<PAGE> 1
Pursuant to Rule 424(b)(5)
Registration No. 33-60788
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 10, 1995)
$200,000,000
NBD BANCORP, INC.
$200,000,000 7 1/8% SUBORDINATED NOTES DUE MAY 15, 2007
---------------------------
Interest Payable May 15 and November 15
---------------------------
The 7 1/8% Subordinated Notes due 2007 (the "Notes") will mature on May 15,
2007. The Notes are not redeemable prior to maturity and are not entitled to the
benefit of a sinking fund.
The Notes will be represented by one or more Global Securities ("Global
Securities") registered in the name of The Depository Trust Company (the
"Depositary"), as Depositary, or its nominee. Beneficial interests in Global
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary and its participants. Except as
described in this Prospectus Supplement, Notes in definitive form will not be
issued in exchange for Global Securities.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------
THE NOTES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
---------------------------
<TABLE>
<CAPTION>
================================================================================================
Price to Underwriting Proceeds to
Public(1) Discounts(2) Corporation(1)(3)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note......................... 99.561% .675% 98.886%
- -------------------------------------------------------------------------------------------------
Total............................ $199,122,000 $1,350,000 $197,772,000
================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from May 17, 1995 to date of delivery.
(2) The Corporation has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Corporation estimated at $170,000.
---------------------------
The Notes offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain further conditions. It is expected that the Global Securities will be
ready for delivery through the facilities of the Depositary in New York, New
York, on or about May 17, 1995.
---------------------------
LEHMAN BROTHERS GOLDMAN, SACHS & CO.
May 12, 1995
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-------------------------
USE OF PROCEEDS
The estimated net proceeds of this offering are $197,602,000. Such proceeds
will be added to the general funds of the Corporation and will be available for
general corporate purposes, including working capital needs and investments in
or advances to existing or future subsidiaries, and possible future
acquisitions.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries at March 31, 1995, and as adjusted to give
effect to the issuance of the Notes offered hereby. For more information
concerning the Corporation, see "NBD BANCORP, INC." and "INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE" in the accompanying Prospectus.
<TABLE>
<CAPTION>
MARCH 31, 1995
-------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-Term Debt:
NBD Bancorp (Parent):
7 1/4% Fixed Rate Subordinated Debentures Due 2004.............. $ 200,000 $ 200,000
8.10% Fixed Rate Subordinated Notes Due 2002.................... 200,000 200,000
7 1/2% Preferred Purchase Units, Due 2023....................... 150,000 150,000
Floating Rate Subordinated Notes Due 2005 (6.38% at 3-31-95).... 96,000 96,000
Notes offered hereby............................................ -- 200,000
---------- ----------
646,000 846,000
---------- ----------
Subsidiary Obligations:
Bank Notes -- various rates and maturities...................... 1,575,000 1,575,000
8 1/4% Fixed Rate Subordinated Notes Due 2024................... 250,000 250,000
6 1/4% Fixed Rate Subordinated Notes Due 2003................... 200,000 200,000
8.75% Fixed Rate Senior Notes Due 1997-1999..................... 10,000 10,000
Capital Lease Obligations -- various rates and maturities....... 16,807 16,807
Other obligations............................................... 5,528 5,528
---------- ----------
2,057,335 2,057,335
---------- ----------
Total Long-Term Debt.......................................... 2,703,335 2,903,335
---------- ----------
Shareholders' Equity:
Series A Preferred Stock -- Par Value $1, Stated Value $50 --
460,000 Shares Authorized, None issued.......................... -- --
Preferred Stock -- No Par Value -- 10,000,000 Shares Authorized,
None Issued..................................................... -- --
Common Stock -- Par Value $1 -- 500,000,000 Shares Authorized,
160,883,008 Shares Issued....................................... 160,883 160,883
Capital Surplus.................................................... 533,576 533,576
Retained Earnings.................................................. 2,990,430 2,990,430
Fair Value Adjustment on Investment Securities (Available for
Sale)........................................................... (78,559) (78,559)
Accumulated Translation Adjustment................................. 9,618 9,618
Deferred Compensation.............................................. (22,131) (22,131)
Treasury Stock (2,854,769 shares).................................. (88,821) (88,821)
---------- ----------
Total Shareholders' Equity.................................... 3,504,996 3,504,996
---------- ----------
Total Capitalization.......................................... $6,208,331 $6,408,331
========== ==========
</TABLE>
S-2
<PAGE> 3
SUMMARY CONSOLIDATED FINANCIAL DATA
The following table sets forth in summary form certain consolidated
financial data for the Corporation and its subsidiaries for the five years ended
December 31, 1994, and for the three months ended March 31, 1995 and 1994, and
is qualified in its entirety by the detailed information and financial
statements included in the documents incorporated herein by reference. See
"INCORPORATION OF CERTAIN INFORMATION BY REFERENCE" in the accompanying
Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31, YEAR ENDED DECEMBER 31,
------------------------- -------------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED) (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operating Results:
Interest Income............ $ 872,088 $ 635,179 $ 2,915,394 $ 2,622,820 $ 2,843,797 $ 3,138,893 $ 3,320,312
Interest Expense........... (451,396) (253,919) (1,290,626) (1,064,713) (1,334,026) (1,800,759) (2,077,923)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Interest Income........ 420,692 381,260 1,624,768 1,558,107 1,509,771 1,338,134 1,242,389
Provision for Possible
Credit Losses............ (20,096) (15,460) (52,032) (119,674) (228,480) (166,212) (151,086)
Non-Interest Income........ 135,730 138,750 545,566 585,383 529,208 473,027 412,339
Non-Interest Expenses...... (323,471) (322,319) (1,304,270) (1,321,840) (1,338,119) (1,161,127) (1,055,774)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income before
Income Taxes............. 212,855 182,231 814,032 701,976 472,380 483,822 447,868
Income Tax Expense......... (71,964) (59,355) (266,753) (220,135) (134,361) (122,288) (99,319)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income before Extraordinary
Item and Cumulative
Effect of Accounting
Change................... 140,891 122,876 547,279 481,841 338,019 361,534 348,549
Extraordinary Item
(Redemption of Debt)..... -- (7,730) (7,730) -- -- -- --
Cumulative Effect of
Accounting Change........ -- (7,885) (7,885) 3,950 (37,885) -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Income................. $ 140,891 $ 107,261 $ 531,664 $ 485,791 $ 300,134 $ 361,534 $ 348,549
=========== =========== =========== =========== =========== =========== ===========
Net Income Per Share (on
average shares
outstanding):
Income before Extraordinary
Item and Cumulative
Effect of Accounting
Change................... $ 0.88 $ 0.77 $ 3.45 $ 2.98 $ 2.11 $ 2.27 $ 2.19
Extraordinary Item
(Redemption of Debt)..... -- (0.05) (0.05) -- -- -- --
Cumulative Effect of
Accounting Change........ -- (0.05) (0.05) 0.03 (0.24) -- --
------ ------ ------ ------ ------ ------ ------
Net Income................. $ 0.88 $ 0.67 $ 3.35 $ 3.01 $ 1.87 $ 2.27 $ 2.19
====== ====== ====== ====== ====== ====== ======
Common Stock Data:
Dividends Declared
Per Share................ $ 0.33 $ 0.30 $ 1.23 $ 1.08 $ 1.04 $ 0.95 $ 0.91
Book Value Per Share
(Period-end)............. $22.18 $20.29 $21.11 $20.21 $18.34 $17.26 $15.98
Balance Sheet Data
(Period-End):
Shareholders' Equity....... $ 3,504,996 $ 3,264,699 $ 3,291,543 $ 3,248,599 $ 2,940,893 $ 2,716,137 $ 2,533,339
Long-Term Debt............. $ 2,703,335 $ 1,583,608 $ 2,504,348 $ 1,434,947 $ 975,381 $ 533,571 $ 325,216
Total Assets............... $47,755,844 $42,932,669 $47,111,133 $40,775,905 $40,937,190 $38,760,388 $36,879,336
Capital Ratios (Period-End):
Tier 1 Capital Ratio
(Minimum -- 4%).......... 8.20% 9.14% 8.44% 9.13% 8.48% 8.19% 8.26%
Total Capital Ratio
(Minimum -- 8%).......... 12.14% 12.94% 12.50% 13.61% 12.01% 10.68% 10.16%
Tier 1 Leverage Ratio
(Minimum -- 3%).......... 6.81% 7.12% 6.77% 7.33% 6.46% 6.24% 6.30%
</TABLE>
S-3
<PAGE> 4
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the Prospectus as the "Debt Securities") supplements and,
to the extent inconsistent therewith, replaces, insofar as such description
relates to the Notes, the description of the Debt Securities set forth in the
Prospectus, to which description reference is hereby made.
GENERAL
The Notes are unsecured, will rank pari passu with other Subordinated Debt
of the Corporation and, together with such other Subordinated Debt, will be
subordinate and junior in right of payment to the prior payment in full of the
"Senior Debt" of the Corporation as described under "DESCRIPTION OF DEBT
SECURITIES -- Subordination" set forth in the Prospectus. The Notes will be
limited to $200,000,000 aggregate principal amount. The Notes will mature on May
15, 2007. The Notes will bear interest at the rate per annum shown on the cover
page of this Prospectus Supplement (computed on the basis of a 360-day year of
twelve 30-day months) from May 17, 1995, payable semi-annually on May 15, and
November 15 of each year (each an "Interest Payment Date"), commencing November
15, 1995, to the persons in whose name such securities (or any predecessor
security) are registered at the close of business on May 1, and November 1, as
the case may be, next preceding such Interest Payment Date. The Notes will not
be redeemable by the Corporation prior to their stated maturity and will not be
entitled to the benefit of a sinking fund.
GLOBAL SECURITIES
The Notes will be issued in the form of one or more Global Securities. The
Global Securities will be deposited with, or on behalf of, the Depositary, and
registered in the name of the Depositary or a nominee thereof. Unless and until
they are exchanged in whole or in part for Notes in definitive form, no Global
Securities may be transferred except as a whole by the Depositary to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee to
a successor of such Depositary or a nominee of such successor.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the Depositary ("participants") or persons that
may hold interests through participants. Upon the issuance of a beneficial
interest in a Global Security, the Depositary will credit, on its book-entry
registration and transfer system, the participants' accounts with the respective
principal amounts of the Notes represented by such Global Security beneficially
owned by such participants. The accounts to be credited shall be designated by
any dealers, underwriters or agents participating in the distribution of such
Notes. Ownership of beneficial interests in such Global Security will be shown
on, and the transfer of such ownership interests will be effected only through,
records maintained by the Depositary (with respect to interests of participants)
and on the records of participants (with respect to interests of persons holding
through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such laws may impair the ability to own, transfer or pledge beneficial
interests in Global Securities.
So long as the Depositary, or its nominee, is the registered owner of such
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by such Global
Security for all purposes under the Indenture. Except as set forth below, owners
of beneficial interests in a Global Security will not be entitled to have their
beneficial interests in such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of such beneficial interests
in definitive form and will not be considered the owners or holders of Notes
under the Indenture. Accordingly, each person owning a beneficial interest in a
Global Security must rely on the procedures of the Depositary for such Global
Security and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a holder under the Indenture. The Corporation understands that under existing
industry practices, if the Corporation requests any action of holders or if an
owner of a beneficial interest in a Global Security desires to give or to take
any action which a holder is entitled to give or to take under the Indenture,
the Depositary would authorize the participants holding the relevant beneficial
interests to give or to take such action, and such participants would authorize
beneficial
S-4
<PAGE> 5
owners owning through such participants to give or to take such action or would
otherwise act upon the instructions of beneficial owners holding through them.
Principal and interest payments on Notes represented by a Global Security
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of such
Global Security. Such payments to the Depositary or its nominee, as the case may
be, will be made by NBD Bank, as Paying Agent, provided that, in the case of
payments of principal, the Global Security is presented to the Paying Agent in
time for the Paying Agent to make such payments in accordance with its normal
procedures. None of the Corporation, the Trustee or any other agent of the
Corporation or agent of the Trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in such Global Security or for maintaining,
supervising or reviewing any record relating to such beneficial ownership
interests.
The Corporation expects that the Depositary, upon receipt of any payment of
principal or interest in respect of such Global Security, will immediately
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in such Global Security as shown on the records
of the Depositary. The Corporation also expects that payments by participants to
owners of beneficial interests in such Global Security held through such
participants will be governed by standing customer instructions and customary
practices, as is now the case with the securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participants.
If the Depositary is at any time unwilling or unable to continue as
Depositary or ceases to be a clearing agency registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), and a successor Depositary registered
as a clearing agency under the Exchange Act is not appointed by the Corporation
within 90 days, the Corporation will issue such Notes in definitive form in
exchange for such Global Security. In addition, the Corporation may at any time
and in its sole discretion determine not to have any of the Notes represented by
one or more Global Securities and, in such event, will issue Notes in definitive
form in exchange for all of the Global Security or Securities representing such
Notes. Any Notes issued in definitive form in exchange for a Global Security
will be registered in such name or names as the Depositary shall instruct the
Trustee. It is expected that such instructions will be based upon directions
received by the Depositary from participants with respect to ownership of
beneficial interests in such Global Security.
The Depositary has confirmed to the Corporation, the Underwriter and the
Trustee that it intends to follow the procedures above.
The Depositary has advised the Corporation and the Underwriters as follows:
The Depositary is a limited purpose trust company organized under the Banking
Law of the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and "clearing agency" registered pursuant to the provisions of section 17A
of the Exchange Act. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations, some of whom (and/or their
representatives) own the Depositary. Access to the Depositary's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made in immediately available funds. So
long as the Notes are represented by a Global Security, all payments of
principal and interest will be made by the Corporation in immediately available
funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, so long as
the Notes are represented by a Global Security registered in
S-5
<PAGE> 6
the name of the Depositary or its nominee, the Notes will trade in the
Depositary's Same-Day Funds Settlement System, and secondary market trading
activity in the Notes will therefore be required by the Depositary to settle in
immediately available funds. No assurance can be given as to the effect, if any,
of settlement in immediately available funds on trading activity in the Notes.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement among the
Corporation, Lehman Brothers Inc. and Goldman, Sachs & Co. (the "Underwriters"),
the Corporation has agreed to sell to the Underwriters, and each of the
Underwriters has severally agreed to purchase from the Corporation, the
principal amount of the Notes as set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF NOTES
----------------
<S> <C>
Lehman Brothers Inc. ........................................................ 70,000,000
Goldman, Sachs & Co. ........................................................ 70,000,000
Chase Securities Inc. ....................................................... 10,000,000
CS First Boston Corporation.................................................. 10,000,000
J.P. Morgan Securities Inc. ................................................. 10,000,000
Merrill Lynch & Co. ......................................................... 10,000,000
Salomon Brothers Inc......................................................... 10,000,000
The Chicago Corporation...................................................... 2,500,000
City Securities Corporation.................................................. 2,500,000
First of Michigan Corporation................................................ 2,500,000
Roney & Co. ................................................................. 2,500,000
------------
Total................................................................. $200,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions.
The Underwriters propose to offer the Notes directly to the public
initially at the public offering price set forth on the cover page of this
Prospectus Supplement and to certain dealers at such price less a concession not
in excess of .40% of the principal amount of the Notes. The Underwriters may
allow and such dealers may reallow a concession not in excess of .25% of the
principal amount of the Notes to certain other dealers. After the initial
offering, the offering price and other selling terms may be changed.
The Corporation has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
and to contribute to payments they may be required to make in respect thereof.
The Notes are a new issue of securities with no established trading market.
The Corporation does not intend to apply for listing of the Notes on a national
securities exchange. The Corporation has been advised by the Underwriters that
they currently intend to make a market in the Notes, but that they are not
obligated to do so and may discontinue such market making at any time without
notice. The Corporation cannot predict the liquidity of any trading market for
the Notes.
The Underwriters and their affiliates may engage in transactions with and
perform services for the Corporation and its affiliates in the ordinary course
of their respective businesses, including, without limitation, commercial
banking and investment banking services.
LEGAL MATTERS
The validity of the Notes will be passed upon for the Corporation by Daniel
T. Lis, Senior Vice President and Secretary of the Corporation. Mr. Lis owns
shares of the Corporation's common stock and holds options to purchase
additional shares of such common stock. The validity of the Notes will be passed
upon for the Underwriters by Wachtell, Lipton, Rosen & Katz. From time to time,
Wachtell, Lipton, Rosen & Katz performs services for the Corporation.
S-6
<PAGE> 7
PROSPECTUS
NBD BANCORP, INC.
SUBORDINATED DEBT SECURITIES
PREFERRED SHARES
PURCHASE CONTRACTS
UNITS
------------------------
NBD Bancorp, Inc. ("NBD Bancorp" or the "Corporation") intends to offer
from time to time unsecured subordinated debt securities (the "Debt
Securities"), shares of preferred stock (the "Preferred Shares"), interests in
which may be represented by depositary shares ("Depositary Shares"), or
contracts under which the counterparty may be required to purchase Debt
Securities, Preferred Shares or Depositary Shares ("Purchase Contracts"), with
an aggregate initial public offering price of up to $500,000,000, on terms to be
determined at the time of sale. The Debt Securities, the Preferred Shares and
Purchase Contracts may be offered separately or as part of units consisting of
one or more such securities ("Units" and, together with the Debt Securities,
Preferred Shares and Purchase Contracts, the "Offered Securities"), in separate
series, in amounts, at prices and on terms to be set forth in one or more
supplements to this Prospectus (a "Prospectus Supplement").
The Debt Securities will be subordinated to all present and future Senior
Debt (as defined herein) of the Corporation.
Specific terms of the Offered Securities will be set forth in the
applicable Prospectus Supplement, including such terms as, where applicable, (i)
in the case of Debt Securities, the specific designation, aggregate principal
amount, denominations, maturity, premium, rate and time of payment of interest,
purchase price, terms for redemption at the option of the Corporation or
repayment at the option of the holder, whether issuable in certified or
uncertificated form, whether initially represented by one or more global
securities, terms for sinking fund payments, terms for conversion or exchange
into common stock, par value $1.00 per share (the "Common Stock") and the
initial public offering price and (ii) in the case of Preferred Shares, the
specific title and stated value, any dividend, liquidation, redemption,
conversion, voting and other rights, the initial public offering price, and
whether interests in the Preferred Shares will be represented by Depositary
Shares. Purchase Contracts would be issued, separately or as part of Units, in
amounts, at prices, and on terms and containing such conditions, covenants and
other provisions, as will be set forth in a Prospectus Supplement. Units would
be issued in amounts, at prices, on terms and containing such conditions,
covenants and other provisions, and will consist of such Offered Securities and
other securities, as will be set forth in a Prospectus Supplement. The
applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered Securities
covered by the Prospectus Supplement.
This Prospectus also relates to an indeterminate number of shares of the
Corporation's Common Stock that may be issuable in the event that the
Corporation offers Offered Securities that are convertible into or exchangeable
for Common Stock. If such Offered Securities are offered, the Prospectus
Supplement will set forth the terms pursuant to which the Offered Securities may
be converted into or exchanged for the Common Stock.
The Offered Securities may be offered directly, through agents designated
from time to time or to or through dealers or underwriters, which may include
affiliates of the Corporation. If agents or underwriters are used, their names,
and any applicable fee, commission, purchase price or discount arrangements will
be set forth, or will be calculable from the information set forth, in the
Prospectus Supplement.
The Offered Securities are not savings accounts, deposits or other
obligations of any bank or nonbank subsidiary of the Corporation and are not
insured by the Federal Deposit Insurance Corporation, the Bank Insurance Fund,
or any other government entity.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is May 10, 1995
<PAGE> 8
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Proxy statements, reports and other information filed by the
Corporation can be inspected and copied at the public reference facilities at
the Commission's office at 450 Fifth Street, N.W., Washington, D.C. 20549, and
the Commission's Regional Offices in New York (Seven World Trade Center,
Thirteenth Floor, New York, New York 10048) and Chicago (230 South Dearborn
Street, Room 3190, Chicago, Illinois 60604), and copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, reports,
proxy statements and other information concerning the Corporation can be
inspected and copied at the offices of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005.
This Prospectus does not contain all of the information set forth in the
Registration Statement on Form S-3 and exhibits thereto (the "Registration
Statement") covering the Offered Securities that the Corporation has filed with
the Commission, certain portions of which have been omitted pursuant to the
rules and regulations of the Commission, and to which portions reference is
hereby made for further information with respect to the Corporation and the
Offered Securities.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Corporation with the Commission (File
No. 1-7127) are incorporated in this Prospectus by reference and made a part
hereof: (a) the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994; (b) the Corporation's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995; and (c) the description of the Corporation's
Common Stock contained in the Corporation's registration statement filed
pursuant to Section 12 of the Exchange Act, and any amendment or report filed
for the purpose of updating such description.
All documents subsequently filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this Prospectus
and prior to the termination of the offering of the securities offered hereby,
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the dates of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference in this Prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Corporation will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the information that has been incorporated in this Prospectus by
reference (other than exhibits to documents incorporated in this Prospectus
unless specifically incorporated in this Prospectus). Such requests should be
directed to Corporate Communications, NBD Bancorp, Inc., 611 Woodward Avenue,
Detroit, Michigan 48226 (telephone number (313) 225-1000).
No person is authorized to give any information or to make any
representations, other than those contained in this Prospectus or a Prospectus
Supplement, and any information or representations not contained herein or
therein must not be relied upon as having been authorized. This Prospectus may
not be used to consummate sales of Offered Securities unless accompanied by a
Prospectus Supplement. The delivery of this Prospectus and a Prospectus
Supplement relating to particular Offered Securities shall not constitute an
offer of any of the other Offered Securities covered by this Prospectus. The
delivery of this Prospectus or any Prospectus Supplement does not constitute an
offer to sell or a solicitation of an offer to buy the Offered Securities in any
circumstances in which such offer or solicitation is unlawful.
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<PAGE> 9
NBD BANCORP, INC.
NBD Bancorp, Inc. is a bank holding company registered under the Bank
Holding Company Act of 1956, as amended (the "BHC Act") and was incorporated
under the laws of the State of Delaware on July 14, 1972. Through bank
subsidiaries operating in Michigan, Illinois, Indiana, Ohio and Florida, the
Corporation provides domestic retail banking, worldwide commercial banking, cash
management, trust and investment management services. The Corporation also
engages in mortgage lending and servicing, insurance, leasing, discount
brokerage and data processing activities through its bank-related subsidiaries
to the extent permitted by the BHC Act. The Corporation's executive offices are
located at 611 Woodward Avenue, Detroit, Michigan 48226 and its telephone number
is (313) 225-1000.
At March 31, 1995, the Corporation and its subsidiaries had total assets of
$47.8 billion, total deposits of $31.6 billion and shareholders' equity of $3.5
billion. Based on rankings of total assets as of March 31, 1995, the Corporation
was the 18th largest bank holding company in the United States. At March 31,
1995, the Corporation and its subsidiaries employed approximately 18,000 persons
on a full-time equivalent basis.
The principal subsidiary of the Corporation is NBD Bank, headquartered in
Detroit, Michigan, which is the largest single contributor to the Corporation's
earnings and accounted for approximately 65% of the consolidated total assets of
the Corporation at March 31, 1995. NBD Bank is the largest bank in the State of
Michigan and among the 20 largest commercial banks in the United States based on
total deposits as of December 31, 1994. At December 31, 1994, it operated 320
banking offices located throughout the lower peninsula of Michigan. In addition
to domestic banking and related activities, NBD Bank conducts international
banking activities, including operations in the Euro-Currency markets, export
and import financing, making credit facilities available to foreign firms and
subsidiaries of United States corporations, foreign exchange transactions and
issuance of letters of credit.
In recent years, the Corporation has expanded significantly through
selective acquisitions, primarily in its Midwest market, as well as through
steady internal growth. On January 7, 1995, the Corporation entered into an
agreement to acquire Deerbank Corporation of Deerfield, Illinois, a one-thrift
holding company with assets of approximately $800 million. The Corporation
anticipates the acquisition will close, and the thrift subsidiary will be merged
into the Corporation's Illinois bank subsidiary, mid-year 1995. On January 9,
1995, the Corporation acquired AmeriFed Financial Corp. of Joliet, Illinois, a
one-thrift holding company with assets of approximately $900 million, and merged
that thrift subsidiary into the Corporation's Illinois bank subsidiary. In 1992,
the Corporation acquired three bank holding companies in Indiana, and during
1993 merged the 12 Indiana bank subsidiaries of those acquired companies into a
single bank. That subsidiary had deposits of approximately $7.8 billion at March
31, 1995, making it the largest bank in Indiana. Between 1987 and 1991, the
Corporation acquired four bank holding companies in Illinois, and in December
1992 merged 17 of the Illinois bank subsidiaries of those acquired companies
into a single bank. That subsidiary had deposits of approximately $4.8 billion
at March 31, 1995, making it the seventh largest bank in Illinois. The
Corporation has also expanded through acquisitions from federal agencies. During
1990, it acquired from the Resolution Trust Corporation approximately $1.1
billion in deposits and selected assets of three thrifts located in Michigan,
Ohio and Florida. The Corporation will continue to regularly explore
opportunities for additional acquisitions of financial institutions and related
businesses. Such acquisitions may be made by the exchange of the Corporation's
stock, through cash purchases, or with other consideration.
The foregoing acquisitions have enhanced the Corporation's geographic
diversity outside of the State of Michigan, particularly in the States of
Indiana and Illinois where operations are conducted through second-tier bank
holding companies. At March 31, 1995, NBD Indiana, Inc. had consolidated total
assets of $10.4 billion, while NBD Illinois, Inc. had consolidated total assets
of $6.1 billion.
GOVERNMENTAL POLICIES, REGULATION AND SUPERVISION
The operations of financial institutions may be affected by legislative
changes and by the policies of various regulatory authorities. In particular,
bank holding companies and their subsidiaries are affected by the credit
policies of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") through its regulation of the national supply of bank credit.
Among the instruments of monetary policy used by the Federal Reserve Board to
implement its objectives are open market operations in U.S. Government
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<PAGE> 10
securities, changes in the discount rate on bank borrowings and changes in
reserve requirements on bank deposits.
Bank holding companies, banks and financial institutions generally are
highly regulated, with numerous federal and state laws and regulations governing
their activities. As a bank holding company, the Corporation is subject to
regulation under the BHC Act and is subject to examination and supervision by
the Federal Reserve Board. Under the BHC Act the Corporation is prohibited, with
certain exceptions, from acquiring or retaining direct or indirect ownership or
control of voting shares of any company which is not a bank or bank holding
company, and from engaging in activities other than those of banking or of
managing or controlling banks, other than subsidiary companies and activities
which the Federal Reserve Board determines to be so closely related to the
business of banking as to be a proper incident thereto. The acquisition of
direct or indirect ownership or control of a bank or bank holding company by the
Corporation is also subject to certain restrictions under the BHC Act and
applicable state laws.
Various federal and state laws govern the operations of the Corporation's
bank subsidiaries. National banks are supervised and regulated by the Office of
the Comptroller of the Currency under the National Bank Act. Since national
banks are also members of the Federal Reserve System and their deposits are
insured by the Federal Deposit Insurance Corporation (the "FDIC"), they are also
subject to the applicable provisions of the Federal Reserve Act and the Federal
Deposit Insurance Act and in certain respects to state laws applicable to
financial institutions. NBD Bank and other state-chartered bank subsidiaries of
the Corporation are in general subject to the same or similar restrictions and
regulations, but with more extensive regulation and examination by state banking
departments, the Federal Reserve Board for Federal Reserve member banks, and the
FDIC. NBD Bank, Federal Savings Bank (Florida) is supervised and regulated by
the Office of Thrift Supervision, Department of Treasury.
The Corporation is a legal entity separate and distinct from its affiliate
banks and its nonbanking subsidiaries. Accordingly, the right of the
Corporation, and thus the right of the Corporation's creditors and shareholders,
to participate in any distribution of the assets or earnings of any affiliate
bank or other subsidiary is necessarily subject to the prior claims of creditors
of any affiliate bank or subsidiary. The principal source of the Corporation's
revenues is dividends and fees from its affiliates. There are legal limitations
on the extent to which the Corporation's subsidiary banks can lend or otherwise
apply funds to the Corporation or certain of its affiliates. Federal law
prevents the Corporation from borrowing from its subsidiary banks unless the
loans are secured by specified obligations and, with respect to the Corporation
and any nonbank affiliate, such secured loans by any subsidiary bank are
generally limited to 10% of the subsidiary bank's capital and surplus and, with
respect to the Corporation and all of its nonbank affiliates, to an aggregate of
20% of the subsidiary bank's capital and surplus. In addition, payment of
dividends to the Corporation by subsidiary banks is subject to various state and
federal regulatory limitations. The Corporation calculates that net assets of
its subsidiary banks not available for dividends or loans amounted to
approximately $2.6 billion at December 31, 1994. In 1995, the Corporation's bank
subsidiaries may distribute to the Corporation (in addition to their 1995 net
income) approximately $602.0 million in dividends without the prior approval of
bank regulatory agencies. In addition, federal bank regulatory agencies have the
authority to prohibit the banking organizations they supervise from engaging in
what, in the bank regulator's opinion, constitutes an unsafe or unsound practice
in conducting its business. Depending upon the financial condition of a bank,
the payment of dividends could be deemed to constitute such an unsafe or unsound
practice.
Recent banking legislation, including particularly the Financial
Institutions Reform Recovery and Enforcement Act of 1989 ("FIRREA") and the
Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), has
broadened the regulatory powers of the federal bank regulatory agencies. Among
other things, FIRREA contains a "cross-guarantee" provision which could result
in insured depository institutions owned by the Corporation being assessed for
losses incurred by the FDIC in connection with assistance provided to, or the
failure of, any other insured depository institution owned by the Corporation.
In addition, under Federal Reserve Board policy, the Corporation is expected to
act as a source of financial strength to each subsidiary bank and to commit
resources to support such subsidiary bank. As a result of such policies, the
Corporation may be required to commit resources to its subsidiary banks in
circumstances where it might not do so absent such policies.
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<PAGE> 11
FDICIA revises sections of the Federal Deposit Insurance Act affecting bank
regulation, deposit insurance and provisions for funding of the Bank Insurance
Fund ("BIF") administered by the FDIC. FDICIA also revises bank regulatory
structures embodied in several other federal banking statutes, links the bank
regulators' authority to intervene in cases of deterioration of a bank's capital
level, places limits on real estate lending and tightens audit requirements.
Among the significant revisions that could have an impact on each of the
Corporation and its banking subsidiaries is the authority granted the FDIC to
impose special assessments on insured depositary institutions to repay FDIC
borrowings from the United States Treasury or other sources and to establish
semiannual assessment rates on BIF-member banks so as to maintain the BIF at the
designated reserve ratio defined in FDICIA. FDICIA also provides for
implementation of a system of risk-based premiums for deposit insurance. Under a
risk-based insurance assessment system that became effective January 1, 1994,
the FDIC places each insured bank in a risk category based on the bank's level
of capital and other relevant information (such as supervisory evaluations).
Proposals to change the laws and regulations governing banks, companies
that control banks, and other financial institutions are frequently raised in
Congress, in the state legislatures and before the various bank regulatory
agencies. For example, legislation enacted in 1994 permits nationwide interstate
bank acquisitions and branching, generally phased in over the next several
years, and requires bank regulatory agencies to reduce the regulatory burden
applicable to banks and their holding companies. The likelihood of any changes
and the impact such changes might have on the Corporation's business are
impossible to determine.
The bank-related subsidiaries of the Corporation are also supervised and
examined by the Federal Reserve Board, as well as other applicable regulatory
agencies. For example, the Corporation's discount brokerage subsidiaries are
subject to supervision and regulation by the Commission, the National
Association of Securities Dealers, Inc. and state securities regulators. Other
bank-related subsidiaries are subject to other extensive laws and regulations of
both the federal government and the various states in which they are authorized
to do business.
USE OF PROCEEDS
Unless otherwise specified in a Prospectus Supplement, the net proceeds
from the sale of Offered Securities will be added to the general funds of the
Corporation and will be available for general corporate purposes, including
working capital needs and investments in or advances to existing or future
subsidiaries, and possible future acquisitions. The Corporation regularly
explores opportunities for additional acquisitions of financial institutions and
related businesses. Pending ultimate application, the net proceeds of the Debt
Securities may be temporarily invested in short-term investments. Management
anticipates that the Corporation may, from time to time, engage in additional
debt or equity financings.
RATIOS OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following are the consolidated ratios of earnings to fixed charges for
each of the years in the five-year period ended December 31, 1994 and for the
three months ended March 31, 1995 and 1994:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
--------------- ----------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Ratios of Earnings to Fixed
Charges:
Excluding interest on deposits........ 2.31x 3.47x 2.88x 3.80x 2.98x 2.84x 2.24x
Including interest on deposits........ 1.47 1.71 1.62 1.65 1.35 1.27 1.21
</TABLE>
The consolidate ratios of earnings to fixed charges have been computed by
dividing income before income taxes and fixed charges by fixed charges. The
Corporation has had no issued and outstanding preferred stock during the periods
shown. Accordingly, historical ratios include no amounts with respect to
preferred stock dividend requirements. Fixed charges, excluding interest on
deposits, consist of interest on indebtedness and one-third of net rental
expense on long-term leases (which is deemed representative of the interest
factor).
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<PAGE> 12
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to such Debt Securities.
Debt Securities that are not issued as part of a Unit are to be issued
under an indenture (the "Indenture"), between the Corporation and Chemical Bank
(the "Trustee"). The Indenture is an exhibit to the Registration Statement. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are qualified in their entirety by reference to the provisions of
the Indenture. Wherever terms of the Indenture are referred to, it is intended
that such terms shall be incorporated herein by reference. Unless otherwise
indicated, capitalized terms shall have the meanings ascribed to them in the
Indenture.
Unless otherwise set forth in the Prospectus Supplement, the Debt
Securities that are issued as part of a Unit will not be issued under or
governed by an indenture qualified under the Trust Indenture Act, and the
holders of Units (whether or not consisting in part of Debt Securities) will not
have the benefits of the protections of the Trust Indenture Act.
GENERAL
The amount of Debt Securities offered by this Prospectus will be limited to
the amount set forth on the cover of this Prospectus. The Indenture provides
that Debt Securities in an unlimited amount may be issued thereunder from time
to time in one or more series.
The Debt Securities will be unsecured and will rank pari passu with other
Subordinated Debt of the Corporation and, together with such other Subordinated
Debt, will be subordinate and junior in right of payment to the prior payment in
full of the "Senior Debt" of the Corporation as described below under
"Subordination."
Reference is hereby made to the Prospectus Supplement relating to the
particular series of Debt Securities for the terms of such Debt Securities,
including, where applicable: (i) the designation and any limit on the aggregate
principal amount of such Debt Securities; (ii) the price (expressed as a
percentage of the aggregate principal amount thereof) at which such Debt
Securities will be issued; (iii) the date or dates on which such Debt Securities
will mature or method by which such dates can be determined; (iv) the
denominations in which any Debt Securities will be issuable, if other than
denominations of $1,000; (v) the rate or rates (which may be fixed or variable)
at which such Debt Securities will bear interest, which rate may be zero in the
case of certain Debt Securities issued at an issue price representing a discount
from the principal amount payable at maturity; (vi) the date from which interest
on such Debt Securities will accrue, the dates on which such interest will be
payable or method by which such dates can be determined, the date on which
payment of such interest will commence and the circumstances, if any, in which
the Corporation may defer interest payments; (vii) the dates on which, and the
price or prices at which, such debt Securities will, pursuant to any mandatory
sinking fund provision, or may, pursuant to any optional redemption or required
repayment provisions, be redeemed or repaid and the other terms and provisions
of any such optional redemption or required repayment; (viii) any terms by which
such Debt Securities may be convertible into or exchangeable for Common Stock,
Preferred Shares, Depositary Shares, and, in case of Debt Securities convertible
into Preferred Shares or Depositary Shares, the terms of such Preferred Shares
or Depositary Shares; (ix) whether such Debt Securities are to be issued in the
form of one or more Global Securities and, if so, the identity of the Depositary
for such Global Security or Securities; (x) any additional covenants included
for the benefit of Holders of such Debt Securities; (xi) any additional Events
of Default provided with respect to such Debt Securities; (xii) information with
respect to book-entry procedures, if any; (xiii) any other terms of the Debt
Securities not inconsistent with the provisions of the Indenture; and (xiv) the
terms of any securities being offered together with or separately from the Debt
Securities. Such Prospectus Supplement will also describe any special provisions
for the payment of additional amounts with respect to the Debt
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<PAGE> 13
Securities and certain United States federal income tax consequences and other
special considerations applicable to such series of Debt Securities.
The ability of the Corporation to make payments of principal of (and
premium, if any, on) and interest on the Debt Securities may be affected by the
ability of the Corporation's subsidiary banks to pay dividends. The ability of
the Corporation and its subsidiary banks to pay dividends in the future will be
influenced by bank regulatory requirements and capital guidelines. See "NBD
BANCORP, INC. -- Governmental Policies, Regulation and Supervision."
REGISTRATION, EXCHANGE AND TRANSFER
Debt Securities will be issued in fully registered form only. Debt
Securities of any series will be exchangeable for other Debt Securities of the
same series of authorized denominations and of a like aggregate principal
amount, tenor and terms. Debt Securities may be presented for exchange and
registration of transfer (duly endorsed or accompanied by a satisfactory written
instrument of transfer), at the office of the Security Registrar or at the
office of any transfer agent designated by the Corporation for such purpose with
respect to such series of Debt Securities, without service charge and upon
payment of any taxes and other governmental charges. If the applicable
Prospectus Supplement refers to any transfer agent (in addition to the Security
Registrar) initially designated by the Corporation with respect to any series of
Debt Securities, the Corporation may at any time rescind the designation of any
such transfer agent or approve a change in the location through which any such
transfer agent or Security Registrar acts. The Corporation may at any time
designate additional transfer agents with respect to any series of Debt
Securities.
GLOBAL SECURITIES
If any Debt Securities of a series are issuable in global form, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such Global Security may exchange
such interests for Debt Securities of such series and of like tenor and
principal amount of any authorized form and denomination. Principal of and any
premium and interest on a Global Security will be payable in the manner
described in the Prospectus Supplement relating thereto.
PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and premium, if any, and interest, if any, on a Debt Security
will be payable in United States dollars, and interest will be payable at the
office of such paying agent or paying agents as the Corporation may appoint from
time to time, except that at the option of the Corporation payment of any
interest may be made by a check mailed to the Holder at such Holder's registered
address or by wire transfer to an account designated by such Holder in writing
not less than ten days prior to the date of such payment. Unless otherwise
indicated in the applicable Prospectus Supplement, payment of any instalment of
interest on a Registered Security will be made to the Person in whose name such
Registered Security is registered at the close of business on the Regular Record
Date for such payments. Unless otherwise indicated in the applicable Prospectus
Supplement, principal payable at maturity will be paid to the registered holder
upon surrender of the Registered Security at the office of a duly appointed
paying agent. The Corporation may terminate the appointment of any of the paying
agents from time to time.
All moneys paid by the Corporation to a paying agent for the payment of
principal of or premium, if any, or interest, if any, on any Debt Security that
remains unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will, at the request of the
Corporation, be repaid to the Corporation, and the Holder of such Debt Security
or any coupon appertaining thereto will thereafter look only to the Corporation
for payment thereof.
ABSENCE OF CERTAIN COVENANTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation is not restricted by the Indenture from incurring, assuming or
becoming liable for any type of debt or other obligations, from
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<PAGE> 14
creating liens on its property for any purposes or from paying dividends or
making distributions on its capital stock or purchasing or redeeming its capital
stock. The Indenture does not require the maintenance of any financial ratios or
specified levels of net worth or liquidity. In addition, the Indenture does not
contain any provision which would require the Corporation to repurchase or
redeem or otherwise modify the terms of any of its Debt Securities upon a change
in control or other events involving the Corporation which may adversely affect
the creditworthiness of the Debt Securities.
MODIFICATION AND WAIVER
Except certain modifications and amendments not adverse to Holders of Debt
Securities, modifications and amendments of and waivers of compliance with
covenants under the Indenture may be made only with the consent of the Holders
of not less than 66 2/3% in principal amount of the Outstanding Debt Securities
of each series thereunder affected by such modification, amendment or waiver;
provided that no such modification or amendment may, without the consent of the
Holder of each Outstanding Debt Security or coupon affected thereby: (i) change
the Stated Maturity of the principal or any instalment of principal or any
instalment of interest, if any; (ii) reduce the amount of principal or interest
thereon, or any premium payable upon redemption or repayment thereof or in the
case of an Original Issue Discount Security the amount of principal payable upon
acceleration of the Maturity thereof; (iii) change the place of payment; (iv)
impair the right to institute suit for the enforcement of any payment of the
principal, premium, if any, and interest, if any, or adversely affect the right
of repayment, if any, at the option of the Holder; (v) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
whose Holders is required for modification or amendment of the applicable
Indenture or for waiver of compliance with certain provisions of the applicable
Indenture or for waiver of certain defaults; or (vi) modify any of the above
provisions.
EVENTS OF DEFAULT
Unless otherwise provided in the applicable Prospectus Supplement, any
series of Debt Securities issued under the Indenture will provide that the only
Event of Default will be certain events of bankruptcy of the Corporation. Unless
specifically stated in the applicable Prospectus Supplement for a particular
series of Debt Securities, there if no right of acceleration of the payment of
principal of the Debt Securities upon a default in the payment of principal,
premium, if any, or interest, if any, or in the performance of any covenant or
agreement in the Debt Securities or Indenture. In the event of default in the
payment of principal, premium, if any, or interest, if any, or the performance
of any covenant or agreement in the Debt Securities or Indenture, the Trustee,
subject to certain limitations and conditions, may institute judicial
proceedings to enforce payment of such principal, premium, if any, or interest,
if any, or to obtain the performance of such covenant or agreement or any other
proper remedy.
The Corporation is required to file with the Trustee annually an Officers'
Certificate as to the absence of certain defaults under the terms of the
Indenture. The Indenture provides that if an Event of Default specified therein
shall occur and be continuing, either the Trustee thereunder or the Holders of
not less than 25% in principal amount of the Outstanding Debt Securities of such
series issued under the Indenture may declare the principal of all such Debt
Securities (or in the case of Original Issue Discount Series, such portion of
the principal amount thereof as may be specified in the terms thereof) to be due
and payable. In certain cases, the Holders of a majority in principal amount of
the Outstanding Debt Securities of any series may, on behalf of the Holders of
all Debt Securities of any such series, waive any past default or Event of
Default except a default (i) in payment of the principal of or premium, if any,
or interest, if any, on any of the Debt Securities of such series and (ii) in
respect of a covenant or provision of the Indenture which cannot be modified or
amended without the consent of the Holder of each Outstanding Debt Security of
such series affected.
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care, to
be indemnified by the Holders of the Debt Securities of any series thereunder
before proceeding to exercise any right or power under the Indenture with
respect to such series at the request of such Holders. The Indenture provides
that no Holder of any Debt Securities of any series thereunder may institute any
proceeding, judicial or otherwise, to enforce the Indenture except in the case
of failure of the Trustee thereunder, for 60 days, to act after it is given
notice of default, a request to enforce the
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<PAGE> 15
Indenture by the Holders of not less than 25% in aggregate principal amount of
the Outstanding Debt Securities of such series and an offer of reasonable
indemnity. This provision will not prevent any Holder of Debt Securities from
enforcing payment of the principal thereof and premium, if any, and interest, if
any, thereon at the respective due dates thereof. The Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of any series
issued under an Indenture may direct the time, method and place of conducting
any proceedings for any remedy available to the Trustee for such Debt Securities
or exercising any trust or power conferred on it with respect to the Debt
Securities of such series. However, the Trustee may refuse to follow any
direction that conflicts with law or the Indenture under which it serves or
which would be unjustly prejudicial to Holders not joining therein.
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to any series of Debt Securities thereunder
known to it, give to the Holders of Debt Securities of such series notice of
such default if not cured or waived, but, except in the case of a default in the
payment of principal of or premium, if any, or interest, if any, on any Debt
Securities of such series or in the payment of any sinking fund instalment with
respect to Debt Securities of such series, the Trustee for such Debt Securities
shall be protected in withholding such notice if it determines in good faith
that the withholding of such notice is in the interest of the Holders of such
Debt Securities.
SUBORDINATION
The Debt Securities shall be subordinate and junior in right of payment, to
the extent set forth in the Indenture, to all "Senior Debt" (as defined below)
of the Corporation. In the event that the Corporation shall default in the
payment of any principal, premium, if any, or interest, if any, on any Senior
Debt when the same becomes due and payable, whether at Maturity or at a date
fixed for prepayment or by declaration of acceleration or otherwise, then,
unless and until such default shall have been cured or waived or shall have
ceased to exist, no direct or indirect payment (in cash, property, securities,
by set-off or otherwise) shall be made or agreed to be made for principal,
premium, if any, or interest, if any, on the Debt Securities, or in respect of
any redemption, repayment, retirement, purchase or other acquisition of any of
the Debt Securities.
"Senior Debt" means (i) the principal of, premium, if any, and interest, if
any, on all indebtedness for money borrowed, whether now outstanding or
subsequently incurred; (ii) all obligations to make payment pursuant to the
terms of financial instruments, such as securities contracts and foreign
currency exchange contracts, derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
option contracts and similar financial instruments; (iii) any indebtedness or
obligation of others of the kind described in clauses (i) and (ii) above for the
payment of which the Corporation is responsible or liable as guarantor or
otherwise; and (iv) all deferrals, renewals or extensions of such indebtedness
or obligations; other than, in each case, (A) any indebtedness or obligation as
to which it is expressly provided that such indebtedness or obligation is not
senior or superior in right to the Debt Securities, that such indebtedness or
obligation ranks pari passu with the Debt Securities or that such indebtedness
or obligation is subordinate in right of payment to any other indebtedness of
the Corporation and (B) the Debt Securities.
As of March 31, 1995, NBD Bancorp (not consolidated with its subsidiaries)
had approximately $91,462,000 of Senior Debt outstanding.
Upon any distribution of assets of the Corporation in connection with
certain events of bankruptcy of the Corporation, all Senior Debt (including any
interest thereon accruing after the commencement of any such proceedings) shall
first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made on account of the principal or
interest on the Debt Securities. Upon any such event, any payment or
distribution on account of the principal of or interest on the Debt Securities,
whether in cash, securities or other property (other than securities of the
Corporation or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in the subordination provisions with respect to the Debt Securities, to
the payment of all Senior Debt at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
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<PAGE> 16
readjustment), which would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the Debt Securities, shall be paid or
delivered directly to the holders of Senior Debt in accordance with the
priorities then existing among such holders until all Senior Debt (including any
interest thereon accruing after the commencement of any such proceedings) shall
have been paid in full.
Upon any distribution of assets of the Corporation in connection with
certain events of bankruptcy of the Corporation, after payment in full of all
sums owing with respect to Senior Debt, the Holders of Debt Securities, together
with the holders of any obligations of the Corporation ranking on a parity with
the Debt Securities, shall be entitled to be repaid from the remaining assets of
the Corporation the amounts at the time due and owing on account of unpaid
principal, premium, if any, and interest, if any, on the Debt Securities and
such other obligations before any payment or other distribution, whether in
cash, property or otherwise, shall be made on account of any capital stock or
obligations of the Corporation ranking junior to the Debt Securities and such
other obligations. If any payment or distribution on account of the principal of
or interest on the Debt Securities of any character or any security, whether in
cash, securities or other property (other than securities of the Corporation or
any other Corporation provided for by a plan of reorganization or readjustment
the payment of which is subordinate, at least to the extent provided in the
subordination provisions with respect to the Debt Securities, to the payment of
all Senior Debt at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment) shall be received
by any Holder of any Debt Securities in contravention of any of the terms hereof
and before all the Senior Debt shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Debt at the time outstanding in accordance with the priorities then existing
among such holders for application so the payment of all Senior Debt remaining
unpaid to the extent necessary to pay all such Senior Debt in full.
By reason of such subordination, in the event of the insolvency of the
Corporation, holders of Senior Debt may receive more, ratably, and holders of
the Debt Securities may receive less, ratably, than the other creditors of the
Corporation. The Debt Securities will rank pari passu with the Corporation's
existing subordinated indebtedness and with other subordinated indebtedness that
the Corporation may from time to time incur, however, the holders of the Debt
Securities may receive more or less, ratably, than the holders of such other
indebtedness in the event of the insolvency of the Corporation by reason of any
definition of "Senior Debt" or the equivalent term applicable to such other
indebtedness that is different than the definition of "Senior Debt" applicable
to the Debt Securities.
CONVERSION OF CONVERTIBLE DEBT SECURITIES
The Holders of Debt Securities of a specified series that are convertible
into Common Stock, Preferred Shares or Depositary Shares of the Corporation
("Convertible Debt Securities") will be entitled at certain times specified in
the applicable Prospectus Supplement, subject to prior redemption, repayment or
repurchase, to convert any Convertible Debt Securities of such series (in
denominations set forth in the applicable Prospectus Supplement) into Common
Stock, Preferred Shares or Depositary Shares, as the case may be, at the
conversion price set forth in the applicable Prospectus Supplement, subject to
adjustment as described below and in the applicable Prospectus Supplement.
Except as described below, no adjustment will be made on conversion of any
Convertible Debt Securities for interest accrued thereon or for dividends on any
Common Stock, Preferred Shares or Depositary Shares issued. If any Convertible
Debt Securities not called for redemption are converted between a Regular Record
Date for the payment of interest and the next succeeding Interest Payment Date,
such Convertible Debt Securities must be accompanied by funds equal to the
interest payable on such succeeding Interest Payment Date on the principal
amount so converted. The Corporation is not required to issue fractional shares
of Common Stock upon conversion of Convertible Debt Securities that are
convertible into Common Stock and, in lieu thereof, will pay a cash adjustment
based upon the Closing Price (as defined in the Indenture) of the Common Stock
on the last business day prior to the date of conversion. In the case of
Convertible Debt Securities called for redemption, conversion rights will expire
at the close of business on the redemption date.
Unless otherwise indicated in the applicable Prospectus Supplement, the
conversion price for Convertible Debt Securities that are convertible into
Common Stock is subject to adjustment under formulas set forth in
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the Indenture in certain events, including: the issuance of the Corporation's
capital stock as a dividend or distribution on the Common Stock; subdivisions
and combinations of the Common Stock; the issuance to all holders of Common
Stock of certain rights or warrants entitling them to subscribe for or purchase
Common Stock within 45 days after the date fixed for the determination of the
stockholders entitled to receive such rights or warrants, at less than the
current market price (as defined in the Indenture); and the distribution to all
holders of Common Stock of evidences of indebtedness or assets of the
Corporation (excluding certain cash dividends and distributions described in the
next paragraph) or rights or warrants (excluding those referred to above). In
the event that the Corporation shall distribute any rights or warrants to
acquire capital stock ("Capital Stock Rights") pursuant to which separate
certificates representing such Capital Stock Rights will be distributed
subsequent to the initial distribution of such Capital Stock Rights (whether or
not such distribution shall have occurred prior to the date of the issuance of a
series of Convertible Debt Securities), such subsequent distribution shall be
deemed to be the distribution of such Capital Stock Rights; provided that the
Corporation may, in lieu of making any adjustment in the conversion price upon a
distribution of separate certificates representing such Capital Stock Rights,
make proper provision so that each Holder of such a Convertible Debt Security
who converts such Convertible Debt Security (or any portion thereof) (i) before
the record date for such distribution of separate certificates shall be entitled
to receive upon such conversion shares of Common Stock issued with Capital Stock
Rights and (ii) after such record date and prior to the expiration, redemption
or termination of such Capital Stock Rights shall be entitled to receive upon
such conversion, in addition to the shares of Common Stock issuable upon such
conversion, the same number of such Capital Stock Rights as would a holder of
the number of shares of Common Stock that such Convertible Debt Security so
converted would have entitled the holder thereof to acquire in accordance with
the terms and provisions applicable to the Capital Stock Rights if such
Convertible Debt Security were converted immediately prior to the record date
for such distribution. Common Stock owned by or held for the account of the
Corporation or any majority owned subsidiary shall not be deemed outstanding for
the purpose of any adjustment.
No adjustment in the conversion price of Convertible Debt Securities that
are convertible into Common Stock will be made for regular quarterly or other
periodic or recurring cash dividends or distributions or for cash dividends or
distributions to the extent paid from retained earnings. No adjustment in the
conversion price of Convertible Debt Securities that are convertible into Common
Stock will be required unless such adjustment would require a change of at least
1% in the conversion price then in effect, provided that any such adjustment not
so made will be carried forward and taken into account in any subsequent
adjustment; and provided, further, that any such adjustment not so made shall be
made no later than three years after the occurrence of the event requiring such
adjustment to be made or carried forward. Notwithstanding any of the foregoing,
neither the issuance of Common Stock under any plan of the Corporation providing
for the purchase of shares of Common Stock by the Corporation's stockholders or
employees at a price not less than 90% of the "average market price" during the
"pricing period," as such terms, or equivalent terms, are defined in, and as
calculated pursuant to, such plans from time to time, nor the granting or
exercise of any rights thereunder, shall require an adjustment to the conversion
price of Convertible Debt Securities that are convertible into Common Stock. The
Corporation reserves the right to make such reductions in the conversion price
in addition to those required in the foregoing provisions as the Corporation in
its discretion shall determine to be advisable in order that certain
stock-related distributions hereafter made by the Corporation to its
stockholders shall not be taxable. Except as stated above, the conversion price
will not be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock, or securities carrying the
right to purchase any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Corporation, or (iii) a sale or conveyance
to another Corporation of the property and assets of the Corporation as an
entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, securities, other
property or assets (including cash) with respect to or in exchange for such
Common Stock, the Holders of the Convertible Debt Securities then outstanding
that are convertible into Common Stock, the Holders of the Convertible Debt
Securities then outstanding that are convertible into Common Stock will be
entitled thereafter to convert such Convertible Debt Securities into the kind
and amount of shares of stock and other securities or property which they would
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have received upon such reclassification, change, consolidation, merger, sale or
conveyance had such Convertible Debt Securities been converted into Common Stock
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance.
In the event of a taxable distribution to holders of Common Stock (or other
transaction) which results in any adjustment of the conversion price of
Convertible Debt Securities that are convertible into Common Stock, the Holders
of such Convertible Debt Securities may, in certain circumstances, be deemed to
have received a distribution subject to United States income tax as a dividend;
in certain other circumstances, the absence of such an adjustment may result in
a taxable dividend to the holders of Common Stock or such Convertible Debt
Securities.
INFORMATION CONCERNING THE TRUSTEE
The Trustee and certain of its affiliates from time to time maintain
accounts and conduct other banking transactions with NBD Bank and certain of its
affiliates, and vice versa. The Trustee may, from time to time, make loans to
the Corporation and perform other services for the Corporation in the normal
course of business. Under the provisions of the Trust Indenture Act of 1939, as
recently amended (the "Trust Indenture Act"), upon the occurrence of a default
under an indenture, if a trustee has a conflicting interest (as defined in the
Trust Indenture Act) the trustee must, within 90 days, either eliminate such
conflicting interest or resign. Under the provisions of the Trust Indenture Act,
an indenture trustee shall be deemed to have a conflicting interest if the
trustee is a creditor of the obligor. If the trustee fails either to eliminate
the conflicting interest or to resign within 10 days after the expiration of
such 90-day period, the trustee is required to notify debt holders to this
effect and any debt holder who has been a bona fide holder for at least six
months may petition a court to remove the trustee and to appoint a successor
trustee.
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DESCRIPTION OF PREFERRED SHARES
The following description of the terms of the Preferred Shares sets forth
certain general terms and provisions of the Preferred Shares to which any
Prospectus Supplement may relate. Particular terms of the Preferred Shares
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Preferred Shares so offered will be
described in the Prospectus Supplement relating to such Preferred Shares. The
description of certain provisions of the Preferred Shares set forth below and in
the Prospectus Supplement does not purport to be complete and is subject to and
qualified in its entirety by reference to the Certificate of Designations
relating to the particular series of Preferred Shares, which will be filed with
the Commission at or prior to the time of the sale of such Preferred Shares.
GENERAL
Under the Corporation's Restated Certificate of Incorporation, the Board of
Directors of the Corporation is authorized without further stockholder action to
adopt resolutions providing for the issuance of up to 460,000 shares of
preferred stock, par value $1.00 per share, and up to 10,000,000 shares of
preferred stock, without par value, in one or more series, with such voting
powers, full or limited, and with such designations, preferences and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions, as may be determined by the Board of Directors, except that in
no event may the Corporation's preferred stock be entitled to more than one vote
per share. As of the date of this Prospectus, the Corporation has no shares of
preferred stock outstanding.
The Preferred Shares shall have the dividend, liquidation, redemption and
voting rights and, if applicable, conversion rights set forth below unless
otherwise provided in the Prospectus Supplement relating to the particular
series of Preferred Shares offered thereby to which reference is hereby made for
specific terms, including, where applicable: (i) the title and stated value of
such Preferred Shares; (ii) the price at which such Preferred Shares will be
issued; (iii) the dividend rates and dates on which dividends shall be payable,
as well as the dates from which dividends shall commence to cumulate; (iv) any
dates on which such Preferred Shares will be subject to redemption and the
redemption price; (v) any mandatory redemption or sinking fund provisions; (vi)
any rights on the part of the holder to convert such Preferred Shares into or
exchange such Preferred Shares for shares of Common Stock; (vii) any additional
dividend, liquidation, redemption, sinking fund, voting and other rights,
preferences, privileges, limitations and restrictions; (viii) whether interests
in the Preferred Shares will be represented by Depositary Shares; and (ix) the
terms of any securities being offered together with or separately from such
Preferred Shares.
The Preferred Shares will be fully paid and nonassessable, and for each
share issued, a sum equal to the stated value will be credited to the
Corporation's preferred stock account.
DIVIDENDS
Holders of Preferred Shares will be entitled to receive quarterly cash
dividends, when, as and if declared by the Board of Directors of the Corporation
out of funds of the Corporation legally available for payment, at such rates and
on such dates as will be set forth in the applicable Prospectus Supplement. Each
dividend will be payable to holders of record as they appear on the stock books
of the Corporation on the record date fixed by the Board of Directors of the
Corporation. Dividends will be cumulative from and after the date set forth in
the applicable Prospectus Supplement. If, for any dividend period or periods,
full cumulative dividends on any shares of preferred stock have not been paid or
declared and set apart for payment or the Corporation is in default or in
arrears with respect to any sinking fund or other arrangement for the purchase
or redemption of any shares of preferred stock, the Corporation may not declare
any dividends on, or make any payment on account of the purchase, redemption or
other retirement of, its Common Stock or any other stock of the Corporation
ranking as to dividends or distribution of assets junior to the preferred stock.
If dividends on Preferred Shares are in arrears, and there shall be outstanding
shares of any other series of preferred stock ranking on a parity as to
dividends with the Preferred Shares, the Corporation, in making any dividend
payment on account of such arrears, is required to make payments ratably upon
all outstanding Preferred
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Shares and shares of such other series of preferred stock in proportion to the
respective amounts of dividends in arrears on such Preferred Shares and shares
of such other series of preferred stock.
The ability of the Corporation to pay dividends with respect to its
preferred stock may be affected by the ability of the Corporation's subsidiary
banks to pay dividends. The ability of the Corporation and its subsidiary banks
to pay dividends in the future will be affected by bank regulatory requirements
and capital guidelines. See "NBD BANCORP, INC. -- Governmental Policies,
Regulation and Supervision."
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of Preferred Shares will be entitled
to receive out of assets of the Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of Common
Stock, liquidating distributions in the amount of the liquidation price per
share (as set forth in the applicable Prospectus Supplement) plus all accrued
and unpaid dividends. If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the amounts payable with respect
to the Preferred Shares and any other shares of stock of the Corporation ranking
as to any such distribution on a parity with the Preferred Shares are not paid
in full, the holders of the Preferred Shares and of such other shares will share
ratably in any such distribution of assets of the Corporation in proportion to
the full respective preferential amounts to which they are entitled. After
payment of the full amount of the liquidating distribution to which they are
entitled, the holders of Preferred Shares will not be entitled to any further
participation in any distribution of assets by the Corporation. A consolidation
or merger of the Corporation with or into any other corporation or corporations
or a sale of all or substantially all of the assets of the Corporation shall not
be deemed to be a liquidation, dissolution or winding up of the Corporation.
REDEMPTION
The Preferred Shares may be redeemable in whole or in part, at the option
of the Corporation, at the times and at the redemption prices set forth in the
applicable Prospectus Supplement. The Corporation may not purchase or redeem any
of the outstanding shares of any series of Preferred Shares unless full
cumulative dividends have been paid or declared and set apart for payment upon
all outstanding shares of any series of preferred stock for all past dividend
periods, and unless all matured obligations of the Corporation with respect to
all sinking funds, retirement funds or purchase funds for all series of
preferred stock then outstanding have been met.
VOTING RIGHTS
Except as indicated in the applicable Prospectus Supplement, or except as
expressly required by applicable law, the holders of the Preferred Shares will
not be entitled to vote.
CONVERSION RIGHTS
The Prospectus Supplement for any series of Preferred Shares will state
whether shares in that series are convertible into Common Stock. See
"DESCRIPTION OF COMMON STOCK." Unless otherwise provided in applicable
Prospectus Supplement, if a series of Preferred Shares is convertible into
shares of Common Stock ("Convertible Preferred Shares"), holders of such
Convertible Preferred Shares will have the right, at their option and at any
time, to convert any of such Convertible Preferred Shares, initially at the
conversion rate set forth in the Prospectus Supplement relating to such
Convertible Preferred Shares, provided that if such series of Convertible
Preferred Shares is called for redemption, the conversion rights pertaining
thereto will terminate at the close of business on the date fixed for
redemption. No fractional share or scrip representing a fractional share will be
issued upon conversion of the Convertible Preferred Shares, but if such
conversion results in a fraction, an equivalent amount will be paid in cash by
the Corporation, based on the Closing Price, as defined in the Certificate of
Designations for such series of Convertible Preferred Shares, of the
Corporation's Common Stock on the business day immediately preceding the day on
which the Convertible Preferred Shares are converted. No payment or adjustment
shall be made upon conversion of the
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Convertible Preferred Shares in respect of dividends accrued and unpaid to the
date of conversion or in respect of any dividends on the Common Stock issued
upon such conversion.
Unless otherwise indicated in the applicable Prospectus Supplement, the
conversion rate is subject to adjustment in certain events, including: (i) the
issuance of the Corporation's capital stock as a dividend or distribution on the
Common Stock; (ii) subdivisions and combinations of the Common Stock; (iii) the
issuance to all holders of Common Stock of certain rights or warrants entitling
them to subscribe for or purchase Common Stock within 45 days after the date
fixed for the determination of the stockholders entitled to receive such rights
or warrants, at less than the current market price (as defined in the
Certificate of Designations of such shares of Convertible Preferred Shares); and
(iv) the distribution to all holders of Common Stock of evidences of
indebtedness or assets of the Corporation (excluding certain cash dividends and
distributions described below) or rights or warrants (excluding those referred
to above). In the event that the Corporation shall distribute any rights or
warrants to acquire capital stock pursuant to clause (iv) above (the "Capital
Stock Rights"), pursuant to which separate certificates representing such
Capital Stock Rights will be distributed subsequent to the initial distribution
of such Capital Stock Rights (whether or not such distribution shall have
occurred prior to the date of the issuance of a series of Convertible Preferred
Shares), such subsequent distribution shall be deemed to be the distribution of
such Capital Stock Rights; provided that the Corporation may, in lieu of making
any adjustment in the conversion rate upon a distribution of separate
certificates representing such Capital Stock Rights, make proper provision so
that each holder of such a Convertible Preferred Share who converts such
Convertible Preferred Share (or any portion thereof) (A) before the record date
for such distribution of separate certificates shall be entitled to receive upon
such conversion shares of Common Stock issued with Capital Stock Rights and (B)
after such record date and prior to the expiration, redemption or termination of
such Capital Stock Rights shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion, the same
number of such Capital Stock Rights as would a holder of the number of shares of
Common Stock that such Convertible Preferred Share so converted would have
entitled the holder thereof to acquire in accordance with the terms and
provisions applicable to the Capital Stock Rights if such Convertible Preferred
Share were converted immediately prior to the record date for such distribution.
Common Stock owned by or held for the account of the Corporation or any majority
owned subsidiary shall not be deemed outstanding for the purpose of any
adjustment.
No adjustment in the conversion rate will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment in the conversion rate will be required unless such adjustment would
require a change of at least 1% in the conversion rate then in effect; provided
that any such adjustment not so made will be carried forward and taken into
account in any subsequent adjustment; and provided, further, that any such
adjustment not so made shall be made no later than three years after the
occurrence of the event requiring such adjustment to be made or carried forward.
Notwithstanding any of the foregoing, neither the issuance of Common Stock under
any law or plans providing for the purchase of shares of Common Stock by the
Corporation's stockholders or employees at a price not less than 90% of the
"average market price" during the "pricing period," as such terms, or equivalent
terms, are defined in, and as calculated pursuant to, such plans from time to
time, nor the granting or exercise of any rights thereunder, shall require an
adjustment to the conversion rate. The Corporation reserves the right to make
such increases in the conversion rate in addition to those described in the
foregoing provisions as the Corporation in its discretion shall determine to be
advisable in order that certain stock-related distributions hereafter made by
the Corporation to its stockholders shall not be taxable. Except as stated
above, the conversion rate will not be adjusted for the issuance of Common Stock
or any securities convertible into or exchangeable for Common Stock, or
securities carrying the right to purchase any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Corporation, or (iii) a sale or conveyance
to another corporation of the property and assets of the Corporation as an
entirety or substantially as an entirety in each case as a result of which
holders of the Corporation's Common Stock shall be entitled to receive stock,
securities, other property or assets (including cash) with respect to or in
exchange for such Common stock, the holders of the Convertible Preferred Shares
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then outstanding will be entitled thereafter to convert such Convertible
Preferred Shares into the kind and amount of shares of stock and other
securities or property which they would have received upon such
reclassification, change, consolidation, merger, sale or conveyance had such
Convertible Preferred Shares been converted into Common Stock immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance.
If at any such time the Corporation makes a distribution of property to its
shareholders that would be taxable to such shareholders as a dividend for
federal income tax purposes (for example, distributions of evidences of
indebtedness or assets of the Corporation, but generally not stock dividends or
rights to subscribe to capital stock) and, pursuant to the antidilution
provisions described above, the conversion rate of the Convertible Preferred
Stock is increased such increase may be deemed to be the receipt of taxable
income by holders of the Convertible Preferred Stock.
DESCRIPTION OF DEPOSITARY SHARES
The following description of the terms of the Depositary Shares sets forth
certain general terms and provisions of the Depositary Shares to which any
Prospectus Supplement may relate. Particular terms of the Depositary Shares
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Depositary Shares so offered will be
described in the Prospectus Supplement relating to such Depositary Shares. The
description of certain provisions of the Depositary Shares set forth below and
in the Prospectus Supplement does not purport to be complete and is subject to
and qualified in its entirety by reference to the forms of Deposit Agreement and
Depositary Receipts, which have been filed with the Commission.
GENERAL
The Corporation may, at is option, elect to offer fractional interests in
Preferred Shares, rather than whole shares of such securities. In such event,
the Corporation will provide for the issuance by a Depositary of Depositary
Receipts evidencing Depositary Shares, each of which will represent a fractional
interest in a share of a particular series of the Preferred Shares, as set forth
in the Prospectus Supplement relating to a such series.
The shares of any series of the Preferred Shares underlying the Depositary
Shares may be deposited under one or more Deposit Agreements (each, a "Deposit
Agreement") between the Corporation and a bank or trust company selected by the
Corporation having its principal office in the United States and having
(together with its parent) a combined capital, surplus and undivided profits
aggregating at least $50,000,000 (the "Depositary"). The Prospectus Supplement
relating to a series of Depositary Shares will set forth the name and address of
the Depositary. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fractional
interest in a Preferred Share underlying such Depositary Share, to all the
rights and preferences of the Preferred Share underlying such Depositary Share
(including dividend, voting, redemption, conversion and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts ("Depositary
Receipts") issued pursuant to the Deposit Agreement. Depositary Receipts will be
distributed to those persons purchasing the fractional shares of the related
series of Preferred Shares in accordance with the terms of the offering
described in the related Prospectus Supplement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Corporation, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Corporation's expense.
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WITHDRAWAL
Upon surrender of the Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption), the holder of the Depositary Shares evidenced thereby will be
entitled to delivery at such office, to or upon such holder's order, of the
number of whole Preferred Shares and any money or other property represented by
such Depositary Shares. Partial Preferred Shares will not be issued. If the
Depositary Receipts delivered by the holder evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the number of
whole Preferred Shares to be withdrawn, the Depositary will deliver to such
holder at the same time a new Depositary Receipt evidencing such excess number
of Depositary Shares. Holders of Preferred Shares thus withdrawn will not
thereafter be entitled to deposit such shares under the Deposit Agreement or to
receive Depositary Shares therefor. If a series of Preferred Shares are
represented by Depositary Shares, the Corporation does not expect that there
will be any public trading market for such Preferred Shares except as
represented by the Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the underlying Preferred Shares to the
record holders of Depositary Shares relating to such Preferred shares in
proportion to the numbers of such Depositary Shares owned by such holders on the
relevant record date. The Depositary shall distribute only such amount, however,
as can be distributed without attributing to any holder of Depositary Shares a
fraction of one cent, and any balance not so distributed shall be added to and
treated as part of the next sum received by the Depositary for distribution to
record holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Corporation, sell such property and distribute the net proceeds from such
sale to such holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Shares underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Shares held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Shares. Whenever the Corporation redeems Preferred Shares held
by the Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares relating to Preferred Shares so redeemed. If less
than all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be determined by the
Depositary. In the event that the Corporation purchases or acquires Preferred
Shares represented by the Depositary Shares pursuant to a tender or exchange
offer, the Depositary will purchase or otherwise acquire as of the same purchase
date the corresponding number of Depositary Shares, representing the shares of
Preferred Stock so purchased or otherwise acquired by the Corporation, pursuant
to a tender or exchange offer made on the same terms to all holders of the
Depositary Shares and mailed to the record holders of the Depositary Shares at
their addresses as they appear on the books of the Depositary; provided,
however, that if some, but less than all, of the Depositary Shares are to be
purchased or otherwise acquired pursuant to such tender or exchange offer and
the number of Depositary Shares so tendered exceeds the number of Depositary
Shares to be purchased or otherwise acquired by the Depositary, such Depositary
Shares shall be so purchased or acquired on behalf and upon the instructions of
the Corporation, on a pro rata basis (with adjustments to eliminate fractions)
according to the number of such Depositary Shares duly tendered by each holder
so tendering Depositary Shares for such purchase or exchange.
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After the date fixed for redemption, the Depositary Shares so called for
redemption will not longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares so called for redemption will cease, except the
right to receive the moneys payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled upon such
redemption upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
CONVERSION
With respect to a series of the Preferred Shares underlying the Depositary
Shares that is convertible into Common Stock, a holder of Depositary Receipts
may participate in the conversion in the manner specified in the pertinent
Certificate of Designations for holders of the underlying Preferred shares. If
the Depositary Shares represented by a Depositary Receipt are to be converted in
part only, a new Depositary Receipt or Depositary Receipts will be issued by the
Depositary for the Depositary Shares not be to converted. No fractional shares
of Common stock will be issued upon conversion, and if such conversion would
result in a fractional share being issued, an amount will be paid in cash by the
Corporation equal to the value of the fractional interest based upon the average
closing prices of the Common Stock on the five business days preceding the date
of conversion.
VOTING THE PREFERRED SHARES
Upon receipt of notice of any meeting at which the holders of the Preferred
Shares are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Shares. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Shares) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of Preferred Shares underlying
such holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote the number of Preferred Shares underlying such Depositary
Shares in accordance with such instructions, and the Corporation will agree to
take all action which may be deemed necessary by the Depositary in order to
enable the Depositary to do so. The Depositary will abstain from voting
Preferred Shares to the extent it does not receive specific instructions from
the holders of Depositary Shares relating to such Preferred shares. The
Depositary's liability with respect to voting Preferred Shares is limited by the
Deposit Agreement.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Corporation and the Depositary. However, any amendment which
materially and adversely alters the rights of the existing holders of Depositary
Shares will not be effective unless such amendment has been approved by the
record holders of at least a majority of the Depositary Shares then outstanding.
Every holder of an outstanding Depositary Receipt at the time any such amendment
becomes effective, or any transferee of such holder, shall be deemed, by
continuing to hold such Depositary Receipt, or by reason of the acquisition
thereof, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby. A Deposit Agreement may be terminated by the
Corporation or the Depositary only if (i) all outstanding Depositary Shares
relating thereto have been redeemed or, if applicable, converted into Common
Stock, or (ii) there has been a final distribution in respect of the Preferred
Shares of the relevant series in connection with any liquidation, dissolution or
winding up of the Corporation and such distribution has been distributed to the
holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
The Corporation will pay all transfer and other taxes and governmental
charges arising solely from the existence of the Deposit Agreement. The
Corporation will pay charges of the Depositary in connection with the initial
deposit of the Preferred Shares and any redemption of the Preferred Shares.
Holders of Depositary Shares will pay other transfer and other taxes and
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be for their accounts.
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RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Corporation
notice of its election to do so, and the Corporation may at any time remove the
Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having (together with its parent) a combined
capital, surplus and undivided profits aggregating at least $50,000,000.
TAXATION
Owners of Depositary Shares will be treated for federal income tax purposes
as if they were owners of the Preferred Shares represented by such Depositary
Shares and, accordingly, will be entitled to take into account for federal
income tax purposes income and deductions to which they would be entitled if
they were holders of such Preferred Shares. In addition, (i) no gain or loss
will be recognized for federal income tax purposes upon the withdrawal of
Preferred Shares in exchange for Depositary Shares as provided in the Deposit
Agreement, (ii) the tax basis of each Preferred Share to an exchanging owner of
Depositary Shares will, upon such exchange, be the same as the aggregate tax
basis of the Depositary Shares exchanged therefor, and (iii) the holding period
for the Preferred Shares in the hands of an exchanging owner of Depositary
Shares who held such Depositary Shares as a capital asset at the time of the
exchange thereof for Preferred Shares will include the period during which such
person owned such Depositary Shares.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Corporation which are delivered to the Depositary
and which the Corporation is required to furnish to the holders of the Preferred
Shares. Neither the Depositary nor the Corporation will be liable if it is
prevented or delayed by law or any circumstance beyond its control in performing
its obligations under the Deposit Agreement. The obligations of the Corporation
and the Depositary under the Deposit Agreement will be limited to performance
without negligence or intentional misconduct of their duties thereunder and they
will not be obligated to prosecute or defend any legal proceeding in respect of
any Depositary Shares or Preferred Shares unless satisfactory indemnity is
furnished. They may rely upon written advice of counsel or accountants, or
information provided by persons presenting Preferred Shares for deposit, holders
of Depositary Shares or other persons believed to be competent and upon
documents believed to be genuine.
DESCRIPTION OF COMMON STOCK
The following description of Common Stock is included in this Prospectus
because a Prospectus Supplement may provide that Common Stock will be issuable
upon conversion of a series of Debt Securities or Preferred Shares.
The Corporation has 500,000,000 authorized shares of Common Stock, par
value $1.00 per share, of which 157,635,222 shares (excluding treasury shares)
were outstanding at April 30, 1995. The following is a brief summary of certain
rights and provisions of the Common Stock.
Subject to the rights of the preferred stock of the Corporation then
outstanding, holders of Common Stock are entitled to receive such dividends as
are declared by the Board of Directors out of funds legally available therefor.
The Federal Reserve Board has adopted a policy statement that it is its view
that, as a matter of prudent banking, a bank holding company should not pay cash
dividends on common stock unless its net income available to holders of common
over the past year has been sufficient to fully fund the dividends and the
prospective rate of earnings retention appears consistent with the company's
capital needs, asset quality and overall financial condition.
Subject to the rights of preferred stock of the Corporation, all voting
rights are vested in the holders of shares of Common Stock, each share being
entitled to one vote. Holders of the shares of Common Stock have noncumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the
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election of directors can elect 100% of the directors if they choose to do so,
and, in such event, the holders of the remaining less than 50% of the shares
voting for the election of directors will not be able to elect any person or
persons to the Board of Directors.
Subject to the rights of preferred stock of the Corporation, in the event
of liquidation of the Corporation, the holders of the Common Stock are entitled
to share equally and ratably in any assets remaining after the payment of all
debtors and liabilities.
Holders of Common Stock do not have preemptive or other subscription or
conversion rights.
The Common Stock does not have any sinking fund, conversion or redemption
provisions applicable thereto and is not liable to further call or assessment by
the Corporation. There is no restriction under the Corporation's Restated
Certificate of Incorporation, By-Laws or any contract by which it is bound on
the Corporation's repurchase or redemption of shares of Common Stock with funds
legally available therefor.
PLAN OF DISTRIBUTION
The Corporation may sell the Offered Securities in three ways: (i) directly
to purchasers, (ii) through agents, which may include affiliates of the
Corporation, and (iii) through underwriters or dealers, which may include
affiliates of the Corporation.
The Prospectus Supplement with respect to any of the Offered Securities
will set forth the terms of the offering of such Offered Securities, including
the name or names of any underwriters or agents, the purchase price of such
Offered Securities, the proceeds to the Corporation from such sale, any
underwriting discounts or agency fees and other items constituting underwriters'
or agents' compensation, the initial public offering price, any discounts or
concessions allowed or reallowed or paid to dealers, and any securities
exchanges on which such Offered Securities may be listed.
If one or more underwriters are utilized in an offering, the Corporation
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transactions
will be set forth in the Prospectus Supplement, which will be used by the
underwriters to make resales of the Offered Securities in respect of which this
Prospectus is delivered to the public. If one or more dealers are utilized in an
offering, the Corporation will sell the Offered Securities to such a dealer as
principal and the dealer may then resell such Offered Securities to the public
at varying prices to be determined by such dealer at the time of resale.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Corporation, to indemnification by the Corporation against certain
civil liabilities, including liabilities under the Securities Act, or to
contributions with respect to payments which the underwriters or agents may be
required to make in respect thereof. Underwriters, dealers and agents may be
customers of, engage in transactions with, or perform services for the
Corporation in the ordinary course of business.
The distribution of the Offered Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices.
All Offered Securities will be new issues of securities with no established
trading market. Any underwriters to whom Offered Securities are sold by the
Corporation for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any Offered Securities.
The Corporation may also issue contracts under which the counterparty may
be required to purchase Debt Securities, Preferred Shares or Depositary Shares.
Such contracts would be issued with Debt Securities, Preferred Shares and/or
Depositary Shares in amounts, at prices and on terms and containing such
conditions, covenants and other provisions, as will be set forth in a Prospectus
Supplement.
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If so indicated in the Prospectus Supplement relating to any Offered
Securities, the Corporation will authorize underwriters, dealers and agents to
solicit offers by certain specified institutions to purchase such Offered
Securities from the Corporation at the public offering price set forth in such
Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject only to those conditions set forth in such Prospectus Supplement, and
such Prospectus Supplement will set forth the commission payable for
solicitation of such contracts.
LEGAL OPINIONS
Certain matters with respect to the validity of the Offered Securities will
be passed upon for the Corporation by Daniel T. Lis, Senior Vice President and
Secretary of the Corporation.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
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NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE CORPORATION OR ANY AGENT OR UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds.......................... S-2
Capitalization........................... S-2
Summary Consolidated Financial Data...... S-3
Description of Notes..................... S-4
Underwriting............................. S-6
PROSPECTUS
Available Information.................... 2
Incorporation of Certain Information by
Reference.............................. 2
NBD Bancorp, Inc. ....................... 3
Use of Proceeds.......................... 5
Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends.............. 5
Description of Debt Securities........... 6
Description of Preferred Shares.......... 13
Description of Depositary Shares......... 16
Description of Common Stock.............. 19
Plan of Distribution..................... 20
Legal Opinions........................... 21
Experts.................................. 21
</TABLE>
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$200,000,000
[LOGO]
7 1/8% SUBORDINATED NOTES
DUE MAY 15, 2007
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PROSPECTUS SUPPLEMENT
May 12, 1995
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LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
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