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United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
Amendment No. 1
(Mark One)
(X) Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required)
For the fiscal year ended December 31, 1994
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For the transition period from _____________________to_____________________
Commission File Number 0-7186
MICHIGAN NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 38-0111135
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
27777 Inkster Road, Farmington Hills, MI 48334
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (810) 473-3000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common stock, $10 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. (X) Yes ( ) No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ( )
At February 28, 1995, the registrant's common stock, $10 par value held by
nonaffiliates, had an aggregate market value of $1,349,741,569 based on the
closing price of $101.875 and 13,248,997 common shares outstanding.
At February 28, 1995, the registrant had outstanding 13,248,997 shares of its
common stock, $10 par value.
DOCUMENTS INCORPORATED BY REFERENCE:
None
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MICHIGAN NATIONAL CORPORATION
INDEX TO ANNUAL REPORT ON FORM 10-K CONTINUED
_____________________________________________________________________________
PART IV (CONTINUED)
(b) Reports on Form 8-K
A Form 8-K was filed on February 15, 1995, which described
under Item 5, an Agreement and Plan of Merger and Stock
Option Agreement which Michigan National Corporation
entered into with National Australia Bank Limited
and an amendment of a Rights Agreement, dated as of April 25,
1988, by and between Michigan National Corporation and Mellon
Bank, N.A. A copy of the above documents and Press Release
dated February 6, 1995, related to these documents were
filed as exhibits under Item 7.
(c) Exhibits required by Item 601 of Regulation S-K
3. Articles of Incorporation and By-Laws
a. Articles of Incorporation, as amended, are incorporated
herein by reference to Exhibit 3(a) on Form 10-K for the
year ended December 31, 1988.
b. By-Laws, as amended, are incorporated herein by reference
to Exhibit A on Form 8-K filed December 19, 1990.
4. Instruments defining the Rights of Security Holders,
including indentures
a. Note Purchase Agreement between Marine Midland Bank,
N.A., dated July 10, 1985, incorporated herein by
reference to Exhibit E on Form 10-C filed July 22, 1985.
b. Stock and Warrant Purchase Agreement between Marine
Midland Banks, Inc. and Michigan National Corporation
dated July 10, 1985, incorporated herein by reference to
Exhibit F on Form 10-C filed July 22, 1985.
c. Stock Purchase Agreement dated July 10, 1985 between
Michigan National Corporation Employee Stock Ownership
Plan and Michigan National Corporation, incorporated
herein by reference to Exhibit D on Form 10-C filed
July 22, 1985.
d. Exchange Agreement and Certificate of Determination of
Relative Rights and Preferences of 6% Cumulative
Convertible Preferred Stock ($10 par value),
incorporated herein by reference to Item 6.(a)-Exhibit
(4) on Form 10-Q dated March 31, 1988.
e. Rights Agreement dated April 25, 1988 between Michigan
National Corporation and Mellon Bank, N.A., incorporated
herein by reference to Exhibit 1 on Form 8-A filed April
26, 1988, and as amended February 4, 1995. The
amendment is incorporated herein by reference to
Exhibit 4 of Form 8-K filed February 15, 1995.
f. Registration No. 33-4515, 500,000 shares of Common Stock
of Michigan National Corporation (Michigan National
Corporation 1985 Stock Option Plan), incorporated herein
by reference to Exhibit 4.1 of Form S-8 dated April 2,
1986.
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MICHIGAN NATIONAL CORPORATION
INDEX TO ANNUAL REPORT ON FORM 10-K CONTINUED
--------------------------------------------------------------------------------
PART IV (CONTINUED)
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g. Registration No. 33-17222, 500,000 shares of Common Stock
of Michigan National Corporation (Michigan National
Corporation Stock Option and Performance Incentive Plan),
incorporated herein by reference to Exhibit 4.1 of Form S-8
dated September 9, 1987.
h. Registration No. 33-18943, 1,303,045 shares of Common Stock
of Michigan National Corporation (Employee Stock
Ownership Plan), incorporated herein by reference to Exhibit
4.1 of Form S-8 dated December 8, 1987.
i. Registration No. 33-22430, 656,787 shares of Common Stock
of Michigan National Corporation, incorporated herein
by reference to Form S-3 dated June 9, 1988.
j. Registration No. 33-22542, 250,000 shares of Common Stock
of Michigan National Corporation (Michigan National
Corporation Employees' Stock Bonus Plan, 401-(k) account),
incorporated herein by reference to Exhibit 4.1 of Form S-8
dated June 27, 1988.
k. Registration No. 33-24751, Indenture, dated as of November
10, 1988, between Michigan National Corporation and Bankers
Trust Company, incorporated herein by reference to
Exhibit 4.1, of Form S-3 dated October 6, 1988.
l. Registration No. 33-45188, 200,000 shares of Common Stock
of Michigan National Corporation (Michigan National
Corporation Nonqualified Stock Option Plan), incorporated
herein by reference to Form S-8 dated January 21, 1992.
m. Registration No. 33-58644, Senior Indenture between
Michigan National Corporation First National Bank of
Chicago and Subordinated Indenture between Michigan
National Corporation and First Trust National Association,
incorporated herein by reference to Exhibit (4)(a) and
Exhibit (4)(b) respectively, on Form S-3 dated January 23,
1993.
n. Registration No. 33-58644, proposed sale of up to
$150,000,000 of debt securities filed as a shelf
registration, is incorporated herein by reference to Form
S-3, filed February 15, 1993.
o. Stock Option Agreement between Michigan National
Corporation and National Australia Bank Limited dated
February 4, 1995, incorporated herein by reference to
Exhibit 2 of Form 8-K filed February 15, 1995.
10. Material Contracts
a. Employment Agreement dated January 16, 1985 between
Michigan National Corporation and Robert J. Mylod, as
amended............................................ (1)
b. Pension Agreement dated January 16, 1985 between Michigan
National Corporation and Robert J. Mylod, as amended
March 17, 1993......................................(4)
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MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
Non-interest expense, excluding non-recurring items, was $429.2 million for
1994 compared to $571.6 million in 1993. Contributing to this decline was a
reduction in salaries and wages related to the implementation of Project
Streamline, successful implementation of a $30 million cost reduction program
announced earlier in 1994, and lower purchased mortgage servicing rights
amortization and other expenses and from the disposition of IOMC's servicing
business and non-Michigan businesses.
Partially due to charge-offs and write-downs resulting from accelerated
disposition program discussed above, Non-performing Assets decreased by $112.2
million, or 44%, from last year, to $143 million. Non-performing Assets as a
percent of loans plus REO declined from 3.77% to 2.37% during the year, and the
Non-performing Loan-to-total loan ratio decreased from 2.36% to 1.81%. Net
charge-offs for 1994 were 1.04% of average loans versus 0.38% in 1993.
Excluding charge-offs taken in connection with the accelerated disposition
strategy and bulk sales of non-performing commercial real estate assets
earlier in 1994, annualized net charge-offs for 1994 were 0.30% of average
loans. The Corporation's allowance for credit losses was $164.3 million at
year-end, representing 2.73% of total loans and 151% of Non-performing Loans.
SUBSEQUENT EVENT
On February 4, 1995, the Corporation executed an Agreement and Plan of Merger
by and among National Australia Bank Limited A.C.N. 004044937, a banking
corporation organized under the laws of Australia (the "National"), MNC
Acquisition Co., a Michigan corporation and wholly owned subsidiary of the
National ("Acquisition"), and the Corporation (the "Merger Agreement"). The
Merger Agreement provides that (i) Acquisition will be merged with and into the
Corporation (the "Merger"), with the Corporation continuing as the surviving
corporation; (ii) the Corporation will thereupon become a wholly owned
subsidiary of the National; and (iii) each outstanding share of common stock,
par value $10 per share, of the Corporation (the "Common Stock") (other than
certain shares owned by the Corporation, the National, or their respective
subsidiaries, which will be canceled) will be converted, upon the effectiveness
of the Merger, into the right to receive $110 in cash, without interest. The
transaction, which is expected to be completed in six to nine months, is
subject to approval by the Corporation's shareholders and various regulatory
approvals.
Further information about the Agreement and Plan of Merger is contained in the
Corporation's Current Report on Form 8-K, filed February 15, 1995, and which is
incorporated herein by reference.
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Deloitte & Touche LLP letter-head
INDEPENDENT AUDITORS' REPORT
Shareholders and Board of Directors
Michigan National Corporation
We have audited the accompanying consolidated statements of financial condition
of Michigan National Corporation and subsidiaries as of December 31, 1994 and
1993, and the related consolidated statements of income, changes in
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 1994. These financial statements are the responsibility of
Michigan National Corporation's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Michigan National Corporation and
subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
As discussed in Notes A and R to the consolidated financial statements, the
Corporation adopted recently issued Statements of Financial Accounting
Standards, and, accordingly changed its method of accounting for investments in
debt and equity securities in 1994, its method of accounting for postretirement
benefits other than pensions in 1993, and its method for accounting for income
taxes in 1992.
/s/ Deloitte & Touche LLP
Detroit, Michigan
February 7, 1995
(February 24, 1995 as to Note V)
140
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PART IV
ITEM 14(c)
EXHIBIT 23
Deloitte & Touche LLP letter-head
INDEPENDENT AUDITORS' CONSENT
Michigan National Corporation:
We consent to the incorporation by reference in the following Registration
Statements of Michigan National Corporation (MNC) of our report dated
February 7, 1995 (February 24, 1995 as to Note V) appearing in this Annual
Report on Form 10-K of MNC for the year ended December 31, 1994:
<TABLE>
<CAPTION>
Registration
Form Statement No. Description
<S> <C> <C>
S-3 33-58644 $150,000,000 of Debt Securities at a rate to be determined,
filed as a shelf registration
S-3 33-24751 $55,000,000 of 8% Redeemable Subordinated Debentures
and Cancellable Mandatory Stock Purchase Contracts
S-8 33-22542 250,000 shares of Common Stock of MNC (MNC
Employees' Stock Bonus Plan, 401-(k) account)
S-3 33-22430 656,787 shares of Common Stock of MNC proposed to be
disposed of by Marine Midland Bank Inc.
S-8 33-18943 1,303,045 shares of Common Stock of MNC (MNC Employee
Stock Ownership Plan)
S-8 33-17222 500,000 shares of Common Stock of MNC (MNC Stock Option and
Performance Incentive Plan)
S-8 33-4515 500,000 shares of Common Stock of MNC (MNC 1985 Stock
Option Plan)
S-8 33-45188 200,000 shares of Common Stock of MNC (MNC Nonqualified
Stock Option Plan)
</TABLE>
/s/ Deloitte & Touche LLP
March 7, 1995
Detroit, Michigan
173
