFER. As soon as practicable after acceptance of Contracts pursuant to the
Offer, 8% Debentures so surrendered will be exchanged for 8% Debentures of equal
principal amount and redelivered to the holder.
<PAGE> 2
NEITHER CONTRACTS NOR 8% DEBENTURES ARE ELIGIBLE FOR BOOK-ENTRY DELIVERY,
THROUGH THE DEPOSITARY TRUST COMPANY OR OTHERWISE.
No fees or commissions will be payable to brokers, dealers or any other
persons for soliciting tenders of Contracts pursuant to the Offer. The Company
will, however, upon request, reimburse you for customary mailing and handling
expenses incurred by you in forwarding any of the enclosed materials to the
beneficial owners of Contracts held by you as a nominee or in a fiduciary
capacity. The Company will pay or cause to be paid any transfer taxes applicable
to its purchase of Contracts, except as otherwise provided in the instructions
in the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal, all corresponding 8% Debentures, and any other
required documents should be sent to the Depositary with Contracts all in
accordance with the instructions set forth in the Letter of Transmittal and the
Offer to Purchase.
As described in Section 2 of the Offer to Purchase, tenders may be made
without the concurrent deposit of Contracts, if such tenders are made by or
through a broker or dealer which is a member firm of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office, branch or
agency in the United States. Contracts so tendered, together with a properly
completed and duly executed Letter of Transmittal, all corresponding 8%
Debentures, and any other documents required by the Letter of Transmittal, must
be received by the Depositary within five over-the-counter trading days after
timely receipt by the Depositary of a properly completed and duly executed
Notice of Guaranteed Delivery.
Any inquiries you may have with respect to the Offer should be addressed to
either of the Dealer Managers or to the Information Agent at their respective
addresses and telephone numbers set forth on the back cover page of the Offer to
Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent, Georgeson & Company Inc., telephone: (212) 440-9800
(collect).
Very truly yours,
KEEFE, BRUYETTE & WOODS, INC.
CS FIRST BOSTON CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS THE AGENT OF THE COMPANY, EITHER OF THE DEALER MANAGERS, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE
ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED
THEREIN.
2
<PAGE> 1
EXHIBIT 99.(a)(5)
MICHIGAN NATIONAL CORPORATION
OFFER TO PURCHASE FOR CASH
ANY AND ALL
CANCELLABLE MANDATORY STOCK PURCHASE CONTRACTS
AT A PURCHASE PRICE OF $21.625
November 3, 1994
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated November
3, 1994, and the related Letter of Transmittal (which together constitute the
"Offer"), in connection with the offer by Michigan National Corporation, a
Michigan corporation (the "Company"), to purchase for cash any or all of its
Cancellable Mandatory Stock Purchase Contracts, upon the terms and subject to
the conditions of the Offer.
WE ARE THE HOLDER OF RECORD OF CONTRACTS AND CORRESPONDING 8% SUBORDINATED
DEBENTURES DUE NOVEMBER 10, 1998 HELD FOR YOUR ACCOUNT. AS SUCH, WE ARE THE ONLY
ONES WHO CAN TENDER YOUR CONTRACTS, AND THEN ONLY PURSUANT TO YOUR INSTRUCTIONS.
WE ARE SENDING YOU THE LETTER OF TRANSMITTAL FOR YOUR INFORMATION ONLY; YOU
CANNOT USE IT TO TENDER CONTRACTS WE HOLD FOR YOUR ACCOUNT.
Please instruct us as to whether you wish us to tender any or all of the
Contracts and surrender for exchange the corresponding 8% Debentures we hold for
your account on the terms and subject to the conditions of the Offer.
We call your attention to the following:
1. You may tender Contracts as indicated in the attached Instruction
Form, at a price of 21.625, net to you in cash.
2. The Offer is not conditioned on any minimum number of Contracts
being tendered. The Offer is, however, subject to certain other conditions
set forth in the Offer.
3. The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on Friday, December 2, 1994, unless the Company extends the
Offer.
4. The Offer is for any and all Contracts.
5. Tendering holders will not be obligated to pay any brokerage
commissions, solicitation fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes on the Company's purchase of
Contracts pursuant to the Offer.
6. Tendering holders must surrender corresponding 8% Debentures
simultaneously with the tender of Contracts. As soon as practicable after
acceptance of Contracts pursuant to the Offer, 8% Debentures so surrendered
will be exchanged for 8% Debentures of equal principal amount and will be
redelivered to the holder.
If you wish to have us tender any or all of your Contracts and
surrender for exchange the corresponding 8% Debentures, please so instruct
us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is
enclosed. If you authorize us to tender your Contracts and surrender for
exchange the corresponding 8% Debentures, we will tender all such Contracts
and surrender for exchange the corresponding 8% Debentures unless you
specify otherwise on the attached Instruction Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION
DATE OF THE OFFER. THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON FRIDAY, DECEMBER 2, 1994, UNLESS THE COMPANY EXTENDS THE
OFFER.
The Offer is not being made to, nor will the Company accept tenders from,
holders of Contracts in any jurisdiction in which the Offer or its acceptance
would not comply with the securities or Blue Sky laws of such jurisdiction. The
Company is not aware of any jurisdiction in which the making of the Offer or the
tender of Contracts would not be in compliance with the laws of such
jurisdictions. However, the Company reserves the right to exclude holders in any
jurisdiction in which it is asserted that the Offer cannot lawfully be made. So
long as the Company makes a good faith effort to comply with any state law
deemed applicable to the Offer, if it cannot do so, the Company believes that
the exclusion of holders residing in such jurisdiction is permitted under Rule
13e-4(f)(9) promulgated under the Exchange Act. In any jurisdiction the
securities or Blue Sky laws of which require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on the Company's behalf
by Keefe, Bruyette & Woods, Inc. and CS First Boston Corporation, as Dealer
Managers, or one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
<PAGE> 2
INSTRUCTION FORM
WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ANY AND ALL
CANCELLABLE MANDATORY STOCK PURCHASE CONTRACTS OF
MICHIGAN NATIONAL CORPORATION
AT A PURCHASE PRICE OF $21.625
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated November 3, 1994 and the related Letter of Transmittal
(which together constitute the "Offer"), in connection with the offer by
Michigan National Corporation, a Michigan corporation (the "Company"), to
purchase for cash any or all of its Cancellable Mandatory Stock Purchase
Contracts, upon the terms and subject to the conditions of the Offer.
The undersigned hereby instruct(s) you to tender to the Company the number
of Contracts indicated below or, if no number is indicated, all Contracts you
hold for the account of the undersigned, and in each case to surrender for
exchange the corresponding 8% Debentures pursuant to the terms and subject to
the conditions of the Offer.
- --------------------------------------------------------------------------------
Aggregate number of Shares issuable pursuant to Contracts to be tendered
by you for us: ________________ Contracts*
* Unless otherwise indicated, all of the Contracts held for the account of
the undersigned will be tendered and the corresponding 8% Debentures
surrendered.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE BOX
Signature(s)
-------------------------------------------------------------
Dated
--------------------------------------------------------------------
Name(s) and Address(es) (Please Print)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Area Code and Telephone Number
--------------------------------------------------------------------------
Taxpayer Identification or Social Security Number
--------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 99.(a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.
Purpose of Form. -- A person who is required to file an information return
with the IRS must obtain your correct TIN to report income paid to you, real
estate transactions, mortgage interest you paid, the acquisition or abandonment
of secured property, or contributions you made to an IRA. Use Form W-9 to
furnish your correct TIN to the requester (the person asking you to furnish your
TIN) and, when applicable, (1) to certify that the TIN you are furnishing is
correct (or that you are waiting for a number to be issued), (2) to certify that
you are not subject to backup withholding, and (3) to claim exemption from
backup withholding if you are an exempt payee. Furnishing your correct TIN and
making the appropriate certifications will prevent certain payments from being
subject to backup withholding.
Note: If a requester gives you a form other than a W-9 to request your TIN,
you must use the requester's form.
How To Obtain a TIN. -- If you do not have a TIN, apply for one
immediately. To apply, get Form SS-5, Application for a Social Security Card
(for individuals), from your local office of the Social Security Administration,
or Form SS-4, Application for Employer Identification Number (for businesses and
all other entities), from your local IRS office.
To complete Form W-9 if you do not have a TIN, write "Applied for" in the
space for the TIN in Part I (or check box 2 of Substitute Form W-9), sign and
date the form, and give it to the requester. Generally, you must obtain a TIN
and furnish it to the requester by the time of payment. If the requester does
not receive your TIN by the time of payment, backup withholding, if applicable,
will begin and continue until you furnish your TIN to the requester.
Note: Writing "Applied for" (or checking box 2 of the Substitute Form W-9)
on the form means that you have already applied for a TIN OR that you intend to
apply for one in the near future.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.
What Is Backup Withholding? -- Persons making certain payments to you after
1992 are required to withhold and pay to the IRS 31% of such payments under
certain conditions. This is called "backup withholding." Payments that could be
subject to backup withholding include interest, dividends, broker and barter
exchange transactions, rents, royalties, nonemployee compensation, and certain
payments from fishing boat operators, but do not include real estate
transactions.
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS notifies the requester that you furnished an incorrect TIN,
or
3. You are notified by the IRS that you are subject to backup
withholding because you failed to report all your interest and dividends on
your tax return (for reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to
backup withholding under 3 above (for reportable interest and dividend
accounts opened after 1983 only), or
5. You do not certify your TIN. This applies only to reportable
interest, dividend, broker, or barter exchange accounts opened after 1983,
or broker accounts considered inactive in 1983.
Except as explained in 5 above, other reportable payments are subject to
backup withholding only if 1 or 2 above applies. Certain payees and payments are
exempt from backup withholding and information reporting.
<PAGE> 2
See Payees and Payments Exempt From Backup Withholding, below, and Example
Payees and Payments under Specific Instructions, below, if you are an exempt
payee.
Payees and Payments Exempt From Backup Withholding. -- The following is a
list of payees exempt from backup withholding and for which no information
reporting is required. For interest and dividends, all listed payees are exempt
except item (9). For broker transactions, payees listed in (1) through (13) and
a person registered under the Investment Advisers Act of 1940 who regularly acts
as a broker are exempt. Payments subject to reporting under sections 6041 and
6041A are generally exempt from backup withholding only if made to payees
described in items (1) through (7), except a corporation that provides medical
and health care services or bills and collects payments for such services is not
exempt from backup withholding or information reporting. Only payees described
in items (2) through (6) are exempt from backup withholding for barter exchange
transactions, patronage dividends, and payments by certain fishing boat
operators.
(1) A corporation. (2) An organization exempt from tax under section
501(a), or an IRA, or a custodial account under section 403(b)(7). (3) The
United States or any of its agencies or instrumentalities. (4) A state, the
District of Columbia, a possession of the United States, or any of their
political subdivisions or instrumentalities. (5) A foreign government or any of
its political subdivisions, agencies, or instrumentalities. (6) An international
organization or any of its agencies or instrumentalities. (7) A foreign central
bank of issue. (8) A dealer in securities or commodities required to register in
the United States or a possession of the United States. (9) A futures commission
merchant registered with the Commodity Futures Trading Commission. (10) A real
estate investment trust. (11) An entity registered at all times during the tax
year under the Investment Company Act of 1940. (12) A common trust fund operated
by a bank under section 584(a). (13) A financial institution. (14) A middleman
known in the investment community as a nominee or listed in the most recent
publication of the American Society of Corporate Secretaries, Inc., Nominee
List. (15) A trust exempt from tax under section 664 or described in section
4947.
Payments of dividend and patronage dividends generally not subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
Payments of interest generally not subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have not
provided your correct TIN to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid by you.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A, and 6050N, and their regulations.
<PAGE> 3
PENALTIES
Failure To Furnish TIN. -- If you fail to furnish your correct TIN to a
requester, you will be subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.
Civil Penalty for False Information With Respect to Withholding. -- If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
Criminal Penalty for Falsifying Information. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
Misuse of TINS. -- If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
SPECIFIC INSTRUCTIONS
Name. -- If you are an individual, you must generally provide the name
shown on your Social Security card. However, if you have changed your last name,
for instance, due to marriage, without informing the Social Security
Administration of the name change, please enter your first name, the last name
shown on your Social Security card, and your new last name.
If you are a sole proprietor, you must furnish your individual name and
either your SSN or EIN. You may also enter your business name or "doing business
as" name on the business name line. Enter your name(s) as shown on your Social
Security card and/or as it was used to apply for your EIN on Form SS-4.
SIGNING THE CERTIFICATION
1. Interest, Dividend, Broker and Barter Exchange Accounts Opened Before
1984 and Broker Accounts Considered Active During 1983. You are required to
furnish your correct TIN, but you are not required to sign the certification.
2. Interest, Dividend, Broker, and Barter Exchange Accounts Opened After
1983 and Broker Accounts Considered Inactive During 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out item 2 in the certification before signing the form.
3. Real Estate Transactions. You must sign the certification. You may cross
out item 2 of the certification.
4. Other Payments. You are required to furnish your correct TIN, but you
are not required to sign the certification unless you have been notified of an
incorrect TIN. Other payments include payments made in the course of the
requester's trade or business for rents, royalties, goods (other than bills for
merchandise), medical and health care services, payments to a nonemployee for
services (including attorney and accounting fees), and payments to certain
fishing boat crew members.
5. Mortgage Interest Paid by You, Acquisition or Abandonment of Secured
Property, IRA Contributions. You are required to furnish your correct TIN, but
you are not required to sign the certification.
6. Exempt Payees and Payments. If you are exempt from backup withholding,
you should complete this form to avoid possible erroneous backup withholding.
Enter your correct TIN in Part I, write "EXEMPT" in the block in Part II, and
sign and date the form. If you are a nonresident alien or foreign entity not
subject to backup withholding, give the requester a complete Form W-8,
Certificate of Foreign Status.
7. TIN "Applied for." Follow the instructions under How To Obtain a TIN on
page 1, and sign and date this form.
Signature. -- For a joint account, only the person whose TIN is shown in
Part I should sign.
Privacy Act Notice. -- Section 6109 requires you to furnish your correct
TIN to persons who must file information returns with the IRS to report
interest, dividends, and certain other income paid to you, mortgage
<PAGE> 4
interest you paid, the acquisition or abandonment of secured property, or
contributions you made to an IRA. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. You must provide
your TIN whether or not you are required to file a tax return. Payers must
generally withhold 31% of taxable interest, dividend, and certain other payments
to a payee who does not furnish a TIN to a payer. Certain penalties may also
apply.
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
<TABLE>
<CAPTION>
For this type of account: Give name and SSN of:
<S> <C>
1. Individual.......................................... The individual
2. Two or more individuals (joint account)............. The actual owner of the account
or, if combined funds, the first
individual on the account(1)
3. Custodian account of a minor (Uniform Gift
to Minors Act)...................................... The minor(2)
4. a. The usual revocable savings trust (grantor is
also trustee).................................... The grantor-trustee(1)
b. So-called trust account that is not a legal or
valid trust under state law......................... The actual owner(1)
5. Sole proprietorship................................. The owner(3)
<CAPTION>
For this type of account: Give name and EIN of:
<S> <C>
6. Sole proprietorship................................. The owner(3)
7. A valid trust, estate, or pension trust............. Legal entity(4)
8. Corporate........................................... The corporation
9. Association, club, religious, charitable,
educational, or other tax-exempt organization....... The organization
10. Partnership......................................... The partnership
11. A broker or registered nominee...................... The broker or nominee
12. Account with the Department of Agriculture in the
name of a public entity (such as a state or local
government, school district or prison) that receives
agriculture program payments........................ The public entity
</TABLE>
- ---------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's SSN.
(3) Show your individual name. You may also enter your business name. You may
use your SSN or EIN.
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless
the legal entity itself is not designated in the account title.)
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 1
EXHIBIT 99.(a)(7)
Joseph J. Whiteside
Chief Financial Officer
810/473-3474
MICHIGAN NATIONAL ANNOUNCES CASH SELF-TENDER OFFERS
FOR COMMON STOCK AND STOCK PURCHASE CONTRACTS
FARMINGTON HILLS, Mich. -- November 2, 1994 -- Michigan National Corporation
(MNCO) today announced that its board of directors has unanimously authorized
repurchase offers for its Common Stock and Cancelable Mandatory Stock Purchase
Contracts ("Purchase Contracts") totaling $200 million commencing November 3,
1994. The Common Stock repurchase offer of approximately $170 million will
take the form of a "Dutch Auction" for up to 1,858,650 of its Common Shares and
the Purchase Contract repurchase offer of approximately $30 million will be
made for any and all Purchase Contracts. The corporation is making the offers
as part of a comprehensive restructuring developed to enhance shareholder
value. The restructuring is intended to focus the corporation's resources on
its Michigan-based, core banking business, to streamline and enhance the
efficiency and profitability of that core business and to reposition the
corporation's balance sheet to increase return on equity by redeploying the
portion of the corporation's equity capital that is not necessary for the
corporation's Michigan-based, core banking business.
The Common Stock offer will amount to up to approximately $170 million in the
aggregate. The offer will allow shareholders to specify prices at which they
are willing to tender their shares at a price no greater than $90.00 and
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<PAGE> 2
no less than $78.00 per share. After receiving tenders, the corporation will
select single per-share price which will allow it to buy up to the maximum
number of shares being sought. All shares purchased will be purchased at the
corporation-selected price for cash, even if tendered at a lower price. If
more than the maximum number of shares sought is tendered at or below the
corporation-selected price, shares will be pro rated.
The cash self-tender offer for any and all of the Purchase Contracts will be
at a price of $21.625. This offer will amount to up to approximately $30
million in the aggregate. If the price paid in the Dutch Auction self-tender
is higher than $78.00, the corporation will increase the price of the Purchase
Contract offer to the price paid in the Dutch Auction self-tender, less the
exercise price of the Purchase Contracts, which is currently $56.375.
As of October 28, 1994, the corporation had outstanding approximately
15,324,000 Common Shares and approximately 973,000 shares issuable pursuant to
the Purchase Contracts. Neither offer will be conditioned on a minimum number
of shares being tendered, but each will be subject to certain conditions set
forth in the offering documents. The corporation will file Schedules 13E-4
with the SEC on November 3, 1994, containing the terms and conditions of the
offers. Such materials will be mailed to shareholders and Purchase Contract
holders commencing November 3, 1994. The offers will expire on December 2,
1994, unless extended by the corporation.
The corporation has been advised that no director or executive officer of the
corporation intends to tender any shares pursuant to the Offer.
Keefe, Bruyette & Woods, Inc. and CS First Boston Corporation will act as
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<PAGE> 3
the dealer managers for the tender offers, and Georgeson & Company Inc. will
act as information agent.
Michigan National Corp. is a diversified financial services corporation
headquartered in Farmington Hills, Michigan. It has 188 branches in Michigan
and total assets of $9.2 billion.
# # # # #
<PAGE> 1
EXHIBIT 99.(a)(8)
[MICHIGAN NATIONAL LETTERHEAD]
November 3, 1994
To Holders of Cancellable Mandatory Stock Purchase Contracts:
We are pleased to inform you that Michigan National Corporation is offering
to purchase any and all of its Cancellable Mandatory Stock Purchase Contracts
("Contracts") through a tender offer at a price of $21.625 per Contract.
Simultaneously with the Offer, the Company is making a separate offer to
purchase for cash up to 1,858,650 shares (the "Shares") of the Company's common
stock, par value $10.00 per share (including the associated preferred share
purchase rights), at prices not greater than $90 and not less than $78 per
Share, specified by the Company's shareholders, upon the terms and subject to
the conditions of the Share offer. If the final purchase price in the Share
offer is greater than $78 per Share, the Company will increase the purchase
price for the Contracts under the Offer to equal the Share offer purchase price
less the exercise price of the Contracts, which is currently $56.375. In such
event, the Company will extend the Offer (but not the Share offer) for an
additional ten business days.
The Company is making this Offer as part of a comprehensive restructuring
developed to enhance shareholder value. The restructuring is intended to focus
the Company's resources on its Michigan-based, core banking business, to
streamline and enhance the efficiency and profitability of that core business
and to reposition the Company's balance sheet to increase return on equity by
redeploying the portion of the Company's equity capital that is not necessary
for the Company's Michigan-based, core banking business.
The Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you wish to tender your Contracts, detailed
instructions on how to tender shares are in the enclosed materials. We encourage
you to read these materials carefully before making any decision with respect to
the Offer. Please note that the tender offer is scheduled to expire at 5:00 p.m.
on Friday, December 2, 1994, unless extended by the Company. Neither the Company
nor its Board of Directors makes any recommendation to any holder as to whether
to tender or refrain from tendering Contracts.
Sincerely,
ROBERT J. MYLOD
Chairman of the Board
and Chief Executive Officer
<PAGE> 1
EXHIBIT 99.(a)(9)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Contracts. The Offer is made solely by the Offer to Purchase, dated
November 3, 1994, and the related Letter of Transmittal. Capitalized terms not
defined in this notice are defined in the Offer to Purchase. The Offer is
not being made to, nor will the Company accept tenders from, holders of
Contracts in any jurisdictions in which the Offer or its acceptance
would violate that jurisdiction's laws. The Company is not aware of any
jurisdiction in which the making of the Offer or the tender of
Contracts would not be in compliance with the laws of such
jurisdiction. In those jurisdictions whose laws require that the
Offer be made by a licensed broker or dealer, the Offer shall be
deemed to be made on the Company's behalf by Keefe, Bruyette &
Woods, Inc. and CS First Boston Corporation or one or more
registered brokers or dealers licensed under the laws of such
jurisdictions.
NOTICE OF OFFER
BY
MICHIGAN NATIONAL CORPORATION
TO
PURCHASE FOR CASH
ANY AND ALL
CANCELLABLE MANDATORY STOCK PURCHASE CONTRACTS
AT A PURCHASE PRICE OF $21.625
Michigan National Corporation, a Michigan corporation (the "Company"),
invites holders of its Cancellable Mandatory Stock Purchase Contracts
("Contracts") issued by the Company in conjunction with issuance of the
Company's 8% Subordinated Debentures due November 10, 1998 ("8% Debentures"), to
tender their Contracts, at a price of $21.625 per Contract, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated November 3, 1994 (the "Offer to Purchase"), and in the related
Letter of Transmittal (which together constitute the "Offer"). The information
contained in the Offer to Purchase and the Letter of Transmittal is incorporated
by reference herein in its entirety.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF CONTRACTS BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS SET FORTH
IN THE OFFER.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 2, 1994, UNLESS THE OFFER IS EXTENDED.
For purposes of the Offer, the Company will be deemed to have accepted for
payment (and thereby purchased), Contracts which are validly tendered when, as
and if it gives oral or written notice to the Depositary of its acceptance of
such Contracts for payment pursuant to the Offer. In all cases, payment for
Contracts tendered and accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of Contracts, a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) and any other
documents required by the Letter of Transmittal. CONTRACTS ARE NOT ELIGIBLE FOR
BOOK-ENTRY DELIVERY, THROUGH THE DEPOSITARY TRUST COMPANY OR OTHERWISE.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, NEITHER
THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY HOLDER AS
TO WHETHER TO TENDER OR REFRAIN FROM TENDERING CONTRACTS. HOLDERS MUST MAKE
THEIR OWN DECISIONS WHETHER TO TENDER CONTRACTS AND, IF SO, HOW MANY CONTRACTS
TO TENDER.
The Offer may allow Contract holders to sell their Contracts at a price
representing a premium over the spread between the exercise price under the
Contracts and recent market prices for the Shares for which the Contracts are
exercisable, without the transaction costs that would be associated with an
exercise of the Contracts and subsequent market sale of the underlying Shares.
The Company is making the Offer as part of a comprehensive restructuring
developed by the Company to enhance shareholder value by focusing the Company's
resources on its Michigan-based, core banking business, by streamlining and
enhancing the efficiency and profitability of that core business, and by
repositioning the Company's balance sheet to increase return on equity by
redeploying the portion of the Company's equity capital that is not necessary
for the Company's Michigan-based, core banking business.
<PAGE> 2
The Company reserves the right, at any time or from time to time, in its
sole discretion, to extend the period of time during which the Offer is open by
giving oral or written notice of such extension to the Depositary and making a
public announcement thereof. Subject to certain conditions, the Company also
expressly reserves the right to terminate the Offer and not accept for payment
any Contracts not theretofore accepted for payment.
Contracts tendered pursuant to the Offer may be withdrawn at any time prior
to the Expiration Date and, unless theretofore accepted for payment by the
Company, may also be withdrawn after 12:00 midnight, New York City time, on
Tuesday, January 3 1995. For a withdrawal to be effective, the Depositary must
timely receive a written, telegraphic or facsimile transmission notice of
withdrawal. Such notice of withdrawal must specify the name of the person who
tendered the Contracts to be withdrawn, the number of Contracts to be withdrawn
and the name of the registered holder (if different from that of the person who
tendered such Contracts). If the Contracts have been delivered or otherwise
identified to the Depositary, then, prior to the release of such Contracts, the
tendering holder must also submit the serial numbers of the particular Contracts
to be withdrawn and the signature on the notice of withdrawal must be Medallion
guaranteed by an Eligible Institution (except in the case of Contracts tendered
by an Eligible Institution).
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION, WHICH SHOULD BE READ BEFORE HOLDERS DECIDE WHETHER TO ACCEPT OR
REJECT THE OFFER. These materials are being mailed to record holders of
Contracts and are being furnished to brokers, banks and similar persons whose
names, or the names of whose nominees, appear on the Company's recordholder list
(or, if applicable, who are listed as participants in a clearing agency's
security position listing) for transmittal to beneficial holders of Contracts.
THE INFORMATION REQUIRED TO BE DISCLOSED BY RULE 13E-(D)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, IS CONTAINED IN THE OFFER TO
PURCHASE AND IS INCORPORATED IN THIS NOTICE BY REFERENCE.
Please contact the Information Agent for copies of the Offer to Purchase,
the related Letter of Transmittal and other tender offer materials. It will
furnish copies promptly at the Company's expense.
<PAGE> 3
The Information Agent for the Offer is:
(LOGO)
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (collect)
Banks and Brokers call collect (212) 440-9800
CALL TOLL FREE: 1-800-223-2064
The Dealer Managers for the Offer are:
KEEFE, BRUYETTE & WOODS, INC. CS FIRST BOSTON CORPORATION
Two World Trade Center 85th 55 East 52nd Street
floor New York, New York 10055
New York, New York 10048 (212) 909-2000 (call
(212) 323-8450 (call collect) collect)
NOVEMBER 3, 1994
<PAGE> 1
EXHIBIT 99.(c)(1)
MICHIGAN NATIONAL CORPORATION
DEALER MANAGER AGREEMENT
November 3, 1994
KEEFE, BRUYETTE & WOODS, INC.
Two World Trade Center
New York, NY 10048
CS FIRST BOSTON CORPORATION
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Dear Sirs:
1. Michigan National Corporation, a Michigan corporation
(the "Company"), plans to make a tender offer (the "Offer") to purchase up to
1,858,650 shares (or such lesser number of shares as are validly tendered) of
the Company's common stock, par value $10 per share (the "Shares") (including
the associated preferred share purchase rights), on the terms and subject to
the conditions set forth in the Offer to Purchase dated November 3, 1994 (such
Offer to Purchase, as the same may be amended or supplemented from time to
time, the "Offer to Purchase"), and in the related Letter of Transmittal (such
Letter of Transmittal, as the same may be amended or supplemented from time to
time, the "Letter of Transmittal") attached hereto as Exhibits A and B,
respectively. The Offer to Purchase and the Letter of Transmittal and any
amendment or supplement thereto shall constitute the "Offer." The Offer is not
being made to holders of the Cancellable Mandatory Stock Purchase Contracts
(the "Stock Purchase Contracts") issued by the Company in conjunction with
issuance of the Company's Subordinated Debentures due November 10, 1998. The
Company plans to make a separate offer (the "Contract Offer") to purchase for
cash any or all of the Stock Purchase Contracts at a purchase price of $21.625
per Stock Purchase Contract simultaneously with the Offer on the terms and
subject to the conditions set forth in the Contract Offer to Purchase dated
November 3, 1994 (such Contract Offer to Purchase, as the same may be amended
or supplemented from time to time, the "Contract Offer to Purchase"), and in
the related Contract Offer Letter of Transmittal (such Contract Offer Letter of
Transmittal, as the same may be amended or supplemented from time to time,
<PAGE> 2
the "Contract Offer Letter of Transmittal") attached hereto as Exhibits C and
D, respectively.
2. The Company hereby appoints each of you as Co-Dealer
Managers in connection with the Offer and the Contract Offer (each a "Dealer
Manager" and together, the "Dealer Managers") and authorizes you to act as such
in connection with the Offer and the Contract Offer. As Co-Dealer Managers,
you agree, in accordance with your customary practice, to perform those
services in connection with the Offer and the Contract Offer as are customarily
performed by investment banking concerns in connection with self tender offers
of like nature. All references herein to "you" and "yours" shall mean each of
you, severally, and not jointly.
3. You shall have no liability (whether direct or
indirect, in tort, contract or otherwise) to the Company or any other person
for any losses, claims, damages, liabilities or expenses related to or arising
from your own acts or omissions in performing your obligations hereunder,
except for any such losses, claims, damages, liabilities or expenses
attributable to your gross negligence or bad faith. In connection with the
Offer and the Contract Offer, no broker or dealer in securities, bank or trust
company is to be deemed to be acting as your agent and you shall act as an
independent contractor. Nothing herein contained shall constitute you an agent
of the Company or the Company an agent of you.
4. The Company shall furnish you, at its sole expense,
with as many copies as you may reasonably request of the Offer to Purchase, the
Letter of Transmittal, the Contract Offer to Purchase, the Contract Letter of
Transmittal and any amendments or supplements thereto and any other materials
publicly filed by the Company relating to the Offer and the Contract Offer
(collectively, as amended or supplemented from time to time, the "Tender Offer
Material"). The Company agrees that, at a reasonable time prior to using any
Tender Offer Material or filing any such Tender Offer Material with the
Securities and Exchange Commission (the "Commission"), it will submit copies of
such Tender Offer Material to you and will give reasonable consideration to
your and your counsel's comments, if any, thereon. If (i) the Company uses or
permits the use of any Tender Offer Material or files any such material with
the Commission (A) in contravention of the foregoing sentence or (B) which has
been submitted to you for your comments and with respect to which you have made
comments which have been communicated to the Company, but which comments have
not resulted in a
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<PAGE> 3
response reasonably satisfactory to you and your counsel, (ii) any restraining
order or other injunctive order shall have been issued or any action, suit or
proceeding shall have been commenced with respect to the Offer, the Contract
Offer or with respect to any of the transactions in connection with, or
contemplated by, the Offer, the Contract Offer or this Agreement before any
court or governmental agency or other regulatory body or administrative
authority which you, in good faith after consultation with the Company,
reasonably believe makes it legally inadvisable for you to continue to act
hereunder, (iii) the Company shall be in violation, in any material respect, of
any of its representations, warranties or agreements hereunder or (iv) your
continuing to act as a Dealer Manager would in your reasonable judgment violate
any applicable statute, regulation or other law of the United States or any
state or other political subdivision thereof, then you shall be entitled to
withdraw as a Dealer Manager in connection with the Offer or the Contract Offer
without any liability or penalty to you or any other Indemnified Person (as
defined in Section 12) and without loss of any right to the payment of all fees
and expenses payable hereunder which have accrued to the date of such
withdrawal. If you withdraw as a Dealer Manager, the fees accrued and
reimbursement for your expenses through the date of such withdrawal shall be
paid to you promptly after such date.
5. As compensation for your services as Dealer Managers
of the Offer and the Contract Offer, the Company agrees to pay you an aggregate
dealer manager fee equal to (i) $.10 per Share purchased by the Company
pursuant to the Offer and (ii) $.10 per Stock Purchase Contract, such fees to
be shared equally by the Dealer Managers and to be payable in cash concurrently
with the payment for Shares and Stock Purchase Contracts purchased by the
Company upon consummation of the Offer and/or the Contract Offer, as the case
may be.
6. In addition to your compensation for your services as
Dealer Managers, the Company agrees to pay (i) all fees and expenses relating
to the preparation, filing, printing, mailing and publishing of the Tender
Offer Materials, (ii) all fees and expenses of the Depositary and Information
Agent (as hereinafter defined), (iii) all advertising charges, if any, provided
that such charges are approved in advance by the Company, (iv) the preparation
and distribution of this Agreement and (v) all other fees and expenses in
connection with the Offer and the Contract Offer, including, if applicable,
those of any soliciting agent, information agent or other person rendering
services in
-3-
<PAGE> 4
connection therewith, provided that any such persons are approved in advance by
the Company. The Company will also reimburse you promptly for all reasonable
out-of-pocket expenses incurred by you in connection with your services as
Dealer Managers, including the reasonable fees, costs and out-of-pocket
expenses of your legal counsel. All payments to be made by the Company
pursuant to this Section 6 (including those payable if you withdraw as a Dealer
Manager in accordance with the terms of Section 4 or 11 of this Agreement)
shall be made promptly after the expiration or termination of the Offer or the
Contract Offer. The Company shall perform its obligations set forth in this
Section 6, in Section 5, and in Section 12 whether or not the Offer or the
Contract Offer is commenced or the Company acquires any Shares or the Stock
Purchase Contract pursuant to the Offer or the Contract Offer, respectively.
7. The Company will arrange for First Chicago Trust
Company of New York and Georgeson & Company Inc., respectively, or such other
persons as are satisfactory to you and the Company to serve as depositary (the
"Depositary") and information agent (the "Information Agent") in connection
with the Offer and the Contract Offer and, as such, to advise you at least
daily as to such matters relating to the Offer and the Contract Offer as you
may reasonably request.
8. The Company represents and warrants to, and agrees
with you, that:
(a) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Michigan, has the corporate power and authority to own its
properties and conduct its business as described in the Offer to
Purchase and the Contract Offer to Purchase and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole;
(b) each of Michigan National Bank and Independence One
Bank of California and any other Significant Subsidiary (as defined in
Section 1-02 in Regulation S-X promulgated by the Commission under the
Securities Exchange Act of 1934, as amended (the "1934 Act")) referred
to herein collectively as the ("Material
-4-
<PAGE> 5
Subsidiaries") has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Offer to
Purchase and the Contract Offer to Purchase and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole; all of the issued and outstanding capital stock of each
Material Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and (except for directors' qualifying
shares) is owned by the Company, directly or through Material
Subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim;
(c) it has taken all necessary corporate action to
authorize the Offer and the Contract Offer, the purchase of the Shares
and the Stock Purchase Contracts pursuant to the Offer and the
Contract Offer and all other actions contemplated in the Tender Offer
Materials and the use by the Company of the funds needed in connection
therewith and the Company has taken or will take all necessary
corporate action to authorize any amendments to, or modifications of,
the Offer and the Contract Offer;
(d) this Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company except as rights to indemnification hereunder may be limited
by applicable state and federal securities laws;
(e) (i) upon commencement of the Offer and the Contract Offer,
the Company will duly file with the Commission an Issuer Tender Offer
Statement on Schedule 13E-4 (the "Statement") pursuant to Rule 13e-4
promulgated by the Commission under the 1934 Act, a copy of which
Statement, including the documents required by Item 9 thereof to be
filed as exhibits thereto (the "Exhibits"), in the form in which the
Statement and such Exhibits has been or will be furnished to you; (ii)
any amendments to the Statement and the final form of all such
Exhibits filed with the Commission or published,
-5-
<PAGE> 6
sent or given to holders of Shares will be furnished to you prior to
any such amendment, filing, publication or distribution; (iii) the
Statement as so filed and as amended from time to time will comply in
all material respects with the provisions of the 1934 Act and the
rules and regulations thereunder; and (iv) neither the Statement as
filed or as amended from time to time nor any other Tender Offer
Material as filed or as amended or supplemented from time to time will
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein,
in light of the circumstances under which they are made, not
misleading, except that the Company makes no representation or
warranty with respect to any statement contained in, or any omission
from, any Tender Offer Material based upon information concerning you
and furnished in writing by you to the Company expressly for use
therein;
(f) except as disclosed in the Offer to Purchase, the
Contract Offer to Purchase, the Offer and the Contract Offer, the
purchase of Shares pursuant to the Offer and the purchase of Stock
Purchase Contracts pursuant to the Contract Offer and the execution
and delivery of, and the consummation of the transactions contemplated
in, this Agreement will comply with all applicable requirements of
law, including any applicable regulation of any governmental agency,
authority or instrumentality, and, except as disclosed in the Offer to
Purchase and the Contract Offer to Purchase, no consent,
authorization, approval, order, exemption or other action of, or
filing with, any governmental agency, authority or instrumentality of
the United States or any jurisdiction therein or any other
jurisdiction is required in connection with the Offer or the Contract
Offer except such filings as may be required under the 1934 Act, any
applicable stock exchange rules or "Blue Sky" laws of any states of
the United States in connection with the solicitation of tenders of
Shares or Stock Purchase Contracts;
(g) except as disclosed in the Offer to Purchase and the
Contract Offer to Purchase, the making or consummation of the Offer
and the Contract Offer, the purchase of Shares pursuant to the Offer
and the purchase of Stock Purchase Contracts pursuant to the Contract
Offer and the execution and delivery of, and the consummation of the
transactions contemplated in, this Agreement will not (i) conflict
with, result in a
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<PAGE> 7
breach of or constitute a default under, the certificate of
incorporation or by-laws of the Company, or any material loan or
credit agreement, indenture, mortgage, note or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which any of them or any of their respective properties or
assets is or may be bound or (ii) violate any order, judgment or
decree of any court or governmental agency, authority or
instrumentality of the United States, or any jurisdiction therein
applicable to the Company or any of its subsidiaries;
(h) in connection with the Offer and the Contract Offer,
the Company has complied, and will continue to comply, in all material
respects with the 1934 Act and the rules and regulations promulgated
thereunder;
(i) the Company is not, and will not become as a result
of the consummation of the Offer or the Contract Offer, an investment
company within the meaning of Investment Company Act of 1940, as
amended, and the rules and regulations promulgated thereunder;
(j) no restraining order has been issued which is
currently in effect and, except as set forth in the Tender Offer
Material, no investigation, proceeding or litigation has been
commenced or, to the knowledge of the Company, threatened before the
Commission or any federal, state, or local court or governmental
agency or authority, with respect to the making or consummation of the
Offer or the Contract Offer or the other transactions contemplated in
the Tender Offer Material or this Agreement; and
(k) the Company has no knowledge of any material fact or
information concerning the Company or any of its subsidiaries, or the
operations, assets, condition, financial or otherwise, or prospects of
the Company or any of its subsidiaries, which is required to be made
generally available to the public and which has not been, or is not
being, or will not be, made generally available to the public through
the Tender Offer Material or otherwise.
9. The Company will advise you promptly of (i) the occurrence
of any event which could cause the Company to withdraw or terminate the Offer
or the Contract Offer or would permit the Company to exercise any right not to
purchase Shares tendered thereunder, (ii) any proposal or
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<PAGE> 8
requirement to make, amend or supplement any Tender Offer Material, (iii) the
issuance or the threatened issuance of any order or the taking of any other
action by any administrative or judicial tribunal or other governmental agency
or instrumentality concerning the Offer or the Contract Offer (and, if in
writing, will furnish you a copy thereof) and (iv) any other information
relating to the Offer or the Contract Offer which may be from time to time
reasonably request.
10. The Company has delivered to you an opinion of
Wachtell, Lipton, Rosen & Katz, outside counsel to the Company, substantially
in the form of Exhibit E hereto and an opinion of Lawrence L. Gladchun, General
Counsel to the Company, substantially in the form of Exhibit F hereto.
11. Your obligation to act, or to continue to act (as the
case may be), as a Dealer Manager hereunder shall at all times be subject, at
your election, to continuing fulfillment of the following conditions:
(a) all representations, warranties and other statements
of the Company contained in this Agreement are now, and at all times
shall be, true and correct in all material respects; and
(b) the Company at all times shall have performed in all
material respects all of its obligations to be performed hereunder.
12. The Company will indemnify and hold harmless each
Dealer Manager and each such Dealer Manager's affiliated companies and any
director, officer, agent or employee of each Dealer Manager or any such
affiliated company and any director, officer or other person controlling
(within the meaning of Section 20(a) of the 1934 Act) each Dealer Manager
(including each Dealer Manager's affiliated companies) (collectively,
"Indemnified Persons") from and against any and all losses, claims, damages,
liabilities or expenses (whether direct or indirect, in contract, tort or
otherwise) whatsoever (as incurred or suffered and including, but not limited
to, any and all expenses, including the reasonable fees of counsel, incurred in
investigating, preparing or defending any litigation or proceeding, commenced
or threatened, or any claim whatsoever and whether or not such Dealer Manager
or any other Indemnified Person shall be a party thereto) (a) arising out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any Tender Offer Material, or any document
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<PAGE> 9
related thereto, or arising out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any withdrawal
or termination by the Company of, or failure by the Company to make or
consummate, the Offer or the Contract Offer or failure by the Company to
purchase any Shares pursuant to the Offer or purchase Stock Purchase Contracts
pursuant to the Contract Offer or (iii) any breach by the Company of any
representation or warranty or failure to comply with any of the agreements
contained herein or (b) otherwise arising out of, relating to or in connection
with the services rendered by you under this Agreement, except in the case of
clause (b) above for any such loss, claim, damage, liability or expense which
is determined by final judgment of a court of competent jurisdiction to result
from your gross negligence or bad faith and except in the case of clauses
(a)(i) and (b) above for any such loss, claim, damage, liability or expense
which arises out of or is based upon (x) any untrue statement or alleged untrue
statement of a material fact contained in any Tender Offer Material or (y) any
omission or alleged omission to state in such Tender Offer Material a material
fact necessary in order to make the statements made therein, in light of the
circumstances on which they were made, not misleading, if in any such case such
statement or omission was made in reliance upon and in conformity with
information furnished in writing by you to the Company expressly for use
therein. The foregoing indemnity shall be in addition to any liability which
the Company might otherwise have to you and such other Indemnified Persons.
If a claim is made against any Indemnified Person as to which
such Indemnified Person may seek indemnity under this Section 12, such
Indemnified Person shall notify the Company promptly after any written
assertion of such claim threatening to institute an action or proceeding with
respect thereto and shall notify the Company within a reasonable time after
such Indemnified Person shall have been served with a summons or other first
legal process giving information as to the nature and basis of the claim.
Failure to so notify the Company shall not, however, relieve the Company from
any liability which it may have on account of the indemnity under this Section
12 if the Company has not been prejudiced in any material respect by such
failure. The Company shall have the right to participate at its own expense in
the defense of any such litigation or proceeding and the Company shall, upon
the request of such Indemnified Person, assume the defense of any such
litigation or proceeding, including the employment of counsel reasonably
satisfactory to such Indemnified Person
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<PAGE> 10
and the payment of all fees and expenses of such counsel. In any such
litigation or proceeding the defense of which the Company shall have so
assumed, any Indemnified Person shall have the right to participate in such
litigation or proceeding and to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel, (ii) the Company shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such proceeding
(including any impleaded parties) include (x) either of the Company and (y) the
Indemnified Person, and the Indemnified Person shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company; provided,
however, that the Company shall not in such event be responsible under this
Agreement for the fees and expenses of more than one firm of separate counsel
(in addition to any local counsel) for all such Indemnified Persons and that
all such fees and expenses shall be reimbursed as they are incurred. Such firm
shall be designated in writing by the Dealer Managers. The Company shall not
be liable for any settlement of any litigation or proceeding effected without
the prior written consent of the Company (which consent will not be
unreasonably withheld), but if settled with such consent or if there be a
final, unappealable judgment for the plaintiff, the Company agrees, subject to
the provision of this Section 12, to indemnify and hold harmless the
Indemnified Person from and against any loss, damage, liability or expense by
reason of such settlement or judgment. The Company agrees to notify each
Dealer Manager promptly of the assertion of any claim in connection with the
Offer or the Contract Offer against it, any of its officers, directors,
shareholders, subsidiaries or affiliates or any person who controls it, or with
which it is under common control, within the meaning of Section 20(a) of the
1934 Act.
If the indemnity provided for in the foregoing paragraphs of
this Section 12 is unavailable to an Indemnified Person in respect of any
losses, claims, damages, liabilities or expenses referred to therein (other
than for reasons specified in the first sentence of this Section 12 relating to
the gross negligence or bad faith of an Indemnified Person), then the Company
in lieu of indemnifying such Indemnified Person, agrees to contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative
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<PAGE> 11
benefits received by the Company on the one hand and by the Dealer Managers on
the other from the Offer and the Contract Offer or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing clause (i), but also the relative fault of the
Company on the one hand and of the Dealer Managers on the other in connection
with the statements, actions or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and by the Dealer Managers on the other shall be deemed to be in the
same proportion as (i) the maximum aggregate value of the consideration
proposed to be paid by the Company for the purchase of Shares pursuant to the
Offer and for Share Purchase Contracts pursuant to the Contract Offer bears to
(ii) the maximum aggregate fee proposed to be paid to each Dealer Manager
pursuant to Section 5. The relative fault of the Company on the one hand and
of each Dealer Manager on the other (i) in the case of an untrue or alleged
untrue statement of a material fact or an omission or alleged omission to state
a material fact, shall be determined by reference to, among other things,
whether such statement or omission relates to information supplied by the
Company or by the Dealer Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission and (ii) in the case of any other action or omission, shall be
determined by reference to, among other things, whether such action or omission
was taken or omitted to be taken by the Company or by the Dealer Managers and
the parties, relative intent, knowledge, access to information and opportunity
to prevent such action or omission.
The Company and each Dealer Manager agrees that it would not
be just and equitable if contribution pursuant to this Section 12 were
determined by pro rata allocation or by any other method of allocation which
does not take into account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages, liabilities or expenses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Person in connection with investigating
or defending any such action or claim.
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<PAGE> 12
If at any time an Indemnified Person shall have requested the
Company to reimburse such Indemnified Person for expenses, as contemplated by
this Section 12, with respect to any litigation, proceeding or claim for which
indemnity may be sought hereunder, the Company agrees that it shall be liable
for any settlement by one or more Indemnified Persons of such litigation,
proceeding or claim effected without the Company's consent if (i) such
settlement is entered into more than 30 days after receipt by the Company of
such request and (ii) the Company shall not have reimbursed all Indemnified
Persons in accordance with all such requests prior to the date of such
settlement. The Company agrees that, without your prior written consent, it
will not settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding in respect of which
indemnification could be sought under the indemnification provisions hereof
(whether or not you or any other Dealer Manager is an actual or potential party
to such claim, action or proceeding), unless such settlement, compromise or
consent includes an unconditional release of such Indemnified Person from all
liability arising out of such claim, action or proceeding.
13. The indemnity and contribution agreements contained
in Section 12 and the representations and warranties of the Company set forth
in this agreement shall remain operative and in full force and effect
regardless of (i) any failure to commence, or the withdrawal, termination or
consummation of, the Offer or the Contract Offer or the termination or
assignment of this Agreement, (ii) any investigation made by or on behalf of
any Indemnified Person and (iii) any withdrawal by the Dealer Managers pursuant
to Section 4 or otherwise.
14. All notices and other communications hereunder will
be in writing and, if sent to you, will be mailed, delivered or telecopied and
confirmed to you.
CS First Boston Corporation,
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Attention: Joseph D. Fashano
Facsimile: (212) 318-0532
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<PAGE> 13
Keefe, Bruyette & Woods, Inc.
Two World Trade Center, 85th Floor
New York, New York 10048
Attention: James M. Harasimowicz
Facsimile: (212) 775-0593
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York 10036
Attention: John M. Reiss, Esq.
Facsimile: 212-354-8113
or, if sent to the Company will be mailed delivered or telecopied and confirmed
to it at
Michigan National Corporation
27777 Inkster Road
Farmington Hills, Michigan 48334
Attention: Lawrence L. Gladchun, Esq.
Facsimile: (810) 473-3086
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Edward D. Herlihy, Esq.
Facsimile: (212) 403-2000
15. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 12, and
no other person will have any right or obligation hereunder.
16. If any provision hereof shall be determined to be
invalid or unenforceable in any respect, such determination shall not affect
such provision in any other respect or any other provision hereof, which shall
remain in full force and effect.
17. This Agreement constitutes the entire agreement
between the parties hereto, and supersedes all prior agreements, understandings
and arrangements, oral or written, between the parties hereto, with respect to
the subject matter hereof.
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<PAGE> 14
18. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
19. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without regard to choice of
law doctrine).
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us one or the counterparts hereof,
whereupon it will become a binding agreement in accordance with its terms.
Very truly yours,
MICHIGAN NATIONAL CORPORATION
By:__________________________
Name:
Title:
The foregoing Dealer Manager
Agreement is hereby confirmed
and accepted as of the date
first above written.
KEEFE, BRUYETTE & WOODS, INC.
By:___________________________
Name:
Title:
CS FIRST BOSTON CORPORATION
By:___________________________
Name:
Title:
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