<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 15, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
NBD BANCORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
<TABLE>
<S> <C> <C>
DELAWARE 38-1984850 6711
(STATE OR OTHER JURISDICTION
OF (I.R.S. EMPLOYER (PRIMARY STANDARD INDUSTRIAL
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) CLASSIFICATION CODE NUMBER)
</TABLE>
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226
313-225-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
DANIEL T. LIS, ESQ.
NBD BANCORP, INC.
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226
313-225-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
<TABLE>
<S> <C> <C>
EDWARD D. HERLIHY, ESQ. SHERMAN I. GOLDBERG, ESQ. PATRICK J. LEDWIDGE, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ FIRST CHICAGO CORPORATION DICKINSON, WRIGHT, MOON,
51 WEST 52ND STREET ONE FIRST NATIONAL PLAZA VAN DUSEN & FREEMAN
NEW YORK, NEW YORK 10019 CHICAGO, ILLINOIS 60670 500 WOODWARD AVENUE, SUITE 4000
DETROIT, MICHIGAN 48226
</TABLE>
---------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED AMOUNT
AMOUNT MAXIMUM MAXIMUM OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE OFFERING PRICE FEE
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1 par value....... 180,754,063 (2) $ (3) $2,225,420.33
---------------------------------------------------------------------------------------------------------
Preferred Stock with Cumulative
and Adjustable Dividends, Series
B............................... 1,191,000 (2) $ (4) $ 35,062.63
---------------------------------------------------------------------------------------------------------
Preferred Stock with Cumulative
and Adjustable Dividends, Series
C............................... 713,800 (2) $ (5) $ 23,567.71
---------------------------------------------------------------------------------------------------------
8.45% Cumulative Preferred Stock,
Series E........................ 160,000 (2) $ (6)(8) $ 35,689.66
---------------------------------------------------------------------------------------------------------
5 3/4% Cumulative Convertible
Preferred Stock, Series B....... 40,000 (2) $ (7)(8) $ 83,448.28
---------------------------------------------------------------------------------------------------------
Depositary Shares representing
Preferred Stock................. (8) (8) $ (8) $ (8)
---------------------------------------------------------------------------------------------------------
Total....................... $2,403,188.61(9)
</TABLE>
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(1) This Registration Statement covers the maximum number of the Registrant's
securities that would be issued, or reserved for issuance, in the
transaction described herein or upon exercise of the options issued in, or
the employee benefit plans assumed as contemplated in, the transaction
described herein.
(2) Not applicable.
(3) Computed pursuant to Rule 457(f)(1), based upon the market value of the
securities to be cancelled in the merger (99,864,123 shares of common
stock of First Chicago Corporation, par value $5 per share).
(4) Computed pursuant to Rule 457(f)(1), based upon the market value of the
securities to be cancelled in the merger (1,191,000 shares of First
Chicago Preferred Stock with Cumulative and Adjustable Dividends, Series
B).
(5) Computed pursuant to Rule 457(f)(1), based upon the market value of the
securities to be cancelled in the merger (713,800 shares of First Chicago
Preferred Stock with Cumulative and Adjustable Dividends, Series C).
(6) Computed pursuant to Rule 457(f)(1), based upon the market value of the
securities to be cancelled in the merger (160,000 shares of First Chicago
8.45% Cumulative Preferred Stock, Series E).
(7) Computed pursuant to Rule 457(f)(1), based upon the market value of the
securities to be cancelled in the merger (40,000 shares of First Chicago 5
3/4% Cumulative Convertible Preferred Stock, Series B).
(8) The 5 3/4% Cumulative Convertible Preferred Stock, Series B and the 8.45%
Cumulative Preferred Stock, Series E will be represented by Depositary
Shares as evidenced by Depositary Receipts issued pursuant to a Deposit
Agreement. The Depositary Receipts represent a fractional interest in
shares of the referenced Preferred Stock. Shares of such Preferred Stock
will be issued to the Depositary under the applicable deposit agreement.
(9) $1,153,560.60 of the Registration Fee was previously paid in connection
with the Registrant's Preliminary Proxy Statement filed with the
Commission on Schedule 14A on August 3, 1995.
---------------
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after the effective date of this
Registration Statement and all other conditions precedent to the merger of
First Chicago Corporation with and into the Registrant have been satisfied or
waived as described in the enclosed Joint Proxy Statement-Prospectus.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO
SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
NBD BANCORP, INC.
CROSS-REFERENCE SHEET FOR REGISTRATION STATEMENT ON FORM S-4
AND
JOINT PROXY STATEMENT-PROSPECTUS.
<TABLE>
<CAPTION>
LOCATION IN JOINT PROXY
S-4 ITEM STATEMENT-PROSPECTUS
-------- -----------------------
<C> <S> <C>
INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration
Statement and Outside Front
Cover Page of Prospectus.... Facing Page of Registration Statement;
Cross-Reference Sheet; Cover Page
2. Inside Front and Outside Back
Cover Pages of Prospectus... Available Information; Information
Incorporated by Reference; Table of
Contents
3. Risk Factors, Ratio of
Earnings to Fixed Charges
and Other Information ...... Summary of Joint Proxy Statement-
Prospectus; Selected Consolidated
Financial Data; Pro Forma Selected
Financial Data
4. Terms of the Transaction..... Summary of Joint Proxy Statement-
Prospectus; The Merger; Amendments to the
NBD Certificate; Board of Directors,
Management and Operations Following the
Merger; Description of NBD Capital Stock;
Description of New Preferred Stock;
Comparison of Stockholders' Rights
5. Pro Forma Financial
Information................. Unaudited Pro Forma Condensed Combined
Financial Statements (including the notes
thereto)
6. Material Contacts with the
Company Being Acquired...... The Merger; Interest of Certain Persons in
the Merger
7. Additional Information
Required for Reoffering by
Persons and Parties Deemed
to be Underwriters.......... Not Applicable
8. Interests of Named Experts
and Counsel................. Experts; Legal Opinion
9. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities................. Not Applicable
INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to
S-3 Registrants............. Not Applicable
11. Incorporation of Certain
Information by Reference.... Information Incorporated by Reference
12. Information with Respect to
S-2 or S-3 Registrants...... Not Applicable
13. Incorporation of Certain
Information by Reference.... Not Applicable
14. Information with Respect to
Registrants Other Than
S-2 or S-3 Registrants...... Not Applicable
INFORMATION ABOUT THE COMPANY BEING ACQUIRED
15. Information with Respect to
S-3 Companies............... Information Incorporated by Reference
16. Information with Respect to
S-2 or S-3 Companies........ Not Applicable
17. Information with Respect to
Companies Other Than
S-2 or S-3 Companies........ Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOCATION IN JOINT PROXY
S-4 ITEM STATEMENT-PROSPECTUS
-------- -----------------------
<C> <S> <C>
VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Con-
sents or Authorizations are
to be Solicited............. Cover Page; Summary of Joint Proxy
Statement-Prospectus; Meeting of NBD
Stockholders; Meeting of First Chicago
Stockholders; Solicitation of Proxies;
Interests of Certain Persons in the
Merger; Board of Directors, Management and
Operations Following the Merger; The
Merger
19. Information if Proxies, Con-
sents or Authorizations are
not to be Solicited, or in
an Exchange Offer........... Not Applicable
</TABLE>
<PAGE>
This Registration Statement contains two forms of the Joint Proxy Statement-
Prospectus to be delivered separately to stockholders of NBD Bancorp, Inc.
("NBD") and First Chicago Corporation ("First Chicago") in connection with
their respective Special Meetings. The Joint Proxy Statement-Prospectus to be
delivered to NBD stockholders in connection with the NBD-First Chicago merger
described herein will contain a letter to NBD stockholders and a Notice of the
NBD Special Meeting. Similarly, the Joint Proxy Statement-Prospectus to be
delivered to First Chicago stockholders in connection with the NBD-First
Chicago merger will contain a letter to First Chicago stockholders and a
Notice of the First Chicago Special Meeting. The Joint Proxy Statement-
Prospectus to be delivered to First Chicago stockholders is otherwise
identical in all respects to the Joint Proxy Statement-Prospectus to be
delivered to NBD stockholders, except with respect to the last page of each,
relating (i) to stockholder proposals for future meetings of stockholders and
(ii) to the conduct of business other than consideration of the proposed
merger at the respective Special Meetings of NBD and First Chicago.
<PAGE>
NBD Bancorp, Inc.
611 Woodward Avenue
Detroit, Michigan 48226
LOGO
September 18, 1995
To the Owners of NBD Bancorp, Inc.
You are cordially invited to attend a Special Meeting of the Stockholders of
NBD Bancorp, Inc. to be held on October 20, 1995 at 10:00 a.m., Detroit time,
on the Staff Floor, Main Office of NBD Bank, 611 Woodward Avenue, Detroit,
Michigan.
At the Special Meeting, you will be asked to consider and vote upon a
proposal to approve and adopt a Merger Agreement, dated as of July 11, 1995,
as amended, by and between NBD and First Chicago Corporation pursuant to which
First Chicago will merge with NBD under the name "First Chicago NBD
Corporation". A copy of the Merger Agreement is attached to the accompanying
Joint Proxy Statement-Prospectus.
At the effective time of the Merger, each share of First Chicago Common
Stock will be converted into 1.81 shares of Common Stock of the combined
company. Each share of NBD Common Stock outstanding at the effective time of
the Merger will remain outstanding as a share of Common Stock of the combined
company.
This significant transaction for NBD will create what is expected to be one
of the 10 largest banking organizations in the United States, and the largest
such institution headquartered in the Midwest. The Merger will create a strong
and profitable financial services company that will have the scale and
capabilities to compete with banks and non-banking financial institutions
across the Midwest, the United States, and around the world.
Enclosed are a Notice of Special Meeting of Stockholders and a Joint Proxy
Statement-Prospectus which describes the Merger and the background to the
transaction. You are urged to read all of these materials carefully. The Board
of Directors has fixed the close of business on September 8, 1995 as the
record date for the Special Meeting. Accordingly, only stockholders of record
on that date will be entitled to notice of, and to vote at, the Special
Meeting or any adjournments or postponements thereof. The affirmative vote of
the holders of a majority of the shares of NBD Common Stock outstanding and
entitled to vote is necessary to approve and adopt the Merger Agreement.
THE BOARD OF DIRECTORS OF NBD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT
AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL AND ADOPTION
OF THE MERGER AGREEMENT.
The accompanying Joint Proxy Statement-Prospectus sets forth the voting
rights of holders of NBD Common Stock with respect to this matter, and
describes the matter to be acted upon at the Special Meeting. Stockholders are
urged to review carefully the accompanying Joint Proxy Statement-Prospectus,
which contains a detailed description of the Merger, its terms and conditions
and the transactions contemplated thereby.
BECAUSE OF THE SIGNIFICANCE OF THE PROPOSED MERGER TO NBD, YOUR
PARTICIPATION IN THE SPECIAL MEETING, IN PERSON OR BY PROXY, IS ESPECIALLY
IMPORTANT. AN ABSTENTION OR FAILURE TO VOTE AT THE SPECIAL MEETING OR FAILURE
TO SUBMIT A PROXY WILL HAVE THE SAME EFFECT AS A VOTE "AGAINST" THE MERGER
AGREEMENT. ACCORDINGLY, PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY
IN THE POSTAGE-PAID ENVELOPE THAT HAS BEEN PROVIDED TO YOU FOR YOUR
CONVENIENCE. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY VOTE IN PERSON IF YOU
WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
The Board and I urge you to vote "FOR" the Merger Agreement and each of the
transactions contemplated thereby.
Thank you, and we look forward to seeing you at the Special Meeting.
Sincerely,
/s/ Verne G. Istock
VERNE G. ISTOCK
Chairman and
Chief Executive Officer
<PAGE>
NBD BANCORP, INC. 611 WOODWARD AVENUE DETROIT, MICHIGAN 48226
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 20, 1995
A Special Meeting of Stockholders (the "Special Meeting") of NBD Bancorp,
Inc., a Delaware corporation ("NBD"), will be held on October 20, 1995 at
10:00 a.m., Detroit time, on the Staff Floor, Main Office of NBD Bank, 611
Woodward Avenue, Detroit, Michigan for the purpose of considering and voting
upon a proposal to approve and adopt the Agreement and Plan of Merger, dated
as of July 11, 1995, as amended (the "Merger Agreement"), by and between NBD
and First Chicago Corporation, a Delaware corporation ("First Chicago"), and
the consummation of the transactions contemplated thereby, pursuant to which
First Chicago will be merged with and into NBD, upon the terms and subject to
the conditions set forth in the Merger Agreement, as are more fully described
in the accompanying Joint Proxy Statement-Prospectus. A copy of the Merger
Agreement is attached as Exhibit A to the accompanying Joint Proxy Statement-
Prospectus.
The Board of Directors has fixed the close of business on September 8, 1995
as the record date (the "Record Date") for determining stockholders entitled
to notice of, and to vote at, the Special Meeting and any adjournments or
postponements thereof. The holders of record of NBD Common Stock at the Record
Date are entitled to notice of and to vote at the Special Meeting and any
adjournments or postponements thereof.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL AND ADOPTION OF
THE MERGER AGREEMENT.
By Order of the Board of Directors,
/s/ Daniel T. Lis
DANIEL T. LIS
Secretary
Detroit, Michigan
September 18, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE SPECIAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
LOGO FIRST CHICAGO
CORPORATION One First National Plaza
Chicago, Illinois 60670
September 18, 1995
TO OUR STOCKHOLDERS:
You are cordially invited to attend a Special Meeting of Stockholders of
First Chicago Corporation which will be held at the First Chicago Center
located in the Plaza adjacent to The First National Bank of Chicago, at 9:30
a.m., Chicago time, on Friday, October 20, 1995. Please use the Dearborn
Street entrance to the Bank Building.
At the Special Meeting, you will be asked to consider and vote upon a
proposal to approve and adopt an Agreement and Plan of Merger, dated as of
July 11, 1995, as amended, between First Chicago and NBD Bancorp, Inc.
pursuant to which First Chicago will be merged with NBD under the name "First
Chicago NBD Corporation". A copy of the Merger Agreement is attached to the
accompanying Joint Proxy Statement-Prospectus.
At the Effective Time of the Merger, each outstanding share of First Chicago
Common Stock will be converted into 1.81 shares of Common Stock of the
combined company. In addition, upon consummation of the Merger, each holder of
First Chicago Preferred Stock and Depositary Shares will be entitled to
receive Preferred Stock or Depositary Shares, as applicable, of the combined
company.
This significant transaction for First Chicago will create what is expected
to be one of the 10 largest banking organizations in the United States, and
the largest such institution headquartered in the Midwest. The Merger will
create a strong and profitable financial services company that will have the
scale and capabilities to compete with banks and non-banking financial
institutions across the Midwest, the United States, and around the world.
Enclosed are a Notice of Special Meeting of Stockholders and a Joint Proxy
Statement-Prospectus which describes the Merger and the background to the
transaction. You are urged to read all of these materials carefully. The Board
of Directors has fixed the close of business on September 8, 1995 as the
record date for the Special Meeting. Accordingly, only stockholders of record
on that date will be entitled to notice of, and to vote at, the Special
Meeting or any adjournments or postponements thereof. The affirmative vote of
the holders of a majority of the shares of First Chicago Common Stock
outstanding and entitled to vote is necessary to approve the Merger.
THE BOARD OF DIRECTORS OF FIRST CHICAGO HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL AND
ADOPTION OF THE MERGER AGREEMENT.
The accompanying Joint Proxy Statement-Prospectus sets forth the voting
rights of holders of First Chicago Common Stock with respect to this matter,
and describes the matter to be acted upon at the Special Meeting. Holders of
First Chicago Preferred Stock are not entitled to vote at the First Chicago
Meeting. Stockholders are urged to review carefully the attached Joint Proxy
Statement-Prospectus, which contains a detailed description of the Merger, its
terms and conditions and the transactions contemplated thereby.
BECAUSE OF THE SIGNIFICANCE OF THE PROPOSED MERGER TO FIRST CHICAGO, YOUR
PARTICIPATION IN THE SPECIAL MEETING, IN PERSON OR BY PROXY, IS ESPECIALLY
IMPORTANT. AN ABSTENTION OR FAILURE TO VOTE AT THE SPECIAL MEETING OR FAILURE
TO SUBMIT A PROXY WILL HAVE THE SAME EFFECT AS A VOTE "AGAINST" THE MERGER.
ACCORDINGLY, PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY IN THE
POSTAGE-PAID ENVELOPE THAT HAS BEEN PROVIDED TO YOU FOR YOUR CONVENIENCE. IF
YOU ATTEND THE SPECIAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
Promptly after the Merger, a letter of transmittal will be mailed to each
holder of record of shares of First Chicago Capital Stock and Depositary
Shares. PLEASE DO NOT SEND YOUR STOCK CERTIFICATES WITH THE ENCLOSED PROXY
CARD TO THE EXCHANGE AGENT.
The Board and I urge you to vote "FOR" the Merger Agreement and each of the
transactions contemplated thereby.
The First Chicago Center offers special access for people in wheelchairs and
headsets for the hearing-impaired. Stockholders who wish to arrange for either
of these services are invited to call (312) 732-3150 by Wednesday, October 18,
1995.
Thank you, and we look forward to seeing you at the Special Meeting.
Sincerely,
/s/ Richard L. Thomas
RICHARD L. THOMAS
Chairman, President and
Chief Executive Officer
<PAGE>
FIRST CHICAGO CORPORATION
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60670
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 20, 1995
A Special Meeting of Stockholders (the "Special Meeting") of First Chicago
Corporation, a Delaware corporation ("First Chicago"), will be held on October
20, 1995 at 9:30 a.m., Chicago time, at the First Chicago Center, One First
National Plaza, Chicago, Illinois. The purpose of the Special Meeting is to
consider and vote upon a proposal to approve and adopt the Agreement and Plan
of Merger, dated as of July 11, 1995, as amended (the "Merger Agreement"), by
and between First Chicago and NBD Bancorp, Inc., a Delaware corporation
("NBD"), and the consummation of the transactions contemplated thereby,
pursuant to which First Chicago will be merged with and into NBD upon the
terms and subject to the conditions set forth in the Merger Agreement, as are
more fully described in the enclosed Joint Proxy Statement-Prospectus. A copy
of the Merger Agreement is attached as Exhibit A to the accompanying Joint
Proxy Statement-Prospectus.
The Board of Directors has fixed the close of business on September 8, 1995
as the record date (the "Record Date") for determining stockholders entitled
to notice of, and to vote at, the Special Meeting and any adjournments or
postponements thereof. The holders of record of First Chicago Common Stock at
said Record Date are entitled to notice of and to vote at the Special Meeting
and any adjournments or postponements thereof. The holders of record of First
Chicago Preferred Stock or Depositary Shares on the Record Date are entitled
to notice of, but will not be entitled to vote at, the Special Meeting.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL AND ADOPTION OF
THE MERGER AGREEMENT.
By Order of the Board of Directors,
/s/ Sherman I. Goldberg
Chicago, Illinois SHERMAN I. GOLDBERG
September 18, 1995 Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE SPECIAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
NBD BANCORP, INC. FIRST CHICAGO CORPORATION
611 WOODWARD AVENUE ONE FIRST NATIONAL PLAZA
DETROIT, MICHIGAN 48226 CHICAGO, ILLINOIS 60670
JOINT PROXY STATEMENT--PROSPECTUS
SPECIAL MEETING OF STOCKHOLDERS
NBD BANCORP, INC.
SPECIAL MEETING OF STOCKHOLDERS
FIRST CHICAGO CORPORATION
OCTOBER 20, 1995
This Joint Proxy Statement-Prospectus is being furnished in connection with
the solicitation of proxies by the Board of Directors (the "NBD Board") of NBD
Bancorp, Inc. ("NBD") to be used at the Special Meeting of Stockholders of NBD
to be held on October 20, 1995 (including any adjournments or postponements
thereof, the "NBD Meeting"). At the NBD Meeting, holders of the common stock,
par value $1.00 per share, of NBD (the "NBD Common Stock") will consider and
vote upon a proposal to approve and adopt an Agreement and Plan of Merger,
dated as of July 11, 1995, as amended (the "Merger Agreement"), by and between
NBD and First Chicago Corporation ("First Chicago") providing for the merger
of First Chicago with and into NBD (the "Merger"). The Merger Agreement is
attached hereto as Exhibit A and is incorporated herein by reference.
Following the Merger, the combined company will operate under the name "First
Chicago NBD Corporation."
This Joint Proxy Statement-Prospectus is also furnished in connection with
the solicitation of proxies by the Board of Directors of First Chicago (the
"First Chicago Board") to be used at the First Chicago Special Meeting of
Stockholders to be held on October 20, 1995 (including any adjournments or
postponements thereof, the "First Chicago Meeting"). At the First Chicago
Meeting, holders of the common stock, par value $5.00 per share, of First
Chicago (together with the associated preferred share purchase rights, the
"First Chicago Common Stock") will consider and vote upon a proposal to
approve and adopt the Merger Agreement.
This Joint Proxy Statement-Prospectus and the respective forms of proxy are
first being mailed on or about September 18, 1995.
At the Effective Time (as defined herein): each share of First Chicago
Common Stock, with certain exceptions described herein, will be converted into
the right to receive 1.81 shares (the "Exchange Ratio") of NBD Common Stock
(the NBD Common Stock after the Effective Time, the "Common Stock"); and each
share of First Chicago preferred stock will be converted into the right to
receive one share of preferred stock of the combined company with
substantially the same terms.
NBD Common Stock and First Chicago Common Stock are traded on the New York
Stock Exchange, (the "NYSE"). The closing sales price of NBD Common Stock and
First Chicago Common Stock was $32 1/2 and $60 5/8, respectively, on July 11,
1995 (the last trading day prior to the public announcement of the Merger),
and was $37 3/4 and $66 3/8, respectively, on September 12, 1995.
NBD has filed a Registration Statement (the "Registration Statement") on
Form S-4 under the Securities Act of 1933, as amended (the "Securities Act"),
with the Securities and Exchange Commission (the "Commission") covering a
maximum of 180,754,063 shares of NBD Common Stock and 2,104,800 shares of New
Preferred Stock (as defined herein) to be issued or reserved for issuance in
connection with the Merger. This Joint Proxy Statement-Prospectus does not
cover any resales of Common Stock of the combined company or the preferred
stock of the combined company to be received by stockholders of First Chicago
upon consummation of the Merger, and no person is authorized to make use of
this Joint Proxy Statement-Prospectus in connection with any such resale.
(Cover Page Continues)
<PAGE>
THE ABOVE MATTERS ARE DISCUSSED IN DETAIL IN THIS JOINT PROXY STATEMENT-
PROSPECTUS. THE PROPOSED MERGER IS A COMPLEX TRANSACTION. STOCKHOLDERS ARE
STRONGLY URGED TO READ AND CONSIDER CAREFULLY THIS JOINT PROXY STATEMENT-
PROSPECTUS IN ITS ENTIRETY.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK OR NON-BANK SUBSIDIARY AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND, THE SAVINGS
ASSOCIATION INSURANCE FUND OR ANY OTHER FEDERAL OR STATE GOVERNMENT AGENCY.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS JOINT PROXY STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
All information contained in this Joint Proxy Statement-Prospectus with
respect to NBD has been supplied by NBD and all information with respect to
First Chicago has been supplied by First Chicago.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE HEREIN
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY NBD OR FIRST CHICAGO. THIS DOCUMENT DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS JOINT PROXY
STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF THE SHARES OF NBD COMMON STOCK OR
PREFERRED STOCK OF THE COMBINED COMPANY HEREUNDER WILL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE AFFAIRS OF NBD OR FIRST CHICAGO SINCE THE DATE HEREOF.
The date of this Joint Proxy Statement-Prospectus is September 18, 1995.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION...................................................... 5
INFORMATION INCORPORATED BY REFERENCE...................................... 6
SUMMARY OF JOINT PROXY STATEMENT-PROSPECTUS................................ 7
The Parties.............................................................. 7
Date, Time and Place of Meetings......................................... 7
Purposes of Meetings..................................................... 7
Vote Required............................................................ 7
Terms of the Merger...................................................... 9
Recommendations of the Boards of Directors and Reasons for the Merger.... 10
Fairness Opinions of Financial Advisors.................................. 11
Conditions to the Consummation of the Merger............................. 11
Board of Directors, Management and Operations Following the Merger....... 11
Regulatory Approvals..................................................... 13
Certain Federal Income Tax Consequences.................................. 13
Accounting Treatment..................................................... 13
Termination of the Merger Agreement...................................... 13
Waiver and Amendment..................................................... 14
Stock Option Agreements.................................................. 14
Interests of Certain Persons in the Merger............................... 15
No Appraisal Rights...................................................... 15
Certain Differences in the Rights of Stockholders........................ 15
Comparative Stock Prices and Dividends; Pro Forma Equivalent Market Value
Per Share............................................................... 15
Selected Historical and Pro Forma Per Share Data......................... 17
Selected Consolidated Financial Data..................................... 18
Pro Forma Selected Financial Data........................................ 21
NBD BANCORP, INC........................................................... 22
FIRST CHICAGO CORPORATION.................................................. 22
MEETING OF NBD STOCKHOLDERS................................................ 23
Date, Time and Place; Purpose of Meeting................................. 23
Record Date.............................................................. 23
Proxies; Voting and Revocation........................................... 23
Vote Required to Approve the Merger Agreement; Principal Stockholders.... 24
MEETING OF FIRST CHICAGO STOCKHOLDERS...................................... 24
Date, Time and Place; Purpose of Meeting................................. 24
Record Date.............................................................. 25
Proxies; Voting and Revocation........................................... 25
Vote Required to Approve the Merger Agreement; Principal Stockholders.... 26
THE MERGER................................................................. 27
General.................................................................. 27
Background of the Merger................................................. 27
Reasons for the Merger................................................... 29
Fairness Opinions of Financial Advisors.................................. 32
Structure of the Merger.................................................. 41
Conversion of First Chicago Capital Stock; Treatment of First Chicago
Stock Options and First Chicago Stock Purchase Plan..................... 41
Exchange of Certificates; Fractional Shares.............................. 42
Effective Time........................................................... 44
Representations and Warranties........................................... 44
Conduct of Business Pending the Merger and Other Agreements.............. 44
Conditions to the Consummation of the Merger............................. 46
</TABLE>
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<TABLE>
<S> <C>
Regulatory Approvals Required for the Merger.............................. 48
Certain Federal Income Tax Consequences................................... 49
Accounting Treatment...................................................... 50
Termination of the Merger Agreement....................................... 51
Extension, Waiver and Amendment of the Merger Agreement................... 51
Stock Option Agreements................................................... 52
First Chicago Rights Agreement............................................ 56
Employee Benefits and Plans............................................... 56
Stock Exchange Listing.................................................... 57
Expenses.................................................................. 57
Dividends................................................................. 57
Resales of NBD Common Stock and New Preferred Stock in the Merger......... 57
No Appraisal Rights....................................................... 58
BOARD OF DIRECTORS, MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER.......... 59
Board of Directors........................................................ 59
Management................................................................ 59
Operations................................................................ 60
INTERESTS OF CERTAIN PERSONS IN THE MERGER.................................. 61
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS................. 63
DESCRIPTION OF NBD CAPITAL STOCK............................................ 73
General................................................................... 73
NBD Common Stock.......................................................... 73
NBD Preferred Stock....................................................... 74
DESCRIPTION OF NEW PREFERRED STOCK.......................................... 74
General................................................................... 75
New Series B Preferred Stock.............................................. 77
New Series C Preferred Stock.............................................. 77
New Series E Preferred Stock.............................................. 77
New Convertible Preferred Stock........................................... 77
AMENDMENTS TO THE NBD CERTIFICATE........................................... 77
COMPARISON OF STOCKHOLDERS' RIGHTS.......................................... 78
General................................................................... 78
Stockholder Meetings...................................................... 78
Voting Rights............................................................. 79
Provisions Relating to Directors.......................................... 80
Rights Agreement.......................................................... 81
EXPERTS..................................................................... 81
LEGAL OPINION............................................................... 81
SOLICITATION OF PROXIES..................................................... 81
STOCKHOLDER PROPOSALS....................................................... 82
OTHER BUSINESS.............................................................. 82
INDEX OF DEFINED TERMS...................................................... 83
</TABLE>
EXHIBITS
<TABLE>
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A. Agreement and Plan of Merger............................................. A-1
B. Opinion of Montgomery Securities......................................... B-1
C. Opinion of Lazard Freres & Co. LLC....................................... C-1
</TABLE>
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AVAILABLE INFORMATION
NBD has filed the Registration Statement with the Commission covering the
shares of NBD Common Stock and New Preferred Stock to be issued in connection
with the Merger. As permitted by the rules and regulations of the Commission,
this Proxy Statement-Prospectus omits certain information, Exhibits and
undertakings contained in the Registration Statement. For further information
pertaining to the securities offered hereby, reference is made to the
Registration Statement, including the Exhibits filed as a part thereof. Such
additional information may be inspected and copied as set forth below.
Each of NBD and First Chicago is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and,
in accordance therewith, files reports, proxy statements and other information
with the Commission. Reports, proxy statements and other information
concerning either NBD or First Chicago can be inspected and copied at the
Commission's office at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and the Commission's Regional Offices in New York
(Suite 1300, Seven World Trade Center, New York, New York 10048) and Chicago
(500 West Madison Street, Suite 1400, Chicago, Illinois 60661), 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. NBD Common Stock, First Chicago Common Stock, First Chicago Preferred
Stock and depositary receipts representing First Chicago Preferred Stock are
each listed on the NYSE. Reports, proxy materials and other information
concerning NBD also may be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005. Reports, proxy materials and other
information concerning First Chicago may also be inspected at the offices of
the NYSE, 20 Broad Street, New York, New York 10005; the Chicago Stock
Exchange, 440 South LaSalle Street, Chicago, Illinois 60605; and the Pacific
Stock Exchange, 301 Pine Street, San Francisco, California 94104. This Joint
Proxy Statement--Prospectus does not contain all the information set forth in
the Registration Statement and Exhibits thereto which NBD has filed with the
Commission under the Securities Act, which may be obtained from the Public
Reference Section of the Commission at its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the prescribed fees, and
to which reference is hereby made.
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INFORMATION INCORPORATED BY REFERENCE
THIS JOINT PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF ANY SUCH
DOCUMENTS, OTHER THAN EXHIBITS THERETO, ARE AVAILABLE WITHOUT CHARGE TO ANY
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS JOINT PROXY STATEMENT-
PROSPECTUS IS DELIVERED UPON WRITTEN OR ORAL REQUEST TO THE FOLLOWING:
NBD DOCUMENTS FIRST CHICAGO DOCUMENTS
NBD BANCORP, INC. FIRST CHICAGO CORPORATION
611 Woodward Avenue One First National Plaza, Suite
Detroit, Michigan 48226 0460
Chicago, Illinois 60670
Attention: Daniel T. Lis
(313) 225-3154 Attention: Investor Relations
Sean O'Neill
(312) 732-4812
IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH DOCUMENTS, A REQUEST MUST BE
RECEIVED NO LATER THAN October 13, 1995.
The following NBD documents are incorporated by reference herein (File No.
1-7127):
(1) NBD's Annual Report on Form 10-K for the year ended December 31,
1994.
(2) NBD's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1995 and June 30, 1995.
(3) NBD's Current Reports on Form 8-K dated July 19, 1995, July 21, 1995
and August 15, 1995.
(4) The description of NBD Common Stock set forth in NBD's registration
statement filed pursuant to Section 12 of the Exchange Act and any
amendment or report filed with the Commission for the purpose of updating
such description.
Such incorporation by reference will not be deemed to specifically
incorporate by reference the information referred to in Item 402(a)(8) of
Regulation S-K.
The following First Chicago documents are incorporated by reference herein
(File No. 1-6052):
(1) First Chicago's Annual Report on Form 10-K for the year ended
December 31, 1994.
(2) First Chicago's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995 and June 30, 1995.
(3) First Chicago's Current Reports on Form 8-K, dated January 17, 1995,
April 17, 1995, July 14, 1995, July 17, 1995, July 19, 1995, July 21, 1995
and August 15, 1995.
(4) Item 14 on pages 26 and 27 of First Chicago's Registration Statement
on Form 10 describing First Chicago's Common Stock.
(5) First Chicago's Registration Statement on Form 8-A dated November 25,
1988, describing the Preferred Share Purchase Rights declared by First
Chicago on November 18, 1988, as amended by Amendment No. 1 on Form 8 dated
July 16, 1990, as further amended by an Amendment dated July 11, 1995, as
filed on Form 8-K, dated July 19, 1995.
Such incorporation by reference will not be deemed to specifically
incorporate by reference the information referred to in Item 402(a)(8) of
Regulation S-K.
All documents filed with the Commission by NBD and First Chicago pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of effectiveness of the Registration Statement of which this Joint Proxy
Statement-Prospectus forms a part and prior to the date of the NBD Meeting and
the First Chicago Meeting are incorporated herein by reference and such
documents will be deemed to be a part hereof from the date of filing of such
documents. Any statement contained in this Joint Proxy Statement-Prospectus or
in a document incorporated or deemed to be incorporated by reference herein
will be deemed to be modified or superseded for purposes of this Joint Proxy
Statement- Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded will not be deemed, except as so modified
or superseded, to constitute a part of this Joint Proxy Statement-Prospectus.
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SUMMARY OF JOINT PROXY STATEMENT-PROSPECTUS
The following is a summary, which is necessarily incomplete, of certain
information contained elsewhere in this Joint Proxy Statement-Prospectus or in
documents incorporated herein by reference. Reference is made to, and this
Summary is qualified in its entirety by, the more detailed information
contained herein, the Exhibits hereto and the documents incorporated by
reference herein. Each stockholder is urged to read the Joint Proxy Statement-
Prospectus and the Exhibits hereto in their entirety and with care.
THE PARTIES
NBD and First Chicago are registered bank holding companies under the Bank
Holding Company Act of 1956, as amended (the "BHC Act"), which, through their
respective banking and non-banking subsidiaries, provide banking and financial
services in the Midwest, particularly in Michigan, Illinois, and Indiana, and
throughout the United States and the world, to customers, including
individuals, corporations, governments, and other institutions. NBD is
headquartered at 611 Woodward Avenue, Detroit, Michigan 48226. First Chicago is
headquartered at One First National Plaza, Chicago, Illinois 60670. See "NBD
Bancorp, Inc." and "First Chicago Corporation".
DATE, TIME AND PLACE OF MEETINGS
The NBD Meeting will be held on the Staff Floor, Main Office of NBD Bank, 611
Woodward Avenue, Detroit, Michigan, at 10:00 a.m., Detroit time, on October 20,
1995. The First Chicago Meeting will be held at the First Chicago Center, One
First National Plaza, Chicago, Illinois at 9:30 a.m., Chicago time, on October
20, 1995.
PURPOSES OF MEETINGS
The NBD Meeting will be held for the purpose of considering and voting upon a
proposal to approve and adopt the Merger Agreement and the consummation of the
transactions contemplated thereby, including the Merger, an increase in the
authorization of NBD Common Stock from 500,000,000 to 750,000,000, and the
changing of the name of NBD to "First Chicago NBD Corporation." See "Meeting of
NBD Stockholders--Date, Time and Place; Purpose of Meeting".
The First Chicago Meeting will be held for the purpose of considering and
voting upon a proposal to approve and adopt the Merger Agreement and the
consummation of the transactions contemplated thereby, including the Merger.
See "Meeting of First Chicago Stockholders--Date, Time and Place; Purpose of
Meeting".
As described herein under "Board of Directors, Management and Operations
Following the Merger", from and after the Effective Time, the Board of
Directors of the combined company will consist of 22 members, two of whom will
be the current Chairmen of each of NBD and First Chicago, 10 of whom will be
directors appointed by NBD's Chairman and the NBD Board and 10 of whom will be
directors appointed by First Chicago's Chairman and the First Chicago Board.
VOTE REQUIRED
The NBD Board and the First Chicago Board have each fixed the close of
business on September 8, 1995 as the record date (the "Record Date") for the
determination of stockholders entitled to notice of, and to vote at, the NBD
Meeting and the First Chicago Meeting, respectively. Only the holders of record
of the outstanding shares of NBD Common Stock and First Chicago Common Stock on
the Record Date will be entitled to notice
7
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of, and to vote at, the NBD Meeting and the First Chicago Meeting,
respectively. The holders of record of the outstanding shares of First Chicago
Preferred Stock on the Record Date will be entitled to notice of, but will not
be entitled to vote at, the First Chicago Meeting. The presence, in person or
by proxy, of a majority of the aggregate number of shares of NBD Common Stock
and First Chicago Common Stock issued, outstanding and entitled to vote on the
Record Date is necessary to constitute a quorum at the NBD Meeting and the
First Chicago Meeting, respectively.
NBD. The affirmative vote of the holders of a majority of the shares of NBD
Common Stock issued, outstanding and entitled to vote at the NBD Meeting will
be required to approve the Merger Agreement and the consummation of the
transactions contemplated thereby. Approval of the Merger Agreement by the
requisite vote of the holders of NBD Common Stock is a condition to, and is
required for, consummation of the Merger.
As of the Record Date, 158,967,936 shares of NBD Common Stock were issued,
outstanding and entitled to vote, of which approximately 2,241,519 shares, or
approximately 1.41%, were held by directors and executive officers of NBD and
their respective affiliates. Each such director and officer of NBD has
indicated his or her intention to vote the NBD Common Stock beneficially owned
by him or her for approval of the Merger Agreement and the consummation of the
transactions contemplated thereby. As of the Record Date, the banking and trust
subsidiaries of NBD, as fiduciaries, custodians or agents, held a total of
21,891,401 shares, or 13.77%, of the outstanding shares of NBD Common Stock
under trust agreements and other instruments and agreements. These entities
maintained sole or shared voting power with respect to 8,213,082 of such
shares. In addition, First Chicago's directors and executive officers as a
group beneficially owned 100 shares, or less than 1%, of the outstanding shares
of NBD Common Stock, all of which they intend to vote for approval of the
Merger Agreement and the consummation of the transactions contemplated thereby.
As of the Record Date, the banking and trust subsidiaries of First Chicago, as
fiduciaries, custodians or agents, held a total of 568,766 shares, or less than
1%, of the outstanding shares of NBD Common Stock under trust agreements and
other instruments and agreements. These entities maintained sole or shared
voting power with respect to 471,252 of such shares.
See "Meeting of NBD Stockholders--Vote Required to Approve the Merger
Agreement; Principal Stockholders".
First Chicago. The affirmative vote of the holders of a majority of the
shares of First Chicago Common Stock issued, outstanding and entitled to vote
at the First Chicago Meeting will be required to approve the Merger Agreement
and the consummation of the transactions contemplated thereby. Holders of
shares of First Chicago Preferred Stock are not entitled to vote on any of the
matters to be considered at the First Chicago Meeting. Approval of the Merger
Agreement by the requisite vote of the holders of First Chicago Common Stock is
a condition to, and required for, consummation of the Merger.
As of the Record Date, 90,518,589 shares of First Chicago Common Stock were
issued, outstanding and entitled to vote, of which approximately 4,268,740
shares, or approximately 4.72%, were held by directors and executive officers
of First Chicago, its subsidiaries and their respective affiliates. Each such
director and executive officer of First Chicago has indicated his or her
intention to vote the First Chicago Common Stock beneficially owned by him or
her for approval of the Merger Agreement and the consummation of the
transactions contemplated thereby. As of the Record Date, the banking and trust
subsidiaries of First Chicago, as fiduciaries, custodians or agents, held a
total of 1,702,777 shares, or 1.88%, of the outstanding shares of First Chicago
Common Stock under trust agreements and other instruments and agreements. These
entities maintained sole or shared voting power with respect to 1,209,961 of
such shares. As of the Record Date, the banking and trust subsidiaries of NBD,
as fiduciaries, custodians or agents, held a total of 636,017 shares, or less
than 1%, of the outstanding shares of First Chicago Common Stock under trust
agreements and other instruments and agreements. These entities maintained sole
or shared voting power with respect to 27,835 of such shares.
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See "Meeting of First Chicago Stockholders--Vote Required to Approve the
Merger Agreement; Principal Stockholders".
TERMS OF THE MERGER
At the Effective Time, First Chicago will be merged with and into NBD, with
NBD as the surviving corporation in the Merger and with the name of NBD changed
to "First Chicago NBD Corporation." In connection with the Merger (i) each then
outstanding share of First Chicago Common Stock (other than shares held in
First Chicago's treasury or directly or indirectly by NBD or its wholly owned
subsidiaries or by First Chicago or its wholly owned subsidiaries (except for,
in both cases, shares held in a fiduciary, custodial or similar capacity or in
respect of a debt previously contracted or in certain other circumstances))
will be converted into the right to receive 1.81 shares of NBD Common Stock.
First Chicago's obligation to consummate the Merger is not conditioned upon NBD
Common Stock continuing to trade at any specified minimum price during any
period prior to the Effective Time. Because the Exchange Ratio is fixed and
because the market price of NBD Common Stock is subject to fluctuation, the
value of the shares of NBD Common Stock that holders of First Chicago Common
Stock will receive in the Merger may increase or decrease prior to and
following the Merger. Subject to stock repurchases by NBD and First Chicago,
option exercises under various NBD and First Chicago employee benefit plans and
other issuances of NBD Common Stock and First Chicago Common Stock prior to the
Effective Time, it is anticipated that at the Effective Time, stockholders of
NBD and First Chicago will own approximately 49.9% and 50.1%, respectively, of
the Common Stock of the combined company following the Merger.
Further, at the Effective Time, (i) each share of First Chicago Preferred
Stock with Cumulative and Adjustable Dividends, Series B ($100 stated value)
(the "First Chicago Series B Preferred Stock") then issued and outstanding will
be converted into the right to receive one share of preferred stock with
cumulative and adjustable dividends of the combined company (the "New Series B
Preferred Stock"); (ii) each share of First Chicago Preferred Stock with
Cumulative and Adjustable Dividends, Series C ($100 stated value) (the "First
Chicago Series C Preferred Stock") then issued and outstanding will be
converted into the right to receive one share of preferred stock with
cumulative and adjustable dividends of the combined company (the "New Series C
Preferred Stock"); (iii) each share of First Chicago's 8.45% Cumulative
Preferred Stock, Series E ($625 stated value) (the "First Chicago Series E
Preferred Stock") then issued and outstanding will be converted into the right
to receive one share of cumulative preferred stock with an annual fixed
dividend rate of 8.45% of the combined company (the "New Series E Preferred
Stock"); and (iv) each share of First Chicago 5 3/4% Cumulative Convertible
Preferred Stock, Series B ($5,000 stated value) (the "First Chicago Convertible
Preferred Stock," and together with the First Chicago Series B Preferred Stock,
the First Chicago Series C Preferred Stock, and the First Chicago Series E
Preferred Stock, the "First Chicago Preferred Stock") then issued and
outstanding will be converted into the right to receive one share of cumulative
convertible preferred stock with an annual fixed dividend rate of 5 3/4% of the
combined company (the "New Convertible Preferred Stock", and together with the
New Series B Preferred Stock, the New Series C Preferred Stock, and the New
Series E Preferred Stock, the "New Preferred Stock"; and the New Preferred
Stock together with the Common Stock, the "Capital Stock"). The terms of the
New Preferred Stock will be substantially the same as the terms of the First
Chicago Preferred Stock. At the Effective Time, any deposit agreements pursuant
to which shares of First Chicago Preferred Stock are held subject to, and
evidenced by, depositary receipts will be assumed by the combined company. See
"The Merger--Conversion of First Chicago Capital Stock; Treatment of First
Chicago Stock Options and First Chicago Stock Purchase Plan", "Description of
NBD Capital Stock", "Description of New Preferred Stock" and "The Merger--No
Appraisal Rights".
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No fractional shares of NBD Common Stock will be issued in the Merger. In
lieu thereof, each holder of First Chicago Common Stock who otherwise would
have been entitled to a fractional share of NBD Common Stock will receive cash
in an amount equal to such fraction (rounded to the nearest thousandth of a
share) multiplied by the average of the closing sale prices of NBD Common Stock
on the NYSE as reported by The Wall Street Journal for the five trading days
immediately preceding the date of the Effective Time.
Each stock option or right to acquire First Chicago Common Stock granted
pursuant to the First Chicago 1983 Stock Option Plan and the First Chicago
Stock Incentive Plan (together, the "First Chicago Stock Plans") which is
outstanding and unexercised immediately prior to the Effective Time will be
converted automatically at the Effective Time into an option to purchase Common
Stock of the combined company and, subject to the adjustment described below,
will continue to be governed by the terms of the First Chicago Stock Plans
which will be assumed by the combined company. As of the Record Date, 5,747,673
shares of First Chicago Common Stock were subject to such options. The number
of shares of Common Stock of the combined company subject to such options and
the exercise price of such options will be adjusted as provided in the Merger
Agreement to give effect to the Exchange Ratio.
In addition, First Chicago employees participating in the current offering
under the First Chicago Employee Stock Purchase and Savings Plan (the "First
Chicago ESPSP") will be eligible to purchase shares of Common Stock of the
combined company at the termination of the current offering under the First
Chicago ESPSP. The number of shares of Common Stock of the combined company
which each participating First Chicago employee will be entitled to purchase
and the purchase price of such shares will be adjusted as contemplated in the
Merger Agreement to give effect to the Exchange Ratio. Other terms of the First
Chicago ESPSP will remain substantially the same after the Effective Time.
Pursuant to the Merger Agreement, at the Effective Time, the NBD Restated
Certificate of Incorporation (as in effect prior to the Effective Time, or,
with respect to any period after the Effective Time, as amended, the "NBD
Certificate") will be amended in accordance with the Delaware General
Corporation Law (the "DGCL") to provide: (a) that the number of shares of
authorized Common Stock of the combined company shall be increased to
750,000,000; (b) that the name of NBD shall be changed to "First Chicago NBD
Corporation"; (c) that the NBD Series A Preferred Stock (as defined herein), of
which, as of the date of this Joint Proxy Statement-Prospectus, no shares are
issued and outstanding, will no longer be authorized capital stock of NBD, and
that the combined company shall no longer be authorized to issue such shares of
such NBD Series A Preferred Stock; and (d) for the designation of each series
of New Preferred Stock.
The Merger will become effective on the date and time (the "Effective Time")
as set forth in the Certificate of Merger which will be filed with the
Secretary of State of Delaware.
See "The Merger--Structure of the Merger", "--Conversion of First Chicago
Capital Stock; Treatment of First Chicago Stock Options and First Chicago Stock
Purchase Plan", "--Exchange of Certificates; Fractional Shares", "--Effective
Time" and "Amendments to the NBD Certificate".
RECOMMENDATIONS OF THE BOARDS OF DIRECTORS AND REASONS FOR THE MERGER
The Boards of Directors of NBD (with 19 directors present and 2 absent) and
First Chicago (with 15 directors present and 2 absent) have unanimously
approved the Merger Agreement. EACH BOARD UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS OF NBD AND FIRST CHICAGO, RESPECTIVELY, VOTE "FOR" APPROVAL AND
ADOPTION OF THE MERGER AGREEMENT.
The NBD Board and the First Chicago Board each believes that the terms of the
Merger Agreement are fair and in the best interests of NBD and its stockholders
and First Chicago and its stockholders, respectively. The terms of the Merger
Agreement were reached on the basis of arm's-length negotiations between NBD
and First Chicago. In the course of reaching their respective decisions to
approve the Merger Agreement, the NBD Board and the First Chicago Board
consulted with their respective legal advisors regarding the legal terms of the
Merger
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Agreement and the NBD Board's and the First Chicago Board's obligations in
consideration thereof, and with their respective financial advisors, Montgomery
Securities ("Montgomery") and Lazard Freres & Co. LLC ("Lazard Freres"), as to
the fairness, from a financial point of view, of the Exchange Ratio to the
holders of NBD Common Stock and First Chicago Common Stock, respectively.
See "The Merger--Background of the Merger", "--Reasons for the Merger" and
"--Fairness Opinions of Financial Advisors".
FAIRNESS OPINIONS OF FINANCIAL ADVISORS
Montgomery, NBD's financial advisor, has rendered its oral opinion, as of
July 11, 1995, and its written opinion as of the date of this Joint Proxy
Statement-Prospectus, to the NBD Board that the Exchange Ratio is fair, from a
financial point of view, to the holders of NBD Common Stock.
Lazard Freres, First Chicago's financial advisor, has rendered its oral
opinion, as of July 11, 1995, and its written opinion, as of the date of this
Joint Proxy Statement-Prospectus, to the First Chicago Board, that the Exchange
Ratio is fair, from a financial point of view, to the holders of First Chicago
Common Stock.
The opinions of the financial advisors, which are attached hereto as Exhibits
B and C, should be read in their entirety with respect to the assumptions made,
matters considered and limits of the reviews undertaken by Montgomery and
Lazard Freres in rendering their respective opinions. NBD and First Chicago
have agreed to pay fees to Montgomery and Lazard Freres, respectively, a
portion of which are contingent upon consummation of the Merger. See "The
Merger--Fairness Opinions of Financial Advisors" for a further description of
the opinions of Montgomery and Lazard Freres and of the fees payable to
Montgomery and Lazard Freres by NBD and First Chicago, respectively.
See "The Merger--Background of the Merger", "--Reasons for the Merger", "--
Fairness Opinions of Financial Advisors" and Exhibits B and C to this Joint
Proxy Statement-Prospectus.
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Consummation of the Merger is subject to certain conditions, including the
approval of the Merger Agreement by the separate affirmative votes of the
holders of a majority of the shares of NBD Common Stock and of First Chicago
Common Stock entitled to vote thereon; the effectiveness of the Registration
Statement of which this Joint Proxy Statement-Prospectus forms a part; approval
of the Merger by certain Federal and state regulatory authorities; receipt by
NBD and First Chicago of an opinion of counsel dated as of the Effective Time
as to the tax-free nature of the Merger for Federal income tax purposes;
receipt by NBD of a letter from Deloitte & Touche LLP and receipt by First
Chicago of a letter from Arthur Andersen LLP each to the effect that the Merger
will qualify for "pooling-of-interests" accounting treatment; the listing,
subject to notice of issuance, on the NYSE of the NBD Common Stock to be issued
in the Merger; the absence of any injunction or legal restraint prohibiting
consummation of the Merger and certain other customary closing conditions. NBD
has received an opinion from Deloitte & Touche LLP and First Chicago has
received an opinion from Arthur Andersen LLP each to the effect that the Merger
will qualify for "pooling-of-interests" accounting treatment. Each of NBD and
First Chicago has received an opinion from Wachtell, Lipton, Rosen & Katz,
dated as of the date hereof, as to the tax-free nature of the Merger for
Federal income tax purposes. There can be no assurance as to when and if the
remaining conditions will be satisfied (or, where permissible, waived) or that
the Merger will be consummated.
See "The Merger--Conditions to the Consummation of the Merger" and "--
Regulatory Approvals Required for the Merger".
BOARD OF DIRECTORS, MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER
From and after the Effective Time, the Board of Directors of the combined
company will consist of 22 persons, divided into three classes of directors,
including Richard L. Thomas, the Chairman, President and Chief
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Executive Officer of First Chicago, Verne G. Istock, the Chairman and Chief
Executive Officer of NBD, 10 additional persons (two of whom may be executive
officers of First Chicago) to be named by Mr. Thomas and the First Chicago
Board, and 10 additional persons (one of whom may be an executive officer of
NBD) to be named by Mr. Istock and the NBD Board. Mr. Thomas and the First
Chicago Board have designated David J. Vitale, currently the Vice Chairman of
the First Chicago Board, and Scott P. Marks, Jr., currently an Executive Vice
President of First Chicago, to serve as Vice Chairmen of the Board of Directors
of the combined company. Mr. Istock and the NBD Board have designated Thomas H.
Jeffs II, currently President, Chief Operating Officer, and a director of NBD,
to serve as a Vice Chairman of the Board of Directors of the combined company.
As of the date of this Joint Proxy Statement-Prospectus, no additional
directors have been designated by Messrs. Thomas and Istock and their
respective boards of directors. The directors selected by NBD and First Chicago
will be divided as equally as practicable among the three classes of directors
and will serve on the various committees established by the Board of Directors
of the combined company in proportion to the aggregate representation of such
directors.
The executive officers of the combined company after the Merger will be
comprised of certain members of NBD's current senior management and certain
members of First Chicago's current senior management. Mr. Thomas will serve as
Chairman of the Board of the combined company until the first annual meeting of
stockholders of the combined company, expected to be held in May, 1996. Mr.
Istock will serve as President and Chief Executive Officer of the combined
company, and will become Chairman of the Board of the combined company on the
date (which in no event will be later than May 31, 1996) upon which Mr. Thomas
ceases to be Chairman of the Board. In addition, as noted above, Mr. Jeffs, an
executive officer of NBD, and Messrs. Vitale and Marks, executive officers of
First Chicago, will be Vice Chairmen of the combined company following the
Merger. For additional information concerning the senior management of the
combined company, see "Board of Directors, Management and Operations Following
the Merger". From time to time prior to consummation of the Merger, decisions
may be made with respect to the management and operations of the combined
company following the Merger, including the selection of additional executive
officers of the combined company.
Following the Merger, the combined company may elect to combine the
operations of and, subject to required regulatory approvals, to merge certain
of the subsidiary banks of NBD and First Chicago and to consolidate the
operations of certain other NBD and First Chicago subsidiaries which provide
similar services. The receipt of such required regulatory approvals is not a
condition to, or required for, consummation of the Merger. As of the date of
this Joint Proxy Statement-Prospectus, no final determination with respect to
such matters had been made, although it is anticipated that NBD's Illinois bank
subsidiaries will be combined with First Chicago's Illinois bank subsidiaries.
While no assurances can be given, following the Merger, NBD and First Chicago
expect to achieve annualized pre-tax cost savings of approximately $200 million
by 1997. Such cost savings are expected to be realized primarily through
reductions in staff, elimination or consolidation of certain branches,
consolidation of the parties' credit card businesses, and the consolidation of
certain offices, data processing and other redundant back-office operations and
staff functions. NBD and First Chicago also anticipate that in order to achieve
such cost savings they will incur approximately $225 million (pre-tax) in one-
time Merger expenses and restructuring charges. It is anticipated that
substantially all these charges will be recognized during 1995 and paid within
12 to 15 months of the Merger.
NBD and First Chicago also expect to reduce the combined company's balance
sheet by up to approximately $25 billion of generally highly-liquid, low margin
assets and related short-term funding sources. It is not anticipated that the
balance sheet reduction program will have any significant impact on the
combined company's operating results. In addition, NBD and First Chicago do not
anticipate incurring any material probable losses as a result of this balance
sheet reduction program.
See "Board of Directors, Management and Operations Following the Merger",
"Interests of Certain Persons in the Merger" and "Unaudited Pro Forma Condensed
Combined Financial Statements".
12
<PAGE>
REGULATORY APPROVALS
The Merger is subject to approval by the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") pursuant to Sections 3 and 4 of
the BHC Act and by other Federal and various state regulators.
Assuming Federal Reserve Board and other required regulatory approvals for
the Merger are obtained, the Merger may not be consummated for 30 days after
such approvals (or 15 days, in certain circumstances described more fully under
"The Merger--Regulatory Approvals Required for the Merger"), during which time
the United States Department of Justice may challenge the Merger on antitrust
grounds and seek the divestiture of assets and liabilities. NBD and First
Chicago have filed prior to the date hereof certain applications or
notifications with the appropriate Federal and state regulators with respect to
the Merger and intend to file any remaining applications or notifications as
soon as practicable following the date of this Joint Proxy Statement-
Prospectus. The Merger will not proceed until the Requisite Regulatory
Approvals (as defined herein) have been obtained, such approvals are in full
force and effect and all statutory waiting periods in respect thereof have
expired. There can be no assurance that the Merger will be approved by the
appropriate Federal and state regulators of whom approval is required. If such
approvals are received, there can be no assurance as to the date of such
approvals or the absence of any litigation challenging such approvals.
See "The Merger--Regulatory Approvals Required for the Merger".
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
NBD and First Chicago have received an opinion from Wachtell, Lipton, Rosen &
Katz, dated as of the date hereof, based upon certain customary representations
and assumptions set forth therein, substantially to the effect that: (i) the
Merger will constitute a tax-free reorganization under Section 368(a)(1)(A) of
the Internal Revenue Code of 1986, as amended (the "Code") and First Chicago
and NBD will each be a party to the reorganization; (ii) no gain or loss will
be recognized by First Chicago or NBD as a result of the Merger; (iii) no gain
or loss will be recognized by the stockholders of First Chicago who exchange
their First Chicago Common Stock or First Chicago Preferred Stock
(collectively, the "First Chicago Capital Stock") solely for NBD Common Stock
or New Preferred Stock pursuant to the Merger (except with respect to cash
received in lieu of a fractional share interest in NBD Common Stock); (iv) the
tax basis of the Capital Stock of the combined company received by stockholders
who exchange all of their First Chicago Capital Stock solely for Capital Stock
of the combined company in the Merger will be the same as the tax basis of the
First Chicago Capital Stock surrendered in exchange therefor (reduced by any
amount allocable to a fractional share interest for which cash is received);
and (v) the holding period of Capital Stock of the combined company received by
stockholders of First Chicago in the Merger will include the period during
which the shares of First Chicago Capital Stock surrendered in exchange
therefor were held; provided that such First Chicago Capital Stock was held as
a capital asset by the holder of such First Chicago Capital Stock at the
Effective Time. Each of NBD's and First Chicago's obligation to effect the
Merger is conditioned on the receipt of an opinion to the same effect updated
as of the Effective Time. See "The Merger--Certain Federal Income Tax
Consequences".
ACCOUNTING TREATMENT
The Merger is intended to be accounted for as a "pooling of interests" under
generally accepted accounting principles. NBD has received an opinion from
Deloitte & Touche LLP and First Chicago has received an opinion from Arthur
Andersen LLP each to the effect that the Merger will qualify for "pooling-of-
interests" accounting treatment. See "The Merger--Accounting Treatment".
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated at any time prior to the Effective
Time (i) by the mutual consent of NBD and First Chicago by a majority vote of
the members of each company's entire Board of Directors; (ii) by either NBD or
First Chicago if any governmental entity which must grant a regulatory approval
has denied approval of the Merger and such denial has become final and
nonappealable or any governmental entity of competent jurisdiction has issued a
final, non-appealable order enjoining or otherwise prohibiting consummation of
the transactions contemplated by the Merger Agreement; (iii) except if the
party seeking termination is in
13
<PAGE>
material breach of the Merger Agreement, by either NBD or First Chicago, (a) if
the Effective Time has not occurred by July 11, 1996 or (b) if there is a
material breach by the other party of any representation, warranty, covenant or
agreement contained in the Merger Agreement which is not timely cured; or (iv)
by either NBD or First Chicago if the requisite stockholder approvals of either
party have not been obtained. See "The Merger--Termination of the Merger
Agreement".
WAIVER AND AMENDMENT
Prior to the Effective Time, NBD and First Chicago, by action taken or
authorized by their respective Boards of Directors, may, to the extent legally
allowed, (i) extend the time for the performance of any of the obligations or
other acts required of the other party contained in the Merger Agreement; (ii)
waive any inaccuracies in the representations and warranties of the other party
contained in the Merger Agreement or in any document delivered pursuant to the
Merger Agreement; or (iii) waive compliance by the other party of any of its
agreements or conditions contained in the Merger Agreement; except that after
First Chicago stockholder approval or NBD stockholder approval, no extension or
waiver will reduce the amount or change the form of consideration to be
delivered to First Chicago's common stockholders under the Merger Agreement
without further approval of the stockholders of First Chicago or NBD.
Subject to compliance with applicable law, the Merger Agreement may be
amended by NBD and First Chicago by action taken or authorized by their
respective Boards of Directors at any time, except that after approval by the
respective stockholders of NBD and First Chicago, no amendment will change the
amount or form of the consideration to be delivered to First Chicago's common
stockholders other than as contemplated by the Merger Agreement.
See "The Merger--Extension, Waiver and Amendment of the Merger Agreement".
STOCK OPTION AGREEMENTS
As an inducement to First Chicago to enter into the Merger Agreement, NBD and
First Chicago entered into the NBD Stock Option Agreement, dated July 11, 1995
(the "NBD Stock Option Agreement"), pursuant to which NBD granted First Chicago
an option to purchase from NBD 31,270,000 shares of NBD Common Stock (subject
to adjustment, but in no event to exceed 19.9% of the then outstanding NBD
Common Stock), at a price of $32 1/2 per share (the "NBD Option"). First
Chicago may exercise the NBD Option only upon the occurrence of certain events
described therein (none of which has occurred as of the date hereof). At the
request of the holder of the NBD Option, under certain circumstances, NBD will
repurchase, pursuant to a formula price set out in the NBD Stock Option
Agreement, the NBD Option and any shares of NBD Common Stock purchased upon the
exercise of the NBD Option and beneficially owned by such holder at that time.
As an inducement to NBD to enter into the Merger Agreement, First Chicago and
NBD entered into the First Chicago Stock Option Agreement, dated July 11, 1995
(the "First Chicago Stock Option Agreement", and together with the NBD Stock
Option Agreement, the "Stock Option Agreements"), pursuant to which First
Chicago granted NBD an option to purchase from First Chicago 17,854,000 shares
of First Chicago Common Stock (subject to adjustment, but in no event to exceed
19.9% of the then outstanding First Chicago Common Stock), at a price of $60
1/8 per share (the "First Chicago Option"). NBD may exercise the First Chicago
Option only upon the occurrence of certain events described therein (none of
which has occurred as of the date hereof). At the request of the holder of the
First Chicago Option, under certain circumstances, First Chicago will
repurchase, pursuant to a formula price set out in the First Chicago Stock
Option Agreement, the First Chicago Option and any shares of First Chicago
Common Stock purchased upon the exercise of the First Chicago Option and
beneficially owned by such holder at that time.
The Stock Option Agreements are intended to increase the likelihood that the
Merger will be consummated in accordance with the terms set forth in the Merger
Agreement. Consequently, certain aspects of the Stock Option Agreements may
have the effect of discouraging persons who might now or prior to the Effective
Time be interested in acquiring all of or a significant interest in NBD or
First Chicago from considering or proposing such an acquisition.
See "The Merger--Stock Option Agreements" and "Information Incorporated by
Reference".
14
<PAGE>
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of NBD's management and the NBD Board, and First Chicago's
management and the First Chicago Board, may be deemed to have certain interests
in the Merger that are in addition to their interests generally as stockholders
of NBD or First Chicago, as the case may be. Certain executive officers and
directors of each of NBD and First Chicago will be executive officers and
directors of the combined company following the Merger. NBD also has agreed to
take certain actions regarding the existing employment and severance
arrangements of certain officers of First Chicago and to indemnify, and
maintain directors' and officers' liability insurance covering, the First
Chicago directors and officers following the Merger.
The NBD Board and the First Chicago Board were aware of these interests and
considered them, among other matters, in approving the Merger Agreement and the
transactions contemplated thereby.
See "Interests of Certain Persons in the Merger" and "Board of Directors,
Management and Operations Following the Merger".
NO APPRAISAL RIGHTS
Under the DGCL, holders of NBD Common Stock, First Chicago Common Stock and
First Chicago Preferred Stock will have no appraisal rights in connection with
the Merger Agreement and the consummation of the transactions contemplated
thereby. See "The Merger--No Appraisal Rights".
CERTAIN DIFFERENCES IN THE RIGHTS OF STOCKHOLDERS
The rights of stockholders of First Chicago are currently governed by the
DGCL, the First Chicago Amended and Restated Certificate of Incorporation (the
"First Chicago Certificate") and the First Chicago by-laws (the "First Chicago
By-laws"). Upon consummation of the Merger, First Chicago stockholders who
receive NBD Capital Stock (as defined herein) in the Merger will become
stockholders of NBD, and their rights will be governed by the NBD Certificate
(as defined herein) and the NBD by-laws (the "NBD By-laws"), and will continue
to be governed by the DGCL. See "Comparison of Stockholders' Rights".
COMPARATIVE STOCK PRICES AND DIVIDENDS; PRO FORMA EQUIVALENT MARKET VALUE PER
SHARE
Common Stock. The shares of NBD Common Stock and First Chicago Common Stock
are listed and traded on the NYSE under the symbols "NBD" and "FNB",
respectively. First Chicago Common Stock is also currently listed on the
Chicago and Pacific Stock Exchanges and the International Stock Exchange of the
United Kingdom and the Republic of Ireland. The table below sets forth the high
and low sales prices for NBD Common Stock and First Chicago Common Stock as
reported on the NYSE, and the cash dividends declared, for the periods
indicated, as well as certain pro forma data per share of First Chicago Common
Stock, assuming consummation of the Merger.
<TABLE>
<CAPTION>
FIRST CHICAGO
NBD FIRST CHICAGO PRO FORMA
------------------------- ------------------------- EQUIVALENT
HIGH LOW DIVIDENDS HIGH LOW DIVIDENDS DIVIDENDS(1)
------- ------- --------- ------- ------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
1991.................... $30 1/8 $20 3/4 $0.95 $28 3/4 $15 5/8 $2.00 $1.72
1992.................... 33 1/8 26 3/4 1.04 37 3/4 22 7/8 1.20 1.88
1993.................... 36 3/8 28 5/8 1.08 50 5/8 35 1/2 1.30 1.95
1994.................... 33 26 3/4 1.23 55 1/2 41 1/8 1.95 2.23
1995 (through September
12, 1995).............. 37 7/8 27 3/8 0.66 66 1/2 45 1.10(2) 1.19
</TABLE>
--------
(1) Represents dividends declared for NBD Common Stock for each specified
period, multiplied by the Exchange Ratio, which is 1.81.
(2) Represents dividends declared for First Chicago Common Stock through July
1, 1995. On July 14, 1995, the First Chicago Board declared a dividend of
$0.60 per share of First Chicago Common Stock payable on October 1, 1995 to
stockholders of record on September 8, 1995.
15
<PAGE>
The following table sets forth the closing sales price of NBD Common Stock
and First Chicago Common Stock and the equivalent per share price of First
Chicago Common Stock giving effect to the Merger on July 11, 1995 (the last
trading day prior to the public announcement of the proposed Merger) and
September 12, 1995 (the latest practicable trading day before the printing of
this Joint Proxy Statement-Prospectus).
<TABLE>
<CAPTION>
CLOSING SALES PRICE
-----------------------------------------------
NBD FIRST CHICAGO PRO FORMA EQUIVALENT
COMMON STOCK COMMON STOCK PER SHARE(1)
------------ ------------- --------------------
<S> <C> <C> <C>
Market value per share:
July 11, 1995.................. $32 1/2 $60 5/8 $ 58.825
September 12, 1995............. 37 3/4 66 3/8 68.3275
</TABLE>
--------
(1) Equivalent market value per share of First Chicago Common Stock represents
the closing sales prices of NBD Common Stock, as reported in The Wall
Street Journal, on each specified date, multiplied by the Exchange Ratio,
which is 1.81.
Stockholders are advised to obtain current market quotations for NBD Common
Stock and First Chicago Common Stock. No assurance can be given as to the
market price of NBD Common Stock or First Chicago Common Stock at the Effective
Time, or the Common Stock of the combined company after the Effective Time.
Because the Exchange Ratio is fixed and because the market price of the NBD
Common Stock is subject to fluctuation, the value of the shares of NBD Common
Stock that holders of First Chicago Common Stock will receive in the Merger may
increase or decrease prior to and following the Merger.
16
<PAGE>
SELECTED HISTORICAL AND PRO FORMA PER SHARE DATA
The unaudited information set forth in the following tables reflects certain
comparative per common share data related to income per share, cash dividends
declared per share and book value per share (i) on a historical basis for NBD
and First Chicago; (ii) on a pro forma combined basis per share of NBD Common
Stock assuming consummation of the Merger; and (iii) on an equivalent pro forma
combined basis per share of First Chicago Common Stock assuming consummation of
the Merger.
The information shown below should be read in conjunction with the
consolidated historical financial statements of NBD and First Chicago,
including the respective notes thereto, which are incorporated by reference in
this Joint Proxy Statement-Prospectus and the unaudited pro forma condensed
combined financial information, including the notes thereto, which appears
elsewhere in this Joint Proxy Statement-Prospectus. The pro forma data is
presented for comparative purposes only and is not necessarily indicative of
the combined financial position or results of operations which would have been
realized had the acquisitions been consummated during the periods or as of the
dates for which the pro forma data is presented.
See "Information Incorporated by Reference" and "Unaudited Pro Forma
Condensed Combined Financial Statements".
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
----------------------- ---------------
1994 1993 1992 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NBD COMMON STOCK
Earnings per share-primary(a):
Historical.......................... $ 3.45 $ 2.98 $ 2.11 $ 1.79 $ 1.61
Pro forma(b)........................ 3.67 3.90 0.60 2.00 1.84
Earnings per share-fully diluted(a):
Historical.......................... 3.43 2.93 2.06 1.79 1.59
Pro forma(b)........................ 3.62 3.78 0.60 1.97 1.81
Cash dividends declared per share:
Historical.......................... 1.23 1.08 1.04 0.66 0.60
Book value per share-end of period:
Historical.......................... 21.11 20.21 18.34 22.92 20.47
Pro forma(c)........................ 22.65 23.84
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
----------------------- ---------------
1994 1993 1992 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
FIRST CHICAGO COMMON STOCK
Earnings per share-primary(a):
Historical.......................... $ 7.04 $ 8.78 $(2.08) $ 3.98 $ 3.76
Equivalent pro forma(d)............. 6.64 7.06 1.09 3.62 3.33
Earnings per share-fully diluted(a):
Historical.......................... 6.88 8.43 (2.08) 3.88 3.67
Equivalent pro forma(d)............. 6.55 6.84 1.09 3.57 3.28
Cash Dividends declared per share:
Historical.......................... 1.95 1.30 1.20 1.10 0.90
Equivalent pro forma(d)............. 2.23 1.95 1.88 1.19 1.09
Book value per share-end of period:
Historical.......................... 43.65 40.55 33.19 46.37 43.40
Equivalent pro forma(d)............. 41.00 43.15
</TABLE>
--------
(a) Earnings per share were calculated using income (loss) from continuing
operations. In calculating pro forma earnings per share, no adjustments to
the pro forma amounts have been made to reflect potential expense
reductions or revenue enhancements which may result from the Merger or the
effect of repurchases of NBD Common Stock or First Chicago Common Stock
subsequent to the stated period.
(b) Gives effect to the Merger as if it had occurred at the beginning of each
period presented.
(c) Gives effect to the Merger as if it had occurred at the end of the period.
The June 30, 1995 pro forma book value per share also includes the after-
tax impact of an anticipated $225 million of restructuring and merger-
related charges and an incremental $4 million of dividends.
(d) The equivalent pro forma computations assume that for each share of First
Chicago Common Stock outstanding, First Chicago stockholders would receive
1.81 shares of NBD Common Stock.
17
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables set forth certain unaudited selected historical
consolidated financial data for each of NBD and First Chicago. This data is
based on, and qualified in its entirety by, the respective consolidated
financial statements of NBD and First Chicago, including the respective notes
thereto, which are incorporated by reference in this Joint Proxy Statement-
Prospectus and should be read in conjunction therewith. See "Information
Incorporated by Reference".
SELECTED CONSOLIDATED FINANCIAL DATA
NBD BANCORP, INC.
(HISTORICAL)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------------ ----------------
1994 1993 1992 1991 1990 1995 1994
-------- -------- -------- -------- -------- ------- -------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY OF
INCOME
Net interest income.... $1,624.8 $1,558.1 $1,509.8 $1,338.1 $1,242.4 $ 849.3 $ 787.6
Provision for possible
credit losses......... 52.0 119.7 228.5 166.2 151.1 40.2 24.0
Noninterest income..... 545.6 585.4 529.2 473.0 412.3 281.1 272.7
Noninterest expenses... 1,304.3 1,321.8 1,338.1 1,161.1 1,055.8 659.7 654.6
Income before
extraordinary item and
cumulative effect of
accounting change..... 547.3 481.8 338.0 361.5 348.5 284.3 258.1
Net income............. 531.7 485.8 300.1 361.5 348.5 284.3 242.5
CONSOLIDATED PERIOD-END
BALANCES
Total assets........... $ 47,111 $ 40,776 $ 40,937 $ 38,760 $ 36,879 $48,051 $45,232
Long-term debt......... 2,504 1,435 975 534 325 3,012 2,333
Stockholders' equity... 3,292 3,249 2,941 2,716 2,533 3,602 3,250
COMMON SHARE DATA
Earnings per share
Primary
Income before
extraordinary item
and cumulative effect
of accounting change. $ 3.45 $ 2.98 $ 2.11 $ 2.27 $ 2.19 $ 1.79 $ 1.61
Net income............ 3.35 3.01 1.87 2.27 2.19 1.79 1.51
Fully diluted
Income before
extraordinary item
and cumulative effect
of accounting change. $ 3.43 $ 2.93 $ 2.06 $ 2.23 $ 2.17 $ 1.79 $ 1.59
Net income............ 3.33 2.95 1.84 2.23 2.17 1.79 1.50
Dividends declared per
share................. 1.23 1.08 1.04 0.95 0.91 0.66 0.60
Book value, period-end. 21.11 20.21 18.34 17.26 15.98 22.92 20.47
Market price, period-
end................... 27 3/8 29 3/4 32 3/4 29 3/4 22 32 31 5/8
CAPITAL
Common equity-to-
assets................ 7.5% 7.8% 7.3% 7.2% 6.9% 7.4% 7.8%
Regulatory leverage
ratio................. 6.8 7.3 6.5 6.2 6.3 6.9 6.8
Risk-based capital
Tier 1 capital ratio... 8.4 9.1 8.5 8.2 8.3 8.0 8.9
Total capital ratio.... 12.5 13.6 12.0 10.7 10.2 12.3 12.5
Tier 1 capital......... $ 3,180 $ 2,967 $ 2,625 $ 2,400 $ 2,299 $ 3,299 $ 3,062
Total capital.......... 4,712 4,424 3,718 3,129 2,830 5,059 4,334
RATIOS
Rate of return on:(1)
Average common
stockholders' equity.. 16.09% 15.57% 10.44% 13.59% 14.18% 16.07% 14.65%
Average assets......... 1.21 1.21 0.76 0.97 0.98 1.19 1.15
RATIO OF EARNINGS TO
FIXED CHARGES
Excluding interest
expense on deposits... 2.88x 3.80x 2.98x 2.84x 2.24x 2.30x 3.28x
Including interest
expense on deposits... 1.62 1.65 1.35 1.27 1.21 1.46 1.68
</TABLE>
--------
(1) Ratios based on net income. Ratios for interim periods have been
annualized.
18
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
FIRST CHICAGO CORPORATION
(HISTORICAL)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------------------ ----------------
1994 1993 1992 1991 1990 1995 1994
-------- -------- -------- -------- -------- ------- -------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY OF
INCOME:
Net interest income...... $1,331.0 $1,225.8 $1,183.0 $1,080.0 $1,197.6 $ 729.2 $ 663.4
Combined credit
provisions
Assets held for
accelerated disposition. -- -- 625.0 -- -- -- --
Other.................... 225.7 274.2 481.9 544.3 518.8 135.5 93.0
Noninterest income....... 1,874.6 2,202.4 1,488.2 1,225.2 1,199.3 957.8 930.7
Noninterest expense (1).. 1,916.9 1,853.9 1,764.4 1,597.0 1,565.9 965.3 945.1
Income (loss) before
cumulative effect of
changes in accounting
principles.............. 689.7 804.5 (114.5) 116.3 249.3 382.5 362.5
Net income............... 689.7 804.5 93.5 116.3 249.3 382.5 362.5
CONSOLIDATED PERIOD-END
BALANCES:
Total assets ............ $ 65,900 $ 52,560 $ 49,281 $ 48,963 $ 50,779 $75,328 $64,089
Long-term debt........... 2,271 2,065 1,705 1,725 1,428 2,271 2,269
Total stockholders'
equity.................. 4,533 4,264 3,401 2,970 2,812 4,771 4,524
COMMON SHARE DATA:
Earnings per share
Primary
Income (loss) before
cumulative effect of
changes in accounting
principles............. $ 7.04 $ 8.78 $ (2.08) $ 1.15 $ 3.35 $ 3.98 $ 3.76
Net income.............. 7.04 8.78 0.64 1.15 3.35 3.98 3.76
Fully diluted
Income (loss) before
cumulative effect of
changes in accounting
principles............. $ 6.88 $ 8.43 $ (2.08) $ 1.15 $ 3.32 $ 3.88 $ 3.67
Net income.............. 6.88 8.43 0.64 1.15 3.32 3.88 3.67
Dividends declared....... 1.95 1.30 1.20 2.00 2.00 1.10 0.90
Book value, period-end... 43.65 40.55 33.19 34.90 36.27 46.37 43.40
Market price, period-end. 47 3/4 43 1/4 36 3/4 24 5/8 16 1/2 59 7/8 48 1/8
CAPITAL:
Common equity-to-assets
(2)..................... 6.6% 7.2% 5.9% 5.1% 4.8% 6.1% 6.5%
Regulatory leverage ratio
(3)..................... 7.5 8.0 6.6 5.8 5.0 7.0 8.0
Risk-based capital (3)
Tier 1 ratio............. 8.8 8.8 6.7 5.5 4.9 8.8 8.9
Total capital ratio...... 13.4 13.6 10.8 9.4 8.3 13.1 13.8
Tier 1 capital........... $ 4,325 $ 4,098 $ 3,223 $ 2,804 $ 2,642 $ 4,567 $ 4,148
Total capital............ 6,566 6,292 5,221 4,762 4,441 6,783 6,424
RATIOS:
Rate of return on: (4)
Average common
stockholders' equity.... 17.0% 24.2% 1.8% 3.2% 9.4% 18.1% 18.3%
Average total
stockholders' equity.... 15.5 20.7 2.8 4.0 9.0 16.6 16.6
Average assets........... 1.08 1.42 0.17 0.22 0.47 1.06 1.20
CONSOLIDATED RATIOS OF
EARNINGS TO COMBINED
FIXED CHARGES
AND PREFERRED STOCK
DIVIDENDS (5):
Earnings to Fixed Charges:
Excluding interest
expense on deposits..... 1.9x 2.7x 0.7x(6) 1.2x 1.3x 1.7x 2.2x
Including interest
expense on deposits..... 1.6x 1.9x 0.9x(6) 1.1x 1.1x 1.4x 1.7x
Earnings to Combined Fixed
Charges and Preferred
Dividends:
Excluding interest
expense on deposits..... 1.8x(7) 2.4x 0.8x(8) 1.1x 1.3x 1.6x 2.0x(7)
Including interest
expense on deposits..... 1.5x(7) 1.8x 0.7x(8) 1.0x 1.1x 1.4x 1.6x(7)
</TABLE>
19
<PAGE>
--------
(1) Excludes provision for other real estate and provision for other real
estate held for accelerated disposition.
(2) Net of investment in First Chicago Capital Markets, Inc., First Chicago's
wholly-owned subsidiary authorized to underwrite, trade and deal in certain
securities.
(3) Under the year-end 1992 risk-based capital rules promulgated by the Federal
Reserve Board.
(4) Ratios based on net income. For return on average common stockholders'
equity, dividends on preferred stock have been deducted. Ratios for interim
periods have been annualized.
(5) The ratios of earnings to combined fixed charges and preferred stock
dividends for First Chicago are computed on the basis of the total
enterprise (as defined by the Commission) by dividing earnings before fixed
charges and income taxes by fixed charges and preferred stock dividend
requirements. Fixed charges consist principally of interest expenses on all
long- and short-term borrowings, excluding or including interest on
deposits as indicated.
(6) For 1992, earnings (as defined) were insufficient to cover fixed charges.
The coverage deficiency was approximately $201 million.
(7) For 1994, preferred dividends include a $4.5 million premium related to the
redemption of First Chicago's 10% Cumulative Preferred Stock, Series D.
(8) For 1992, earnings (as defined) were insufficient to cover combined fixed
charges and preferred stock dividends. The coverage deficiency was
approximately $279 million.
20
<PAGE>
PRO FORMA SELECTED FINANCIAL DATA
The following table presents selected unaudited financial data for the
combined company prepared on a pro forma basis. The pro forma income statement
items have been prepared assuming that the Merger had occurred at the beginning
of the periods presented. The pro forma income statement items and related per
share amounts do not include anticipated revenue enhancements or expense
reductions as a result of the Merger or the effect of repurchases of NBD Common
Stock or First Chicago Common Stock subsequent to the stated period. The income
statement items and related per share amounts exclude the after-tax impact of
an anticipated $225 million of restructuring and merger-related charges.
The pro forma balance sheet items give effect to the Merger as if it occurred
at the end of the period presented. The pro forma balance sheet items for June
30, 1995 also include the after-tax impact of an anticipated $225 million of
restructuring and merger-related charges, and an incremental $4 million of
dividends.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------- -----------------
1994 1993 1992 1995 1994
-------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
SUMMARY OF INCOME
Net interest income............... $2,955.7 $2,783.9 $2,692.8 $1,578.5 $1,451.0
Provision for credit losses....... 276.0 389.7 653.5 175.2 117.0
Provision for assets held for
accelerated disposition.......... -- -- 625.0 -- --
Noninterest income................ 2,420.2 2,787.8 2,017.4 1,238.9 1,203.4
Noninterest expense............... 3,222.9 3,180.0 3,159.4 1,625.5 1,599.7
Income from continuing operations. 1,237.0 1,286.3 223.5 666.8 620.6
PERIOD-END BALANCES
Total assets...................... $113,011 $ 93,336 $ 90,218 $123,379 $109,321
Long-term debt.................... 4,775 3,500 2,680 5,283 4,602
Total stockholders' equity........ 7,825 7,513 6,342 8,227 7,774
COMMON SHARE DATA
Income from continuing
operations--per share
Primary.......................... $ 3.67 $ 3.90 $ 0.60 $ 2.00 $ 1.84
Fully diluted.................... 3.62 3.78 0.60 1.97 1.81
</TABLE>
21
<PAGE>
NBD BANCORP, INC.
NBD is a multi-bank holding company incorporated in Delaware in 1972. Based
on rankings of total assets at December 31, 1994, NBD was the 18th largest
bank holding company in the United States. Through its banking subsidiaries,
NBD provides domestic retail banking, worldwide commercial banking, trust and
investment management services. Through its non-banking subsidiaries, NBD
engages in mortgage lending and servicing, insurance, leasing, community
development, discount brokerage and data processing activities. The lead
banking subsidiary of NBD is NBD Bank, Detroit, Michigan ("NBD Bank"),
formerly named NBD Bank, N.A. and prior to that National Bank of Detroit,
which was the largest bank in the State of Michigan and among the 20 largest
commercial banks in the United States based on total deposits at December 31,
1994. NBD's activities in the States of Indiana and Illinois are conducted
primarily through second-tier bank holding companies. At June 30, 1995, NBD
Indiana, Inc. had consolidated total assets of $10.6 billion, while NBD
Illinois, Inc. had consolidated total assets of $6.2 billion, making them the
first and seventh largest banking companies located in Indiana and Illinois,
respectively. NBD has expanded significantly in recent years through selective
acquisitions, and it regularly explores opportunities for additional
acquisitions of financial institutions and related businesses.
As of June 30, 1995, NBD had total assets, deposits, and shareholders'
equity of approximately $48.1 billion, $32.6 billion, and $3.6 billion,
respectively, making NBD the fifth largest bank holding company headquartered
in the Midwest and the 18th largest in the United States in terms of assets.
As a registered bank holding company, NBD is subject to supervision and
regulation by the Federal Reserve Board. See "The Merger--Regulatory Approvals
Required for the Merger".
NBD's principal offices are located at 611 Woodward Avenue, Detroit,
Michigan 48226, and its telephone number is 313-225-1000.
FIRST CHICAGO CORPORATION
First Chicago is a multi-bank holding company incorporated in Delaware in
1969. The principal asset of First Chicago is the capital stock of The First
National Bank of Chicago ("FNBC"). First Chicago also owns all the outstanding
capital stock of American National Corporation ("ANC") and FCC National Bank.
ANC is the holding company for American National Bank and Trust Company of
Chicago. FCC National Bank is a Delaware-based bank primarily engaged in the
issuance of VISA and MasterCard credit cards. In addition to these banking
organizations, First Chicago, directly or indirectly, owns the stock of
various nonbank companies engaged in businesses related to banking and
finance, including venture capital, leasing and investment management.
In addition to its equity investments in subsidiaries, First Chicago,
directly or indirectly, raises funds principally to finance operations of its
nonbank subsidiaries. A substantial portion of First Chicago's annual income
typically has been derived from dividends from its subsidiaries, and from
interest on loans, some of which are subordinated, to its subsidiaries.
As of June 30, 1995, First Chicago had total assets, deposits, and
shareholders' equity of approximately $75.3 billion, $33.8 billion, and $4.8
billion, respectively, making First Chicago the second largest bank holding
company headquartered in the Midwest and the 10th largest in the United States
in terms of assets.
As a registered bank holding company, First Chicago is subject to
supervision and regulation by the Federal Reserve Board. See "The Merger--
Regulatory Approvals Required for the Merger".
First Chicago's principal offices are located at One First National Plaza,
Chicago, Illinois 60670, and its telephone number is 312-732-4000.
22
<PAGE>
MEETING OF NBD STOCKHOLDERS
DATE, TIME AND PLACE; PURPOSE OF MEETING
This Joint Proxy Statement-Prospectus is being furnished in connection with
the solicitation of proxies by the NBD Board for use at the NBD Meeting. The
NBD Meeting will be held on the Staff Floor, Main Office of NBD Bank, 611
Woodward Avenue, Detroit, Michigan at 10:00 a.m., Detroit time, on October 20,
1995.
The NBD Meeting will be held for the purpose of considering and voting upon
a proposal to approve and adopt the Merger Agreement and the consummation of
the transactions contemplated thereby, including the Merger, an increase in
the authorization of NBD Common Stock from 500,000,000 to 750,000,000, and the
changing of the name of NBD to "First Chicago NBD Corporation."
Management of NBD knows of no matters to be brought before the meeting other
than those referred to herein. If any other business should properly come
before the NBD Meeting, the persons named in the proxy will vote in accordance
with their best judgment.
THE NBD BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT.
RECORD DATE
The NBD Board has fixed the close of business on September 8, 1995 as the
Record Date. Only the holders of record of the outstanding shares of NBD
Common Stock on the Record Date will be entitled to notice of, and to vote at,
the NBD Meeting. At the Record Date, 158,967,936 shares of NBD Common Stock
were outstanding and entitled to vote. The presence, in person or by proxy, of
a majority of the aggregate number of shares of NBD Common Stock outstanding
and entitled to vote on the Record Date is necessary to constitute a quorum at
the NBD Meeting.
PROXIES; VOTING AND REVOCATION
Shares of NBD Common Stock represented by a properly executed proxy received
prior to the vote at the NBD Meeting and not revoked will be voted at the NBD
Meeting as directed in the proxy. IF A PROXY IS SUBMITTED AND NO DIRECTIONS
ARE GIVEN, THE PROXY WILL BE VOTED "FOR" APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT. NBD intends to count shares of NBD Common Stock present in person
at the NBD Meeting but not voting, and shares of NBD Common Stock for which it
has received proxies but with respect to which holders of shares have
abstained, as present at the NBD Meeting for purposes of determining the
presence or absence of a quorum for the transaction of business. Since the
affirmative vote of the holders of a majority of the outstanding shares of NBD
Common Stock entitled to vote on the Merger is required to approve and adopt
the Merger Agreement and the transactions contemplated thereby, such non-
voting shares and abstentions will have the effect of a vote "against" the
approval of the Merger Agreement. In addition, under the rules of the NYSE,
brokers who hold shares in street name for customers who are the beneficial
owners of such shares are prohibited from giving a proxy to vote shares held
for such customers with respect to the approval and adoption of the Merger
Agreement and the transactions contemplated thereby without specific
instructions from such customers. The failure of such customers to provide
specific instructions with respect to their shares of NBD Common Stock to
their broker will have the effect of a vote "against" the approval of the
Merger Agreement.
Each share of NBD Common Stock is entitled to one vote on each matter voted
upon at the NBD Meeting. The persons named as proxies by a stockholder may
propose and vote for one or more adjournments or postponements of the NBD
Meeting to permit further solicitation of proxies in favor of such proposal;
provided,
23
<PAGE>
however, that no proxy which is voted "against" the proposal to approve and
adopt the Merger Agreement will be voted in favor of any such adjournment or
postponement.
A stockholder of record may revoke a proxy by filing an instrument of
revocation with Daniel T. Lis, Secretary of NBD (611 Woodward Avenue, Detroit,
Michigan 48226), by filing a duly executed proxy bearing a later date, or by
appearing at the NBD Meeting in person, notifying the Secretary, and voting by
ballot at the NBD Meeting. Any stockholder of record attending the NBD Meeting
may vote in person whether or not a proxy has been previously given, but the
mere presence (without notifying the Secretary) of a stockholder at the NBD
Meeting will not constitute revocation of a previously given proxy. In
addition, stockholders whose shares of NBD Common Stock are not registered in
their own name will need additional documentation from the record holder of
such shares to vote personally at the NBD Meeting.
VOTE REQUIRED TO APPROVE THE MERGER AGREEMENT; PRINCIPAL STOCKHOLDERS
The affirmative vote of the holders of a majority of the shares of NBD
Common Stock outstanding and entitled to vote at the NBD Meeting is necessary
to approve and adopt the Merger Agreement and the transactions contemplated
thereby. The approval of the Merger Agreement by holders of NBD Common Stock
is a condition to the consummation of the Merger.
As of the Record Date, 158,967,936 shares of NBD Common Stock were
outstanding and entitled to vote, of which approximately 2,241,519 shares, or
approximately 1.41%, were held by directors and executive officers of NBD, its
subsidiaries and their respective affiliates. Each such director and executive
officer of NBD has indicated his or her intention to vote the NBD Common Stock
beneficially owned by him or her for approval of the Merger Agreement and the
consummation of the transactions contemplated thereby. As of the Record Date,
the banking and trust subsidiaries of NBD, as fiduciaries, custodians or
agents, held a total of 21,891,401 shares, or 13.77%, of the outstanding
shares of NBD Common Stock under trust agreements and other instruments and
agreements. These entities maintained sole or shared voting power with respect
to 8,213,082 of such shares. In addition, as of July 15, 1995, First Chicago's
directors and executive officers beneficially owned 100 shares, or less than
1%, of the outstanding shares of NBD, all of which they intend to vote for
approval of the Merger and the consummation of the transactions contemplated
thereby. As of the Record Date, the banking and trust subsidiaries of First
Chicago, as fiduciaries, custodians or agents, held a total of 568,766 shares,
or less than 1%, of the outstanding shares of NBD Common Stock under trust
agreements and other instruments and agreements. These entities maintained
sole or shared voting power with respect to 471,252 of such shares.
Information with respect to beneficial ownership of NBD Common Stock by
entities owning more than 5% of such stock and more detailed information with
respect to beneficial ownership of NBD Common Stock by NBD directors and
executive officers is incorporated by reference to NBD's 1994 Annual Report on
Form 10-K which is incorporated herein by reference. See "Information
Incorporated by Reference".
MEETING OF FIRST CHICAGO STOCKHOLDERS
DATE, TIME AND PLACE; PURPOSE OF MEETING
This Joint Proxy Statement-Prospectus is being furnished in connection with
the solicitation of proxies by the First Chicago Board for use at the First
Chicago Meeting. The First Chicago Meeting will be held at the First Chicago
Center, One First National Plaza, Chicago, Illinois, at 9:30 a.m., Chicago
time, on October 20, 1995.
The First Chicago Meeting will be held for the purpose of considering and
voting upon a proposal to approve and adopt the Merger Agreement and the
consummation of the transactions contemplated thereby. Any action may be taken
with respect to the foregoing at the First Chicago Meeting or at any
adjournments or postponements thereof.
24
<PAGE>
Management of First Chicago knows of no matters to be brought before the
meeting other than those referred to herein. If any other business should
properly come before the First Chicago Meeting, the persons named in the proxy
will vote in accordance with their best judgment.
THE FIRST CHICAGO BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL AND ADOPTION OF
THE MERGER AGREEMENT.
RECORD DATE
The First Chicago Board has fixed the close of business on September 8, 1995
as the Record Date. Only the holders of record of the outstanding shares of
First Chicago Common Stock and First Chicago Preferred Stock on the Record
Date will be entitled to notice of, and only the holders of record of the
outstanding shares of First Chicago Common Stock will be entitled to vote at,
the First Chicago Meeting. At the Record Date, 90,518,589 shares of First
Chicago Common Stock were outstanding and entitled to vote. The presence, in
person or by proxy, of a majority of the aggregate number of shares of First
Chicago Common Stock outstanding and entitled to vote on the Record Date is
necessary to constitute a quorum at the First Chicago Meeting.
PROXIES; VOTING AND REVOCATION
Shares represented by a properly executed proxy received prior to the vote
at the First Chicago Meeting and not revoked will be voted at the First
Chicago Meeting as directed in the proxy. IF A PROXY IS SUBMITTED AND NO
DIRECTIONS ARE GIVEN, THE PROXY WILL BE VOTED "FOR" APPROVAL AND ADOPTION OF
THE MERGER AGREEMENT. First Chicago intends to count shares of First Chicago
Common Stock present in person at the First Chicago Meeting but not voting,
and shares of First Chicago Common Stock for which it has received proxies but
with respect to which holders of shares have abstained, as present at the
First Chicago Meeting for purposes of determining the presence or absence of a
quorum for the transaction of business. Since the affirmative vote of the
holders of a majority of the outstanding shares of First Chicago Common Stock
entitled to vote on the Merger is required to approve and adopt the Merger
Agreement and the transactions contemplated thereby, such nonvoting shares and
abstentions will have the effect of a vote "against" the approval of the
Merger Agreement. In addition, under the rules of the NYSE, brokers who hold
shares in street name for customers who are the beneficial owners of such
shares are prohibited from giving a proxy to vote shares held for such
customers on the approval and adoption of the Merger Agreement without
specific instructions from such customers. The failure of such customers to
provide specific instructions with respect to their shares of First Chicago
Common Stock to their broker will have the effect of a vote "against" the
approval of the Merger Agreement.
Each share of First Chicago Common Stock is entitled to one vote on each
matter voted upon at the First Chicago Meeting. The persons named as proxies
by a stockholder may propose and vote for one or more adjournments or
postponements of the First Chicago Meeting to permit further solicitation of
proxies in favor of such proposal; provided, however, that no proxy which is
voted against the proposal to approve and adopt the Merger Agreement will be
voted in favor of any such adjournment or postponement.
The giving of a proxy does not affect the rights of a holder of First
Chicago Common Stock who attends the First Chicago Meeting to vote at such
meeting, since a stockholder may revoke his or her proxy at any time before it
is voted at the First Chicago Meeting. A stockholder of record may revoke a
proxy by filing an instrument of revocation with Sherman I. Goldberg,
Secretary of First Chicago (One First National Plaza, Chicago, Illinois
60670), by filing a duly executed proxy bearing a later date, or by appearing
at the First Chicago Meeting in person, notifying the Secretary, and voting by
ballot at the First Chicago Meeting. Any stockholder of record attending the
First Chicago Meeting may vote in person whether or not a proxy has been
previously given, but the mere presence (without notifying the Secretary) of a
stockholder at the First Chicago Meeting will
25
<PAGE>
not constitute revocation of a previously given proxy. In addition,
stockholders whose shares of First Chicago Common Stock are not registered in
their own name will need additional documentation from the record holder of
such shares to vote personally at the First Chicago Meeting.
VOTE REQUIRED TO APPROVE THE MERGER AGREEMENT; PRINCIPAL STOCKHOLDERS
The affirmative vote of the holders of a majority of the shares of First
Chicago Common Stock outstanding and entitled to vote at the First Chicago
Meeting is necessary to approve and adopt the Merger Agreement and the
transactions contemplated thereby. The approval of the Merger Agreement by
First Chicago's stockholders is a condition to the consummation of the Merger.
As of the Record Date, 90,518,589 shares of First Chicago Common Stock were
outstanding and entitled to vote, of which approximately 4,268,740 shares, or
approximately 4.72%, were held by directors and executive officers of First
Chicago, its subsidiaries and their respective affiliates. Each such director
and executive officer of First Chicago has indicated his or her intention to
vote the First Chicago Common Stock beneficially owned by him or her for
approval of the Merger Agreement and the consummation of the transactions
contemplated thereby. As of the Record Date, the banking and trust
subsidiaries of First Chicago, as fiduciaries, custodians or agents, held a
total of 1,702,777 shares, or 1.88%, of the outstanding shares of First
Chicago Common Stock under trust agreements and other instruments and
agreements. These entities maintained sole or shared voting power with respect
to 1,209,961 of such shares. As of the Record Date, the banking and trust
subsidiaries of NBD, as fiduciaries, custodians or agents, held a total of
636,017 shares, or less than 1%, of the outstanding shares of First Chicago
Common Stock under trust agreements and other instruments and agreements.
These entities maintained sole or shared voting power with respect to 27,835
of such shares.
Information with respect to beneficial ownership of First Chicago Common
Stock by entities owning more than 5% of such stock and more detailed
information with respect to beneficial ownership of First Chicago Common Stock
by First Chicago directors and executive officers is incorporated by reference
to First Chicago's 1994 Annual Report on Form 10-K which is incorporated
herein by reference. See "Information Incorporated by Reference".
26
<PAGE>
THE MERGER
GENERAL
The Boards of Directors of NBD (with 19 directors present and 2 directors
absent) and First Chicago (with 15 directors present and 2 directors absent)
have unanimously approved the Merger Agreement, which provides for the Merger,
at the Effective Time, of NBD and First Chicago, with NBD as the surviving
corporation in the Merger and continuing under the name "First Chicago NBD
Corporation". With certain limited exceptions described below, each share of
First Chicago Common Stock outstanding at the Effective Time shall be
converted into the right to receive 1.81 shares of NBD Common Stock. Shares of
NBD Common Stock issued and outstanding immediately prior to the Effective
Time will remain issued and outstanding after the Merger as Common Stock of
the combined company. See "The Merger--Conversion of First Chicago Capital
Stock; Treatment of First Chicago Stock Options and First Chicago Stock
Purchase Plan".
The Board of Directors of each of NBD and First Chicago believes that the
terms of the Merger Agreement are fair to and in the best interest of the
parties and their respective stockholders and unanimously recommends that the
stockholders of each of NBD and First Chicago vote to approve and adopt the
Merger Agreement and the consummation of the transactions contemplated thereby
and the other proposals set forth herein.
This section of the Joint Proxy Statement-Prospectus describes certain
aspects of the proposed Merger, including the principal provisions of the
Merger Agreement and the Stock Option Agreements. The Merger Agreement is
attached to this Joint Proxy Statement-Prospectus as Exhibit A and is
incorporated by reference herein in its entirety. All stockholders of NBD and
First Chicago are urged to read the Merger Agreement in its entirety.
BACKGROUND OF THE MERGER
NBD. For many years, the NBD Board's strategy for building long-term value
for NBD stockholders has been based upon the objective of building a strong
and profitable Midwest banking franchise that will enable NBD to compete
effectively in the increasingly competitive market for financial services and
products, while continuing to expand selectively into national and
international financial product markets. In the past several years, NBD has
expanded significantly through selective acquisitions, primarily in its
Midwest market, as well as through steady internal growth.
The NBD Board has long recognized that in order for NBD to achieve the
requisite scale and scope of operations necessary for NBD to remain an
effective competitor in the dramatically changing market for banking and
financial services in the United States, a strategic combination with another
large bank holding company would likely be necessary. An important component
to NBD of any such strategic combination has been the compatibility of the
business profiles of the two merger partners and the ability of the
managements of both parties to work together effectively in integrating the
combining companies. From time to time, NBD has explored potential strategic
combinations with other large bank holding companies. None of such discussions
led to an agreement as to the terms of a potential merger until the recent
commencement of discussions with First Chicago leading to the execution of the
Merger Agreement.
Mr. Thomas, Chairman, President and Chief Executive Officer of First
Chicago, Mr. Istock, Chairman and Chief Executive Officer of NBD, and Charles
T. Fisher III, former Chairman, President and Chief Executive Officer of NBD,
are well acquainted with each other, each having played a significant role in
banking for numerous years. From time to time during the past several years,
Mr. Thomas has met with either Mr. Istock or Mr. Fisher to discuss regional
and national developments in the financial services industry as well as
developments affecting their respective companies.
In the fall of 1993, Mr. Thomas and Mr. Fisher met to discuss the
possibility of NBD and First Chicago affiliating. The talks were inconclusive
and did not lead to any agreement, largely because of the impending retirement
from NBD of Mr. Fisher and the anticipated election of Mr. Istock as Chairman
and Chief Executive Officer of NBD. Subsequent to Mr. Istock's election as
Chairman and Chief Executive Officer of NBD effective at the beginning of
1994, Messrs. Thomas and Istock had occasional discussions about the
possibility of NBD and First Chicago affiliating.
27
<PAGE>
Following further consolidation in the banking industry during 1994 and the
first part of 1995, Messrs. Istock and Thomas met on May 8, 1995 regarding a
potential merger of NBD and First Chicago and agreed to commence exploratory
discussions. Thereafter, Messrs. Istock and Thomas and/or a small number of
senior officers of NBD and First Chicago met or otherwise had discussions on
multiple occasions in May, June and July to explore the strategic, business
and operational fit, as well as the rationale and potential value of a merger
between NBD and First Chicago. In preparation for meetings of their respective
boards of directors (or committees of the boards), Messrs. Thomas and Istock
met with their respective senior management teams and financial and legal
advisors during this period to determine the potential structure of the
transaction, and the business, cultural and social implications of a merger of
equals. During the latter part of this period, members of NBD's management
team commenced a due diligence investigation of First Chicago's business. NBD
engaged Montgomery to act as its financial advisor in connection with the
Merger on June 13, 1995.
On May 15, June 19 and July 7, 1995, Mr. Istock described the preliminary
discussions between the parties to the NBD Board. At such meetings, members of
NBD's senior management made presentations which set forth the reasons for the
Merger and the potential benefits to NBD and its stockholders from the Merger,
NBD's legal advisors reviewed the NBD Board's obligations in consideration
thereof, and NBD's financial advisors discussed the strategic, business and
operational fit, rationale and financial aspects of the transaction. On June
22, 1995, the parties entered into a customary confidentiality agreement
providing for exclusive negotiations between the parties through July 31,
1995. Thereafter, through July 11, 1995, Mr. Istock continued discussions with
Mr. Thomas concerning the proposed transaction and NBD's senior management
continued to conduct its due diligence investigation of First Chicago's
business and to negotiate issues in the Merger Agreement and the Stock Option
Agreements. During this period, the Exchange Ratio was determined on the basis
of arm's-length negotiations between the parties. At a special meeting of the
NBD Board on July 11, 1995, Mr. Istock and senior management of NBD again
reviewed the reasons for and the potential benefits of the Merger; NBD's legal
advisors reviewed the terms of the Merger Agreement and Stock Option
Agreements; and NBD's financial advisors made a presentation regarding the
financial terms and fairness, from a financial point of view, of the Exchange
Ratio to holders of NBD Common Stock. After discussion and consideration of
the factors discussed below under "--Reasons for the Merger", the NBD Board
(with 19 directors present and 2 directors absent) unanimously approved and
authorized the execution of the Merger Agreement (see "The Merger") and the
Stock Option Agreements (see "The Merger--Stock Option Agreements"). The
Merger Agreement and the Stock Option Agreements were entered into on July 11,
1995.
First Chicago. The First Chicago Board's strategy for building long-term
value for First Chicago stockholders has been based upon the objective of
building a banking franchise with a commitment to having a national presence
in consumer banking and a national and international presence in corporate
banking by tailoring and delivering value-added products to customers,
continuing to invest in technology and prudently managing risk. In conjunction
with that strategy, First Chicago established the goal of becoming one of the
top ten United States bank holding companies in market capitalization. To
achieve this goal, the First Chicago Board has for some time recognized that a
strategic combination with another large bank holding company might be
necessary. First Chicago has viewed as crucial to any such combination the
compatibility of the businesses of the two merger partners and the ability of
the managements of both parties to work together effectively in integrating
the combining companies. From time to time, First Chicago has explored
potential strategic combinations with other large bank holding companies, as
well as potential restructurings. None of these explorations led to an
agreement as to the terms of a potential merger until the recent commencement
of discussions with NBD leading to the execution of the Merger Agreement.
Mr. Thomas, Mr. Istock, and Charles T. Fisher III, former NBD Chairman,
President and Chief Executive Officer, are well acquainted with each other,
each having played a significant role in banking for numerous years. From time
to time during the past several years, Mr. Thomas has met with either Mr.
Istock or Mr. Fisher to discuss regional and national developments in the
financial services industry as well as developments affecting their respective
companies.
In the fall of 1993, Mr. Thomas and Mr. Fisher met to discuss the
possibility of NBD and First Chicago affiliating. The talks were inconclusive
and did not lead to any agreement, largely because of the impending
28
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retirement from NBD of Mr. Fisher and the anticipated election of Mr. Istock
as Chairman and Chief Executive Officer of NBD. Subsequent to Mr. Istock's
election as Chairman and Chief Executive Officer of NBD, effective at the
beginning of 1994, Messrs. Thomas and Istock had occasional discussions about
the possibility of NBD and First Chicago affiliating.
Following further consolidation in the banking industry during 1994 and the
first part of 1995, Messrs. Thomas and Istock met on May 8, 1995 regarding a
potential merger of NBD and First Chicago and agreed to commence exploratory
discussions. Thereafter, Messrs. Istock and Thomas and/or a small number of
senior officers of NBD and First Chicago met or otherwise had discussions on
multiple occasions in May, June and July to explore the strategic, business
and operational fit, as well as the rationale and potential value of a merger
between NBD and First Chicago. In preparation for meetings of their respective
boards of directors (or committees of the boards), Messrs. Thomas and Istock
met with their respective senior management teams and financial and legal
advisors during this period to determine the potential structure of the
transaction, and the business, cultural and social implications of a merger of
equals. During the latter part of this period, members of First Chicago's
management team commenced a due diligence investigation of NBD's business.
First Chicago engaged Lazard Freres to act as its financial advisor in
connection with the Merger on or about May 11, 1995.
On May 12 and July 7, 1995, Mr. Thomas described the preliminary discussions
between the parties to the First Chicago Board and, on June 21, 1995, to the
Executive Committee of the First Chicago Board. At such meetings, members of
First Chicago's management team made presentations which set forth the reasons
for the Merger and the potential benefits to First Chicago and its
stockholders from the Merger, First Chicago's legal advisors reviewed the
First Chicago Board's obligations in consideration thereof, and First
Chicago's financial advisors discussed the strategic, business and operational
fit, rationale and financial aspects of the transaction. On June 22, 1995, the
parties entered into a customary confidentiality agreement providing for
exclusive negotiations between the parties through July 31, 1995. Thereafter,
through July 11, 1995, Mr. Istock continued discussions with Mr. Thomas
concerning the proposed transaction and First Chicago's senior management team
continued to conduct its due diligence investigation of NBD's business and to
negotiate issues in the Merger Agreement and the Stock Option Agreements.
During this period, the Exchange Ratio was determined on the basis of arm's-
length negotiations between the parties. At a special meeting of the First
Chicago Board on July 11, 1995, Mr. Thomas and senior management of First
Chicago again reviewed the reasons for and the potential benefits of the
Merger; First Chicago's legal advisors reviewed the terms of the Merger
Agreement and Stock Option Agreements; and First Chicago's financial advisors
made a presentation regarding the financial terms and fairness, from a
financial point of view, of the Exchange Ratio to holders of First Chicago
Common Stock. After discussion and consideration of the factors discussed
below under "--Reasons for the Merger", the First Chicago Board (with 15
directors present and 2 directors absent) unanimously approved and authorized
the execution of the Merger Agreement (see "The Merger") and the Stock Option
Agreements (see "The Merger--Stock Option Agreement"). The Merger Agreement
and the Stock Option Agreements were entered into on July 11, 1995.
REASONS FOR THE MERGER
General. The Merger will create a strong Midwest banking franchise with an
important national presence and international capabilities. By combining the
strengths of two high-performing financial institutions, the Merger is
expected to create an institution with the scale and capabilities to meet the
challenges of the ever-changing market for financial products and services in
the United States. The Merger will combine NBD's significant customer base and
credit skills with First Chicago's wide product range, customer base and
attractive market positions. The Merger will permit each company to diversify
beyond its current businesses and its current strengths in specialty financial
products and services by expanding the marketing of its products and services
to the customers now served by the other, and will enable the combined company
to continue to provide a broad array of innovative financial services and
products to the customers and communities currently served by each.
In reaching their decisions to approve the Merger Agreement and the Stock
Option Agreements, the NBD Board and First Chicago Board considered that the
Merger would create what is expected to be one of the ten largest banking
institutions in the United States, and the largest such institution to be
headquartered in the Midwest. Each board also considered that the Merger would
represent a strategic alliance between NBD and
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First Chicago and that the NBD and First Chicago stockholders would realize
the expected benefits of such alliance, including, but not limited to, the
future stock value and earnings per share of the combined company, the
combined company's financial strength and its consequent enhanced ability to
invest in its existing businesses as well as develop new products and
services, the cost savings to be realized through consolidation of operations,
the potential for cross-marketing services to customers of the two companies,
the opportunity to diversify earnings, the business synergies that might be
realized, and the potential effect of the Merger on the perception of the
combined company's businesses by the rating agencies and the financial
markets.
Each board determined that the Merger would significantly enhance the
combined company's ability to compete effectively and to meet the ever-
changing credit and product needs of its customers and communities by
combining two financially sound institutions with complementary businesses and
business strategies, thereby creating a stronger combined company with greater
size, flexibility, breadth of services, efficiency, capital strength,
profitability and potential for growth than either NBD or First Chicago would
possess on a stand-alone basis. Each board believes that each institution is
well-managed and possesses management philosophies and strategic focus
compatible with those of the other, and that the strong capitalization of the
combined company following the Merger will allow it to take advantage of
future opportunities for growth, including appropriate acquisitions and
investments in products and technology. Although there can be no assurances,
each board also believes that the Merger will allow the combined company to
compete effectively in the rapidly changing marketplace for banking and
financial services and to take advantage of opportunities for growth and
diversification that may not be available to either institution on its own. In
evaluating the Merger, each of the NBD Board and First Chicago Board and their
respective managements discussed the critical importance of successfully
integrating, and building on the strengths of, the management teams and
cultures of both companies, and considered the uncertainties inherent in any
such combination of two significant companies.
Recommendation of the NBD Board and Reasons for the Merger.
THE NBD BOARD BELIEVES THAT THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS
OF, NBD AND ITS STOCKHOLDERS. THE NBD BOARD UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE
MERGER.
In reaching its conclusion to approve the Merger Agreement and the Stock
Option Agreements, the NBD Board consulted with NBD management, as well as
with its financial and legal advisors, and considered the factors described
above under "--General" and a number of additional factors, including the
following:
(i) The NBD Board considered the effectiveness of the Merger in
implementing and accelerating NBD's basic long-term external growth
strategy.
(ii) The NBD Board analyzed the financial condition, businesses and
prospects of NBD and First Chicago, including, but not limited to,
information with respect to their respective recent and historic stock and
earnings performance and their respective relatively strong credit position
and access to the capital markets. The NBD Board considered the detailed
financial analyses, pro forma and other information with respect to NBD and
First Chicago discussed by Montgomery, as well as the NBD Board's own
knowledge of NBD, First Chicago and their respective businesses. In making
its determination, the NBD Board took into account the results of NBD's due
diligence review of First Chicago's business. The NBD Board also considered
the likelihood that the Merger, on a pro forma basis, would be immediately
accretive to the combined company's 1996 earnings per share, based on
expected cost savings from the Merger.
(iii) The NBD Board considered the oral opinion of Montgomery,
subsequently confirmed in writing, that, as of July 11, 1995, the Exchange
Ratio was fair to holders of NBD Common Stock from a financial point of
view. See "--Fairness Opinions of Financial Advisors--NBD".
(iv) The NBD Board considered the terms of the Merger Agreement and the
Stock Option Agreements, which were reciprocal in nature. The NBD Board
also considered certain other information regarding the Merger, including
the terms and structure of the Merger, the proposed arrangements with
respect to the board of directors and management structure of the combined
company following the Merger, and that the corporate headquarters of the
combined company would be located in Chicago, with major business functions
being located in Detroit. See "Board of Directors, Management and
Operations Following the Merger" and "Interests of Certain Persons in the
Merger".
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(v) The NBD Board considered the effect on NBD stockholders' value of NBD
continuing as a stand-alone entity compared to the effect of NBD combining
with First Chicago in light of the factors summarized above with respect to
the financial condition and prospects of the two companies on a stand-alone
basis and of the combined company, and the current economic and financial
environment.
(vi) The NBD Board also considered the likelihood of the Merger being
approved by the appropriate regulatory authorities. See "--Regulatory
Approvals Required for the Merger".
(vii) The NBD Board considered the anticipated cost savings and operating
efficiencies available to the combined company from the Merger. See "Board
of Directors, Management and Operations Following the Merger--Operations".
(viii) The NBD Board considered the terms of the Merger Agreement which
it considered to be attractive in that the terms allow NBD's stockholders
to be stockholders in a combined company which is expected to be one of the
10 largest bank holding companies in the United States on the basis of
market capitalization and assets as of December 31, 1994.
(ix) The NBD Board considered the effect of the Merger on NBD's other
constituencies, including its senior management and other employees and the
communities and customers served by NBD. See "Interests of Certain Persons
in the Merger".
The foregoing discussion of the information and factors considered by the
NBD Board is not intended to be exhaustive but is believed to include all
material factors considered by the NBD Board. In reaching its determination to
approve and recommend the Merger, the NBD Board did not assign any relative or
specific weights to the foregoing factors, and individual directors may have
given differing weights to different factors. After deliberating with respect
to the Merger and the other transactions contemplated by the Merger Agreement,
considering, among other things, the matters discussed above and the opinion
of Montgomery referred to above, the NBD Board unanimously (with 19 directors
present and 2 directors absent) approved and adopted the Merger Agreement and
the transactions contemplated thereby, including the Stock Option Agreements,
as being in the best interests of NBD and its stockholders. The NBD Board is
unanimous in its recommendation that holders of NBD Common Stock vote "FOR"
approval and adoption of the Merger Agreement.
Recommendation of the First Chicago Board and Reasons for the Merger.
THE FIRST CHICAGO BOARD BELIEVES THAT THE MERGER IS FAIR TO, AND IN THE BEST
INTERESTS OF, FIRST CHICAGO AND ITS STOCKHOLDERS. THE FIRST CHICAGO BOARD
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE APPROVAL AND ADOPTION
OF THE MERGER AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING THE MERGER.
In reaching its conclusion to approve the Merger Agreement and the Stock
Option Agreements, the First Chicago Board consulted with First Chicago
management, as well as with its financial and legal advisors, and considered
the factors described above under "--General" and a number of additional
factors, including the following:
(i) The First Chicago Board considered the effectiveness of the Merger in
implementing and accelerating First Chicago's basic long-term external
growth strategy.
(ii) The First Chicago Board analyzed the financial condition, businesses
and prospects of NBD and First Chicago, including, but not limited to,
information with respect to their respective recent and historic stock and
earnings performance and their respective relatively strong credit position
and access to the capital markets. The First Chicago Board considered the
detailed financial analyses, pro forma and other information with respect
to NBD and First Chicago discussed by Lazard Freres, as well as the First
Chicago Board's own knowledge of First Chicago, NBD and their respective
businesses. In making its determination, the First Chicago Board took into
account the results of First Chicago's due diligence review of NBD's
business. The First Chicago Board also considered the likelihood that the
Merger, on a pro forma basis, would be immediately accretive to the
combined company's 1996 earnings per share, based on expected cost savings
from the Merger.
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(iii) The First Chicago Board considered the oral opinion of Lazard
Freres, subsequently confirmed in writing, that, as of July 11, 1995, the
Exchange Ratio was fair to holders of First Chicago Common Stock from a
financial point of view. See "--Fairness Opinions of Financial Advisors--
First Chicago".
(iv) The First Chicago Board considered the terms of the Merger Agreement
and the Stock Option Agreements, which were reciprocal in nature. The First
Chicago Board also considered certain other information regarding the
Merger, including the terms and structure of the Merger, the proposed
arrangements with respect to the board of directors and management
structure of the combined company following the Merger, and that the
corporate headquarters of the combined company would be located in Chicago,
with major business functions being located in Detroit. See "Board of
Directors, Management and Operations Following the Merger" and "Interests
of Certain Persons in the Merger".
(v) The First Chicago Board considered the effect on First Chicago
stockholders' value of First Chicago continuing as a stand-alone entity
compared to the effect of First Chicago combining with NBD in light of the
factors summarized above with respect to the financial condition and
prospects of the two companies on a stand-alone basis and of the combined
company, and the current economic and financial environment.
(vi) The First Chicago Board also considered the likelihood of the Merger
being approved by the appropriate regulatory authorities. See "--Regulatory
Approvals Required for the Merger".
(vii) The First Chicago Board considered the anticipated cost savings
and operating efficiencies available to the combined institution from the
Merger. See "Board of Directors, Management and Operations Following the
Merger--Operations".
(viii) The First Chicago Board considered the terms of the Merger
Agreement which it believed to be attractive in that the terms allow First
Chicago stockholders to become stockholders in a combined institution which
is expected to be one of the 10 largest bank holding companies in the
United States on the basis of market capitalization and assets as of
December 31, 1994.
(ix) The First Chicago Board considered the expectation that the Merger
will generally be a tax-free transaction to First Chicago and its
stockholders. See "--Certain Federal Income Tax Consequences".
(x) The First Chicago Board considered the effect of the Merger on First
Chicago's other constituencies, including its senior management and other
employees, customers and the communities served by First Chicago. See
"Interests of Certain Persons in the Merger".
The foregoing discussion of the information and factors considered by the
First Chicago Board is not intended to be exhaustive but is believed to
include all material factors considered by the First Chicago Board. In
reaching its determination to approve and recommend the Merger, the First
Chicago Board did not assign any relative or specific weights to the foregoing
factors, and individual directors may have given differing weights to
different factors. After deliberating with respect to the Merger and the other
transactions contemplated by the Merger Agreement, considering, among other
things, the matters discussed above and the opinion of Lazard Freres referred
to above, the First Chicago Board unanimously (with 15 directors present and 2
directors absent) approved and adopted the Merger Agreement and the
transactions contemplated thereby, including the Stock Option Agreements, as
being in the best interests of First Chicago and its stockholders. The First
Chicago Board is unanimous in its recommendation that holders of First Chicago
Common Stock vote "FOR" approval and adoption of the Merger Agreement.
FAIRNESS OPINIONS OF FINANCIAL ADVISORS
NBD. Pursuant to an engagement letter dated June 13, 1995 (the "Engagement
Letter") between NBD and Montgomery, NBD retained Montgomery to act as NBD's
exclusive representative and financial advisor in connection with the possible
Merger. As part of its engagement, Montgomery agreed, if requested by NBD, to
render an opinion with respect to the fairness from a financial point of view
to NBD of the consideration to be
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paid by NBD in the Merger. Montgomery is a nationally recognized firm and, as
part of its investment banking activities, is regularly engaged in the
valuation of businesses and their securities in connection with merger
transactions and other types of acquisitions, negotiated underwritings,
secondary distributions of listed and unlisted securities, private placements
and valuations for corporate and other purposes. NBD selected Montgomery as
its financial adviser on the basis of its experience and expertise in
transactions similar to the Merger and its reputation in the banking, savings
and loan and investment communities.
At the July 11, 1995 meeting of the NBD Board, Montgomery delivered its oral
opinion that the consideration to be paid by NBD in the Merger was fair to NBD
from a financial point of view as of July 11, 1995. Montgomery subsequently
delivered to the NBD Board a written opinion dated as of the date of this
Joint Proxy Statement-Prospectus confirming its oral opinion. No limitations
were imposed by NBD on Montgomery with respect to the investigations made or
procedures followed in rendering its opinion.
THE FULL TEXT OF MONTGOMERY'S WRITTEN OPINION TO THE NBD BOARD, DATED THE
DATE OF THIS JOINT PROXY STATEMENT-PROSPECTUS, WHICH SETS FORTH THE
ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS OF REVIEW BY MONTGOMERY,
IS ATTACHED HERETO AS EXHIBIT B AND IS INCORPORATED HEREIN BY REFERENCE AND
SHOULD BE READ CAREFULLY AND IN ITS ENTIRETY IN CONNECTION WITH THIS JOINT
PROXY STATEMENT-PROSPECTUS. THE FOLLOWING SUMMARY OF MONTGOMERY'S OPINION IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION.
MONTGOMERY'S OPINION IS ADDRESSED TO THE NBD BOARD AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY STOCKHOLDER OF NBD OR FIRST CHICAGO AS TO HOW SUCH
STOCKHOLDER SHOULD VOTE WITH RESPECT TO THE MERGER. IN FURNISHING ITS OPINION,
MONTGOMERY DID NOT ADMIT THAT IT IS AN EXPERT WITHIN THE MEANING OF THE TERM
"EXPERT"' AS USED IN THE SECURITIES ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER, OR THAT ITS OPINION CONSTITUTES A REPORT OR VALUATION
WITHIN THE MEANING OF SECTION 11 OF THE SECURITIES ACT AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER, AND STATEMENTS TO SUCH EFFECT ARE INCLUDED
IN THE TEXT OF MONTGOMERY'S WRITTEN OPINION.
In connection with its opinions, Montgomery has, among other things: (i)
reviewed certain publicly available financial and other data with respect to
NBD and First Chicago, including the consolidated financial statements for
recent years and interim periods to June 30, 1995 and certain other relevant
financial and operating data relating to NBD and First Chicago made available
to Montgomery from published sources and from the internal records of NBD and
First Chicago; (ii) reviewed the Merger Agreement; (iii) reviewed certain
historical market prices and trading volumes of NBD Common Stock and First
Chicago Common Stock as reported on the NYSE; (iv) compared NBD and First
Chicago from a financial point of view with certain other companies which
Montgomery deemed to be relevant; (v) considered the financial terms, to the
extent publicly available, of selected recent business combinations, including
transactions which Montgomery deemed to be mergers of equals, in the banking
and savings and loan industries which Montgomery deemed to be comparable, in
whole or in part, to the Merger; (vi) reviewed and discussed with
representatives of the management of NBD and First Chicago certain information
of a business and financial nature regarding NBD and First Chicago furnished
to Montgomery by NBD and First Chicago, including financial forecasts and
related assumptions of NBD and First Chicago; (vii) made inquiries regarding
and discussed the Merger, the Merger Agreement and other matters related
thereto with NBD's counsel; and (viii) performed such other analyses and
examinations as Montgomery deemed appropriate.
In connection with its review, Montgomery did not assume any obligation
independently to verify any of the foregoing information and relied on such
information being complete and accurate in all material respects. With respect
to the financial forecasts for NBD and First Chicago provided to Montgomery by
their respective managements, Montgomery assumed for purposes of its opinion
that the forecasts were reasonably prepared on bases reflecting the best
available estimates and judgments of their respective managements at the time
of preparation as to the future financial performance of NBD and First Chicago
and that they provided a reasonable basis upon which Montgomery could form its
opinion. Neither NBD nor First Chicago publicly discloses internal management
forecasts of the type provided to Montgomery in connection with Montgomery's
review of the Merger. Such forecasts were not prepared with a view towards
public disclosure. In addition, such forecasts were based on numerous
variables and assumptions that are inherently uncertain, including, without
limitation, factors related to general economic and competitive conditions.
Accordingly, actual results could vary significantly from
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those set forth in such forecasts. Montgomery has assumed no liability for the
accuracy of such forecasts. Montgomery also assumed that there were no
material changes in NBD's or First Chicago's assets, financial condition,
results of operations, business or prospects since the respective dates of
their last financial statements made available to Montgomery. Montgomery
relied on advice of counsel as to all legal matters with respect to NBD, First
Chicago, the Merger and the Merger Agreement. Montgomery also assumed that NBD
will conduct the Merger in a manner that complies in all respects with the
applicable provisions of the Securities Act and the Exchange Act and all other
applicable federal and state statutes, rules and regulations. In addition,
Montgomery is not an expert in the valuation of loan portfolios for purposes
of assessing the adequacy of the allowances for losses with respect thereto
and assumed, with NBD's consent, that such allowances for each of NBD and
First Chicago are in the aggregate adequate to cover such losses. In addition,
Montgomery did not assume responsibility for reviewing any individual credit
files or making an independent evaluation, appraisal or physical inspection of
the assets or individual properties of NBD or First Chicago, nor was
Montgomery furnished with any such appraisals. Further, Montgomery's opinions
were based on economic, monetary and market and other conditions as in effect
on, and the information made available to Montgomery as of the respective
dates thereof.
Montgomery further assumed, with NBD's consent, that the Merger will be
consummated in accordance with the terms and provisions of the Merger
Agreement, without any amendments thereto, and without any waiver by NBD or
First Chicago of any of the material conditions to their respective
obligations.
Set forth below is a brief summary of the report presented by Montgomery to
the NBD Board on July 11, 1995 in connection with its opinion:
Dilution Analysis. Using estimates prepared by the respective managements
of NBD and First Chicago, Montgomery compared the calendar year 1996 and
1997 estimated earnings per share of NBD Common Stock on a stand-alone
basis to the calendar year 1996 and 1997 estimated earnings per share of
the common stock for the pro forma combined company using three different
scenarios, all of which utilized fully-diluted share numbers. Analysis of
the first scenario, which assumes that no cost savings or revenue
enhancement will result between NBD and First Chicago (the "no synergies
scenario"), for calendar 1996 and 1997, showed that the proposed
transaction would be dilutive to NBD Common Stock by 1.43% and 2.19%,
respectively. The second scenario, which assumes pre-tax adjustments which
will be fully phased-in by 1997 consisting of the following: (i) $50
million due to revenue enhancements, (ii) $200 million resulting from
reductions in non-interest expense associated with overlapping or
restructured operations, and (iii) an approximately $100 million reduction
in net interest income due to the sale of assets of approximately $24.5
billion. In addition, the second scenario assumes that prior to the
Effective Time, NBD and First Chicago utilize $300 million to repurchase
shares of Common Stock so that the currently outstanding shares of NBD
Common Stock represent 50% of the outstanding Common Stock of the pro forma
combined company (the "pre-closing repurchase scenario"). Under the pre-
closing repurchase scenario, for calendar year 1996 and 1997, this analysis
showed that the proposed transaction would be accretive to NBD Common Stock
by 3.26% and 6.21%, respectively. Under the third scenario, which makes the
same assumptions as the pre-closing repurchase scenario and also assumes
that the pro forma combined company utilizes $84.6 million and $212.2
million in 1996 and 1997, respectively, to repurchase shares of its common
stock following the consummation of the Merger (the "post-closing
repurchase scenario"), for calendar year 1996 and 1997, this analysis
showed that the proposed transaction would be accretive to NBD Common Stock
by 4.10% and 9.29%, respectively. The assumptions utilized in this analysis
were made by Montgomery for analytical purposes only, and are not
necessarily indicative of expected results or plans of NBD or First
Chicago.
Using estimates of security market analysts, Montgomery also compared the
calendar year 1996 estimated earnings per share of NBD Common Stock on a
stand-alone basis to the calendar year 1996 estimated earnings per share of
the common stock for the pro forma combined company using the above-
referenced scenarios. Based on the no synergies scenario, for the calendar
year 1996, this analysis showed that the proposed transaction would be
accretive to NBD Common Stock by 1.00%. Based on the pre-closing repurchase
scenario, for the calendar year 1996, this analysis showed that the
proposed transaction would be accretive to NBD Common Stock by 5.74%. Based
on the post-closing repurchase scenario, for the calendar year 1996, this
analysis showed that the proposed transaction would be accretive to NBD
Common Stock by 6.48%.
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Montgomery also compared the calendar year 1995, 1996 and 1997 estimated
book value per share of NBD Common Stock on a stand-alone basis to the
calendar year 1995, 1996 and 1997 estimated book value per share of common
stock for the pro forma combined company using the above-referenced no
synergies, pre-closing repurchase and post-closing repurchase scenarios.
Based on the no synergies scenario, the proposed transaction would be
accretive to the book value of NBD Common Stock by 3.30%, 3.99% and 4.41%,
respectively, in 1995, 1996 and 1997. Based on the pre-closing repurchase
scenario, the proposed transaction would be dilutive to the book value of
NBD Common Stock by 0.43% in 1995 and accretive to the book value of NBD
Common Stock by 0.81% and 1.99%, respectively, in 1996 and 1997. Based on
the post-closing repurchase scenario, the proposed transaction would be
accretive to the book value of NBD Common Stock by 0.40%, 3.83% and 6.10%,
respectively, in 1995, 1996 and 1997.
Contribution Analysis. Montgomery analyzed the contribution of each of
NBD and First Chicago to, among other things, assets, common equity and net
income of the pro forma combined company for the years ended 1992, 1993 and
1994, the last twelve months ("LTM") ended March 31, 1995 and the three
months ended March 31, 1995. For the years ended 1992, 1993 and 1994, this
analysis showed, among other things, that, NBD would have contributed
45.4%, 43.7% and 41.7%, respectively, of the assets, 51.8%, 48.1% and
45.6%, respectively, of the common equity and 151.2%, 37.5% and 44.2% of
the net income for the pro forma combined company. For the LTM ended March
31, 1995 and the three months ended March 31, 1995, this analysis showed,
among other things, that NBD would have contributed 39.8% and 39.8%,
respectively, of the assets, 46.4% and 46.4%, respectively, of the common
equity and 45.0% and 41.9%, respectively, of the net income for the pro
forma combined company. Based upon an exchange ratio in the Merger of 1.81
shares of NBD Common Stock for each share of First Chicago Common Stock,
holders of NBD Common Stock would own approximately 49.0% of the combined
company based on the market values of NBD and First Chicago on July 11,
1995.
Exchange Ratio Analysis. Montgomery analyzed the ratio of closing prices
of NBD Common Stock to First Chicago Common Stock as reported on the NYSE
on a daily basis during the period from March 3, 1995 to July 11, 1995. The
analysis showed that, for the 90 days prior to July 11, 1995, the 60 days
prior to such date, the 30 days prior to such date, the 10 days prior to
such date and the five days prior to such date, the average ratios were
1.7333, 1.8152, 1.8411, 1.8548 and 1.8623, respectively. Montgomery noted
that the ratio at July 11, 1995, the last trading day prior to the
announcement of the Merger, was 1.8654, and that the exchange ratio in the
Merger is 1.81 shares of NBD Common Stock for each share of First Chicago
Common Stock.
Analysis of Selected Merger of Equals Transactions. Montgomery reviewed
the consideration paid in 30 transactions which it viewed as involving
mergers of equals in the banking and savings and loan industries announced
since January 1990 (the "MOEs"). For each company merged or to be merged in
such transactions, Montgomery compiled figures illustrating, among other
things, the ratio of premium (i.e. transaction price in excess of tangible
book value) to core deposits, transaction price to tangible book value and
transaction price to LTM earnings.
The figures for the MOEs produces (i) a median ratio of premium to core
deposits (expressed as a percentage) of 1.03%; (ii) a median ratio of
transaction price to tangible book value of 1.1; and (iii) a median ratio
of transaction price to LTM earnings of 10.1. In comparison, based upon an
exchange ratio in the Merger of 1.81 shares of NBD Common Stock for each
share of First Chicago Common Stock, representing shares of NBD Common
Stock with a value of $58.82 per share of First Chicago Common Stock (based
on the $32.50 per share closing price of the NBD Common Stock as reported
on the NYSE on July 11, 1995), Montgomery determined that the consideration
to be paid to the holders of First Chicago Common Stock in the Merger
represented a ratio of premium to core deposits (expressed as a percentage)
of 4.83%, a ratio of transaction price to tangible book value of 1.37 and a
ratio of transaction price to LTM earnings of 8.52.
In addition, Montgomery reviewed the following seven recent MOEs in more
detail: Charter One Financial, Inc./FirstFed Michigan Corporation; BB&T
Financial Corporation/Southern National Corporation; Dime Bancorp/Anchor
Bancorp, Inc.; KeyCorp/Society Corporation; Comerica
Incorporated/Manufacturers National Corporation; Chemical Banking
Corporation/Manufacturers Hanover
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Corporation; and The Planters Corporation/Peoples Bancorporation.
Montgomery analyzed, among other things, the contribution of the surviving
entity to the market value, assets, total equity and LTM net income of the
pro forma combined company, which ranged from 49% to 59%, 42% to 55%, 45%
to 59% and 47% to 58%, respectively. In comparison, NBD would contribute
approximately 48.9%, 39.8%, 42.9% and 45.0%, respectively, to the market
value, assets, total equity and LTM net income of the pro forma combined
company.
No other company or transaction used in the above analysis as a comparison
is identical to NBD, First Chicago or the Merger. Accordingly, an analysis of
the results of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the companies and other factors that could affect the
public trading volume of the companies to which NBD, First Chicago and the
Merger are being compared.
In connection with the written opinion dated the date of this Joint Proxy
Statement-Prospectus, Montgomery performed procedures to reconfirm, as
necessary, certain of the analyses described above and reviewed the
assumptions on which such analyses were based and the factors considered in
connection therewith. Montgomery did not perform any analyses in addition to
those described above in rendering its written opinion.
The summary set forth above does not purport to be a complete description of
the presentation by Montgomery to the NBD Board or of the analyses performed
by Montgomery. The preparation of a fairness opinion is not necessarily
susceptible to partial analysis or summary description. Montgomery believes
that its analyses and the summary set forth above must be considered as a
whole and that selecting portions of its analyses and of the factors
considered, without considering all analyses and factors, would create an
incomplete view of the process underlying the analyses set forth in its
presentation to the NBD Board. In addition, Montgomery may have given various
analyses more or less weight than other analyses, and may have deemed various
assumptions more or less probable than other assumptions, so that the ranges
of valuations resulting from any particular analysis described above should
not be taken to be Montgomery's view of the actual value of NBD or the
combined company. The fact that any specific analysis has been referred to in
the summary above is not meant to indicate that such analysis was given
greater weight than any other analysis.
In performing its analyses, Montgomery made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of NBD and First Chicago.
The analyses performed by Montgomery are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than those suggested by such analyses. Such analyses were prepared
solely as part of Montgomery's analysis of the fairness of the Merger to NBD
and were provided to the NBD Board in connection with the delivery of
Montgomery's opinions. The analyses do not purport to be appraisals or to
reflect the prices at which a company might actually be sold or the prices at
which any securities may trade at the present time or at any time in the
future. Montgomery used in its analyses various projections of future
performance prepared by the managements of NBD and First Chicago. The
projections are based on numerous variables and assumptions which are
inherently unpredictable and must be considered not certain of occurrence as
projected. Accordingly, actual results could vary significantly from those set
forth in such projections.
As described above, Montgomery's opinion and presentation to the NBD Board
were among the many factors taken into consideration by the NBD Board in
making its determination to approve, and to recommend that its stockholders
approve, the Merger.
Pursuant to the Engagement Letter, NBD paid Montgomery a retainer fee of
$250,000 and, upon the execution of the Merger Agreement, NBD paid Montgomery
a fee equal to $1,500,000, which fees will be credited against any other fee
to be paid to Montgomery under the Engagement Letter. If the Merger is
consummated, Montgomery will be paid a fee equal to $6,000,000. While the
payment of all or a significant portion of fees related to financial advisory
services provided in connection with arm's-length mergers and other business
combination transactions upon consummation of such transactions, as is the
case with the Merger, might be viewed as giving such financial advisors a
financial interest in the successful completion of such transactions, such
compensation arrangements are standard and customary for transactions of the
size and type of the Merger. NBD has also agreed to reimburse Montgomery for
its reasonable out-of-pocket expenses, including legal fees.
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NBD has agreed to indemnify Montgomery, its affiliates, and their respective
partners, directors, officers, agents, consultants, employees and controlling
persons against certain liabilities, including liabilities under the Federal
securities laws.
In addition, NBD has agreed to pay Montgomery a financial advisory retainer
of $3,000,000 payable in two installments of $1,500,000 on September 30 and
December 31, 1995, for financial advisory services. Montgomery has from time to
time provided other financial advisory services to NBD for which Montgomery has
received fees, including fees of approximately $75,000 during the past two
years. In the ordinary course of its business, Montgomery actively trades the
equity securities of NBD and First Chicago for its own account and for the
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities. Montgomery has also performed various investment
banking services for NBD.
First Chicago. First Chicago retained Lazard Freres to act as First Chicago's
financial advisor in connection with the Merger and related matters based upon
its qualifications, expertise and reputation, as well as Lazard Freres's prior
investment banking relationship and familiarity with First Chicago. At the July
11, 1995 meeting of the First Chicago Board, Lazard Freres rendered an oral
opinion to the First Chicago Board that, as of such date, the Exchange Ratio
was fair, from a financial point of view, to holders of the First Chicago
Common Stock. Lazard Freres subsequently delivered to the First Chicago Board a
written opinion dated as of the date of this Joint Proxy Statement-Prospectus
confirming its oral opinion. No limitations were imposed by First Chicago with
respect to the investigations made or the procedures followed by Lazard Freres
in rendering its opinions.
THE FULL TEXT OF THE OPINION OF LAZARD FRERES, WHICH SETS FORTH ASSUMPTIONS
MADE, MATTERS CONSIDERED, AND LIMITS ON THE REVIEW UNDERTAKEN BY LAZARD FRERES,
IS ATTACHED HERETO AS EXHIBIT C. FIRST CHICAGO SHAREHOLDERS ARE URGED TO READ
THIS OPINION IN ITS ENTIRETY. THE SUMMARY SET FORTH IN THIS JOINT PROXY
STATEMENT-PROSPECTUS OF THE OPINION OF LAZARD FRERES IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION ATTACHED HERETO.
THE OPINION OF LAZARD FRERES IS LIMITED TO THE FAIRNESS, AS OF THE DATE OF
SUCH OPINION, FROM A FINANCIAL POINT OF VIEW, TO THE HOLDERS OF FIRST CHICAGO
COMMON STOCK OF THE EXCHANGE RATIO AND DOES NOT ADDRESS FIRST CHICAGO'S
UNDERLYING BUSINESS DECISION TO UNDERTAKE THE MERGER. MOREOVER, SUCH OPINION
DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER AS TO ANY APPROVAL OF
THE MERGER OR THE MERGER AGREEMENT.
In connection with its opinion, among other things, Lazard Freres: (i)
reviewed the financial terms and conditions of the Merger Agreement; (ii)
reviewed certain historical business and financial information relating to
First Chicago and NBD; (iii) reviewed various financial forecasts and other
data provided by First Chicago and NBD with respect to the businesses and
prospects of First Chicago and NBD, respectively, the strategic objectives of
each, and possible financial benefits which might be realized following the
Merger; (iv) participated in discussions with members of the senior managements
of First Chicago and NBD with respect to the businesses and prospects of First
Chicago and NBD, respectively, the strategic objectives of each and possible
financial benefits which might be realized following the Merger; (v) reviewed
public information with respect to certain other bank holding companies, the
securities of which are publicly traded; (vi) reviewed the financial terms of
certain comparable business combinations involving bank holding companies;
(vii) reviewed the historical stock prices and trading volumes of shares of
First Chicago Common Stock and NBD Common Stock; and (viii) conducted such
other financial studies, analyses and investigations as Lazard Freres deemed
appropriate. The opinion of Lazard Freres was necessarily based on economic,
monetary, market and other conditions as in effect on, and the information made
available to them as of, the date thereof.
In conducting its review and in arriving at its opinion, Lazard Freres relied
upon the accuracy and completeness of the financial and other information
provided by First Chicago and NBD and reviewed by Lazard Freres for purposes of
its opinion, and has not assumed any responsibility for any independent
verification of such information. With respect to financial forecasts, as well
as projections of cost savings, revenue enhancements and operating synergies,
Lazard Freres has assumed that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of management
of First Chicago and NBD as to the future financial performance of First
Chicago and NBD, respectively, and have assumed that such forecasts and
projections will be realized in the amounts and at the times contemplated
thereby. Lazard Freres
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has assumed no responsibility for and has expressed no view as to such
forecasts and projections or the assumptions on which they are based. Lazard
Freres is not an expert in the evaluation of loan portfolios or the allowances
for credit losses with respect thereto and has assumed that such allowances for
First Chicago and NBD are in the aggregate adequate to cover such losses. In
addition, Lazard Freres has not reviewed individual credit files or made an
independent appraisal of the assets and liabilities of First Chicago or NBD or
any of their subsidiaries and has not been furnished with any such evaluation
or appraisal. In rendering its opinion, Lazard Freres has assumed that the
Merger will be consummated on the terms described in the Merger Agreement,
without any waiver of any material terms or conditions by First Chicago and
that obtaining the necessary regulatory approvals for the Merger will not have
an adverse effect on First Chicago, NBD or the combined company. In particular,
Lazard Freres has assumed that the Merger will be recorded as a "pooling of
interests" in accordance with generally accepted accounting principles.
The forecasts and projections reviewed by Lazard Freres were prepared by the
respective managements of First Chicago and NBD. Neither First Chicago nor NBD
publicly discloses internal management projections of the type provided to
Lazard Freres in connection with the preparation of its opinion. Such forecasts
and projections were not prepared with a view towards public disclosure. In
addition, such forecasts and projections were based on numerous variables and
assumptions which are inherently uncertain, including, without limitation,
factors related to general economic and competitive conditions. Accordingly,
actual results could vary significantly from those contemplated by such
projections. Lazard Freres has assumed no responsibility for the accuracy of
such information.
In connection with rendering its opinion to the First Chicago Board, Lazard
Freres performed a variety of financial and comparative analyses, which are
summarized briefly below. Such summary does not purport to be a complete
description of the analyses performed by Lazard Freres. In addition, Lazard
Freres believes that its analyses must be considered as a whole and that
selecting portions of such analyses and the factors considered by it, without
considering all such analyses and factors, could create an incomplete view of
the process underlying the analyses and its opinions. The preparation of a
financial adviser's opinion is a complex process involving subjective judgments
and is not necessarily susceptible to partial analyses or summary description.
In its analyses, Lazard Freres also took into account its assessment of general
economic, market, and financial conditions and its experience in similar
transactions, as well as its experience in securities valuation and its
knowledge of the banking industry generally. With respect to the comparative
market performance and merger of equals transaction analyses summarized below,
no public company utilized as a comparison is identical to First Chicago or NBD
and such analyses necessarily involve complex considerations and judgments
concerning the differences in financial and operating characteristics of the
companies and other factors that could affect the acquisition or public trading
values of the companies concerned. Any estimates contained in Lazard Freres'
analyses are not necessarily indicative of future results or values, which may
be significantly more or less favorable than such estimates. Estimates of
values of companies do not purport to be appraisals or necessarily reflect the
prices at which companies or their securities actually may be sold. None of the
analyses performed by Lazard Freres was assigned a greater significance by
Lazard Freres than any other.
The following is a brief summary of the financial analyses presented to the
First Chicago Board by Lazard Freres in connection with its oral opinion as of
July 11, 1995:
(a) Contribution Analysis. Lazard Freres analyzed the contribution of
each of First Chicago and NBD to the market capitalization, balance sheet
and income statement of the pro forma combined company. Among the various
balance sheet items analyzed as of March 31, 1995 were the relative
contribution to the pro forma combined company of each of First Chicago's
and NBD's assets, loans, deposits, total equity, common equity and tangible
common equity. In addition, Lazard Freres analyzed the relative
contribution to the pro forma combined company of each of First Chicago's
and NBD's net income to common shareholders for the 12 months ended March
31, 1995 and on a projected basis for the years 1995, 1996 and 1997.
Projections for net income to common shareholders were provided by the
respective managements of First Chicago and NBD. The analysis produced a
range of relative contribution by First Chicago to the balance sheet of the
pro forma combined company of a maximum of 60.2% (total assets)
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and a minimum of 46.9% (total loans), implying a range of Exchange Ratios
between 1.555 and 2.666 (based on primary shares outstanding at March 31,
1995). The analysis further produced a range of relative contribution by
First Chicago to the net income available to common shareholders of the pro
forma combined company having a maximum of 53.2% (for the twelve months
ended March 31, 1995) and a minimum of 50.2% (projected 1997), implying a
range of Exchange Ratios between 1.772 and 2.003 (based on primary shares
outstanding at March 31, 1995). Furthermore, the market capitalization of
First Chicago represented a contribution of 51.6% of pro forma combined
market capitalization, implying an Exchange Ratio of 1.877 (based on the
July 10, 1995 market prices of First Chicago Common Stock and NBD Common
Stock and on the primary number of shares of each outstanding at March 31,
1995). The Exchange Ratio in the Merger is 1.81 shares of NBD Common Stock
for each share of First Chicago Common Stock, which will result in the
holders of First Chicago Common Stock owning 50.7% of the Common Stock of
the pro forma combined company, based on primary shares outstanding at
March 31, 1995.
(b) Exchange Ratio Analysis. Lazard Freres reviewed the ratio of the
closing prices per share of First Chicago Common Stock to NBD Common Stock
over various time periods during the past five years. The analysis showed
that such ratio ranged from 0.694x to 1.898x over the five-year period
ending July 10, 1995, and from 1.530 to 1.877 over the six-month period
then ended, and that for the three-month period ended July 10, 1995, such
ratio ranged from 1.576 to 1.877, with an average of 1.805 and a median of
1.829. This analysis further showed that, for the one-month period
preceding entry into the Merger Agreement, such ratio ranged from 1.813 to
1.877, with an average of 1.850 and a median of 1.854. The Exchange Ratio
is 1.81 shares of NBD Common Stock for each share of First Chicago Common
Stock.
(c) Comparative Market Performance Analysis. In performing a comparative
market performance analysis, Lazard Freres analyzed certain operating
performance statistics of First Chicago, NBD and the pro forma combined
company relative to, (1) in the case of First Chicago: BankAmerica
Corporation, The Bank of New York Company, Inc., The Chase Manhattan
Corporation, Chemical Banking Corp., Citicorp and J.P. Morgan & Co.
Incorporated (the "First Chicago Comparison Group"); (2) in the case of
NBD: Banc One Corporation, Comerica Incorporated, First Bank System, Inc.,
KeyCorp, Mellon Bank Corporation, National City Corporation, Norwest
Corporation, PNC Bank Corp., and Wachovia Corporation (the "NBD Comparison
Group"); and (3) in the case of the pro forma combined company: BankAmerica
Corporation, Banc One Corporation, First Union Corporation, Mellon Bank
Corporation and NationsBank Corporation (the "Combined Company Comparison
Group").
Lazard Freres analyzed the relative financial performance and stock
market valuation of First Chicago and NBD by comparing certain financial
and market trading information of First Chicago with the First Chicago
Comparison Group and of NBD with the NBD Comparison Group. In addition,
Lazard Freres analyzed the relative financial performance of the pro forma
combined company by comparing certain financial information of the pro
forma combined company with the Combined Company Comparison Group.
Historical financial information used in connection with this analysis was
as of, and for the twelve months ended, March 31, 1995. Market information
used in the analysis detailed below was as of July 10, 1995.
Among the financial information compared was (i) return on average
assets, adjusted to exclude extraordinary items, primarily changes in
accounting principles, and selected nonrecurring items, (which was 1.04%
for First Chicago, 1.24% for NBD and 1.12% for the combined company, and,
on average, 1.08% for the First Chicago Comparison Group, 1.32% for the NBD
Comparison Group and 1.26% for the Combined Company Comparison Group), (ii)
return on average equity, adjusted to exclude extraordinary items,
primarily changes in accounting principles, and selected nonrecurring items
(which was 15.4% for First Chicago, 16.9% for NBD and 16.0% for the
combined company, and, on average, 15.3% for the First Chicago Comparison
Group, 16.4% for the NBD Comparison Group and 15.4% for the Combined
Company Comparison Group), (iii) market price to book value (which was
1.35x for First Chicago and 1.47x for NBD, and, on average, 1.48x for the
First Chicago Comparison Group, 1.75x for the NBD Comparison Group and
1.52x for the Combined Company Comparison Group), (iv) market price to
tangible book value (which was 1.54x for First Chicago and 1.55x for NBD,
and, on average, 1.71x for the First Chicago Comparison Group, 2.11x for
the NBD Comparison Group and 1.97x for the Combined Company
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Comparison Group), and (v) market price to the median Institutional Brokers
Estimate System ("IBES") projection of earnings per share as of July 10,
1995 for 1995 and 1996 (which were 8.7x and 8.2x, respectively, for First
Chicago and 8.9x and 8.2x, respectively, for NBD, and, on average, 9.7x and
8.6x, respectively, for the First Chicago Comparison Group, 10.1x and 9.1x,
respectively, for the NBD Comparison Group and 9.1x and 8.3x, respectively,
for the Combined Company Comparison Group). IBES is a data service that
monitors and publishes compilations of earnings estimates produced by
selected research analysts regarding companies of interest to institutional
shareholders.
(d) Analysis of Other Merger of Equals Transactions. Lazard Freres
analyzed other mergers of equals in the United States banking industry over
the period from 1989 that it considered relevant. The merger of equals
transactions analyzed were: BB&T Financial Corporation/Southern National
Corporation, KeyCorp/Society Corporation, Comerica
Incorporated/Manufacturers National Corporation, Chemical Banking
Corporation/Manufacturers Hanover Corporation, The Planters
Corporation/Peoples Bancorporation, and Sovran Financial Corporation/The
Citizens and Southern Corp. This analysis, which was based on publicly
available financial information for the latest 12 months preceding the
entry into the relevant merger agreement, showed that the average of the
ratios of (i) the ownership of the combined entity by the common
shareholders of the partner in the merger of equals transactions whose
shareholders held the greater level of ownership of the combined company to
(ii) the market capitalization, total assets, common equity and latest
twelve months net income contributed to the combined entity by such partner
ranged from 0.94x to 1.03x, compared to 0.93x for the Merger and 0.96x for
the Merger excluding consideration of the parties' relative contributions
to pro forma total assets for the Merger.
(e) Summary Pro Forma Financial Impact. Lazard Freres reviewed the
projections prepared for its review by the managements of each of First
Chicago and NBD for the years 1995, 1996 and 1997. On the basis of these
projections, Lazard Freres analyzed certain pro forma profitability,
capital adequacy and per share data on a projected pro forma combined basis
for such three-year period. This analysis was based on (i) an Exchange
Ratio of 1.81 shares of NBD Common Stock for each outstanding share of
First Chicago Common Stock, (ii) an assumed repurchase of 4.7 million
shares of First Chicago Common Stock or 8.5 million shares of NBD Common
Stock, or a combination of both, prior to consummation of the Merger, (iii)
an assumed balance sheet reduction of $24.5 billion in assets (effected
during 1996), including the associated loss of spread income, (iv) assumed
cost reductions of $200 million (fully phased in by 1997), revenue
enhancements of $50 million (fully phased in by 1997) and pre-tax
restructuring charges of $225 million (taken at the time of consummation of
the Merger), each based on estimates provided by First Chicago and NBD
management, (v) a projected dividend pay-out ratio of 36% for the combined
company, and (vi) the assumed use of excess capital (over an 8.0% Tier 1
risk-based capital ratio) to repurchase Common Stock of the combined
company beginning in 1997.
This analysis showed, among other things, that for projected years 1995,
1996 and 1997, (i) the pro forma combined company could expect a return on
average assets of 1.01%, 1.09% and 1.25%, respectively, compared to 0.88%,
0.81% and 0.80%, respectively, for First Chicago on a stand-alone basis,
(ii) the pro forma combined company could expect a return on average common
equity of 16.36%, 16.63% and 17.80%, respectively, compared to 15.36%,
15.55% and 15.52%, respectively, for First Chicago on a stand-alone basis,
(iii) the pro forma combined company could expect a regulatory Tier 1 risk-
based capital ratio of 7.88%, 9.01% and 8.00%, respectively, compared to
8.14%, 8.02% and 7.97% for First Chicago on a stand-alone basis, and (iv)
the pro forma combined company could expect a regulatory Tier 1 leverage
capital ratio of 6.39%, 7.81% and 7.03%, respectively, compared to 6.41%,
6.06% and 6.20%, respectively, for First Chicago on a stand-alone basis.
This analysis also showed that, compared with the results reflected in
First Chicago management's stand-alone projections, the Merger could be
expected to result in (i) a projected increase in fully diluted earnings
per share of 3.6% in 1996 and 8.1% in 1997, (ii) a projected increase in
dividends per share of 5.3% in 1995, 16.4% in 1996 and 23.7% in 1997, (iii)
a projected decrease in book value per share of (5.9)% at December 31,
1995, (6.6)% at December 31, 1996 and (10.8)% at December 31, 1997, and
(iv) a projected decrease in tangible book value per share of (10.1)% at
December 31, 1995, (10.6)% at December 31, 1996 and (15.2)% at December 31,
1997.
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(f) Other Analyses. Lazard Freres also reviewed certain other information
regarding selected pro forma industry rankings, the institutional ownership
of First Chicago Common Stock and NBD Common Stock and the historical price
and trading volume and relative market performance of First Chicago Common
Stock and NBD Common Stock.
Lazard Freres used substantially the same types of financial analyses in
preparing its written opinion dated as of the date of this Joint Proxy
Statement--Prospectus as it presented to the First Chicago Board on July 11,
1995, as summarized above.
Lazard Freres is an internationally recognized investment banking firm that
regularly engages in the valuation of businesses and their securities in
connection with mergers and acquisitions.
First Chicago and Lazard Freres have entered into an agreement relating to
the financial advisory services being provided by Lazard Freres in connection
with the Merger. In such agreement, First Chicago has agreed to pay Lazard
Freres fees as follows: (a) $250,000, payable upon execution of such agreement
(which has been paid), (b) an additional fee of $1,750,000, payable upon
submission of its opinion to the Board of Directors (which has been paid), and
(c) an additional fee of $4,000,000, payable upon the consummation of the
Merger. While the payment of all or a significant portion of fees related to
financial advisory services provided in connection with arm's-length mergers
and other business combination transactions upon consummation of such
transactions, as is the case with the Merger, might be viewed as giving such
financial advisors a financial interest in the successful completion of such
transactions, such compensation arrangements are standard and customary for
transactions of the size and type of the Merger. First Chicago also has agreed
to reimburse Lazard Freres for all its out-of-pocket expenses incurred in
connection with its engagement and to indemnify Lazard Freres and certain
related parties against certain liabilities, including liabilities under the
Federal securities laws.
In addition, First Chicago has agreed to pay Lazard Freres a financial
advisory retainer of $3,000,000, payable in two installments of $1,500,000 on
September 30 and December 31, 1995, for financial advisory services. Lazard
Freres has from time to time provided other financial advisory services to
First Chicago for which Lazard Freres has received fees, including fees of
approximately $200,000 during the past two years. In the ordinary course of
business and subject to certain restrictions, Lazard Freres and its affiliates
actively trade the debt and equity securities of First Chicago and NBD for its
own account and for the accounts of its customers, including accounts as to
which Lazard Freres has discretionary investment authority, and may at any
time hold long or short positions in such securities.
STRUCTURE OF THE MERGER
Subject to the terms and conditions of the Merger Agreement and in
accordance with the DGCL, at the Effective Time, First Chicago will merge with
and into NBD. NBD will be the surviving corporation in the Merger, and will
continue its corporate existence under the DGCL under the name "First Chicago
NBD Corporation". At the Effective Time, the separate corporate existence of
First Chicago will terminate. The NBD Certificate, as amended pursuant to the
Merger Agreement and as otherwise in effect at the Effective Time, will be the
articles of incorporation of the combined company and the NBD By-Laws, as in
effect immediately prior to the Effective Time, will be the by-laws of the
combined company.
CONVERSION OF FIRST CHICAGO CAPITAL STOCK; TREATMENT OF FIRST CHICAGO STOCK
OPTIONS AND FIRST CHICAGO STOCK PURCHASE PLAN
At the Effective Time, each share of First Chicago Common Stock outstanding,
other than shares held in First Chicago's treasury or held by NBD or First
Chicago or any wholly owned subsidiary thereof (except, in both cases, for
shares held directly or indirectly in trust accounts, managed accounts and the
like or otherwise held in a fiduciary, custodial or similar capacity that are
beneficially owned by third parties ("Trust Account Shares") or in respect of
a debt previously contracted ("DPC Shares"), or in certain other
circumstances), will be converted into the right to receive 1.81 shares of NBD
Common Stock. First Chicago's obligation to consummate the Merger is not
conditioned upon NBD Common Stock continuing to trade at any specified minimum
price during any period prior to the Effective Time. Because the Exchange
Ratio is fixed and because the market price of NBD Common Stock is subject to
fluctuation, the value of the shares of NBD Common Stock
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that holders of First Chicago Common Stock will receive in the Merger may
increase or decrease prior to and following the Merger.
Further, at the Effective Time, (i) each share of First Chicago Series B
Preferred Stock issued and outstanding immediately prior to the Effective Time
will be converted into the right to receive one share of New Series B
Preferred Stock; (ii) each share of First Chicago Series C Preferred Stock
issued and outstanding immediately prior to the Effective Time will be
converted into the right to receive one share of New Series C Preferred Stock;
(iii) each share of First Chicago Series E Preferred Stock issued and
outstanding immediately prior to the Effective Time will be converted into the
right to receive one share of New Series E Preferred Stock; and (iv) each
share of First Chicago Convertible Preferred Stock issued and outstanding
immediately prior to the Effective Time will be converted into the right to
receive one share of New Convertible Preferred Stock. The terms of the New
Preferred Stock will be substantially the same as the terms of the First
Chicago Preferred Stock from which such shares were converted. See
"Description of NBD Capital Stock" and "Description of New Preferred Stock".
Each outstanding share of First Chicago Capital Stock owned by NBD or its
wholly owned subsidiaries or First Chicago or its wholly owned subsidiaries
(except for Trust Account Shares, DPC Shares, or in certain other
circumstances) or by First Chicago as treasury stock will be cancelled at the
Effective Time and will cease to exist, and no NBD Capital Stock or other
consideration will be delivered in exchange therefor. All shares of NBD Common
Stock that are owned by First Chicago (except for Trust Account Shares, DPC
Shares, or in certain other circumstances) will become treasury stock of the
combined company.
Each stock option to acquire First Chicago Common Stock granted under the
First Chicago Stock Plans (each a "First Chicago Plan Option") which is
outstanding and unexercised immediately prior to the Effective Time will be
converted automatically at the Effective Time into, and will become, stock
options to purchase Common Stock of the combined company and will, subject to
the adjustments described below, otherwise continue to be governed by the
terms of the First Chicago Stock Plans (which will be assumed by the combined
company) pursuant to which such options were issued. In each case, (a) the
number of shares of Common Stock of the combined company subject to the new
option (a "New Option") will be equal to the product of the number of shares
of First Chicago Common Stock subject to the First Chicago Plan Option and the
Exchange Ratio, rounded to the nearest share, and (b) the exercise price per
share of Common Stock of the combined company subject to the New Option will
be equal to the exercise price per share of First Chicago Common Stock under
the First Chicago Plan Option divided by the Exchange Ratio, rounded down to
the nearest cent. The duration and other terms of each New Option will be
substantially the same as the First Chicago Plan Option.
In addition, First Chicago employees participating in the First Chicago
ESPSP will be eligible to purchase shares of Common Stock of the combined
company on September 30, 1996, the termination of the current offering under
the First Chicago ESPSP. Subject to the adjustments described below,
participation in the First Chicago ESPSP will continue to be governed by the
terms and conditions of the First Chicago ESPSP as in effect prior to the
Effective Time. After the Effective Time and at the times provided for in the
First Chicago ESPSP, each participating First Chicago employee will be
entitled to purchase shares of Common Stock of the combined company based upon
funds accumulated in their purchase savings accounts through payroll
contributions at a purchase price equal to such employee's original purchase
price under the First Chicago ESPSP divided by the Exchange Ratio, rounded
down to the nearest cent. Under the terms of the Merger Agreement, the
combined company will assume First Chicago's rights and obligations under the
ESPSP.
Shares of NBD Capital Stock issued and outstanding immediately prior to the
Effective Time will remain issued and outstanding immediately after the
Merger.
EXCHANGE OF CERTIFICATES; FRACTIONAL SHARES
First Chicago. At or prior to the Effective Time, NBD will deposit, or cause
to be deposited, with First Chicago Trust Company of New York (the "Exchange
Agent"), for the benefit of the holders of certificates of
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First Chicago Capital Stock, certificates representing the shares of Common
Stock of the combined company, New Preferred Stock and the cash in lieu of any
fractional shares to be issued pursuant to the Merger Agreement in exchange
for outstanding shares of First Chicago Capital Stock.
As soon as is practicable after the Effective Time, and in no event later
than five business days thereafter, a form of transmittal letter will be
mailed by the Exchange Agent to the holders of First Chicago Capital Stock.
The form of transmittal letter will contain instructions with respect to the
surrender of certificates representing First Chicago Capital Stock and
depositary receipts representing First Chicago Depositary Shares.
FIRST CHICAGO STOCK CERTIFICATES SHOULD NOT BE RETURNED WITH THE ENCLOSED
PROXY AND SHOULD NOT BE FORWARDED TO THE EXCHANGE AGENT UNLESS AND UNTIL THE
FIRST CHICAGO STOCKHOLDER OR HOLDER OF DEPOSITARY RECEIPTS RECEIVES A LETTER
OF TRANSMITTAL FOLLOWING THE EFFECTIVE TIME.
No dividends or other distributions declared with respect to Common Stock of
the combined company or New Preferred Stock with a record date following the
30th day to occur after the Effective Time will be paid to the holder of any
certificate representing shares of First Chicago Capital Stock until such
certificates have been surrendered for exchange. Holders of certificates
representing shares of First Chicago Common Stock or First Chicago Preferred
Stock will be paid the amount of dividends or other distributions with a
record date after the Effective Time but on or before such 30th day payable
with respect to the shares of Common Stock of the combined company or New
Preferred into which such First Chicago Common Stock or First Chicago
Preferred Stock has been converted. If certificates representing shares of
First Chicago Capital Stock are presented after the Effective Time, they will
be cancelled and exchanged for the relevant certificate representing the
applicable shares of Common Stock of the combined company and New Preferred
Stock.
No fractional shares of Common Stock of the combined company will be issued
to any holder of First Chicago Common Stock upon consummation of the Merger.
For each fractional share that would otherwise be issued, the combined company
will pay cash in an amount equal to such fraction (rounded down to the nearest
thousandth of a share) multiplied by the average of the closing sale prices of
NBD Common Stock on the NYSE as reported by The Wall Street Journal for the
five trading days immediately preceding the date of the Effective Time. No
interest will be paid or accrued on the cash in lieu of fractional shares
payable to holders of such certificates.
None of NBD, First Chicago, the Exchange Agent or any other person will be
liable to any former holder of First Chicago Capital Stock for any amount
delivered in good faith to a public official pursuant to applicable abandoned
property, escheat or similar laws.
If a certificate for First Chicago Capital Stock has been lost, stolen or
destroyed, the Exchange Agent will issue the consideration properly payable in
accordance with the Merger Agreement upon receipt of appropriate evidence as
to such loss, theft or destruction, appropriate evidence as to the ownership
of such certificate by the claimant, and appropriate and customary
indemnification.
For a description of the differences between the rights of the holders of
NBD Capital Stock and First Chicago Capital Stock, see "Comparison of
Stockholders' Rights". For a description of the NBD Capital Stock, including
the New Preferred Stock and the New Depositary Shares, see "Description of NBD
Capital Stock" and "Description of New Preferred Stock".
NBD. Shares of NBD Common Stock issued and outstanding immediately prior to
the Effective Time will remain issued and outstanding and be unaffected by the
Merger, and holders of such stock will not be required to exchange the
certificates representing such stock or take any other action by reason of the
consummation of the Merger.
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EFFECTIVE TIME
The Effective Time will be as set forth in the Certificate of Merger (the
"Certificate of Merger") which will be filed with the Secretary of State of
the State of Delaware on the closing date with respect to the Merger (the
"Closing Date"). The Closing Date will occur on a date to be specified by the
parties which will be no later than five business days after the satisfaction
or waiver (subject to applicable law) of the latest to occur of the conditions
precedent to the Merger set forth in the Merger Agreement. NBD and First
Chicago each anticipate that the Merger will be consummated by the end of
1995. However, the consummation of the Merger could be delayed as a result of
delays in obtaining any necessary regulatory agency or other governmental
approvals required for the transactions contemplated by the Merger Agreement
(the "Requisite Regulatory Approvals"). There can be no assurances as to if or
when such approvals will be obtained or that the Merger will be consummated.
If the Merger is not effected on or before July 11, 1996, the Merger Agreement
may be terminated by either NBD or First Chicago, unless the failure to effect
the Merger by such date is due to the failure of the party seeking to
terminate the Merger Agreement to perform or observe the covenants and
agreements of such party set forth therein. See "--Conditions to the
Consummation of the Merger" and "--Regulatory Approvals Required for the
Merger".
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains representations and warranties of NBD and
First Chicago as to, among other things, (i) the corporate organization and
existence of each party and its subsidiaries; (ii) the capitalization of each
party and its subsidiaries; (iii) the corporate power and authority of each
party and the compliance of the Merger Agreement with (a) the charter and by-
laws of each party, (b) applicable law, and (c) certain material agreements;
(iv) governmental and third-party approvals; (v) the timely filing of required
regulatory reports; (vi) each party's financial statements and filings with
the Commission; (vii) each party's brokers' fees; (viii) the absence of
certain changes in each party's business since March 31, 1995; (ix) the
absence of material legal proceedings; (x) the filing and accuracy of each
party's tax returns; (xi) each party's employee benefit plans and related
matters; (xii) material accuracy and completeness of the filings made by each
party with the Commission; (xiii) each party's compliance with applicable law;
(xiv) the absence of material defaults under certain contracts; (xv)
agreements between each party and regulatory agencies; (xvi) activities of the
subsidiaries of each party; (xvii) investment securities; (xviii) interest
rate risk management instruments; (xix) the absence of undisclosed
liabilities; (xx) environmental liabilities; (xxi) the inapplicability to the
transactions contemplated by the Merger Agreement of Section 203 of the DGCL,
relating to certain business combinations specified in such statute; (xxii)
"pooling-of-interests" accounting treatment; and (xxiii) the inapplicability
to the transactions contemplated by the Merger Agreement of the First Chicago
Rights Agreement (as defined herein).
CONDUCT OF BUSINESS PENDING THE MERGER AND OTHER AGREEMENTS
Pursuant to the Merger Agreement, prior to the Effective Time NBD and First
Chicago have each agreed to, and to cause their respective subsidiaries to,
(i) conduct its business in the usual, regular and ordinary course consistent
with past practice, (ii) use reasonable best efforts to maintain and preserve
intact its business organization, employees and advantageous business
relationships and retain the services of its officers and key employees, and
(iii) take no action which would adversely affect or delay the ability of
either NBD or First Chicago to obtain any Requisite Regulatory Approvals or to
perform its covenants and agreements under the Merger Agreement or the Stock
Option Agreements.
NBD and First Chicago have also agreed to use their best efforts to promptly
prepare and file all necessary documentation to effect all applications,
notices, petitions and filings, and to obtain and to cooperate in obtaining
permits, consents, approvals and authorizations of all third parties and
governmental entities necessary or advisable to consummate the transactions
contemplated by the Merger Agreement and to comply with the terms and
conditions of all such permits, consents, approvals and authorizations. NBD
and First Chicago have each agreed upon request to furnish to the other party
all information concerning themselves and their subsidiaries, directors,
officers and stockholders and such other matters as may be necessary or
advisable in connection with
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the Merger. NBD and First Chicago have also agreed, subject to the terms and
conditions of the Merger Agreement, to use their best efforts to take, or
cause to be taken, all actions necessary, proper or advisable to comply
promptly with all legal requirements which may be imposed on such party or its
subsidiaries and to consummate the Merger. NBD also agreed to cause the shares
of NBD Common Stock to be issued in the Merger to be approved for listing on
the NYSE, subject to official notice of issuance. NBD and First Chicago also
agreed that the employee benefit plans in place at the Effective Time with
respect to employees of NBD and First Chicago, as the case may be, will remain
in effect for such employees until such time as the combined company adopts
new benefit plans covering employees of both parties who continue to be
employed by the combined company (the "New Benefit Plans"). NBD and First
Chicago have stated their intention to develop New Benefit Plans, effective as
of the Effective Time or as soon thereafter as practicable, which, among other
things, (i) treat similarly situated employees on a substantially equivalent
basis, taking into account all relevant factors, including, without
limitation, duties, geographic location, tenure, qualifications and abilities,
and (ii) do not discriminate between employees of the combined company who
were covered by NBD Benefit Plans, on the one hand, and those covered by First
Chicago Benefit Plans (as defined herein), on the other, at the Effective
Time. NBD and First Chicago also reached certain agreements with respect to
directors' and officers' indemnification and insurance, and with respect to
dividends. See "Interests of Certain Persons in the Merger".
Each of NBD and First Chicago have further agreed to give the other party
access to all of its properties, books, contracts, commitments and records and
to furnish information concerning its businesses, properties and personnel,
subject to the restrictions set forth in the Merger Agreement.
In addition, except as expressly contemplated by the Merger Agreement or
specified in a schedule thereto or as contemplated by the Stock Option
Agreements, each of NBD and First Chicago has agreed that, without the consent
of the other party, it and its subsidiaries will not, among other things:
(i) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money (other than short-term
indebtedness incurred to refinance short-term indebtedness and indebtedness
of NBD or any of its subsidiaries to NBD or any of its subsidiaries, on the
one hand, or of First Chicago or any of its subsidiaries to First Chicago
or any of its subsidiaries, on the other hand), assume, guarantee, endorse
or otherwise as an accommodation become responsible for the obligations of
any other individual, corporation or other entity, or make any loan or
advance;
(ii) adjust, split, combine or reclassify any capital stock; make,
declare or pay any dividend or make any other distribution on, or directly
or indirectly redeem, purchase or otherwise acquire, any shares of its
capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock (except, (a) in the case
of NBD, for regular quarterly cash dividends at a rate not in excess of
$.33 per share of NBD Common Stock, (b) in the case of First Chicago, for
regular quarterly cash dividends on First Chicago Common Stock at a rate
not in excess of $.60 per share of First Chicago Common Stock, (c) in the
case of First Chicago Preferred Stock, for regular quarterly or semiannual
cash dividends thereon at the rates set forth in the applicable certificate
of incorporation or certificate of designation for such securities and
except for dividends paid by any of the subsidiaries of each of First
Chicago and NBD to First Chicago or NBD or any of their subsidiaries,
respectively, and (d) for dividends paid in the ordinary course of business
by any subsidiaries (whether or not wholly owned) of each of First Chicago
and NBD); grant any stock appreciation rights or grant any individual,
corporation or other entity any right to acquire any shares of its capital
stock (except for options to purchase stock granted in the ordinary course
of business consistent with past practice pursuant to the First Chicago
Stock Plans, the First Chicago ESPSP, and the NBD Stock Plans (as defined
herein)); or issue any additional shares of capital stock except pursuant
to (A) the exercise of stock options or warrants outstanding as of July 11,
1995, (B) the First Chicago Convertible Preferred Stock, (C) the Stock
Option Agreements, (D) the First Chicago Rights Agreement, (E) the First
Chicago Dividend Reinvestment and Stock Purchase Plan, or (F) the First
Chicago ESPSP;
(iii) sell, transfer, mortgage, encumber or otherwise dispose of any of
its properties or assets to any individual, corporation or other entity
other than a subsidiary, or cancel, release or assign any indebtedness to
any such person or any claims held by any such person, except in the
ordinary course of business
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consistent with past practice or pursuant to contracts or agreements in
force at the date of the Merger Agreement;
(iv) except for transactions in the ordinary course of business
consistent with past practice or pursuant to contracts or agreements in
force at the date of the Merger Agreement, make any material investment
either by purchase of stock or securities, contributions to capital,
property transfers, or purchase of any property or assets of any other
individual, corporation or other entity other than a subsidiary;
(v) except for transactions in the ordinary course of business consistent
with past practice, enter into or terminate any material contract or
agreement, or make any change in any of its material leases or contracts,
other than renewals of contracts and leases without material adverse
changes of terms;
(vi) increase in any manner the compensation or fringe benefits of any of
its employees or pay any pension or retirement allowance not required by
any existing plan or agreement to any such employees or become a party to,
amend or commit itself to any pension, retirement, profit-sharing or
welfare benefit plan or agreement or employment agreement with or for the
benefit of any employee other than in the ordinary course of business
consistent with past practice or accelerate the vesting of any stock
options or other stock-based compensation;
(vii) solicit, encourage or authorize any individual, corporation or
other entity to solicit from any third party any inquiries or proposals
relating to the disposition of its business or assets, or the acquisition
of its voting securities, or the merger of it or any of its subsidiaries
with any corporation or other entity other than as provided by the Merger
Agreement (and each party will promptly notify the other of all of the
relevant details relating to all inquiries and proposals which it may
receive relating to any of such matters);
(viii) settle any claim, action or proceeding involving money damages,
except in the ordinary course of business consistent with past practice;
(ix) take any action (other than the exercise of its rights under the
First Chicago Stock Option Agreement or the NBD Stock Option Agreement, as
the case may be) that would prevent or impede the Merger from qualifying
(A) for "pooling-of-interests" accounting treatment or (B) as a
"reorganization" within the meaning of Section 368 of the Code;
(x) amend its certificate of incorporation or articles of incorporation,
as the case may be, or its bylaws;
(xi) other than in prior consultation with the other party, restructure
or materially change its investment securities portfolio or its gap
position, through purchases, sales or otherwise, or the manner in which the
portfolio is classified or reported;
(xii) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in the Merger
Agreement being or becoming untrue in any material respect at any time
prior to the Effective Time, or in any of the conditions to the Merger set
forth in the Merger Agreement not being satisfied or in a violation of any
provision of the Merger Agreement, except, in every case, as may be
required by applicable law; or
(xiii) agree to, or make any commitment to, take any of the actions
listed above.
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Each party's obligation to effect the Merger is subject to the satisfaction
or waiver, where permissible, of the following conditions at or prior to the
Effective Time:
(i) the Merger Agreement and the transactions contemplated thereby shall
have been adopted and approved by the respective requisite affirmative
votes of the holders of NBD Common Stock and First Chicago Common Stock
entitled to vote thereon;
(ii) the shares of NBD Common Stock which are to be issued to First
Chicago stockholders upon consummation of the Merger shall have been
authorized for listing on the NYSE, subject to official notice of issuance;
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(iii) the Requisite Regulatory Approvals shall have been obtained and
will remain in full force and effect and all statutory waiting periods with
respect to such approvals will have expired;
(iv) the Registration Statement of which this Joint Proxy Statement-
Prospectus forms a part shall have become effective and no stop order
suspending the effectiveness will have been issued and no proceedings for
that purpose will have been initiated or threatened by the Commission;
(v) no order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger or any of the other transactions
contemplated by the Merger Agreement shall be in effect and no statute,
rule, regulation, order, injunction or decree shall have been enacted,
entered, promulgated or enforced by any court, administrative agency or
commission or other governmental authority or instrumentality which
prohibits or makes illegal consummation of the Merger;
(vi) First Chicago and NBD each shall have received an opinion of
Wachtell, Lipton, Rosen & Katz, in form and substance reasonably
satisfactory to First Chicago and NBD, dated as of the Effective Time,
substantially to the effect that, on the basis of facts, representations
and assumptions set forth in such opinion which are consistent with the
state of facts existing at the Effective Time: (a) the Merger will
constitute a tax-free reorganization under Section 368(a)(1)(A) of the Code
and First Chicago and NBD will each be a party to the reorganization, (b)
no gain or loss will be recognized by First Chicago or NBD as a result of
the Merger, (c) no gain or loss will be recognized by the stockholders of
First Chicago who exchange their First Chicago Capital Stock solely for NBD
Capital Stock pursuant to the Merger (except with respect to cash received
in lieu of a fractional share interest in NBD Capital Stock), (d) the tax
basis of the NBD Capital Stock received by stockholders who exchange all of
their First Chicago Capital Stock solely for NBD Capital Stock in the
Merger will be the same as the tax basis of the First Chicago Capital Stock
surrendered in exchange therefor (reduced by any amount allocable to a
fractional share interest for which cash is received), and (e) the holding
period of NBD Capital Stock received by stockholders of First Chicago in
the Merger will include the period during which the shares of First Chicago
Capital Stock surrendered in exchange therefor were held (provided that
such First Chicago Capital Stock was held as a capital asset by the holder
of such First Chicago Capital Stock at the Effective Time);
(vii) First Chicago and NBD each shall have received a letter from Arthur
Andersen LLP and Deloitte & Touche LLP, respectively, addressed to First
Chicago or NBD, as the case may be, to the effect that the Merger will
qualify for "pooling-of-interests" accounting treatment;
(viii) the representations and warranties of the other party to the
Merger Agreement shall be true and correct in all material respects as of
the date of the Merger Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing Date as though made on the Closing Date;
(ix) each party shall have performed in all material respects all
obligations required to be performed by it under the Merger Agreement at or
prior to the Closing Date; and
(x) the rights issued pursuant to the First Chicago Rights Agreement
shall not have become nonredeemable, exercisable, distributed or triggered
pursuant to the terms of each such agreement. See "--First Chicago Rights
Agreement".
NBD has received an opinion from Deloitte & Touche LLP and First Chicago has
received an opinion from Arthur Andersen LLP each to the effect that the
Merger will be accounted for as a "pooling of interests".
No assurance can be provided as to if or when the Requisite Regulatory
Approvals necessary to consummate the Merger will be obtained or whether all
of the other conditions precedent to the Merger will be satisfied or waived by
the party permitted to do so. If the Merger is not effected on or before July
11, 1996, the Merger Agreement may be terminated by either NBD or First
Chicago, unless the failure to effect the Merger by such date is due to the
failure of the party seeking to terminate the Merger Agreement to perform or
observe covenants and agreements of such party set forth therein.
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REGULATORY APPROVALS REQUIRED FOR THE MERGER
NBD and First Chicago have agreed to use their best efforts to obtain the
Requisite Regulatory Approvals, which include approval from the Federal
Reserve Board and various state regulatory authorities, and intend to complete
the filing of applications and notifications to obtain such Requisite
Regulatory Approvals promptly after the date of this Joint Proxy Statement-
Prospectus. The Merger cannot proceed in the absence of the Requisite
Regulatory Approvals. There can be no assurance that such Requisite Regulatory
Approvals will be obtained, and, if obtained, there can be no assurance as to
the date of any such approvals or the absence of any litigation challenging
such approvals. There can likewise be no assurance that the United States
Department of Justice or any state attorney general will not attempt to
challenge the Merger on antitrust grounds or, if such a challenge is made, as
to the result thereof.
NBD and First Chicago are not aware of any other material governmental
approvals or actions that are required prior to the parties' consummation of
the Merger other than those described below. It is presently contemplated that
if any such additional governmental approvals or actions are required, such
approvals or actions will be sought. There can be no assurance, however, that
any such additional approvals or actions will be obtained.
Federal Reserve Board. The Merger is subject to approval by the Federal
Reserve Board pursuant to Sections 3 and 4 of the BHC Act. NBD and First
Chicago have filed the required application and notification with the Federal
Reserve Board for approval of the Merger. Assuming Federal Reserve Board
approval, the Merger may not be consummated until 30 days after such approval,
during which time the Department of Justice may challenge the Merger on
antitrust grounds and seek the divestiture of certain assets and liabilities.
With the approval of the Federal Reserve Board and the Department of Justice,
the waiting period may be reduced to no less than 15 days.
The Federal Reserve Board is prohibited from approving any transaction under
the applicable statutes which:
(i) would result in a monopoly or which would be in furtherance of any
combination or conspiracy to monopolize or to attempt to monopolize the
business of banking in any part of the United States; or
(ii) may have the effect in any section of the United States of
substantially lessening competition, or tending to create a monopoly, or
resulting in a restraint of trade, unless the Federal Reserve Board finds
that the anti-competitive effects of the transaction are clearly outweighed
in the public interest by the probable effect of the transaction in meeting
the convenience and needs of the communities to be served.
In addition, in reviewing a transaction under the applicable statutes, the
Federal Reserve Board will consider the financial and managerial resources of
the companies and their subsidiary banks and the convenience and needs of the
communities to be served. As part of, or in addition to, consideration of the
above factors, it is anticipated that the Federal Reserve Board will consider
the regulatory status of NBD and First Chicago, current and projected economic
conditions in the Midwest and the overall capital and safety and soundness
standards established by the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA") and the regulations promulgated thereunder.
In addition, under the Community Reinvestment Act of 1977, as amended (the
"CRA"), the Federal Reserve Board must take into account the record of
performance of each of NBD and First Chicago in meeting the credit needs of
the entire community, including low and moderate income neighborhoods, served
by each company. Each of NBD's lead banking subsidiaries in Illinois, Indiana,
Michigan and Ohio has an outstanding CRA rating with the appropriate Federal
regulator, and each other NBD banking subsidiary has a satisfactory CRA
rating. Each of First Chicago's banking subsidiaries has either an outstanding
or satisfactory CRA rating with the appropriate Federal regulator. None of
NBD's or First Chicago's banking subsidiaries received any negative comments
from its respective Federal regulator in its last CRA examination relating to
such ratings which were material and remain unresolved.
The Federal Reserve Board will furnish notice and a copy of the application
for approval of the Merger to the Office of the Comptroller of the Currency
(the "OCC"), the Federal Deposit Insurance Corporation (the
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"FDIC") and the appropriate state regulatory authorities. These agencies have
30 days to submit their views and recommendations to the Federal Reserve
Board. The Federal Reserve Board is required to hold a public hearing in the
event it receives a written recommendation of disapproval of the application
from any of these agencies within such 30-day period. Furthermore, the BHC Act
and Federal Reserve Board regulations require publication of notice of, and
the opportunity for public comment on, the application submitted by NBD and
First Chicago for approval of the Merger and authorize the Federal Reserve
Board to hold a public hearing in connection therewith if the Federal Reserve
Board determines that such a hearing would be appropriate. Any such hearing or
comments provided by third parties could prolong the period during which the
application is subject to review by the Federal Reserve Board.
As noted above, the Merger may not be consummated until 30 days after
Federal Reserve Board approval, during which time the Department of Justice
may challenge the Merger on antitrust grounds and seek the divestiture of
certain assets and liabilities. With the approval of the Federal Reserve Board
and the Department of Justice, the waiting period may be reduced to no less
than 15 days. The commencement of an antitrust action by the Department of
Justice would stay the effectiveness of Federal Reserve Board approval of the
Merger unless a court specifically orders otherwise. In reviewing the Merger,
the Department of Justice could analyze the Merger's effect on competition
differently than the Federal Reserve Board, and thus it is possible that the
Department of Justice could reach a different conclusion than the Federal
Reserve Board regarding the Merger's competitive effects. Failure of the
Department of Justice to object to the Merger may not prevent the filing of
antitrust actions by private persons or state attorneys general.
In general, the Federal Reserve Board and the Department of Justice will
examine the impact of the Merger on competition in various product and
geographic markets, including competition for deposits and loans, especially
loans to small and middle market businesses.
NBD's and First Chicago's rights to exercise their respective options under
the Stock Option Agreements are also subject to the prior approval of the
Federal Reserve Board, to the extent that the exercise of their respective
options under the Stock Option Agreements would result in NBD or First
Chicago, as the case may be, owning more than 5% of the outstanding shares of
First Chicago Common Stock or NBD Common Stock, respectively. In considering
whether to approve NBD's or First Chicago's right to exercise its respective
option, including its respective right to purchase more than 5% of the
outstanding shares of First Chicago Common Stock or NBD Common Stock, as the
case may be, the Federal Reserve Board would generally apply the same
statutory criteria it would apply to its consideration of approval of the
Merger.
State Regulatory Authorities. Applications or notifications have been filed
with the Financial Institutions Bureau of the State of Michigan and the
Illinois Commissioner of Banks and Trust Companies. These regulators will
review such applications or notifications pursuant to standards which are
similar to certain of the standards employed by the Federal Reserve Board, as
described above. An application for approval of the New York State Banking
Department has been filed in connection with the indirect acquisition by NBD
of First Chicago Trust Company of New York, a New York State trust company,
that may be deemed to have occurred as a result of the Merger. In addition, an
application for approval of the Delaware State Bank Commissioner has been
filed in connection with the indirect acquisition by NBD of FCC National Bank
(a Delaware-based national bank which is primarily engaged in the issuance of
Visa and MasterCard credit cards), that may be deemed to have occurred as a
result of the Merger.
In addition, the Merger may be reviewed by the attorneys general in the
various states in which NBD and First Chicago own banking subsidiaries,
including Illinois, Michigan, New York and Delaware. Such authorities may be
empowered under the applicable state laws and regulations to investigate
and/or disapprove the Merger under the circumstances and based upon the review
set forth in applicable state laws and regulations. There can be no assurance
that one or more state attorneys general will not file an antitrust action to
enjoin the Merger.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General. The following is a summary description of the material Federal
income tax consequences of the Merger. This summary is not a complete
description of all of the consequences of the Merger and, in particular,
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may not address Federal income tax considerations that may affect the
treatment of a stockholder which, at the Effective Time, already owns some NBD
Capital Stock, is not a U.S. person, is a tax-exempt entity or an individual
who acquired First Chicago Common Stock pursuant to an employee stock option,
or exercises some form of control over First Chicago. In addition, no
information is provided herein with respect to the tax consequences of the
Merger under applicable foreign, state or local laws. Consequently, each First
Chicago stockholder is advised to consult a tax advisor as to the specific tax
consequences of the transaction to that stockholder. The following discussion
is based on the Code, as in effect on the date of this Joint Proxy Statement-
Prospectus, without consideration of the particular facts or circumstances of
any holder of First Chicago Common Stock.
The Merger. NBD and First Chicago have received an opinion from Wachtell,
Lipton, Rosen & Katz, dated as of the date hereof, based upon certain
customary representations and assumptions set forth therein, substantially to
the effect that for Federal income tax purposes the Merger constitutes a
reorganization within the meaning of Section 368 of the Code.
Based on such opinion, the material Federal income tax consequences of the
Merger will be:
(i) no gain or loss will be recognized by NBD or by First Chicago as a
result of the Merger;
(ii) no gain or loss will be recognized by First Chicago stockholders
upon their exchange of First Chicago Capital Stock for NBD Common Stock or
New Preferred Stock, except that a First Chicago stockholder who receives
cash proceeds in lieu of a fractional share interest in NBD Common Stock
will recognize gain or loss equal to the difference between such proceeds
and the tax basis allocated to the fractional share interest and such gain
or loss will constitute capital gain or loss if such stockholder's First
Chicago Capital Stock with respect to which gain or loss is recognized is
held as a capital asset at the Effective Time;
(iii) the tax basis of the NBD Common Stock or NBD New Preferred Stock
received by a First Chicago stockholder who exchanges his or her First
Chicago Capital Stock for NBD Common Stock or New Preferred Stock will be
the same as such stockholder's tax basis in the First Chicago Capital Stock
surrendered in exchange therefor (reduced by any amount allocable to a
fractional share interest for which cash is received); and
(iv) the holding period of the NBD Common Stock or New Preferred Stock
received by a First Chicago stockholder will include the period during
which the First Chicago Capital Stock surrendered in exchange therefor was
held (provided that such First Chicago Capital Stock was held by such First
Chicago stockholder as a capital asset at the Effective Time).
Each of NBD's and First Chicago's obligation to effect the Merger is
conditioned on the receipt of an opinion to the same effect updated as of the
Effective Time.
Information Reporting and Backup Withholding. Payments in respect of First
Chicago Capital Stock may be subject to information reporting to the Internal
Revenue Service and to a 31% backup withholding tax. Backup withholding will
not apply, however, to a payment to a First Chicago stockholder or other payee
if such stockholder or payee completes and signs the substitute Form W-9 that
will be included as part of the transmittal letter or otherwise proves to the
combined company and the Exchange Agent that it is exempt from backup
withholding.
ACCOUNTING TREATMENT
It is anticipated that the Merger will be accounted for as a "pooling-of-
interests" transaction under generally accepted accounting principles. Under
such method of accounting, holders of First Chicago Common Stock will be
deemed to have combined their existing voting common stock interest with that
of holders of NBD Common Stock by exchanging their shares for shares of NBD
Common Stock. Accordingly, the book value of the assets, liabilities and
stockholders' equity of First Chicago, as reported on its consolidated balance
sheet, will be carried over to the consolidated balance sheet of the combined
company and no goodwill will be created. The
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combined company will be able to include in its consolidated income the
consolidated income of both companies for the entire fiscal year in which the
Merger occurs; however, certain expenses incurred to effect the Merger must be
treated as current charges against income rather than adjustments to the
balance sheet.
NBD has received an opinion from Deloitte & Touche LLP and First Chicago has
received an opinion from Arthur Andersen LLP each to the effect that the
Merger will be accounted for as a "pooling of interests".
The unaudited pro forma financial information contained in this Joint Proxy
Statement-Prospectus has been prepared using the "pooling-of-interests"
accounting method to account for the Merger. See "Selected Historical and Pro
Forma Per Share Data" and "Unaudited Pro Forma Condensed Combined Financial
Statements".
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement provides that the Merger may be terminated at any time
prior to the Effective Time, whether before or after approval by NBD's or
First Chicago's stockholders:
(i) by mutual consent of NBD and First Chicago in a written instrument,
if the Board of Directors of each so determines by a vote of a majority of
the members of its entire board of directors;
(ii) by either the NBD Board or the First Chicago Board if any
governmental entity which must grant a Requisite Regulatory Approval has
denied approval of the Merger and such denial has become final and non-
appealable or any governmental entity of competent jurisdiction has issued
a final non-appealable order enjoining or otherwise prohibiting the
consummation of the transactions contemplated by the Merger Agreement;
(iii) by either the NBD Board or First Chicago Board if the Merger is not
consummated on or before July 11, 1996, unless the failure of the Effective
Time to occur by such date is due to the failure of the party seeking to
terminate the Merger Agreement to perform or observe the covenants and
agreements of such party set forth therein;
(iv) by either the NBD Board or First Chicago Board (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained in the Merger Agreement) if
there has been a material breach of any of the covenants or agreements or
any of the representations or warranties set forth in the Merger Agreement
on the part of the other party, which breach is not cured within 45 days
following written notice to the party committing such breach, or which
breach, by its nature, cannot be cured prior to the Effective Time; or
(v) by either NBD or First Chicago if NBD or First Chicago stockholder
approvals have not been obtained by reason of the failure to obtain the
required vote at a duly held meeting of stockholders or any adjournment or
postponement thereof.
Whether or not the Merger is consummated, all fees and expenses incurred in
connection with the Merger and the transactions contemplated thereby will be
paid by the party incurring such expenses, except that the costs and expenses
of printing and mailing this Joint Proxy Statement-Prospectus, and all filing
and other fees paid to the Commission in connection with the Merger, will be
borne equally by NBD and First Chicago.
EXTENSION, WAIVER AND AMENDMENT OF THE MERGER AGREEMENT
Extension and Waiver. At any time prior to the Effective Time, NBD and First
Chicago, by action taken or authorized by their respective boards of
directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party, (ii)
waive any inaccuracies in the representations and warranties contained in the
Merger Agreement or in any document delivered pursuant the Merger Agreement
and (iii) waive compliance with any of the agreements or conditions contained
in the Merger Agreement; except that after any approval of the transactions
contemplated by the Merger Agreement by the respective stockholders of First
Chicago or NBD, there may not be, without further approval of such
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stockholders, any extension or waiver of the Merger Agreement which reduces
the amount or changes the form of the consideration to be delivered to the
holders of First Chicago Common Stock.
Amendment. Subject to compliance with applicable law, the Merger Agreement
may be amended by NBD and First Chicago, by action taken or authorized by
their respective Boards of Directors, at any time before or after approval of
the matters presented in connection with the Merger by the stockholders of
NBD, except that after any approval of the transactions contemplated by the
Merger Agreement by the respective stockholders of First Chicago or NBD, there
may not be, without further approval of such stockholders, any amendment of
the Merger Agreement which changes the amount or the form of the consideration
to be delivered to the holders of First Chicago Common Stock hereunder, other
than as contemplated by the Merger Agreement. In the event the parties
contemplate an amendment to the Merger Agreement of the type which by law or
pursuant to the foregoing may not be made without stockholder approval, NBD
and/or First Chicago, as the case may be, may resolicit proxies from the
stockholders of NBD and/or of First Chicago, as the case may be, to obtain
such approval.
STOCK OPTION AGREEMENTS
Concurrently with the execution of the Merger Agreement, NBD executed and
delivered the NBD Stock Option Agreement, pursuant to which NBD granted to
First Chicago the NBD Option. At the same time, First Chicago executed and
delivered the First Chicago Stock Option Agreement, pursuant to which First
Chicago granted to NBD the First Chicago Option. NBD and First Chicago
approved and entered into the Stock Option Agreements to induce each other to
enter into the Merger Agreement. The Stock Option Agreements are intended to
increase the likelihood that the Merger will be consummated in accordance with
the terms of the Merger Agreement. Consequently, certain aspects of the Stock
Option Agreements may have the effect of discouraging persons who might now or
prior to the Effective Time be interested in acquiring all of or a significant
interest in NBD or First Chicago from considering or proposing such an
acquisition.
Except as otherwise noted below, the terms and conditions of the NBD Stock
Option Agreement and the First Chicago Stock Option Agreement are identical in
all material respects. For purposes of this Section, except as otherwise
noted, (i) the NBD Stock Option Agreement or the First Chicago Option
Agreement, as the case may be, is sometimes referred to as the "Issuer Option
Agreement", (ii) NBD, as issuer of the NBD Common Stock, and First Chicago, as
issuer of the First Chicago Common Stock, upon the exercise of the NBD Option
and the First Chicago Option, respectively, are sometimes individually
referred to as the "Issuer", (iii) NBD and First Chicago, as the holder of the
First Chicago Option and the NBD Option, respectively, are sometimes
individually referred to as the "Optionee", (iv) the NBD Option or the First
Chicago Option, as the case may be, is sometimes referred to as the "Issuer
Option" and (v) the NBD Common Stock and the First Chicago Common Stock is
referred to as "Issuer Common Stock".
The NBD Stock Option Agreement provides for the purchase by First Chicago of
31,270,000 shares (the "NBD Option Shares" or the "Issuer Option Shares", as
the case may be) of NBD Common Stock at an exercise price of $32 1/2 per
share, payable in cash. The NBD Option Shares, if issued pursuant to the NBD
Option Agreement, will in no event exceed 19.9% of the NBD Common Stock issued
and outstanding without giving effect to the issuance of any NBD Common Stock
pursuant to the NBD Option.
The First Chicago Stock Option Agreement provides for the purchase by NBD of
17,854,000 shares (the "First Chicago Option Shares" or the "Issuer Option
Shares", as the case may be) of First Chicago Common Stock at an exercise
price of $60 1/8 per share, payable in cash. The First Chicago Stock Option
Shares, if issued pursuant to the First Chicago Option Agreement, will in no
event exceed 19.9% of the First Chicago Common Stock issued and outstanding
without giving effect to the issuance of any First Chicago Common Stock
pursuant to the First Chicago Option.
The number of shares of Issuer Common Stock subject to the Issuer Option
will be increased or decreased to the extent that the Issuer issues additional
shares of Issuer Common Stock (otherwise than pursuant to an
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exercise of the Issuer Option) or redeems, repurchases, retires or otherwise
causes to be no longer outstanding shares of Issuer Common Stock such that the
number of shares of Issuer Common Stock subject to the Issuer Option continues
to equal 19.9% of the Issuer Common Stock then issued and outstanding, without
giving effect to the issuance of shares of Issuer Common Stock pursuant to an
exercise of the Issuer Option. In the event of any change in, or distributions
in respect of, the Issuer Common Stock by reason of stock dividends, split-
ups, mergers, recapitalizations, combinations, subdivisions, conversions,
exchanges of shares, distributions on or in respect of the Issuer Common Stock
that would be prohibited under the terms of the Merger Agreement, or the like,
the type and number of shares of Issuer Common Stock subject to the Issuer
Option, and the applicable exercise price per Issuer Option Share, will be
appropriately adjusted in such manner as to fully preserve the economic
benefits provided under the Issuer Option Agreement.
The Optionee or any other holder or holders of the Issuer Option
(collectively, the "Holder") may exercise the Issuer Option, in whole or in
part, by sending notice within 90 days (subject to extension as provided in
the Issuer Option Agreement) after the occurrence of both an "Initial
Triggering Event" and a "Subsequent Triggering Event" (as such terms are
defined herein) prior to termination of the Issuer Option. The term "Initial
Triggering Event" is defined as the occurrence of any of the following events:
(i) the Issuer or any of its subsidiaries (each an "Issuer Subsidiary"),
without having received the Optionee's prior written consent, shall have
entered into an agreement to engage in an Acquisition Transaction (as
defined herein) with any person (the term "person" for purposes of the
Issuer Option Agreement having the meaning assigned thereto in Sections
3(a)(9) and 13(d)(3) of the Exchange Act, and the rules and regulations
thereunder) other than the Optionee or any of its subsidiaries (each an
"Optionee Subsidiary") or the Board of Directors of the Issuer shall have
recommended that the stockholders of the Issuer approve or accept any such
Acquisition Transaction. For purposes of the Issuer Option Agreement,
"Acquisition Transaction" shall mean (w) a merger or consolidation, or any
similar transaction, involving the Issuer or any "Significant Subsidiary"
(as such term is defined in Rule 1-02 of Regulation S-X promulgated by the
Commission) of the Issuer, (x) a purchase, lease, or other acquisition of
all or a substantial portion of the assets or deposits of the Issuer or any
Significant Subsidiary of the Issuer, (y) a purchase or other acquisition
(including by way of merger, consolidation, share exchange or otherwise) of
securities representing 10% or more of the voting power of the Issuer, or
(z) any substantially similar transaction; provided, however, that in no
event shall any merger, consolidation, purchase, or similar transaction
involving only the Issuer and one or more of its subsidiaries or involving
only any two or more of such Issuer Subsidiaries, be deemed to be an
Acquisition Transaction, provided any such transaction is not entered into
in violation of the terms of the Merger Agreement; and provided, further,
that any transaction described in this sentence that is expressly permitted
by the Merger Agreement shall not be deemed to be an Acquisition
Transaction;
(ii) the Issuer or any Issuer Subsidiary, without having received
Optionee's prior written consent, shall have authorized, recommended,
proposed, or publicly announced its intention to authorize, recommend, or
propose, to engage in an Acquisition Transaction with any person other than
the Optionee or an Optionee Subsidiary, or the Board of Directors of the
Issuer shall have publicly withdrawn or modified, or publicly announced its
interest to withdraw or modify, in any manner adverse to the Optionee, its
recommendation that the stockholders of the Issuer approve the transactions
contemplated by the Merger Agreement;
(iii) any person other than the Optionee, any Optionee Subsidiary, or any
Issuer Subsidiary acting in a fiduciary capacity in the ordinary course of
its business (and other than any person who (a) as of the date of the
Issuer Option Agreement, beneficially owned 10% or more of the outstanding
shares of the Issuer Common Stock, and (b) would have been eligible to use
Schedule 13G but for the fact that such person owned 10% or more of the
outstanding shares of the Issuer Common Stock) shall have acquired
beneficial ownership or the right to acquire beneficial ownership of 10% or
more of the outstanding shares of the Issuer Common Stock (the term
"beneficial ownership" for purposes of the Issuer Option Agreement having
the meaning assigned thereto in Section 13(d) of the Exchange Act, and the
rules and regulations thereunder);
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(iv) any person other than the Optionee or any Optionee Subsidiary shall
have made a bona fide proposal to the Issuer or its stockholders by public
announcement or written communication that is or becomes the subject of
public disclosure to engage in an Acquisition Transaction;
(v) after an overture is made by a third party to the Issuer or its
stockholders to engage in an Acquisition Transaction, the Issuer shall have
breached any covenant or obligation contained in the Merger Agreement and
such breach (x) would entitle the Optionee to terminate the Merger
Agreement and (y) shall not have been cured prior to the date of the
written notice exercising the Issuer Option; or
(vi) any person other than the Optionee or any Optionee Subsidiary, other
than in connection with a transaction to which the Optionee has given its
prior written consent, shall have filed an application or notice with the
Federal Reserve Board or other Federal or state bank regulatory authority,
which application or notice has been accepted for processing, for approval
to engage in an Acquisition Transaction.
"Subsequent Triggering Event" is defined as either (A) the acquisition by
any person of beneficial ownership of 20% or more of the then outstanding
Issuer Common Stock, or (B) the occurrence of the Initial Triggering Event
described in clause (i) above, except that the percentage referred to in
subclause (y) thereof shall be 20%.
Within 90 days (subject to extension as provided in the Issuer Option
Agreement) after a Subsequent Triggering Event prior to the termination of the
Issuer Option, the Optionee (on behalf of itself or any subsequent Holder) may
demand that the Issuer Option and the related Issuer Option Shares be
registered under the Securities Act. Upon such demand, the Issuer must effect
such registration promptly, subject to certain exceptions. The Optionee is
entitled to two such registrations.
The Issuer Option terminates (i) at the Effective Time, (ii) upon
termination of the Merger Agreement in accordance with the terms of the Merger
Agreement prior to the occurrence of an Initial Triggering Event except a
termination by the Optionee due to the material breach by the Issuer of any
representation, warranty, covenant or other agreement in the Merger Agreement
(unless the breach by the Issuer giving rise to such right of termination is
nonvolitional), or (iii) 12 months after termination of the Merger Agreement
following the occurrence of an Initial Triggering Event or if the termination
is by the Optionee due to the material breach by the Issuer of any
representation, warranty, covenant or other agreement in the Merger Agreement
(unless the breach by the Issuer giving rise to such right of termination is
nonvolitional) (provided that if an Initial Triggering Event occurs after or
continues beyond such termination and prior to the passage of such 12-month
period, the Issuer Option will terminate twelve months from the expiration of
the last Initial Triggering Event to expire, but in no event more than 18
months after such termination).
Immediately prior to the occurrence of a Repurchase Event (as defined
herein), the Issuer is required (i) at the request of the holder delivered
prior to termination of the Issuer Option, to repurchase the Issuer Option
from the holder at a price (the "Issuer Option Repurchase Price") equal to the
amount by which (x) the "Market/Offer Price" (as defined herein) exceeds (y)
the then applicable Issuer Option exercise price, multiplied by the number of
shares for which the Issuer Option may then be exercised; and (ii) at the
request of the owner of Issuer Option Shares from time to time (the "Owner")
delivered within 90 days of such occurrence, to repurchase such number of the
Issuer Option Shares from the Owner as the Owner designates at a price per
share (the "Issuer Option Share Repurchase Price") equal to the "Market/Offer
Price". "Market/Offer Price" means the highest of (A) the price per share of
the Issuer Common Stock at which a tender offer or exchange offer therefor has
been made, (B) the price per share of the Issuer Common Stock to be paid by
any third party pursuant to an agreement with the Issuer, (C) the highest
closing price for shares of the Issuer Common Stock within the six-month
period immediately preceding the date the Holder gives notice of the required
repurchase of the Issuer Option or the Owner gives notice of the required
repurchase of the Issuer Option Shares, as the case may be, and (D) in the
event of the sale of all or a substantial portion of the Issuer's assets, the
sum of the price paid in such sale for such assets and the current market
value of the remaining assets of the Issuer divided by the number of shares of
the Issuer Common Stock then outstanding. "Repurchase Event" means (i) the
consummation of any merger, consolidation or similar transaction involving the
Issuer or any purchase, lease or other acquisition of all or a
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substantial portion of the assets of the Issuer, other than any such
transaction which would not constitute an Acquisition Transaction (as defined
above) or (ii) the acquisition by any person of beneficial ownership of 50% or
more of then outstanding shares of the Issuer Common Stock, provided that no
such event shall constitute a Repurchase Event unless a Subsequent Triggering
Event shall have occurred prior to an Exercise Termination Event (as defined
in the Stock Option Agreements).
In the event that prior to termination of the Issuer Option, the Issuer
enters into an agreement (i) to consolidate with or merge into any person
other than the Optionee or one of its subsidiaries and shall not be the
continuing or surviving corporation of such consolidation or merger, (ii) to
permit any person other than the Optionee or one of its subsidiaries to merge
into the Issuer with the Issuer as the continuing or surviving corporation,
but, in connection therewith, the then outstanding shares of the Issuer Common
Stock are changed into or exchanged for securities of any other person or cash
or any other property, or the then outstanding shares of the Issuer Common
Stock after such merger represent less than 50% of the outstanding voting
shares and voting share equivalents of the merged company, or (iii) to sell or
transfer all or substantially all of its assets to any entity other than the
Optionee or one of its subsidiaries, then such agreement shall provide that
the Issuer Option be converted into or exchanged for an option (a "Substitute
Option") to purchase shares of common stock of, at the holder's option, either
(x) the continuing or surviving corporation of a merger or consolidation or
the transferee of all or substantially all of the Issuer's assets, or (y) the
person controlling such continuing or surviving corporation or transferee. The
number of shares subject to the Substitute Option and the exercise price per
share will be determined in accordance with a formula in the Issuer Option
Agreement. To the extent possible, the Substitute Option will contain terms
and conditions that are the same as those in the Issuer Option.
The issuer of the Substitute Option will be required to repurchase the
Substitute Option at the request of the holder thereof and to repurchase any
shares of such issuer's common stock ("Substitute Common Stock") issued upon
exercise of a Substitute Option ("Substitute Shares of Issuer Common Stock")
at the request of the owner thereof. The repurchase price for a Substitute
Option will equal the amount by which (A) the Highest Closing Price (as
defined herein) exceeds (B) the exercise price of the Substitute Option,
multiplied by the number of shares of Substitute Common Stock for which the
Substitute Option may then be exercised, plus the Optionee's reasonable out-
of-pocket expenses. The repurchase price for Substitute Shares of Issuer
Common Stock shall equal the Highest Closing Price multiplied by the number of
Substitute Shares of Issuer Common Stock to be repurchased, plus the
Optionee's reasonable out-of-pocket expenses. As used herein, "Highest Closing
Price" means the highest closing price for shares of Substitute Common Stock
within the six-month period immediately preceding the date the holder gives
notice of the required repurchase of the Substitute Option or the owner gives
notice of the required repurchase of Substitute Shares of Issuer Common Stock,
as the case may be.
Neither the Issuer nor the Optionee may assign any of its respective rights
and obligations under the Issuer Option Agreement or the Issuer Option to any
other person without the other party's express written consent, except that if
a Subsequent Triggering Event occurs prior to termination of the Issuer
Option, within 90 days thereafter (subject to extension as provided in the
Issuer Option Agreement), the Optionee, subject to the provisions of the
Issuer Option Agreement, may assign, in whole or in part, its rights and
obligations thereunder; provided, however, that until 15 days after the
Federal Reserve Board approves an application by the Optionee to acquire the
Issuer Option Shares, the Optionee may not assign its rights under the Issuer
Option except in (i) a widely dispersed public distribution, (ii) a private
placement in which no one party acquires the right to purchase in excess of 2%
of the voting shares of the Issuer, (iii) an assignment to a single party for
the purpose of conducting a widely dispersed public distribution on the
Optionee's behalf, or (iv) any other manner approved by the Federal Reserve
Board.
The rights and obligations of the Issuer and the Optionee under the Issuer
Option Agreement are subject to receipt of any required regulatory approvals,
and both parties have agreed to use their best efforts in connection
therewith. These include, but are not limited to, seeking approval to list
shares of the Issuer Common Stock on the NYSE upon official notice of issuance
and applying to the Federal Reserve Board for approval to acquire the Issuer
Option Shares. See "--Regulatory Approvals Required for the Merger".
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FIRST CHICAGO RIGHTS AGREEMENT
On October 18, 1988, the First Chicago Board declared a dividend of one
preferred share purchase right (a "First Chicago Right") for each outstanding
share of First Chicago Common Stock to stockholders of record at the close of
business on December 2, 1988. Each First Chicago Right, when exercisable, will
entitle the registered holder to purchase from First Chicago one one-hundredth
of a share (a "Unit") of Series A Junior Participating Voting Preferred Stock,
without par value, of First Chicago, at a purchase price of $130 per Unit,
subject to adjustment. One additional First Chicago Right has been issued with
each share of First Chicago Common Stock issued after December 2, 1988. The
First Chicago Rights are not currently exercisable. The description and terms
of the First Chicago Rights are set forth in the Rights Agreement, dated as of
October 18, 1988, as amended as of July 13, 1990 and July 11, 1995 (the "First
Chicago Rights Agreement"), a copy of which is incorporated by reference
herein. See "Information Incorporated by Reference".
The First Chicago Rights have certain anti-takeover effects and will cause
substantial dilution to a person or group that attempts to acquire First
Chicago on terms not approved by the First Chicago Board.
Immediately prior to the execution of the Merger Agreement, the First
Chicago Board amended the First Chicago Rights Agreement to (i) amend the
definition of "Acquiring Person" and the definition of the "Distribution Date"
to permit the execution and delivery by First Chicago of the NBD Option
Agreement without NBD becoming an Acquiring Person or triggering a
Distribution Date under the First Chicago Rights Agreement and (ii) provide
that the First Chicago Rights will not be exercisable after the Effective
Time.
EMPLOYEE BENEFITS AND PLANS
The Merger Agreement requires that the employment, compensation and benefit
plans in effect with respect to employees of First Chicago (the "First Chicago
Benefit Plans") and to employees of NBD (the "NBD Benefit Plans") will remain
in effect with respect to employees of First Chicago or NBD who become
employed by the combined company at the Effective Time until such time as the
combined company adopts New Benefit Plans covering former employees of both
parties who continue to be employed by the combined company. Prior to the
Effective Time, NBD and First Chicago will cooperate in reviewing, evaluating
and analyzing the First Chicago Benefit Plans and NBD Benefit Plans with a
view towards developing appropriate New Benefit Plans for the employees
covered thereby subsequent to the Effective Time. NBD and First Chicago intend
to develop New Benefit Plans, effective as of the Effective Time or as soon
thereafter as practicable, which, among other things, (i) treat similarly
situated employees on a substantially equivalent basis, taking into account
all relevant factors, including, without limitation, duties, geographic
location, tenure, qualifications and abilities, and (ii) do not discriminate
between employees of the combined company who were covered by NBD Benefit
Plans, on the one hand, and those covered by First Chicago Benefit Plans, on
the other, at the Effective Time. The New Benefit Plans may include any of the
NBD Benefit Plans or any of the First Chicago Benefit Plans.
The foregoing notwithstanding, the combined company has, pursuant to the
Merger Agreement, agreed to honor, in accordance with their terms, all
benefits which had vested as of the date of the Merger Agreement under the
First Chicago Benefit Plans or the NBD Benefit Plans or under certain
contracts, arrangements, commitments, or understandings disclosed between the
parties. Stockholder approval and adoption of the Merger Agreement will also
constitute approval and adoption of the First Chicago Benefit Plans by the
combined company.
In addition, NBD and First Chicago have agreed to take all actions
necessary, including securing the consent of optionees, to amend the terms of
NBD Benefits Plans pursuant to which options to purchase NBD Common Stock have
been issued or granted ("NBD Stock Plans") and the First Chicago Stock Plans
and any severance or other agreements that provide for the surrender of stock
options issued thereunder in exchange for a cash payment ("LSARs") as a result
of or in connection with the Merger to provide that such LSARs will be settled
in stock with a fair market value equal to the cash that would otherwise have
been payable thereunder. Additional information concerning the First Chicago
Stock Plans is incorporated by reference to First Chicago's Annual
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Report on Form 10-K for the year ended December 31, 1994, which is
incorporated herein by reference. See "Information Incorporated By Reference."
Each First Chicago Plan Option which is outstanding and unexercised
immediately prior to the Effective Time will be converted at the Effective
Time into, and will become, a New Option to purchase Common Stock of the
combined company and will, subject to the adjustments described below,
continue to be governed by the terms of the First Chicago Stock Plans which
will be assumed by the combined company. In each case, (i) the number of
shares of Common Stock subject to the New Option will be equal to the product
of the number of shares of First Chicago Common Stock subject to the First
Chicago Plan Option and the Exchange Ratio, rounded to the nearest share, and
(ii) the exercise price per share of Common Stock of the combined company
subject to the New Option will be equal to the exercise price per share of
First Chicago Common Stock under the First Chicago Plan Option divided by the
Exchange Ratio, rounded down to the nearest cent. The duration and other terms
of each New Option will be substantially the same as the First Chicago Plan
Option.
In addition, First Chicago employees participating in the First Chicago
ESPSP will be eligible to purchase shares of the Common Stock of the combined
company at the termination of the current offering under the First Chicago
ESPSP, September 30, 1996. Subject to the adjustments described below,
participation in the First Chicago ESPSP will continue to be governed by the
terms and conditions of the First Chicago ESPSP prior to the Effective Time.
After the Effective Time and at the time provided for in the First Chicago
ESPSP, each participating First Chicago employee will be entitled to purchase
shares of Common Stock of the combined company at a purchase price equal to
such employee's original purchase price under the First Chicago ESPSP divided
by the Exchange Ratio, rounded down to the nearest cent.
STOCK EXCHANGE LISTING
The Merger Agreement provides for the filing of a listing application with
the NYSE covering the NBD stock issuable pursuant to the Merger. It is a
condition to the consummation of the Merger that such shares of NBD Common
Stock be authorized for listing on the NYSE effective upon official notice of
issuance.
EXPENSES
The Merger Agreement provides that NBD and First Chicago will each pay its
own expenses in connection with the Merger and the transactions contemplated
thereby, provided that NBD and First Chicago will divide equally all printing
costs, filing fees and registration fees in connection with the Merger
Agreement, this Joint Proxy Statement-Prospectus and the Registration
Statement of which this Joint Proxy Statement-Prospectus is a part.
DIVIDENDS
The Merger Agreement provides that NBD and First Chicago will coordinate the
declaration and payment of dividends in respect of NBD Common Stock and First
Chicago Common Stock, it being the intent of NBD and First Chicago that
holders thereof will not receive two dividends, or fail to receive one
dividend, for any quarter in which they would otherwise receive a dividend in
the absence of the Merger. Dividends on the First Chicago Preferred Stock and
the New Preferred Stock will be payable in accordance with their respective
terms.
RESALES OF NBD COMMON STOCK AND NEW PREFERRED STOCK IN THE MERGER
The NBD Common Stock and New Preferred Stock issued pursuant to the Merger
will be freely transferable under the Securities Act, except for shares issued
to any First Chicago stockholder who may be deemed to be an affiliate of NBD
for purposes of Rule 144 promulgated under the Securities Act ("Rule 144") or
an affiliate of First Chicago for purposes of Rule 145 promulgated under the
Securities Act ("Rule 145") (each an "Affiliate"). Affiliates will include
persons (generally executive officers, directors and 10% stockholders) who
control, are controlled by, or are under common control with (i) NBD or First
Chicago at the time of the First Chicago Meeting or (ii) the combined company
at or after the Effective Time.
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Rules 144 and 145 will restrict the sale of NBD Common Stock and New
Preferred Stock received in the Merger by Affiliates and certain of their
family members and related interests. Generally speaking, during the two years
following the Effective Time, those persons who are Affiliates of First
Chicago at the time of the First Chicago Meeting, provided they are not
Affiliates of NBD at or following the Effective Time, may publicly resell any
Common Stock of the combined company and New Preferred Stock received by them
in the Merger, subject to certain limitations as to, among other things, the
amount of Common Stock of the combined company and New Preferred Stock, as the
case may be, sold by them in any three-month period and as to the manner of
sale. After the two-year period, such Affiliates may resell their shares
without such restrictions so long as there is adequate current public
information with respect to the combined company as required by Rule 144.
Persons who become Affiliates of NBD prior to, or of the combined company at
or after the Effective Time, may publicly resell the Common Stock of the
combined company and New Preferred Stock received by them in the Merger
subject to similar limitations and subject to certain filing requirements
specified in Rule 144.
The ability of Affiliates to resell shares of Common Stock of the combined
company and New Preferred Stock received in the Merger under Rule 144 or Rule
145 as summarized herein generally will be subject to the combined company's
having satisfied its Exchange Act reporting requirements for specified periods
prior to the time of sale. Affiliates also would be permitted to resell Common
Stock of the combined company and New Preferred Stock received in the Merger
pursuant to an effective registration statement under the Securities Act or
another available exemption from the Securities Act registration requirements.
This Joint Proxy Statement-Prospectus does not cover any resales of Common
Stock of the combined company or New Preferred Stock received by persons who
may be deemed to be Affiliates of NBD or First Chicago in the Merger.
Commission guidelines regarding qualifying for the "pooling-of-interests"
method of accounting also limit sales of shares of the acquiring and acquired
company by affiliates of either company in a business combination. Commission
guidelines indicate further that the "pooling-of-interests" method of
accounting will generally not be challenged on the basis of sales by
affiliates of the acquiring or acquired company if they do not dispose of any
of the shares of the corporation they own or shares of a corporation they
receive in connection with a merger during the period beginning 30 days before
the merger and ending when financial results covering at least 30 days of
post-merger operations of the combined entity have been published.
Each of First Chicago and NBD has agreed in the Merger Agreement to use its
best efforts to cause each person who is an Affiliate (for purposes of Rule
145 and for purposes of qualifying the Merger for "pooling-of- interests"
accounting treatment) of such party to deliver to the other party a written
agreement intended to ensure compliance with the Securities Act and preserve
the ability to treat the Merger as a "pooling of interests".
The combined company has agreed in the Merger Agreement to use its best
efforts to publish not later than 90 days after the end of the first month
after the Effective Time in which there are at least 30 days of post-Merger
combined operations, combined sales and net income figures as contemplated by
and in accordance with the terms of the Commission's Accounting Series Release
No. 135.
NO APPRAISAL RIGHTS
Under the DGCL, holders of NBD Common Stock, First Chicago Common Stock and
First Chicago Preferred Stock will have no appraisal rights in connection with
the Merger Agreement and the consummation of the transactions contemplated
thereby.
58
<PAGE>
BOARD OF DIRECTORS, MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER
BOARD OF DIRECTORS
From and after the Effective Time, the Board of Directors of the combined
company will consist of 22 persons, divided into three classes of directors,
with each class serving staggered terms of three years, so that only one class
is elected in any one year. The Board of Directors of the combined company
will consist of Messrs. Thomas and Istock, 10 additional persons, two of whom
may be executive officers of First Chicago, to be selected prior to the
Effective Time by Mr. Thomas and the First Chicago Board, and 10 additional
persons, one of whom may be an executive officer of NBD, to be selected prior
to the Effective Time by Mr. Istock and the NBD Board. Mr. Thomas and the
First Chicago Board have designated Mr. Vitale and Mr. Marks, both currently
executive officers of First Chicago, to serve as directors of the combined
company. Mr. Istock and the NBD Board have designated Mr. Jeffs, currently an
executive officer of NBD, to serve as a director of the combined company. As
of the date of this Joint Proxy Statement-Prospectus, no additional directors
have been designated by Messrs. Istock and Thomas and the NBD and First
Chicago Boards.
The directors selected by NBD and First Chicago will be divided as equally
as practicable among the three classes of directors and the various committees
established by the Board of Directors of the combined company in proportion to
the aggregate representation of such directors.
MANAGEMENT
The executive officers of the combined company will consist of certain
members of NBD's senior management and certain members of First Chicago's
senior management. Mr. Thomas, Chairman of the Board, President, and Chief
Executive Officer of First Chicago, will be the Chairman of the Board of the
combined company following the Merger, and Mr. Istock, Chairman of the Board
and Chief Executive Officer of NBD, will be the Chief Executive Officer and
President of the combined company following the Merger. Mr. Thomas will retire
as Chairman of the Board of the combined company upon the first annual meeting
of the stockholders of the combined company following the Effective Time, at
which time Mr. Istock will become Chairman.
In addition, the following persons will have the responsibilities set forth
below at the combined company after the Merger:
<TABLE>
<CAPTION>
NAME RESPONSIBILITY
---- --------------
<S> <C>
Thomas H. Jeffs II........... Vice Chairman of First Chicago NBD Corporation and
President of NBD Bank (Michigan)
David J. Vitale.............. Vice Chairman of First Chicago NBD Corporation and
President of The First National Bank of Chicago
Scott P. Marks, Jr........... Vice Chairman of First Chicago NBD Corporation and
Chairman of FCC National Bank
Frederick M. Adams, Jr. ..... Corporate Retail Support
John W. Ballantine........... Corporate Banking
Alan F. Delp................. Chairman of American National Bank and Trust
Company of Chicago
Sherman I. Goldberg.......... General Counsel
Thomas H. Hodges............. Corporate Banking
Fred J. Johns................ Human Resources
Philip S. Jones.............. Corporate Banking Head
W.G. Jurgensen............... Community Banking
James R. Lancaster........... Regional/Community Banking Head
Thomas J. McDowell........... Risk Management
Susan S. Moody............... Corporate Banking
Andrew J. Paine, Jr.......... President of NBD Bank, N.A. (Indiana)
Robert A. Rosholt............ Chief Financial Officer
</TABLE>
59
<PAGE>
Additional information about certain of such persons, including Messrs.
Istock and Thomas and the directors of NBD and First Chicago, is contained in
NBD's and First Chicago's respective Annual Reports on Form 10-K for the year
ended December 3l, 1994, which are incorporated by reference in this Joint
Proxy Statement-Prospectus. See "Available Information" and "Information
Incorporated by Reference".
Except for the foregoing, it has not yet been determined which members of
NBD's or First Chicago's senior management also will become executive officers
or directors of the combined company following the Merger or what such
persons' titles or functions will be. From time to time prior to consummation
of the Merger, decisions may be made with respect to the management and
operations of the combined company following the Merger, including the
selection of executive officers of the combined company.
OPERATIONS
Following the Merger, the combined company intends to combine the operations
of and may, subject to required regulatory approvals, merge certain of the
subsidiary banks of NBD and First Chicago and consolidate the operations of
certain other NBD and First Chicago subsidiaries which provide similar
services. As of the date of this Joint Proxy Statement-Prospectus, no final
determination with respect to such matters had been made, although it is
anticipated that NBD's Illinois bank subsidiaries will be combined with First
Chicago's Illinois bank subsidiaries.
While no assurances can be given, NBD and First Chicago expect to achieve
annualized pre-tax cost savings of approximately $200 million by 1997. Such
cost savings are expected to be realized primarily through reductions in
staff, elimination or consolidation of certain branches, consolidation of the
parties' credit card businesses, and the consolidation of certain offices,
data processing and other redundant back-office operations and staff
functions. Cost reductions and branch consolidations will come from both
companies. Reductions resulting from elimination of the overlap in Chicago-
area retail branch expense constitute the largest component of the anticipated
cost reductions. The extent to which cost savings will be achieved is
dependent upon various factors beyond the control of NBD and First Chicago,
including the regulatory environment, economic conditions, unanticipated
changes in business conditions, inflation and the level of FDIC assessments.
Therefore, no assurances can be given with respect to the ultimate level of
cost savings to be realized, or that such savings will be realized in the
time-frame currently anticipated.
NBD and First Chicago also anticipate that in order to achieve approximately
$200 million of annualized, pre-tax savings by 1997, they will incur one-time
Merger expenses and restructuring charges in connection with the Merger,
estimated to be approximately $225 million (pre-tax) in the aggregate,
principally as a result of expenses to be incurred in connection with
anticipated staff reductions, elimination of duplicate headquarters and
operational facilities, and branch consolidations. It is anticipated that
substantially all of these charges will be recognized during 1995 and paid
within 12 to 15 months of the Merger. For additional information with respect
to the estimated $225 million one-time Merger expenses and restructuring
charges, see "Unaudited Pro Forma Condensed Combined Financial Statements".
While no assurances can be given, NBD and First Chicago expect to achieve
annualized revenue enhancements of up to approximately $50 million per year by
1997. These revenue enhancements will come principally from the combined
company's ability to offer a wider array of corporate risk- and cash-
management products and from improved funding costs.
NBD and First Chicago expect to reduce the combined company's balance sheet
by up to approximately $25 billion of generally highly-liquid, low-margin
assets and related short-term funding sources. While no assurances can be
given, NBD and First Chicago expect that shedding these assets will lower the
combined company's average cost of funding and will generate up to
approximately $1 billion in additional capital for reinvestment or return to
stockholders by 1997. It is not anticipated that the balance sheet reduction
program will have any significant impact on the combined company's operating
results. In addition, NBD and First Chicago do not anticipate incurring any
material probable losses as a result of this balance sheet reduction program.
The combined company will have its corporate headquarters in Chicago,
Illinois, following the Merger, but intends to maintain a significant presence
in Detroit, Michigan, where NBD Bank will be headquartered.
60
<PAGE>
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of First Chicago's management and the First Chicago Board,
and NBD's management and the NBD Board, respectively, may be deemed to have
certain interests in the Merger that are in addition to their interests as
stockholders of First Chicago or NBD, as the case may be, generally. The First
Chicago Board and the NBD Board were aware of these interests and considered
them, among other matters, in approving the Merger Agreement and the
transactions contemplated thereby.
The directors, officers and principal stockholders of First Chicago and
their associates may have had in the past, and expect to have in the future,
transactions in the ordinary course of business with NBD and its subsidiaries.
The directors, officers and principal stockholders of NBD and their associates
may have had in the past, and expect to have in the future, transactions in
the ordinary course of business with First Chicago and its subsidiaries. Such
transactions were, and are expected to be, on substantially the same terms as
those prevailing at the time for comparable transactions with others.
Directorships and Officerships. The Merger Agreement provides that, from and
after the Effective Time, the Board of Directors of the combined company will
be comprised of 22 directors, including Mr. Thomas (who will serve as Chairman
of the combined company until the first annual meeting of stockholders of the
combined company after the Effective Time), Mr. Istock (who will serve as
Chief Executive Officer and President of the combined company and will be
Chairman of the combined company following the first annual meeting of
stockholders of the combined company held after the Effective Time), 10
additional persons, one of whom may be an executive officer of NBD, to be
selected prior to the Effective Time by Mr. Istock and the NBD Board, and 10
additional persons, two of whom may be executive officers of First Chicago, to
be selected prior to the Effective Time by Mr. Thomas and the First Chicago
Board. In addition, after the Effective Time, Mr. Jeffs will serve as Vice
Chairman of the combined company and President of NBD Bank, Mr. Vitale will
serve as Vice Chairman of the combined company and President of FNBC, and Mr.
Marks will serve as Vice Chairman of the combined company and Chairman of FCC
National Bank. See "Board of Directors, Management and Operations Following
the Merger".
Indemnification; Directors' and Officers' Insurance. The Merger Agreement
provides that, in the event of any threatened or actual claim or proceeding in
which any person who is or has been a director, officer or employee of First
Chicago, its subsidiaries or any of their predecessors (the "Indemnified
Parties") is, or is threatened to be, made a party based in whole or in part
on, or pertaining to, (i) the fact that such person was a director, officer or
employee of First Chicago, its subsidiaries or any of their predecessors, or
(ii) the Merger Agreement, the Stock Option Agreements or the transactions
contemplated thereby, the combined company will, subject to the conditions set
forth in the Merger Agreement, indemnify such person to the fullest extent
permitted by law against any liability or expense incurred in connection with
any such claim or proceeding. The Merger Agreement provides that the combined
company's obligation to indemnify any Indemnified Party will continue for a
period of at least six years following the Effective Time, provided that
rights to indemnification in respect of any claim asserted or made within such
period will continue until final disposition of such claim. The Merger
Agreement further provides that the combined company will, subject to the
conditions set forth in the Merger Agreement, use its best efforts to cause
the persons serving as officers and directors of First Chicago immediately
prior to the Merger to be covered for a period of at least six years following
the Effective Time by First Chicago's directors' and officers' liability
insurance policy (or any equivalent substitute therefor), provided that the
combined company will not be required to expend more than 200% of the current
amount expended by First Chicago to procure such insurance.
Severance Policies. NBD and First Chicago have each agreed to adopt new
severance policies covering employees which are expected to become effective
prior to the Effective Time and which thereafter will become obligations of
the combined company.
New Employment Agreements. First Chicago has entered into employment
agreements with 11 key executives (including Messrs. Thomas, Vitale, Marks,
and W.G. Jurgensen), and NBD has entered into employment agreements with 12
key executives (including Messrs. Istock, Jeffs, Andrew J. Paine, Jr., and
Philip S. Jones) which will become effective at the Effective Time and will
thereafter become obligations of the combined company. Each of these
employment agreements (the "New Employment Agreements") provides that in the
event an employee who is party to a New Employment Agreement (a "Covered
Executive") is terminated during the two-year period following the Effective
Time other than due to death, disability or for cause (as defined in the New
Employment Agreements) or if such Covered Executive terminates his employment
for Good Reason (defined in the New Employment Agreements to include a
material diminution of duties and responsibilities or benefits), the Covered
Executive will receive a severance payment consisting of: (a) the
61
<PAGE>
Covered Executive's base salary through the date of termination, (b) a
proportionate bonus based upon the average bonus paid to the Covered Executive
with respect to the three fiscal years prior to the Effective Time (the
"Average Bonus"), (c) the product of two and one-half and the sum of the
Covered Executive's base salary and the Average Bonus, and (d) unpaid deferred
compensation and vacation pay. The Covered Executive will also be entitled to
a payment equal to the actuarial value of the additional service credit under
the combined company's qualified and supplemental retirement plans the Covered
Executive would have received had the Covered Executive remained employed for
30 months after the date of termination, which amount will be payable pursuant
to the terms of the supplemental retirement plans. The factors that provide
the basis for calculating the severance payments and additional service credit
payments vary over time, and consequently can only be determined as of the
specific date upon which any such payments accrue. If payments were to be made
at the Effective Time, the total of such severance payments and additional
service credit payments to each of Messrs. Thomas, Vitale, Marks, Jurgensen,
Istock, Jeffs, Paine and Jones would be $6,850,500, $3,264,500, $2,702,500,
$2,219,000, $3,859,300, $3,387,800, $1,307,800 and $1,900,400, respectively. A
Covered Executive whose employment is not terminated in the manner described
in this paragraph will not be entitled to receive any severance or additional
service credit payments under the New Employment Agreements. In addition to
such severance payments and additional service credit payments, the Covered
Executive is entitled to continued employee welfare benefits for 30 months
after his date of termination. The combined company will also provide the
Covered Executive with outplacement services, secretarial support, office
space and a company car (if provided prior to the termination of employment)
for one year following such termination. In addition, the New Employment
Agreements provide that in the event a Covered Executive becomes entitled to
receive a severance payment, additional service credit payment and other
severance benefits and such severance payment and benefits are subject to an
excise tax, the Covered Executive will become entitled to receive an
additional payment in an amount such that after the payment of all income and
excise taxes, the Covered Executive will be in the same after-tax position as
if no excise tax had been imposed (the severance payments and benefits
described in this paragraph, collectively, the "Severance Benefits").
New Change of Control Agreements. First Chicago has entered into change of
control severance agreements with 14 key executives of First Chicago including
the 11 key executives who have entered into New Employment Agreements, and NBD
has entered into change of control severance agreements with the same 12 key
executives of NBD who have entered into New Employment Agreements. These
executive severance agreements (the "Executive Severance Agreements") are
effective as of July 11, 1995, the date of the Merger Agreement, and provide,
generally, that if, within three years subsequent to a change of control of
NBD or First Chicago, as the case may be (a "Change of Control"), or the 30-
day period which begins one year after the Change of Control, the Covered
Executive's employment is terminated (other than for cause, or for other
limited reasons specified in the Executive Severance Agreements), or if the
Covered Executive terminates employment for Good Reason (defined in the
Executive Severance Agreements to include a material diminution of duties and
responsibilities or benefits), the Covered Executive will be entitled to
receive the Severance Benefits (as defined herein).
The Merger does not constitute a Change of Control for purposes of the
Executive Severance Agreements.
In the case of First Chicago, the Executive Severance Agreements amend the
change of control employment agreements previously in effect between First
Chicago and the same key executives of First Chicago who have entered into New
Employment Agreements. The original change of control agreements with such
executive provided benefits similar to the Severance Benefits as described
above but did not provide for any additional payments to an executive upon the
imposition of an excise tax.
Other Benefit Plans. NBD and First Chicago have each represented and
warranted to the other party that the consummation of the Merger and the other
transactions contemplated in the Merger Agreement will not (i) result in any
material payment becoming due to any of their respective directors or
employees under any applicable employee benefit plan or otherwise, (ii)
materially increase any benefits otherwise payable under any applicable
employee benefit plan or (iii) result in any acceleration of the time of
payment or vesting of any such benefits to any material extent.
Transitional Compensation Arrangement. On July 13, 1995, Leo F. Mullin
resigned as the President and Chief Operating Officer of First Chicago and of
FNBC; Mr. Mullin also resigned from the Board of Directors of First Chicago
and of FNBC. In consideration of Mr. Mullin's significant contributions to
First Chicago throughout his 15-year tenure, First Chicago expects to enter
into a transitional compensation agreement with Mr. Mullin. As of the date of
this Joint Proxy Statement-Prospectus, no such agreement has been finalized;
however, Mr. Mullin is not expected to be an employee or director of, or a
consultant to, the combined company following the Merger.
62
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Combined Balance Sheet as of
June 30, 1995, and the Unaudited Pro Forma Condensed Combined Statements of
Income for each of the three years ended December 31, 1994, 1993, and 1992 and
for the six month periods ended June 30, 1995 and June 30, 1994, give effect
to the Merger, accounted for as a "pooling of interests". The Pro Forma
Condensed Combined Balance Sheet assumes the Merger was effective on June 30,
1995. The Unaudited Pro Forma Condensed Combined Statements of Income give
effect to the Merger as if the Merger had occurred on January 1 in each such
year.
The pro forma information is based on the historical consolidated financial
statements of NBD and of First Chicago, under the assumptions and adjustments
set forth in the accompanying Notes to the Unaudited Pro Forma Condensed
Combined Financial Statements. The pro forma condensed combined financial
statements do not give effect to the anticipated cost savings or potential
revenue enhancements in connection with the Merger. See "Board of Directors,
Management and Operations Following the Merger--Operations".
The information shown below should be read in conjunction with the
consolidated historical financial statements of NBD and of First Chicago,
including the respective notes thereto, which are incorporated by reference in
this Joint Proxy Statement-Prospectus, and the unaudited pro forma condensed
combined per share financial information, including the notes thereto, which
appear elsewhere in this Joint Proxy Statement-Prospectus. The pro forma data
are presented for comparative purposes only and are not necessarily indicative
of the combined financial position or results of operations in the future or
of the combined financial position or results of operations which would have
been realized had the Merger been consummated during the periods or as of the
dates for which the pro forma data are presented.
Pro forma per share amounts for the combined NBD and First Chicago entity
are based on the Exchange Ratio of 1.81 shares of NBD Common Stock for each
share of First Chicago Common Stock. See "Information Incorporated by
Reference", "Summary of Joint Proxy Statement-Prospectus--Comparative Stock
Prices and Dividends; Pro Forma Equivalent Market Value Per Share", "Selected
Historical and Pro Forma Per Share Data" and "Selected Consolidated Financial
Data".
63
<PAGE>
FIRST CHICAGO NBD CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
NBD FIRST CHICAGO PRO FORMA PRO FORMA
(AS REPORTED) (AS REPORTED) ADJUSTMENTS COMBINED
------------- ------------- ----------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks-
noninterest bearing......... $ 2,376 $ 3,646 $ $ 6,022
Due from banks-interest
bearing..................... 579 9,484 10,063
Federal funds sold and
securities under resale
agreements.................. 138 14,274 14,412
Trading account assets....... 144 7,706 7,850
Derivative product assets.... 87 8,909 8,996
Investment securities........ 11,092 2,583 13,675
Loans........................ 31,967 26,517 58,484
Allowance for credit losses.. (470) (689) (1,159)
Other assets................. 2,138 2,898 5,036
------- ------- ------- --------
Total assets............. $48,051 $75,328 $ -- $123,379
======= ======= ======= ========
LIABILITIES
Deposits:
Demand..................... $ 6,805 $ 6,941 $ $ 13,746
Savings.................... 12,455 7,442 19,897
Time....................... 9,636 5,681 15,317
Foreign offices............ 3,659 13,700 17,359
------- ------- ------- --------
Total deposits........... 32,555 33,764 -- 66,319
Short-term borrowings........ 7,862 23,516 31,378
Long-term debt............... 3,012 2,271 5,283
Derivative product
liabilities................. 92 8,581 8,673
Other liabilities............ 928 2,425 146 3,499
------- ------- ------- --------
Total liabilities........ 44,449 70,557 146 115,152
STOCKHOLDERS' EQUITY
Preferred stock.............. -- 611 611
Common stock................. 161 467 (467) 323
162
Surplus...................... 533 1,712 (1,712) 2,362
1,829
Retained earnings............ 3,082 2,169 (142) 5,105
(4)
Other........................ (57) -- (57)
------- ------- ------- --------
Total.................... 3,719 4,959 (334) 8,344
Less: Treasury stock......... 117 188 (188) 117
------- ------- ------- --------
Total Stockholders' equi-
ty........................ 3,602 4,771 (146) 8,227
------- ------- ------- --------
Total liabilities and
stockholders' equity.... $48,051 $75,328 $ -- $123,379
======= ======= ======= ========
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements.
64
<PAGE>
FIRST CHICAGO NBD CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR SIX MONTHS
FOR YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------ -----------------
1994 1993 1992 1995 1994
--------- --------- --------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans.... $ 4,000.1 $ 3,611.5 $ 3,934.0 $2,544.1 $1,876.9
Interest on Federal funds sold
and securities under resale
agreements................... 623.9 349.6 290.7 485.9 227.5
Interest on trading account
assets....................... 284.4 227.3 268.1 194.3 118.2
Interest on investment
securities................... 832.5 724.2 811.3 441.3 379.8
Other interest income......... 394.4 334.3 409.3 304.6 172.5
--------- --------- --------- -------- --------
Total....................... 6,135.3 5,246.9 5,713.4 3,970.2 2,774.9
INTEREST EXPENSE
Interest on deposits.......... 1,652.7 1,472.0 2,082.4 1,239.7 727.6
Interest on short-term
borrowings................... 1,230.0 760.1 752.8 968.7 461.7
Interest on long-term debt.... 296.9 230.9 185.4 183.3 134.6
--------- --------- --------- -------- --------
Total....................... 3,179.6 2,463.0 3,020.6 2,391.7 1,323.9
NET INTEREST INCOME........... 2,955.7 2,783.9 2,692.8 1,578.5 1,451.0
Provision for credit losses... 276.0 389.7 653.5 175.2 117.0
Provision for loans held for
accelerated disposition...... -- -- 491.0 -- --
--------- --------- --------- -------- --------
Net Interest Income After
Combined Credit Provisions... 2,679.7 2,394.2 1,548.3 1,403.3 1,334.0
NONINTEREST INCOME
Equity securities gains....... 228.6 480.2 204.6 114.5 138.1
Investment securities gains
(losses)..................... (1.3) 9.6 10.2 1.7 1.4
Credit card fee revenue....... 870.7 730.3 553.4 424.9 394.3
Other noninterest income...... 1,322.2 1,567.7 1,249.2 697.8 669.6
--------- --------- --------- -------- --------
Total....................... 2,420.2 2,787.8 2,017.4 1,238.9 1,203.4
NONINTEREST EXPENSE
Salaries and employee
benefits..................... 1,589.6 1,557.7 1,424.2 823.0 775.8
Occupancy and equipment
expense...................... 501.6 460.3 489.2 244.9 261.7
Other noninterest expense..... 1,131.7 1,162.0 1,380.0 557.6 562.2
--------- --------- --------- -------- --------
Total....................... 3,222.9 3,180.0 3,293.4 1,625.5 1,599.7
INCOME BEFORE INCOME TAXES.... 1,877.0 2,002.0 272.3 1,016.7 937.7
Applicable income taxes....... 640.0 715.7 48.8 349.9 317.1
--------- --------- --------- -------- --------
INCOME FROM CONTINUING
OPERATIONS................... $ 1,237.0 $ 1,286.3 $ 223.5 $ 666.8 $ 620.6
--------- --------- --------- -------- --------
COMMON SHARE DATA
Income from continuing
operations
Primary....................... $ 3.67 $ 3.90 $ 0.60 $ 2.00 $ 1.84
Fully diluted................. 3.62 3.78 0.60 1.97 1.81
Weighted average shares
Primary....................... 322.7 315.4 299.2 323.5 319.8
Fully diluted................. 330.8 331.3 N/M 330.5 329.4
</TABLE>
--------
N/M = Not Meaningful
See accompanying notes to unaudited pro forma condensed combined financial
statements.
65
<PAGE>
FIRST CHICAGO NBD CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
NBD FIRST CHICAGO PRO FORMA
(AS REPORTED) (AS REPORTED) COMBINED
------------- ------------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans............... $2,102.9 $1,897.2 $4,000.1
Interest on Federal funds sold and
securities under resale agreements...... 8.7 615.2 623.9
Interest on trading account assets....... 6.7 277.7 284.4
Interest on investment securities........ 764.3 68.2 832.5
Other interest income.................... 32.7 361.7 394.4
-------- -------- --------
Total.................................. 2,915.3 3,220.0 6,135.3
INTEREST EXPENSE
Interest on deposits..................... 873.2 779.5 1,652.7
Interest on short-term borrowings........ 290.6 939.4 1,230.0
Interest on long-term debt............... 126.8 170.1 296.9
-------- -------- --------
Total.................................. 1,290.6 1,889.0 3,179.6
NET INTEREST INCOME...................... 1,624.7 1,331.0 2,955.7
Provision for credit losses.............. 52.0 224.0 276.0
-------- -------- --------
Net Interest Income After Provision for
Credit Losses........................... 1,572.7 1,107.0 2,679.7
NONINTEREST INCOME
Equity securities gains.................. -- 228.6 228.6
Investment securities gains (losses)..... (2.5) 1.2 (1.3)
Credit card fee revenue.................. 38.6 832.1 870.7
Other noninterest income................. 509.5 812.7 1,322.2
-------- -------- --------
Total.................................. 545.6 1,874.6 2,420.2
NONINTEREST EXPENSE
Salaries and employee benefits........... 720.7 868.9 1,589.6
Occupancy and equipment expense.......... 206.9 294.7 501.6
Other noninterest expense................ 376.7 755.0 1,131.7
-------- -------- --------
Total.................................. 1,304.3 1,918.6 3,222.9
INCOME BEFORE INCOME TAXES............... 814.0 1,063.0 1,877.0
Applicable income taxes.................. 266.7 373.3 640.0
-------- -------- --------
INCOME FROM CONTINUING OPERATIONS........ $ 547.3 $ 689.7 $1,237.0
-------- -------- --------
COMMON SHARE DATA
Income from continuing operations
Primary.................................. $ 3.45 $ 7.04 $ 3.67
Fully diluted............................ 3.43 6.88 3.62
Weighted average shares
Primary.................................. 158.8 90.5 322.7
Fully diluted............................ 160.1 94.2 330.8
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements.
66
<PAGE>
FIRST CHICAGO NBD CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR YEAR ENDED DECEMBER 31, 1993
(UNAUDITED)
<TABLE>
<CAPTION>
NBD FIRST CHICAGO PRO FORMA
(AS REPORTED) (AS REPORTED) COMBINED
------------- ------------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans............... $1,924.1 $1,687.4 $3,611.5
Interest on Federal funds sold and
securities under resale agreements...... 4.8 344.8 349.6
Interest on trading account assets....... 5.4 221.9 227.3
Interest on investment securities........ 652.2 72.0 724.2
Other interest income.................... 36.3 298.0 334.3
-------- -------- --------
Total.................................. 2,622.8 2,624.1 5,246.9
INTEREST EXPENSE
Interest on deposits..................... 827.9 644.1 1,472.0
Interest on short-term borrowings........ 156.2 603.9 760.1
Interest on long-term debt............... 80.6 150.3 230.9
-------- -------- --------
Total.................................. 1,064.7 1,398.3 2,463.0
NET INTEREST INCOME...................... 1,558.1 1,225.8 2,783.9
Provision for credit losses.............. 119.7 270.0 389.7
-------- -------- --------
Net Interest Income After Provision for
Credit Losses........................... 1,438.4 955.8 2,394.2
NONINTEREST INCOME
Equity securities gains.................. -- 480.2 480.2
Investment securities gains.............. 9.3 0.3 9.6
Credit card fee revenue.................. 36.1 694.2 730.3
Other noninterest income................. 540.0 1,027.7 1,567.7
-------- -------- --------
Total.................................. 585.4 2,202.4 2,787.8
NONINTEREST EXPENSE
Salaries and employee benefits........... 703.8 853.9 1,557.7
Occupancy and equipment expense.......... 202.3 258.0 460.3
Other noninterest expense................ 415.8 746.2 1,162.0
-------- -------- --------
Total.................................. 1,321.9 1,858.1 3,180.0
INCOME BEFORE INCOME TAXES............... 701.9 1,300.1 2,002.0
Applicable income taxes.................. 220.1 495.6 715.7
-------- -------- --------
INCOME FROM CONTINUING OPERATIONS........ $ 481.8 $ 804.5 $1,286.3
-------- -------- --------
COMMON SHARE DATA
Income from continuing operations
Primary.................................. $ 2.98 $ 8.78 $ 3.90
Fully diluted............................ 2.93 8.43 3.78
Weighted average shares
Primary.................................. 161.3 85.2 315.4
Fully diluted............................ 167.9 90.3 331.3
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements.
67
<PAGE>
FIRST CHICAGO NBD CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR YEAR ENDED DECEMBER 31, 1992
(UNAUDITED)
<TABLE>
<CAPTION>
NBD FIRST CHICAGO PRO FORMA
(AS REPORTED) (AS REPORTED) COMBINED
------------- ------------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans............... $2,039.6 $1,894.4 $3,934.0
Interest on Federal funds sold and
securities under resale agreements...... 5.9 284.8 290.7
Interest on trading account assets....... 9.1 259.0 268.1
Interest on investment securities........ 737.9 73.4 811.3
Other interest income.................... 51.3 358.0 409.3
-------- -------- --------
Total.................................. 2,843.8 2,869.6 5,713.4
INTEREST EXPENSE
Interest on deposits..................... 1,108.7 973.7 2,082.4
Interest on short-term borrowings........ 166.8 586.0 752.8
Interest on long-term debt............... 58.5 126.9 185.4
-------- -------- --------
Total.................................. 1,334.0 1,686.6 3,020.6
NET INTEREST INCOME...................... 1,509.8 1,183.0 2,692.8
Provision for credit losses.............. 228.5 425.0 653.5
Provision for loans held for accelerated
disposition............................. -- 491.0 491.0
-------- -------- --------
Net Interest Income After Combined Credit
Provisions.............................. 1,281.3 267.0 1,548.3
NONINTEREST INCOME
Equity securities gains.................. -- 204.6 204.6
Investment securities gains.............. 1.6 8.6 10.2
Credit card fee revenue.................. 37.3 516.1 553.4
Other noninterest income................. 490.3 758.9 1,249.2
-------- -------- --------
Total.................................. 529.2 1,488.2 2,017.4
NONINTEREST EXPENSE
Salaries and employee benefits........... 676.2 748.0 1,424.2
Occupancy and equipment expense.......... 192.0 297.2 489.2
Other noninterest expense................ 469.9 910.1 1,380.0
-------- -------- --------
Total.................................. 1,338.1 1,955.3 3,293.4
INCOME (LOSS) BEFORE INCOME TAXES........ 472.4 (200.1) 272.3
Applicable income taxes (benefits)....... 134.4 (85.6) 48.8
-------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS. $ 338.0 $ (114.5) $ 223.5
-------- -------- --------
COMMON SHARE DATA
Income (loss) from continuing operations
Primary.................................. $ 2.11 $ (2.08) $ 0.60
Fully diluted............................ 2.06 (2.08) 0.60
Weighted average shares
Primary.................................. 160.7 76.5 299.2
Fully diluted............................ 168.9 N/M N/M
</TABLE>
--------
N/M = Not Meaningful.
See accompanying notes to unaudited pro forma condensed combined financial
statements.
68
<PAGE>
FIRST CHICAGO NBD CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
NBD FIRST CHICAGO PRO FORMA
(AS REPORTED) (AS REPORTED) COMBINED
------------- ------------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans............... $1,345.8 $1,198.3 $2,544.1
Interest on Federal funds sold and
securities under resale agreements...... 6.4 479.5 485.9
Interest on trading account assets....... 3.5 190.8 194.3
Interest on investment securities........ 397.4 43.9 441.3
Other interest income.................... 22.9 281.7 304.6
-------- -------- --------
Total.................................. 1,776.0 2,194.2 3,970.2
INTEREST EXPENSE
Interest on deposits..................... 604.0 635.7 1,239.7
Interest on short-term borrowings........ 231.3 737.4 968.7
Interest on long-term debt............... 91.4 91.9 183.3
-------- -------- --------
Total.................................. 926.7 1,465.0 2,391.7
NET INTEREST INCOME...................... 849.3 729.2 1,578.5
Provision for credit losses.............. 40.2 135.0 175.2
-------- -------- --------
Net Interest Income After Provision for
Credit Losses........................... 809.1 594.2 1,403.3
NONINTEREST INCOME
Equity securities gains.................. -- 114.5 114.5
Investment securities gains.............. 1.7 -- 1.7
Credit card fee revenue.................. 20.1 404.8 424.9
Other noninterest income................. 259.3 438.5 697.8
-------- -------- --------
Total.................................. 281.1 957.8 1,238.9
NONINTEREST EXPENSE
Salaries and employee benefits........... 361.8 461.2 823.0
Occupancy and equipment expense.......... 106.8 138.1 244.9
Other noninterest expense................ 191.1 366.5 557.6
-------- -------- --------
Total.................................. 659.7 965.8 1,625.5
INCOME BEFORE INCOME TAXES............... 430.5 586.2 1,016.7
Applicable income taxes.................. 146.2 203.7 349.9
-------- -------- --------
INCOME FROM CONTINUING OPERATIONS........ $ 284.3 $ 382.5 $ 666.8
-------- -------- --------
COMMON SHARE DATA
Income from continuing operations
Primary.................................. $ 1.79 $ 3.98 $ 2.00
Fully diluted............................ 1.79 3.88 1.97
Weighted average shares
Primary.................................. 158.6 91.1 323.5
Fully diluted............................ 158.6 95.0 330.5
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements.
69
<PAGE>
FIRST CHICAGO NBD CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR SIX MONTHS ENDED JUNE 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
NBD FIRST CHICAGO PRO FORMA
(AS REPORTED) (AS REPORTED) COMBINED
------------- ------------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans............... $ 969.0 $ 907.9 $1,876.9
Interest on Federal funds sold and
securities under resale agreements...... 2.8 224.7 227.5
Interest on trading account assets....... 2.4 115.8 118.2
Interest on investment securities........ 349.3 30.5 379.8
Other interest income.................... 15.0 157.5 172.5
------- ------- --------
Total.................................. 1,338.5 1,436.4 2,774.9
INTEREST EXPENSE
Interest on deposits..................... 390.8 336.8 727.6
Interest on short-term borrowings........ 107.7 354.0 461.7
Interest on long-term debt............... 52.4 82.2 134.6
------- ------- --------
Total.................................. 550.9 773.0 1,323.9
NET INTEREST INCOME...................... 787.6 663.4 1,451.0
Provision for credit losses.............. 24.0 93.0 117.0
------- ------- --------
Net Interest Income After Provision for
Credit Losses........................... 763.6 570.4 1,334.0
NONINTEREST INCOME
Equity securities gains.................. -- 138.1 138.1
Investment securities gains.............. 0.3 1.1 1.4
Credit card fee revenue.................. 18.1 376.2 394.3
Other noninterest income................. 254.3 415.3 669.6
------- ------- --------
Total.................................. 272.7 930.7 1,203.4
NONINTEREST EXPENSE
Salaries and employee benefits........... 355.5 420.3 775.8
Occupancy and equipment expense.......... 105.6 156.1 261.7
Other noninterest expense................ 193.5 368.7 562.2
------- ------- --------
Total.................................. 654.6 945.1 1,599.7
INCOME BEFORE INCOME TAXES............... 381.7 556.0 937.7
Applicable income taxes.................. 123.6 193.5 317.1
------- ------- --------
INCOME FROM CONTINUING OPERATIONS........ $ 258.1 $ 362.5 $ 620.6
------- ------- --------
COMMON SHARE DATA
Income from continuing operations
Primary.................................. $ 1.61 $ 3.76 $ 1.84
Fully diluted............................ 1.59 3.67 1.81
Weighted average shares
Primary.................................. 160.7 87.9 319.8
Fully diluted............................ 163.5 91.7 329.4
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements.
70
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
a) The pro forma information presented is not necessarily indicative of the
results of operations or the combined financial position that would have
resulted had the Merger been consummated at the beginning of the periods
indicated, nor is it necessarily indicative of the results of operations in
future periods or the future financial position of the combined entities.
It is anticipated that the Merger will be consummated by the end of 1995.
b) First Chicago and NBD are still in the process of reviewing their
respective accounting policies in light of those employed by the other
entity. As a result of this review, it might be necessary to restate either
First Chicago's or NBD's financial statements to conform to those
accounting policies that are most appropriate. No restatements of prior
periods have been included in the pro forma condensed combined financial
statements. At this time, it is not expected that conformance of such
accounting policies will have a material impact on the pro forma condensed
combined financial statements. Any restatements, if appropriate, will be
made upon the completion of this review process.
c) Certain reclassifications have been included in the unaudited pro forma
condensed combined balance sheet and statements of income to conform
statement presentations. Transactions conducted in the ordinary course of
business between the two companies are immaterial, and accordingly, have
not been eliminated.
d) Pro forma adjustments to common shares and surplus at June 30, 1995,
reflect the Merger accounted for as a "pooling of interests", through the
exchange of 162.4 million shares of Common Stock of the combined company
(using the Exchange Ratio of 1.81) for the 89.7 million outstanding shares
of First Chicago Common Stock. Retained earnings and dividends payable have
been adjusted by approximately $4 million, reflecting the pro forma number
of shares at NBD's current dividend rate.
The pro forma entries are displayed below (in millions):
<TABLE>
<S> <C> <C>
Debit Common stock (First Chicago)............................ $ 467
Debit Common surplus (First Chicago).......................... 1,712
Credit Treasury stock (First Chicago)....................... $ 188
Credit Common stock (combined company)...................... 162
Credit Common surplus (combined company).................... 1,829
Debit Retained earnings....................................... $ 4
Credit Other liabilities.................................... $ 4
</TABLE>
e) The pro forma financial information presented does not give effect to First
Chicago's and NBD's plan to repurchase in the aggregate approximately $300
million worth of First Chicago Common Stock and NBD Common Stock prior to
the consummation of the Merger.
f) Income per share data has been computed based on the combined historical
income from continuing operations applicable to common stockholders of
First Chicago and NBD using the historical weighted average number of
outstanding shares of NBD Common Stock, and the historical weighted average
number of outstanding shares of First Chicago Common Stock adjusted to
equivalent shares of Common Stock of the combined company, as of the
earliest period presented.
g) The pro forma condensed combined financial statements do not include the
anticipated cost savings in connection with the Merger. It is estimated,
however, that approximately $200 million in pre-tax annualized cost savings
($126 million after-tax) will be realized by the combined company in 1997.
Reductions resulting from elimination of the overlap in Chicago-area retail
branch expense constitute the largest component. Product synergies in the
large corporate and middle markets, and staff and functional areas, also
provide additional expense reduction opportunities.
71
<PAGE>
h) First Chicago and NBD are still in the process of reviewing their combined
investment securities portfolio to determine the classification of such
securities as either available-for-sale or held-to-maturity in connection
with the combined company's existing interest rate risk position. As a
result of this review, certain reclassifications of the combined company's
investment securities might take place. No adjustments have been made to
existing securities classifications in the pro forma condensed combined
balance sheet. Any such reclassifications will be accounted for in
accordance with Financial Accounting Standards Board's Statement No. 115.
i) A liability of $225 million has been recorded in the unaudited pro forma
condensed combined balance sheet to reflect First Chicago's and NBD's
current estimate of merger and restructuring related charges in connection
with the attainment by 1997 of annualized pre-tax cost savings of
approximately $200 million. This resulted in a $142 million after-tax
charge to retained earnings in this unaudited pro forma condensed combined
balance sheet.
The pro forma entries are displayed below (in millions):
<TABLE>
<S> <C> <C>
Debit Retained earnings............................................ $142
Debit Other liabilities--taxes payable............................. 83
Credit Other liabilities--reserve................................ $225
</TABLE>
It is anticipated that substantially all of these charges will be paid
within 12 to 15 months of the Merger. This charge has been excluded from
the pro forma condensed combined income statement due to its nonrecurring
nature. The following table provides details of the estimated pre-tax
charges (in millions).
<TABLE>
<CAPTION>
AMOUNT
------
<S> <C>
Personnel............................................................. $150
Facilities and equipment.............................................. 45
Other Merger expenses................................................. 30
----
$225
====
</TABLE>
Personnel-related costs reflect severance and assistance costs for
separated employees. Facilities costs consist of lease termination costs
and other facilities-related exit costs arising from the closing of
duplicate branch facilities and from the consolidation of duplicate
headquarters and operational facilities. Equipment costs consist of
computer equipment and software write-offs due to duplication or
incompatibility. The reserve will be established in compliance with
Emerging Issues Task Force #94-3.
Substantially all of the personnel-related costs represent employee
severance costs. An estimate of staff reductions totals 1,700 coming
primarily from the overlap in the Chicago retail banking business, product
synergies in the large corporate and middle market businesses, as well as
from staff and administrative support functions. The contemplated timeframe
for completion of these actions is a 12 to 15 month period from the
Effective Time.
Other merger-related costs include investment banking fees, securities
registration and filing fees, as well as accounting, legal and other
related costs. Investment banking fees, estimated at $12 million, represent
the largest component of such costs.
72
<PAGE>
DESCRIPTION OF NBD CAPITAL STOCK
GENERAL
Under the NBD Certificate, NBD's authorized capital stock consists of
10,000,000 shares of preferred stock ("NBD Preferred Stock", and together with
the NBD Common Stock and, after the Effective Time, the New Preferred Stock,
"NBD Capital Stock"), without par value, and 500,000,000 shares of NBD Common
Stock. In the event stockholders of NBD and First Chicago approve and adopt
the Merger Agreement, at the Effective Time, the number of authorized shares
of NBD Common Stock will be 750,000,000. At June 30, 1995, 157,139,395 shares
of NBD Common Stock were outstanding (excluding treasury shares). Although no
shares of NBD Preferred Stock were outstanding at such date, shares of NBD
Preferred Stock were reserved for issuance pursuant to potential NBD exercise
of the purchase contracts under the NBD Preferred Purchase Units as described
under "--NBD Preferred Stock". In addition, the NBD Certificate authorizes the
issuance of 460,000 shares of Preferred Stock, Series A ("NBD Series A
Preferred Stock"), all of which were issued in 1987 and redeemed in 1988. In
the event the stockholders of NBD and First Chicago approve and adopt the
Merger Agreement, at the Effective Time the NBD Series A Preferred Stock, no
shares of which are outstanding as of the date of this Joint Proxy Statement-
Prospectus, will be retired.
The NBD Certificate contains specific provisions with respect to the
election of directors, which include the provision that the NBD Board is
divided into three classes, each having a number of directors as nearly equal
as possible, and each class being elected for a three-year term, with one
class being elected each year. The NBD Certificate also includes specific
provisions with respect to mergers and other business combinations. In
general, these provisions require that, in the case of a proposed merger or
other business combination involving NBD and an Interested Stockholder (as
defined herein), the approving vote of the holders of at least a majority of
the voting power of all the shares of voting stock held by persons who are not
Interested Stockholders or persons affiliated with Interested Stockholders is
required, unless the business combination has been approved by a majority of
directors not affiliated with the Interested Stockholder or unless certain
conditions regarding minimum price and procedural protections are met with
respect to each class of NBD's then outstanding voting stock. The provisions
of the NBD Certificate also require that the NBD Board will not approve a
proposal for a business combination or a tender offer until the NBD Board has
evaluated the proposal in light of its effect on the stockholders and
employees of NBD and the communities served by NBD. These provisions of the
NBD Certificate could be used to make more difficult a change in control of
the combined company after the Effective Time. See "Comparison of Stockholders
Rights".
NBD COMMON STOCK
Dividend Rights. Subject to any prior rights of the Preferred Stock then
outstanding, holders of the NBD Common Stock are entitled to receive such
dividends as are declared by the NBD Board out of funds legally available for
that purpose.
Voting Rights--Non-Cumulative Voting. Subject to the voting rights, if any,
of the NBD Preferred Stock, all voting rights are vested in the holders of
shares of NBD Common Stock, each share being entitled to one vote.
The shares of NBD Common Stock have non-cumulative voting rights, which
means that the holders of more than 50% of the shares of NBD Common Stock
voting for the election of directors can elect 100% of the directors standing
for election at any meeting if they choose to do so and, in such event, the
holders of the remaining shares voting for the election of directors will not
be able to elect any person or persons to the NBD Board at that meeting.
Liquidation Rights. Subject to the rights of the NBD Preferred Stock, in the
event of liquidation, the holders of the NBD Common Stock will be entitled to
receive pro rata any assets distributable to stockholders in respect of shares
held by them.
73
<PAGE>
Preemptive Rights. Holders of NBD Common Stock do not have any right to
subscribe to any additional securities which may be issued by NBD.
Accordingly, holders of NBD Common Stock have no statutory right to purchase a
proportionate share of any new NBD Common Stock or other securities issued by
NBD.
Other Matters. The NBD Common Stock does not have any redemption provisions
applicable thereto, and all outstanding shares are, and the shares to be
issued to holders of First Chicago Common Stock upon the consummation of the
Merger will be, fully paid and non-assessable.
Restrictions on Ownership. The BHC Act requires any "bank holding company"
(as defined in the BHC Act) to obtain the approval of the Federal Reserve
Board prior to the acquisition of 5% or more of the NBD Common Stock. Any
person other than a bank holding company is required to obtain prior approval
of the Federal Reserve Board to acquire 10% or more of the NBD Common Stock
under the Change in Bank Control Act (the "CBC Act"). Any holder of 25% or
more of the NBD Common Stock (or a holder of 5% or more if such holder
otherwise exercises a "controlling influence" over NBD) is subject to
regulation as a bank holding company under the BHC Act.
NBD PREFERRED STOCK
The NBD Board is authorized, without further action by the NBD stockholders,
to issue preferred stock, without par value, in one or more series, from time
to time, with such voting powers, full or limited but not to exceed one vote
per share, or without voting powers, and with such designations, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations and restrictions thereof, as may be provided in a
resolution or resolutions adopted by the NBD Board. The authority of the NBD
Board includes, but is not limited to, the determination or fixing of the
following with respect to shares of such class or any series thereof: (i) the
number of shares and designation; (ii) the dividend rate and whether dividends
are to be cumulative; (iii) whether shares are to be redeemable and, if so,
the terms and amount of any sinking fund providing for the purchase or
redemption of such shares; (iv) whether shares will be convertible and, if so,
the terms and provisions applying; (v) what voting rights are to apply, if
any, not to exceed one vote per share; and (vi) what restrictions are to
apply, if any, on the issue or reissue of any additional NBD Preferred Stock.
No NBD Preferred Stock is outstanding. If NBD Preferred Stock were
outstanding, it would have preference over the NBD Common Stock with respect
to dividends and other matters and might have the effect of making more
difficult any change in control of NBD.
On May 11, 1993, NBD issued 6,000,000 preferred purchase units ("NBD
Preferred Purchase Units") of which each 7 1/2% NBD Preferred Purchase Unit
consisted of a 30-year subordinated debenture and a purchase contract
requiring the purchase on May 10, 2023 (or earlier at NBD's election) of NBD 7
1/2% Cumulative Preferred Stock (the "7 1/2% Preferred") at a purchase price
of $25 per share. NBD may redeem any or all of the NBD Preferred Purchase
Units anytime after May 10, 1998, at par, and, as a result, some or all of the
7 1/2% Preferred may not be issued by NBD. The 7 1/2% Preferred would rank
prior to the NBD Common Stock, but would have no voting rights except if the
NBD Preferred Purchase Units were in default or the NBD Certificate was
proposed to be amended in a manner adverse to the 7 1/2% Preferred
stockholder. The Preferred Stock which could be issued pursuant to the
purchase contract has been reserved by NBD on its stock records.
DESCRIPTION OF NEW PREFERRED STOCK
The following is a brief description of the New Preferred Stock, the terms,
rights and preferences of each series of which will be substantially similar
to the terms, rights and preferences of the series of First Chicago Preferred
Stock for which the shares of New Preferred Stock will be exchanged. The New
Preferred Stock will be issued as New Preferred Stock, without par value, and
will consist of four series: (i) New Series B Preferred Stock, (ii) New Series
C Preferred Stock, (iii) New Series E Preferred Stock, and (iv) New
Convertible Preferred Stock. The New Preferred Stock will have a preference
over the Common Stock of the combined company with respect to the payment of
dividends and the distribution of assets in the event of liquidation, winding-
up or
74
<PAGE>
dissolution of the combined company. The New Preferred Stock will rank pari
passu with any series of NBD Preferred Stock with respect to dividends and
liquidation rights in the combined company.
The shares of the New Series E Preferred Stock and the New Convertible
Preferred Stock will be represented by depositary shares, evidenced by
depositary receipts, each representing a fraction of a share of each such
series. The combined company, at the Effective Time, will assume First
Chicago's obligations under the applicable deposit agreement for each such
series.
GENERAL
The New Preferred Stock will be, when issued, fully paid and nonassessable.
The New Preferred Stock will have no preemptive rights to subscribe for any
additional securities which may be issued by the combined company.
Because the combined company will be a holding company, its rights and the
rights of holders of its securities, including the holders of New Preferred
Stock, to participate in the assets of any subsidiary of the combined company
upon the such subsidiary's liquidation or recapitalization will be subject to
the prior claims of such subsidiary's creditors and preferred shareholders,
except to the extent the combined company may itself be a creditor with
recognized claims against such subsidiary or a holder of preferred shares of
such subsidiary.
First Chicago Trust Company of New York will be the transfer agent,
registrar and dividend disbursing agent for the New Preferred Stock and the
depositary shares representing such stock, as applicable. The shares of the
New Preferred Stock (or with respect to the New Series E Preferred Stock and
the New Convertible Preferred Stock, the outstanding depositary receipts
evidencing shares of such stock) will be listed on the NYSE. FNBC will
continue to serve as depositary for the shares of the New Preferred Stock
represented by depositary shares.
Dividends. Dividends on each series of New Preferred Stock shall be
cumulative, and, consequently, the combined company will not declare or pay or
set apart for payment any dividends on any series of its preferred shares
ranking, as to dividends, on a parity with or junior to the outstanding New
Preferred Stock of any series unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on such New Preferred Stock for
all dividend periods terminating on or prior to the date of payment of any
such dividends on such other series of preferred shares of the combined
company. When dividends are not paid in full upon New Preferred Stock of any
series and any other shares of preferred stock of the combined company ranking
on a parity as to dividends with such New Preferred Stock, all dividends
declared upon such New Preferred Stock and any other preferred shares of the
combined company ranking on a parity as to dividends with such New Preferred
Stock will be declared pro rata, so that the amount of dividends declared per
share on such New Preferred Stock and such other shares will in all cases bear
to each other the same ratio that the accrued dividends per share on such New
Preferred Stock and such other preferred shares bear to each other. Except as
set forth in the preceding sentence, unless full dividends on the outstanding
New Preferred Stock of any series have been paid for all past dividend periods
and a sum sufficient for the payment thereof set apart for such payment, no
dividends (other than in Common Stock of the combined company or other shares
of the combined company ranking junior to such New Preferred Stock as to
dividends and upon liquidation) will be declared or paid or set aside for
payment, nor shall any other distribution be made on Common Stock of the
combined company or on any other shares of the combined company ranking junior
to or on a parity with such New Preferred Stock as to dividends or upon
liquidation. Unless full dividends on the New Preferred Stock of any series
have been paid for all past dividend periods and a sum sufficient for the
payment thereof set apart for such payment, no Common Stock or any other
shares of the combined company ranking junior to or on a parity with such New
Preferred Stock as to dividends or upon liquidation will be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be paid
or made available for a sinking fund for the redemption of any such shares) by
the combined company or any subsidiary of the combined company except by
conversion into or exchange for shares of the combined company ranking junior
to such New Preferred Stock as to dividends and upon liquidation.
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Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the combined company, the holders of
New Preferred Stock will be entitled to receive out of the assets of the
combined company available for distribution to stockholders, before any
distribution of assets is made to holders of Common Stock of the combined
company or any other class or series of shares ranking junior to such New
Preferred Stock upon liquidation, liquidating distributions in the amount of
the liquidation preference of such New Preferred Stock plus accrued and unpaid
dividends. If, upon any voluntary or involuntary liquidation, dissolution or
winding-up of the combined company, the amounts payable with respect to New
Preferred Stock of any series and any other shares of the combined company
ranking as to any such distribution on a parity with such New Preferred Stock
are not paid in full, the holders of such New Preferred Stock and of such
other shares will share ratably in any such distribution of assets of the
combined company 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 New Preferred Stock of
any series will not be entitled to any further participation in any
distribution of assets by the combined company.
Voting Rights. Except as indicated below, or except as expressly required by
applicable law, the holders of the New Preferred Stock will not be entitled to
vote. On any matter with respect to which the New Preferred Stock will be
entitled to vote, as indicated below, each full share of each series of New
Preferred Stock will be entitled to one vote on matters on which holders of
such series of the New Preferred Stock are entitled to vote. Since each full
share of any series of New Preferred Stock will be entitled to one vote, the
voting power of such series, on matters on which holders of such series and
holders of other series of New Preferred Stock are entitled to vote as a
single class, will depend on the number of shares in such series, not the
aggregate stated value, liquidation preference or initial offering price of
the shares of such series of New Preferred Stock. Each depositary share (which
represents a fraction of a share of the applicable series of New Preferred
Stock) will, in effect, be entitled to a fraction of a vote per depositary
share.
If the equivalent of six quarterly dividends payable on any series of New
Preferred Stock are in default, the number of directors of the combined
company will be increased by two, and the holders of all outstanding series of
New Preferred Stock, voting as a single class without regard to series, will
be entitled to elect such additional two directors until all dividends in
default have been paid or declared and set apart for payment.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of New Preferred Stock of any series, voting as a class,
will be required for any amendment to the certificate of incorporation of the
combined company that will adversely affect the powers, preferences,
privileges or rights of the New Preferred Stock of such series. The
affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of New Preferred Stock of any series and any other series
of preferred shares of the combined company ranking on a parity with the New
Preferred Stock of such series as to dividends or upon liquidation, voting as
a single class without regard to series, will be required to authorize, effect
or validate the creation, authorization or issue of any shares of any class of
stock of the combined company ranking prior to the New Preferred Stock of such
series as to dividends or upon liquidation, or the reclassification of any
authorized stock of the combined company into any such prior shares, or the
creation, authorization or issue of any obligation or security convertible
into or evidencing the right to purchase any such prior shares.
Subject to such affirmative vote or consent of the holders of the
outstanding shares of New Preferred Stock of any series, the combined company
may, by resolution of the Board of Directors of the combined company or as
otherwise permitted by law, from time to time alter or change the preferences,
rights or powers of the New Preferred Stock of such series. The holders of the
New Preferred Stock of such series will not be entitled to participate in any
such vote if, at or prior to the time when any such alteration or change is to
take effect, provision is made for the redemption of all the New Preferred
Stock of such series at the time outstanding. Nothing in this Section shall be
taken to require a class vote or consent in connection with the authorization,
designation, increase or issuance of any shares of any class or series
(including additional New Preferred Stock of any series) that rank junior to
or on a parity with the New Preferred Stock of such series as to dividends and
liquidation rights or in connection with the authorization, designation,
increase or issuance of any bonds, mortgages, debentures or other obligations
of the combined company.
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NEW SERIES B PREFERRED STOCK
The New Series B Preferred Stock will be subject to a minimum and maximum
dividend rate of 6.00% and 12.00%, respectively. The dividend rate for shares
of this series will be adjusted quarterly, based on a formula that considers
the interest rates for selected short- and long-term United States Treasury
securities prevailing at the time the rate is set. Shares of this series will
be redeemable, at the option of the combined company, at their stated value of
$100 per share plus accrued and unpaid dividends. Shares of this series will
not be convertible into other securities of the combined company.
NEW SERIES C PREFERRED STOCK
The New Series C Preferred Stock will be subject to a minimum and maximum
dividend rate of 6.50% and 12.50%, respectively. The dividend rate for shares
of this series will be adjusted quarterly, based on a formula that considers
the interest rates for selected short- and long-term United States Treasury
securities prevailing at the time the rate is set. Shares of this series will
be redeemable, at the option of the combined company, at their stated value of
$100 per share plus accrued and unpaid dividends. Shares of this series will
not be convertible into other securities of the combined company.
NEW SERIES E PREFERRED STOCK
The New Series E Preferred Stock will be represented by depositary shares
with each depositary share representing a one-twenty-fifth interest in a share
of New Series E Preferred Stock. The New Series E Preferred Stock will have an
annual dividend rate equal to $52.8125 ($2.1125 per depositary share), or
8.45%. Shares of this series are redeemable, at the option of the combined
company, at any time on or after November 16, 1997, at a redemption price of
$625 per share ($25 per depositary share). Shares of this series will not be
convertible into other securities of the combined company.
NEW CONVERTIBLE PREFERRED STOCK
The New Convertible Preferred Stock will be represented by depositary shares
with each depositary share representing a one-hundredth interest in a share of
New Convertible Preferred Stock. The New Convertible Preferred Stock will have
an annual dividend rate equal to $287.50 ($2.875 per depositary share), or 5
3/4%, which will be fixed at the date of issue. Shares of the New Convertible
Preferred Stock will be convertible into shares of Common Stock of the
combined company at a conversion price of $29.6271 per share of Common Stock
of the combined company (equivalent to a conversion rate of 1.6876 share of
Common Stock of the combined company for each depositary share) at the option
of the stockholder at any time. The conversion price represents an adjustment
to the conversion price of the First Chicago Convertible Preferred Stock due
to the Merger. Resultant fractional interests will be paid in cash. The
conversion rate will be subject to further adjustment for certain stock
dividends, subdivisions, splits and combinations, certain distributions of
assets and debt to holders of Common Stock of the combined company, certain
reclassifications of Common Stock of the combined company into other
securities and certain distributions of rights or warrants to purchase Common
Stock at a price per share less than the then market value of the Common Stock
of the combined company. Shares of this series will be redeemable, at the
option of the combined company, on or after April 1, 1997 through March 30,
2003, at an original redemption price of $5,172.50 ($51.7250 per depositary
share), declining over such period to $5,028.75 ($50.2875 per depositary
share), and thereafter at their stated value of $5,000 per share ($50.00 per
depositary share) plus accrued and unpaid dividends.
AMENDMENTS TO THE NBD CERTIFICATE
The Merger Agreement provides that, at the Effective Time, the NBD
Certificate will be amended in accordance with the DGCL to provide: (a) that
the number of shares of authorized Common Stock of the combined company shall
be increased to 750,000,000; (b) that the name of the combined company shall
be changed to "First Chicago NBD Corporation"; (c) that the NBD Series A
Preferred Stock, of which, as of the
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<PAGE>
date of this Joint Proxy Statement-Prospectus, no shares are issued and
outstanding, will no longer be authorized capital stock of NBD, and that the
combined company shall no longer be authorized to issue such shares of such
NBD Series A Preferred Stock; and (d) for the designation of each series of
New Preferred Stock. Stockholders are advised that, pursuant to Section 251 of
the DGCL, such amendments form a part of the Merger Agreement which
stockholders will consider and vote upon at the NBD Meeting and that
stockholders will not be asked to consider or vote upon such amendments
separate from the Merger Agreement.
Increase in Authorized NBD Common Stock. The combined company intends to
finance its operations through, among other things, the issuance from time to
time of various debt and equity securities, to consider the acquisition of
financial services businesses (possibly using Common Stock of the combined
company as consideration in some instances) and to consider the issuance of
additional shares of Common Stock of the combined company in connection with
employee benefit plans or through stock splits and stock dividends in
appropriate circumstances. Accordingly, the continued availability of shares
of Common Stock of the combined company is necessary to provide the combined
company with the flexibility to take advantage of opportunities in such
situations. There are, at present, no plans, understandings, agreements or
arrangements concerning the issuance of additional shares of Common Stock of
the combined company, except (i) for the shares to be issued pursuant to the
Merger, (ii) as described under "The Merger--Conduct of Business Pending the
Merger" and (iii) for shares presently reserved for issuance.
Uncommitted authorized but unissued shares of Common Stock of the combined
company may be issued from time to time to such persons and for such
considerations as the Board of Directors of the combined company may determine
and holders of the then outstanding shares of Common Stock of the combined
company may or may not be given the opportunity to vote thereon, depending
upon the nature of any such transactions, applicable law, the rules and
policies of the NYSE and the judgment of the Board of Directors of the
combined company regarding the submission thereof to stockholders of the
combined company. Stockholders of the combined company generally will have no
preemptive rights to subscribe to newly issued shares.
COMPARISON OF STOCKHOLDERS' RIGHTS
GENERAL
The rights of First Chicago stockholders are currently governed by the First
Chicago Certificate, the First Chicago By-laws and the DGCL. The rights of NBD
stockholders are governed by the NBD Certificate, the NBD By-laws and the
DGCL. After the Effective Time, the rights of First Chicago stockholders who
become stockholders of the combined company will be governed by the NBD
Certificate, the NBD By-laws and the DGCL. In most respects, the rights of
First Chicago stockholders are similar to those of NBD stockholders. The
following is a summary of the material differences between the rights of
holders of NBD Common Stock and those of holders of First Chicago Common
Stock. The following is a discussion only of those material differences
between the rights of NBD stockholders under the NBD Certificate, NBD By-laws
and the DGCL, on the one hand, and the rights of First Chicago stockholders
under the First Chicago Certificate, First Chicago By-laws and the DGCL, on
the other. This summary does not purport to be a complete discussion of, and
is qualified in its entirety by reference to, the NBD Certificate, NBD By-
laws, the First Chicago Certificate, First Chicago By-laws and the DGCL.
STOCKHOLDER MEETINGS
Special Meetings. The NBD Certificate and By-laws provide that a special
meeting of NBD stockholders can be called only by action of the NBD Board. The
First Chicago By-laws permit a special meeting of First Chicago stockholders
to be called by the Chairman of the First Chicago Board, the President or any
Vice Chairman of the First Chicago Board, or upon the request of a majority of
the directors of First Chicago.
The First Chicago By-laws provide that no business may be brought before a
special meeting of stockholders except such business described in First
Chicago's notice of meeting delivered to stockholders. Neither the NBD
Certificate nor the NBD By-laws contains a similar provision.
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<PAGE>
Action by Written Consent. The NBD Certificate expressly prohibits
stockholder action by written consent and requires that any stockholder action
be taken at a duly called meeting of stockholders. The affirmative vote of at
least 80% of the voting power of NBD is required to amend this provision of
the NBD Certificate.
The First Chicago Certificate and the First Chicago By-laws expressly permit
stockholders of First Chicago to act upon the receipt of written consent of
holders of a majority of all stock that would be entitled to vote upon the
matter were such matter to be acted upon at a meeting of First Chicago
stockholders; provided, that in no event may the written consent be by
stockholders having less than the minimum percentage of the vote required by
any applicable law or statute.
Written Notice. The NBD By-laws require that shareholders be given notice of
meetings no less than 10 and no more than 50 days prior to such meeting. The
First Chicago By-laws require that shareholders be given notice of meetings no
less than 10 and no more than 60 days prior to such meeting.
Record Date. The NBD By-laws require that the record date for any meeting of
stockholders be no less than 10 and no more than 50 days prior to such
meeting. The First Chicago By-laws require that the record date for any
meeting of stockholders be no less than 10 and no more than 60 days prior to
such meeting.
VOTING RIGHTS
Required Vote For Certain Business Combinations. The NBD Certificate
provides that any Business Combination (as defined herein) involving NBD and
an Interested Stockholder (as defined herein) must be approved by the
affirmative vote of a majority of the voting power of all the shares of voting
stock held by stockholders other than an Interested Stockholder, with which or
by or on whose behalf, directly or indirectly, a Business Combination is
proposed, voting together as a single class (the "NBD Voting Requirement").
The NBD Voting Requirement does not apply if (i) the Business Combination is
approved by a majority of the NBD "Continuing Directors" (defined generally to
include any person who is unaffiliated with, and not a representative of, the
NBD Interested Stockholder in the Business Combination and who either was a
director immediately prior to the time the NBD Interested Stockholder became
such a person or was recommended or elected to succeed such an NBD Continuing
Director by a majority of the NBD Continuing Directors); or (ii) certain "fair
price" (defined generally to mean that the consideration to be received by
stockholders in such Business Combination shall be at least equal to the
higher of, and in the same form as, (A) the consideration paid by the NBD
Interested Stockholder for such person's acquisition of the applicable NBD
capital stock (x) within the two-year period immediately prior to the first
public announcement of the proposed Business Combination or (y) in the
transaction in which such person became a NBD Interested Stockholder, or (B)
the market price of NBD capital stock on the date the Interested Stockholder
became such) and other criteria are met. As defined in the NBD Certificate, a
"Business Combination" includes, among other things: (i) any merger or
consolidation of NBD or any NBD subsidiary with any NBD Interested Stockholder
or affiliate or associate thereof; (ii) the sale, lease, exchange, mortgage,
pledge, transfer or other disposition by NBD of assets or securities having a
fair market value equal to 15% or more of the total shareholders' equity of
NBD ("Substantial Assets") to an NBD Interested Stockholder or an affiliate or
associate thereof; (iii) the adoption of a plan or proposal for the
liquidation or dissolution of NBD proposed by or on behalf of an NBD
Interested Stockholder or an affiliate or associate thereof; (iv) any
transaction that has the effect of increasing the proportionate share of any
class of equity or convertible security of NBD or any subsidiary that is
beneficially owned by an NBD Interested Stockholder or any affiliate or
associate thereof and (v) any agreement or arrangement providing for any of
the foregoing. As defined in the NBD Certificate, "Interested Stockholder"
means any person (other than NBD or any subsidiary and other than any profit-
sharing, employee stock ownership or other employee benefit plan of NBD or any
subsidiary or any trustee of or fiduciary with respect to any such plan when
acting in such capacity) who or which is a person who is the beneficial owner,
directly or indirectly, of more than 10% of the voting power of the then
outstanding voting stock; or is an affiliate or associate of NBD and at any
time within the two-year period immediately prior to the date in question was
the beneficial owner of 10% or more of the voting power of the then
outstanding voting stock; or is an assignee of or has otherwise succeeded to
any shares of voting stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have occurred in the
course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act.
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Neither the First Chicago Certificate nor the First Chicago By-laws contain
any similar provision or provisions.
Board Review of Certain Transactions. The NBD Certificate prohibits the NBD
Board from approving, adopting or recommending any proposal to enter into such
Business Combination or any tender or exchange offer for any capital stock in
NBD until the NBD Board establishes a procedure for evaluating and evaluates
and determines that such proposal or offer complies with all applicable laws
and is in the best interests of NBD and its stockholders. The NBD Certificate
requires that, in making this determination, the NBD Board consider (among
other factors) the adequacy of the consideration to be received by NBD and/or
its stockholders, the business competence of the acquiring person or entity
and the potential social and economic impact of the plan on the communities in
which NBD operates.
In addition, the NBD Certificate provides that the NBD Board may not
approve, adopt or recommend any offer of any person, other than the
corporation, to make a tender or exchange offer for any capital stock of the
corporation in which the fair market value per share of the consideration to
be received by one or more stockholders is substantially more than the fair
market value per share of the consideration to be received by other
stockholders holding shares of the same class and series, or any tender or
exchange offer the consummation of which is reasonably likely, in the good
faith determination of the NBD Board, in one transaction or a series of
transactions, to have that result.
Neither the First Chicago Certificate nor the First Chicago By-laws contains
any similar provision or provisions.
Charter and By-Law Amendments. The NBD Certificate provides that any
amendment, alteration or repeal of Article Twelfth thereof (relating to action
by the stockholders) requires the affirmative vote of the holders of at least
80% of the voting power of all the shares of NBD entitled to vote generally in
the election of directors, voting together as a single class. The NBD
Certificate further provides that any amendment, alteration or repeal of the
provisions in the NBD Certificate relating to a Business Combination requires
the affirmative vote by the holders of at least 80% of the voting power of all
the shares of the voting stock, voting together as a single class, except that
if such action has been proposed, directly or indirectly, on behalf of an
Interested Stockholder, it must also be approved by the affirmative vote of a
majority of the voting power of all the shares of voting stock held by
stockholders other than such Interested Stockholder.
The NBD By-laws provide that such By-laws may be altered, amended or
repealed by a majority vote of the whole NBD Board at any meeting of the NBD
Board, provided that such amendments are not inconsistent with any provision
of the NBD Certificate.
The First Chicago By-laws provide that such First Chicago By-laws may be
altered or repealed at any meeting of the stockholders or the First Chicago
Board or by written consent of the stockholders or directors as provided
therein.
PROVISIONS RELATING TO DIRECTORS
Number of Directors. The NBD Certificate provides that the number of
directors be no less than 15 and no more than 30. The First Chicago By-laws
provide that the number of directors be no less than five and no greater than
25. Pursuant to the Merger Agreement, the number of directors of the combined
company after the Effective Time will be 22 until such number is changed by
the Board of Directors of the combined company pursuant to the NBD By-laws.
Classification. The NBD Certificate provides for classification of the NBD
Board into three classes as nearly equal in number as possible, with one class
being elected annually. Neither the First Chicago Certificate nor the First
Chicago By-laws provides for such classification of directors.
Removal. The NBD Certificate provides that a director may be removed from
office only for cause, and only upon the vote of holders of a majority of the
voting power of the capital stock of NBD entitled to vote,
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voting as a single class. The First Chicago By-laws provide that the First
Chicago Board may declare vacant the office of a director if such director is
declared of unsound mind by an order of court or convicted of a felony, or for
any other proper cause, or if, within sixty days after notice of his election
as a director, he does not accept such office either in writing or by
attending a meeting of the First Chicago Board. Neither the First Chicago
Certificate nor the First Chicago By-laws expressly provides for the removal
of directors. In the absence of such express provisions, the DGCL provides
that directors may be removed, with or without cause, by a vote of the holders
of a majority of the voting power of First Chicago entitled to vote at the
meeting at which the vote is taken.
RIGHTS AGREEMENT
First Chicago has issued the First Chicago Rights and is party to the First
Chicago Rights Agreement. See "The Merger--First Chicago Rights Agreement".
NBD is not party to any similar plan and has neither authorized nor issued
similar securities.
EXPERTS
The consolidated financial statements of NBD incorporated in this Joint
Proxy Statement-Prospectus (and elsewhere in the Registration Statement) by
reference from NBD'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.
The consolidated financial statements of First Chicago incorporated by
reference in the Annual Report on Form 10-K for the year ended December 31,
1994 incorporated herein by reference have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein by reference in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
LEGAL OPINION
The legality of the shares of NBD Common Stock to be issued to the holders
of First Chicago Common Stock pursuant to the Merger, and certain other legal
matters in connection with the Merger, will be passed upon by Daniel T. Lis,
Chief Legal Officer of NBD. Mr. Lis is a Senior Vice President and Secretary
of NBD, and is also a stockholder of NBD and a holder of options to purchase
shares of NBD.
SOLICITATION OF PROXIES
The cost of solicitation of proxies from holders of NBD Common Stock and
First Chicago Common Stock, including the cost of reimbursing brokerage houses
and other custodians, nominees or fiduciaries for forwarding proxies and proxy
statements to their principals, will be borne by each respective party. D.F.
King & Co., Inc. has been retained by NBD to assist in the solicitation of
proxies and will be compensated in the estimated amount of $9,500 plus
reasonable out-of-pocket expenses. In addition to such solicitation and
solicitation by use of the mails, solicitation may be made in person or by
telephone or telegraph by certain directors, officers and regular employees of
NBD and First Chicago who will not receive additional compensation therefor.
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STOCKHOLDER PROPOSALS
Any stockholder who wishes to submit a proposal for presentation to the 1996
Annual Meeting of stockholders must submit the proposal to NBD Bancorp, Inc.,
611 Woodward Avenue, Detroit, Michigan 48226, Attention: Secretary, not later
than December 11, 1995, for inclusion, if appropriate, in NBD's proxy
statement and the form of proxy relating to the 1996 Annual Meeting of
stockholders.
OTHER BUSINESS
NBD knows of no other matters to be brought before the NBD Meeting other
than those referred to herein, but if any other business should properly come
before the NBD Meeting, the persons named in the proxy, or authorized
substitutes, intend to vote in accordance with their best judgment.
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INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
7 1/2% Preferred........................................................... 74
Acquisition Transaction.................................................... 53
Affiliate.................................................................. 57
ANC........................................................................ 22
Average Bonus.............................................................. 62
BHC Act.................................................................... 7
Business Combination....................................................... 79
Capital Stock.............................................................. 9
CBC Act.................................................................... 74
Certificate of Merger...................................................... 44
Change of Control.......................................................... 62
Closing Date............................................................... 44
Code....................................................................... 13
Combined Company Comparison Group.......................................... 39
Commission................................................................. 1
Common Stock............................................................... 1
Continuing Directors....................................................... 79
Covered Executive.......................................................... 61
CRA........................................................................ 48
DGCL....................................................................... 10
DPC Shares................................................................. 41
Effective Time............................................................. 10
Engagement Letter.......................................................... 32
Exchange Act............................................................... 5
Exchange Agent............................................................. 42
Exchange Ratio............................................................. 1
Executive Severance Agreements............................................. 62
FDIC....................................................................... 49
FDICIA..................................................................... 48
Federal Reserve Board...................................................... 13
First Chicago.............................................................. 1
First Chicago Benefit Plans................................................ 56
First Chicago Board........................................................ 1
First Chicago By-laws...................................................... 15
First Chicago Capital Stock................................................ 13
First Chicago Certificate.................................................. 15
First Chicago Common Stock................................................. 1
First Chicago Comparison Group............................................. 39
First Chicago Convertible Preferred Stock.................................. 9
First Chicago ESPSP........................................................ 10
First Chicago Meeting...................................................... 1
First Chicago Option....................................................... 14
First Chicago Option Shares................................................ 52
First Chicago Plan Option.................................................. 42
First Chicago Preferred Stock.............................................. 9
First Chicago Right........................................................ 56
First Chicago Rights Agreement............................................. 56
First Chicago Series B Preferred Stock..................................... 9
First Chicago Series C Preferred Stock..................................... 9
First Chicago Series E Preferred Stock..................................... 9
</TABLE>
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
First Chicago Stock Option Agreement...................................... 14
First Chicago Stock Plans................................................. 10
FNBC...................................................................... 22
Highest Closing Price..................................................... 55
Holder.................................................................... 53
IBES...................................................................... 40
Indemnified Parties....................................................... 61
Initial Triggering Event.................................................. 53
Interested Stockholder.................................................... 79
Issuer.................................................................... 52
Issuer Common Stock....................................................... 52
Issuer Option............................................................. 52
Issuer Option Agreement................................................... 52
Issuer Option Repurchase Price............................................ 54
Issuer Option Share Repurchase Price...................................... 54
Issuer Option Shares...................................................... 52
Issuer Subsidiary......................................................... 53
Lazard Freres............................................................. 11
LSARs..................................................................... 56
LTM....................................................................... 35
Market/Offer Price........................................................ 54
Merger.................................................................... 1
Merger Agreement.......................................................... 1
MOEs...................................................................... 35
Montgomery................................................................ 11
NBD....................................................................... 1
NBD Bank.................................................................. 22
NBD Benefit Plans......................................................... 56
NBD Board................................................................. 1
NBD By-laws............................................................... 15
NBD Capital Stock......................................................... 73
NBD Certificate........................................................... 10
NBD Common Stock.......................................................... 1
NBD Comparison Group...................................................... 39
NBD Meeting............................................................... 1
NBD Option................................................................ 14
NBD Option Shares......................................................... 52
NBD Preferred Purchase Units.............................................. 74
NBD Preferred Stock....................................................... 73
NBD Series A Preferred Stock.............................................. 73
NBD Stock Option Agreement................................................ 14
NBD Stock Plans........................................................... 56
NBD Voting Requirement.................................................... 79
New Benefit Plans......................................................... 45
New Convertible Preferred Stock........................................... 9
New Employment Agreements................................................. 61
New Option................................................................ 42
New Preferred Stock....................................................... 9
New Series B Preferred Stock.............................................. 9
New Series C Preferred Stock.............................................. 9
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
New Series E Preferred Stock............................................... 9
NYSE....................................................................... 1
OCC........................................................................ 48
Optionee................................................................... 52
Optionee Subsidiary........................................................ 53
Owner...................................................................... 54
Record Date................................................................ 7
Registration Statement..................................................... 1
Repurchase Event........................................................... 54
Requisite Regulatory Approvals............................................. 44
Rule 144................................................................... 57
Rule 145................................................................... 57
</TABLE>
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
Securities Act............................................................ 1
Severance Benefits........................................................ 62
Significant Subsidiary.................................................... 53
Stock Option Agreements................................................... 14
Subsequent Triggering Event............................................... 54
Substantial Assets........................................................ 79
Substitute Common Stock................................................... 55
Substitute Option......................................................... 55
Substitute Shares of Issuer Common Stock.................................. 55
Trust Account Shares...................................................... 41
Unit...................................................................... 56
</TABLE>
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STOCKHOLDER PROPOSALS
First Chicago intends to hold an annual meeting of stockholders in 1996 only
if the Merger is not consummated on or before July 11, 1996. Any eligible
stockholder who wishes to submit written proposals for possible inclusion in
next year's proxy statement, if any, must be sure that all such proposals are
received by First Chicago on or before November 18, 1995. Any such proposal or
nomination should be mailed to First Chicago Corporation, One First National
Plaza, Chicago, Illinois 60670, Attention: Secretary.
OTHER BUSINESS
First Chicago knows of no other matters that are to be presented for action
at the First Chicago Meeting. If any other matters are properly presented to
the First Chicago Meeting, the persons named in the enclosed proxy, or
authorized substitutes, will vote on such matters in accordance with their
best judgment.
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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BETWEEN
FIRST CHICAGO CORPORATION
AND
NBD BANCORP, INC.
AS AMENDED
----------------
DATED AS OF JULY 11, 1995
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TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
ARTICLE I
The Merger
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1.1 The Merger......................................................... 1
1.2 Effective Time..................................................... 1
1.3 Effects of the Merger.............................................. 1
1.4 Conversion of First Chicago Common Stock; First Chicago Preferred
Stock.............................................................. 1
1.5 NBD Common Stock................................................... 3
1.6 Options............................................................ 3
1.7 Certificate of Incorporation....................................... 4
1.8 By-Laws............................................................ 4
1.9 Tax Consequences................................................... 4
1.10 Management Succession.............................................. 4
1.11 Board of Directors................................................. 4
1.12 Headquarters of Surviving Corporation.............................. 4
ARTICLE II
Exchange of Shares
2.1 NBD to Make Shares Available....................................... 5
2.2 Exchange of Shares................................................. 5
ARTICLE III
Representations and Warranties of NBD
3.1 Corporate Organization............................................. 6
3.2 Capitalization..................................................... 7
3.3 Authority; No Violation............................................ 8
3.4 Consents and Approvals............................................. 8
3.5 Reports............................................................ 9
3.6 Financial Statements............................................... 9
3.7 Broker's Fees...................................................... 9
3.8 Absence of Certain Changes or Events............................... 9
3.9 Legal Proceedings.................................................. 10
3.10 Taxes and Tax Returns.............................................. 10
3.11 Employees.......................................................... 11
3.12 SEC Reports........................................................ 12
3.13 Compliance with Applicable Law..................................... 12
3.14 Certain Contracts.................................................. 12
3.15 Agreements with Regulatory Agencies................................ 13
3.16 Other Activities of NBD and its Subsidiaries....................... 13
3.17 Investment Securities.............................................. 14
3.18 Interest Rate Risk Management Instruments.......................... 14
3.19 Undisclosed Liabilities............................................ 14
</TABLE>
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3.20 Environmental Liability............................................. 14
3.21 State Takeover Laws................................................. 14
3.22 Pooling of Interests................................................ 14
ARTICLE IV
Representations and Warranties of First Chicago
4.1 Corporate Organization.............................................. 15
4.2 Capitalization...................................................... 15
4.3 Authority; No Violation............................................. 16
4.4 Consents and Approvals.............................................. 17
4.5 Reports............................................................. 17
4.6 Financial Statements................................................ 17
4.7 Broker's Fees....................................................... 18
4.8 Absence of Certain Changes or Events................................ 18
4.9 Legal Proceedings................................................... 18
4.10 Taxes and Tax Returns............................................... 18
4.11 Employees........................................................... 19
4.12 SEC Reports......................................................... 20
4.13 Compliance with Applicable Law...................................... 20
4.14 Certain Contracts................................................... 21
4.15 Agreements with Regulatory Agencies................................. 21
4.16 Other Activities of First Chicago and its Subsidiaries.............. 21
4.17 Investment Securities............................................... 22
4.18 Interest Rate Risk Management Instruments........................... 22
4.19 Undisclosed Liabilities............................................. 22
4.20 Environmental Liability............................................. 22
4.21 State Takeover Laws................................................. 23
4.22 Rights Agreement.................................................... 23
4.23 Pooling of Interests................................................ 23
ARTICLE V
Covenants Relating to Conduct of Business
5.1 Conduct of Businesses Prior to the Effective Time................... 23
5.2 Forbearances........................................................ 23
ARTICLE VI
Additional Agreements
6.1 Regulatory Matters.................................................. 25
6.2 Access to Information............................................... 26
6.3 Stockholders' Approvals............................................. 26
6.4 Legal Conditions to Merger.......................................... 26
6.5 Affiliates; Publication of Combined Financial Results............... 26
6.6 Stock Exchange Listing.............................................. 27
6.7 Employee Benefit Plans.............................................. 27
6.8 Indemnification; Directors' and Officers' Insurance................. 27
</TABLE>
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6.9 Additional Agreements............................................... 29
6.10 Advice of Changes................................................... 29
6.11 Dividends........................................................... 29
ARTICLE VII
Conditions Precedent
7.1 Conditions to Each Party's Obligation To Effect the Merger.......... 29
7.2 Conditions to Obligations of First Chicago.......................... 30
7.3 Conditions to Obligations of NBD.................................... 30
ARTICLE VIII
Termination and Amendment
8.1 Termination......................................................... 31
8.2 Effect of Termination............................................... 31
8.3 Amendment........................................................... 31
8.4 Extension; Waiver................................................... 31
ARTICLE IX
General Provisions
9.1 Closing............................................................. 32
9.2 Nonsurvival of Representations, Warranties and Agreements........... 32
9.3 Expenses............................................................ 32
9.4 Notices............................................................. 32
9.5 Interpretation...................................................... 33
9.6 Counterparts........................................................ 33
9.7 Entire Agreement.................................................... 33
9.8 Governing Law....................................................... 33
9.9 Severability........................................................ 33
9.10 Publicity........................................................... 33
9.11 Assignment; Third Party Beneficiaries............................... 33
</TABLE>
Exhibit A--First Chicago Option Agreement
Exhibit B--NBD Option Agreement
Exhibit 6.5(a)(1)--Form of Affiliate Letter Addressed to NBD
Exhibit 6.5(a)(2)--Form of Affiliate Letter Addressed to First Chicago
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INDEX OF DEFINED TERMS
<TABLE>
<S> <C>
BHC Act..................................................................... 7
CERCLA...................................................................... 14
Certificate................................................................. 3
Certificate of Merger....................................................... 1
Claim....................................................................... 28
Closing..................................................................... 32
Closing Date................................................................ 32
Code........................................................................ 4
Common Certificate.......................................................... 2
Confidentiality Agreement................................................... 26
Delaware Secretary.......................................................... 1
DGCL........................................................................ 1
DPC Shares.................................................................. 3
Effective Time.............................................................. 1
ERISA....................................................................... 11
Exchange Act................................................................ 9
Exchange Agent.............................................................. 5
Exchange Fund............................................................... 5
Exchange Ratio.............................................................. 2
Federal Reserve Board....................................................... 8
First Chicago............................................................... 1
First Chicago Bank Subsidiary............................................... 22
First Chicago Benefit Plans................................................. 19
First Chicago Capital Stock................................................. 2
First Chicago Common Stock.................................................. 2
First Chicago Contract...................................................... 21
First Chicago Convertible Preferred Stock................................... 15
First Chicago Disclosure Schedule........................................... 15
First Chicago DRIP.......................................................... 15
First Chicago ERISA Affiliate............................................... 19
First Chicago ESPSP......................................................... 16
First Chicago 8.45% Series E Cumulative Fixed Rate Preferred Stock.......... 15
First Chicago March 31, 1995 Form 10-Q...................................... 17
First Chicago Option Agreement.............................................. 1
First Chicago Preferred Stock............................................... 15
First Chicago Regulatory Agreement.......................................... 21
First Chicago Reports....................................................... 20
First Chicago Rights........................................................ 15
First Chicago Rights Agreement.............................................. 15
First Chicago Series A Cumulative Adjustable Rate Preferred Stock........... 15
First Chicago Series B Cumulative Adjustable Rate Preferred Stock........... 15
First Chicago Series C Cumulative Adjustable Rate Preferred Stock........... 15
First Chicago Stock Plans................................................... 3
GAAP........................................................................ 9
Governmental Entity......................................................... 8
HOLA........................................................................ 7
Indemnified Parties......................................................... 27
Injunction.................................................................. 29
Insurance Amount............................................................ 28
IRS......................................................................... 10
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Joint Proxy Statement....................................................... 8
Liens....................................................................... 7
LSARS....................................................................... 27
Material Adverse Effect..................................................... 6
Merger...................................................................... 1
NBD......................................................................... 1
NBD Bank Subsidiary......................................................... 13
NBD Benefit Plans........................................................... 11
NBD Capital Stock........................................................... 2
NBD Common Stock............................................................ 2
NBD Contract................................................................ 13
NBD Convertible Preferred Stock............................................. 2
NBD Disclosure Schedule..................................................... 6
NBD 8.45% Series E Cumulative Fixed Rate Preferred Stock.................... 2
NBD ERISA Affiliate......................................................... 11
NBD March 31, 1995 Form 10-Q................................................ 9
NBD New Preferred Stock..................................................... 2
NBD Option Agreement........................................................ 1
NBD Preferred Stock......................................................... 7
NBD Regulatory Agreement.................................................... 13
NBD Reports................................................................. 12
NBD Series A Cumulative Adjustable Rate Preferred Stock..................... 2
NBD Series B Cumulative Adjustable Rate Preferred Stock..................... 2
NBD Series C Cumulative Adjustable Rate Preferred Stock..................... 2
NBD Stock Plans............................................................. 27
NBD Units................................................................... 7
New Benefit Plans........................................................... 27
NYSE........................................................................ 6
OCC......................................................................... 9
Option Agreements........................................................... 1
OTS......................................................................... 8
Preferred Stock Certificate................................................. 3
Regulatory Agencies......................................................... 9
Requisite Regulatory Approvals.............................................. 29
S-4......................................................................... 8
SBA......................................................................... 8
SEC......................................................................... 8
Securities Act.............................................................. 12
Significant Subsidiary...................................................... 13
SRO......................................................................... 8
State Approvals............................................................. 8
State Regulator............................................................. 9
Subsidiary.................................................................. 7
Surviving Corporation....................................................... 1
Taxes....................................................................... 11
Trust Account Shares........................................................ 3
Trust Activities............................................................ 13
</TABLE>
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 11, 1995, as amended by and
between FIRST CHICAGO CORPORATION, a Delaware corporation ("First Chicago")
and NBD BANCORP, INC., a Delaware corporation ("NBD").
WHEREAS, the Boards of Directors of NBD and First Chicago have determined
that it is in the best interests of their respective companies and their
stockholders to consummate the business combination transaction provided for
herein in which First Chicago will, subject to the terms and conditions set
forth herein, merge with and into NBD (the "Merger"), so that NBD is the
surviving corporation (hereinafter sometimes called the "Surviving
Corporation") in the Merger; and
WHEREAS, it is the intent of the respective Boards of Directors of First
Chicago and NBD that the Merger be structured as a "merger of equals" of First
Chicago and NBD and that the Surviving Corporation be governed and operated on
this basis; and
WHEREAS, as a condition to, and immediately after the execution of, this
Agreement, First Chicago and NBD are entering into a First Chicago stock
option agreement (the "First Chicago Option Agreement") attached hereto as
Exhibit A; and
WHEREAS, as a condition to, and immediately after the execution of, this
Agreement, First Chicago and NBD are entering into a NBD stock option
agreement (the "NBD Option Agreement"; and together with the First Chicago
Option Agreement, the "Option Agreements") attached hereto as Exhibit B; and
WHEREAS, the parties desire to make certain representations, warranties and
agreements in connection with the Merger and also to prescribe certain
conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
The Merger
1.1 The Merger. Subject to the terms and conditions of this Agreement, in
accordance with the Delaware General Corporation Law (the "DGCL"), at the
Effective Time (as defined in Section 1.2), First Chicago shall merge with and
into NBD. NBD shall be the Surviving Corporation in the Merger, and shall
continue its corporate existence under the laws of the State of Delaware. Upon
consummation of the Merger, the separate corporate existence of First Chicago
shall terminate.
1.2 Effective Time. The Merger shall become effective as set forth in the
certificate of merger (the "Certificate of Merger") which shall be filed with
the Secretary of State of the State of Delaware (the "Delaware Secretary") on
the Closing Date (as defined in Section 9.1). The term "Effective Time" shall
be the date and time when the Merger becomes effective, as set forth in the
Certificate of Merger.
1.3 Effects of the Merger. At and after the Effective Time, the Merger shall
have the effects set forth in Section 261 of the DGCL.
1.4 Conversion of First Chicago Common Stock; First Chicago Preferred
Stock. At the Effective Time, in each case, subject to Section 2.2(e), by
virtue of the Merger and without any action on the part of First Chicago, NBD
or the holder of any of the following securities:
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(a) Each share of the common stock, par value $5.00 per share, of First
Chicago (the "First Chicago Common Stock"; and together with the First
Chicago Preferred Stock (as defined in Section 4.2(a)), the "First Chicago
Capital Stock") issued and outstanding immediately prior to the Effective
Time (other than shares of First Chicago Capital Stock held (x) in First
Chicago's treasury or (y) directly or indirectly by First Chicago or NBD or
any of their respective wholly owned Subsidiaries (as defined in Section
3.1) (except for Trust Account Shares and DPC shares, as such terms are
defined in Section 1.4(i) and as set forth in the First Chicago Disclosure
Schedule)) shall be converted into the right to receive 1.81 shares (the
"Exchange Ratio") of the common stock, par value $1.00 per share, of NBD
(the "NBD Common Stock"; the NBD Common Stock, the NBD Preferred Stock (as
defined in Section 3.2) and the NBD New Preferred Stock (as defined Section
1.4(f)) being referred to herein as the "NBD Capital Stock").
(b) Each share of First Chicago Series A Cumulative Adjustable Rate
Preferred Stock (as defined in Section 4.2(a)) issued and outstanding
immediately prior to the Effective Time shall be converted into the right
to receive one share of preferred stock with cumulative and adjustable
dividends of NBD (the "NBD Series A Cumulative Adjustable Rate Preferred
Stock"). The terms of the NBD Series A Cumulative Adjustable Rate Preferred
Stock shall be substantially the same as the terms of the First Chicago
Series A Cumulative Adjustable Rate Preferred Stock.
(c) Each share of First Chicago Series B Cumulative Adjustable Rate
Preferred Stock (as defined in Section 4.2(a)) issued and outstanding
immediately prior to the Effective Time shall be converted into the right
to receive one share of preferred stock with cumulative and adjustable
dividends of NBD (the "NBD Series B Cumulative Adjustable Rate Preferred
Stock"). The terms of the NBD Series B Cumulative Adjustable Rate Preferred
Stock shall be substantially the same as the terms of the First Chicago
Series B Cumulative Adjustable Rate Preferred Stock.
(d) Each share of First Chicago Series C Cumulative Adjustable Rate
Preferred Stock (as defined in Section 4.2(a)) issued and outstanding
immediately prior to the Effective Time shall be converted into the right
to receive one share of preferred stock with cumulative and adjustable
dividends of NBD (the "NBD Series C Cumulative Adjustable Rate Preferred
Stock"). The terms of the NBD Series C Cumulative Adjustable Rate Preferred
Stock shall be substantially the same as the terms of the First Chicago
Series C Cumulative Adjustable Rate Preferred Stock.
(e) Each share of First Chicago 8.45% Series E Cumulative Fixed Rate
Preferred Stock (as defined in Section 4.2(a)) issued and outstanding
immediately prior to the Effective Time shall be converted into the right
to receive one share of preferred stock with a fixed rate dividend of NBD
(the "NBD 8.45% Series E Cumulative Fixed Rate Preferred Stock"). The terms
of the NBD 8.45% Series E Cumulative Fixed Rate Preferred Stock shall be
substantially the same as the terms of the First Chicago 8.45% Series E
Cumulative Fixed Rate Preferred Stock.
(f) Each share of First Chicago Convertible Preferred Stock (as defined
in Section 4.2(a)) issued and outstanding immediately prior to the
Effective Time shall be converted into the right to receive one share of
convertible preferred stock with a fixed rate dividend of NBD (the "NBD
Convertible Preferred Stock", and together with the NBD Series A Cumulative
Adjustable Rate Preferred Stock, NBD Series B Cumulative Adjustable Rate
Preferred Stock, NBD Series C Cumulative Adjustable Rate Preferred Stock,
and NBD 8.45% Series E Cumulative Fixed Rate Preferred Stock, the "NBD New
Preferred Stock"). The terms of the NBD Convertible Preferred Stock shall
be substantially the same as the terms of the First Chicago Convertible
Preferred Stock.
(g) At the Effective Time, any deposit agreements pursuant to which
shares of First Chicago Preferred Stock are held subject to depositary
receipts shall automatically, and without further action on the part of the
Surviving Corporation, be assumed by the Surviving Corporation.
(h) All of the shares of First Chicago Common Stock converted into NBD
Common Stock pursuant to this Article I shall no longer be outstanding and
shall automatically be cancelled and shall cease to exist as of the
Effective Time, and each certificate (each a "Common Certificate")
previously representing any such shares of First Chicago Common Stock shall
thereafter represent the right to receive (i) a certificate
2
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representing the number of whole shares of NBD Common Stock and (ii) cash
in lieu of fractional shares into which the shares of First Chicago Common
Stock represented by such Common Certificate have been converted pursuant
to this Section 1.4 and Section 2.2(e). Common Certificates previously
representing shares of First Chicago Common Stock shall be exchanged for
certificates representing whole shares of NBD Common Stock and cash in lieu
of fractional shares issued in consideration therefor upon the surrender of
such Common Certificates in accordance with Section 2.2, without any
interest thereon. If, prior to the Effective Time, the outstanding shares
of NBD Common Stock or First Chicago Common Stock shall have been
increased, decreased, changed into or exchanged for a different number or
kind of shares or securities as a result of a reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse
stock split, or other similar change in capitalization, then an appropriate
and proportionate adjustment shall be made to the Exchange Ratio.
(i) At the Effective Time, all shares of First Chicago Common Stock that
are owned by First Chicago as treasury stock and all shares of First
Chicago Common Stock that are owned, directly or indirectly, by First
Chicago or NBD or any of their respective wholly owned Subsidiaries (other
than shares of First Chicago Common Stock held, directly or indirectly, in
trust accounts, managed accounts and the like or otherwise held in a
fiduciary capacity that are beneficially owned by third parties (any such
shares, and shares of NBD Common Stock which are similarly held, whether
held directly or indirectly by First Chicago or NBD, as the case may be,
being referred to herein as "Trust Account Shares") and other than any
shares of First Chicago Common Stock held by First Chicago or NBD or any of
their respective Subsidiaries in respect of a debt previously contracted
(any such shares of First Chicago Common Stock, and shares of NBD Common
Stock which are similarly held, whether held directly or indirectly by
First Chicago or NBD or any of their respective Subsidiaries, being
referred to herein as "DPC Shares") and as set forth in the First Chicago
Disclosure Schedule) shall be cancelled and shall cease to exist and no
stock of NBD or other consideration shall be delivered in exchange
therefor. All shares of NBD Common Stock that are owned by First Chicago or
any of its wholly owned Subsidiaries (other than Trust Account Shares and
DPC Shares) shall become treasury stock of NBD.
(j) All of the shares of First Chicago Preferred Stock converted into NBD
New Preferred Stock pursuant to this Article I shall no longer be
outstanding and shall automatically be cancelled and shall cease to exist
as of the Effective Time, and each certificate (each a "Preferred Stock
Certificate"; and together with a Common Certificate, a "Certificate")
previously representing any such shares of First Chicago Preferred Stock
shall thereafter represent the right to receive a certificate representing
the number of whole shares of corresponding NBD New Preferred Stock into
which the shares of First Chicago Preferred Stock represented by such
Preferred Stock Certificate have been converted pursuant to this Section
1.4. Preferred Stock Certificates previously representing shares of First
Chicago Preferred Stock shall be exchanged for certificates representing
whole shares of corresponding NBD New Preferred Stock issued in
consideration therefor upon the surrender of such Preferred Stock
Certificates in accordance with Section 2.2 hereof, without any interest
thereon.
1.5 NBD Common Stock. At and after the Effective Time, each share of NBD
Common Stock issued and outstanding immediately prior to the Closing Date
shall remain an issued and outstanding share of common stock of the Surviving
Corporation and shall not be affected by the Merger.
1.6 Options. (a) At the Effective Time, each option granted by First Chicago
to purchase shares of First Chicago Common Stock which is outstanding and
unexercised immediately prior thereto shall cease to represent a right to
acquire shares of First Chicago Common Stock and shall be converted
automatically into an option to purchase shares of NBD Common Stock in an
amount and at an exercise price determined as provided below (and otherwise,
in the case of options, subject to the terms of the First Chicago benefit
plans under which they were issued (collectively, the "First Chicago Stock
Plans") and the agreements evidencing grants thereunder)):
(i) The number of shares of NBD Common Stock to be subject to the new
option shall be equal to the product of the number of shares of First
Chicago Common Stock subject to the original option and the Exchange Ratio,
provided that any fractional shares of NBD Common Stock resulting from such
multiplication shall be rounded to the nearest whole share; and
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(ii) The exercise price per share of NBD Common Stock under the new
option shall be equal to the exercise price per share of First Chicago
Common Stock under the original option divided by the Exchange Ratio,
provided that such exercise price shall be rounded down to the nearest
whole cent.
(b) The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code")) shall be and is intended to be effected
in a manner which is consistent with Section 424(a) of the Code. The duration
and other terms of the new option shall be the same as the original option
except that all references to First Chicago shall be deemed to be references
to NBD.
1.7 Certificate of Incorporation. Subject to the terms and conditions of
this Agreement, at the Effective Time, the Certificate of Incorporation of NBD
shall be the Certificate of Incorporation of the Surviving Corporation until
thereafter amended in accordance with applicable law, except that such
Certificate of Incorporation shall be amended to provide: (a) that the number
of shares of authorized Common Stock of the Surviving Corporation shall be
increased to 750,000,000; (b) that the name of the Surviving Corporation shall
be "First Chicago NBD Corporation"; (c) for the deletion of the Series A
Preferred Stock, par value $1.00 per share; and (d) for the NBD New Preferred
Stock.
1.8 By-Laws. Subject to the terms and conditions of this Agreement, at the
Effective Time, the By-Laws of NBD, shall be the By-Laws of the Surviving
Corporation until thereafter amended in accordance with applicable law.
1.9 Tax Consequences. It is intended that the Merger shall constitute a
reorganization within the meaning of Section 368(a)(i)(A) of the Code, and
that this Agreement shall constitute a "plan of reorganization" for the
purposes of Section 368 of the Code.
1.10 Management Succession. (a) At the Effective Time, Mr. Richard L. Thomas
shall be Chairman of the Board of the Surviving Corporation, and shall serve
in such capacity until the annual meeting of stockholders of the Surviving
Corporation (anticipated to be held on May 20, 1996). At the Effective Time,
Mr. Verne G. Istock shall be the President and Chief Executive Officer of the
Surviving Corporation. Mr. Istock shall immediately and without further action
of the Board of Directors become Chairman of the Board of the Surviving
Corporation on the date (which in no event shall be later than May 31, 1996)
upon which Mr. Thomas ceases to be Chairman of the Board.
(b) At the annual meeting of stockholders of the Surviving Corporation
(anticipated to be held on May 20, 1996), Mr. Thomas shall retire from all
positions he then holds as an officer of the Surviving Corporation or as an
officer or employee of any of its Subsidiaries.
1.11 Board of Directors. (a) From and after the Effective Time, the Board of
Directors of the Surviving Corporation shall consist of 22 persons, including
Messrs. Thomas and Istock, 10 additional persons, two of whom may be executive
officers of First Chicago, to be named by Mr. Thomas and the Board of
Directors of First Chicago, and 10 additional persons, one of whom may be an
executive officer of NBD, to be named by Mr. Istock and the Board of Directors
of NBD.
(b) The representatives selected by First Chicago and NBD, respectively,
shall be divided as equally as practicable among the three classes of
directors in proportion to the aggregate representation set forth above. From
and after the Effective Time, the representatives of First Chicago and NBD
shall also be represented in proportion to the aggregate representation set
forth above on all committees of the Board of Directors of the Surviving
Corporation.
1.12 Headquarters of Surviving Corporation. At the Effective Time, the
headquarters and principal executive offices of the Surviving Corporation
shall be Chicago, Illinois.
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ARTICLE II
Exchange of Shares
2.1 NBD to Make Shares Available. At or prior to the Effective Time, NBD
shall deposit, or shall cause to be deposited, with First Chicago Trust
Company of New York, or another bank or trust company reasonably acceptable to
each of First Chicago and NBD (the "Exchange Agent"), for the benefit of the
holders of Certificates, for exchange in accordance with this Article II,
certificates representing the shares of NBD Common Stock and NBD New Preferred
Stock and cash in lieu of any fractional shares (such cash and certificates
for shares of NBD Common Stock and NBD New Preferred Stock, together with any
dividends or distributions with respect thereto, being hereinafter referred to
as the "Exchange Fund") to be issued pursuant to Section 1.4 and paid pursuant
to Section 2.2(a) in exchange for outstanding shares of First Chicago Common
Stock.
2.2 Exchange of Shares. (a) As soon as practicable after the Effective Time,
and in no event later than five business days thereafter, the Exchange Agent
shall mail to each holder of record of one or more Certificates a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent) and instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing, the
shares of NBD Common Stock, NBD New Preferred Stock and any cash in lieu of
fractional shares into which the shares of First Chicago Common Stock or First
Chicago Preferred Stock represented by such Certificate or Certificates shall
have been converted pursuant to this Agreement. Upon proper surrender of a
Certificate for exchange and cancellation to the Exchange Agent, together with
such properly completed letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange therefor, as
applicable, (i) a certificate representing that number of whole shares of NBD
Common Stock or NBD New Preferred Stock to which such holder of First Chicago
Common Stock or First Chicago Preferred Stock shall have become entitled
pursuant to the provisions of Article I, and (ii) a check representing the
amount of any cash in lieu of fractional shares which such holder has the
right to receive in respect of the Certificate surrendered pursuant to the
provisions of this Article II, and the Certificate so surrendered shall
forthwith be cancelled. No interest will be paid or accrued on any cash in
lieu of fractional shares or on any unpaid dividends and distributions payable
to holders of Certificates.
(b) No dividends or other distributions declared with respect to NBD Common
Stock or NBD New Preferred Stock with a record date following the 30th day to
occur after the Effective Time shall be paid to the holder of any
unsurrendered Certificate until the holder thereof shall surrender such
Certificate in accordance with this Article II. Subject to Section 6.11 and to
the effect of applicable laws, (i) until such 30th day, there shall be paid to
each former holder of shares of First Chicago Common Stock or First Chicago
Preferred Stock, the amount of dividends or other distributions with a record
date after the Effective Time but on or before such 30th day payable with
respect to the shares of NBD Common Stock or NBD New Preferred into which such
First Chicago Common Stock or First Chicago Preferred Stock has been converted
pursuant to this Article II and (ii) after the surrender of a Certificate in
accordance with this Article II, the record holder thereof shall be entitled
to receive any such dividends or other distributions with a record date
following the 30th day to occur after the Effective Time, without any interest
thereon, which theretofore had become payable with respect to shares of NBD
Common Stock or NBD New Preferred Stock represented by such Certificate.
(c) If any certificate representing shares of NBD Common Stock or NBD New
Preferred Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of the issuance thereof that the Certificate so surrendered shall be
properly endorsed (or accompanied by an appropriate instrument of transfer)
and otherwise in proper form for transfer, and that the person requesting such
exchange shall pay to the Exchange Agent in advance any transfer or other
taxes required by reason of the issuance of a certificate representing shares
of NBD Common Stock or NBD New Preferred Stock in any name other than that of
the registered holder of the Certificate surrendered, or required for any
other reason, or shall establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not payable.
5
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(d) After the Effective Time, there shall be no transfers on the stock
transfer books of First Chicago of the shares of First Chicago Common Stock or
First Chicago Preferred Stock which were issued and outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates
representing such shares are presented for transfer to the Exchange Agent,
they shall be cancelled and exchanged for certificates representing shares of
NBD Common Stock or NBD New Preferred Stock as provided in this Article II.
(e) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of NBD Common Stock shall
be issued upon the surrender for exchange of Certificates, no dividend or
distribution with respect to NBD Common Stock shall be payable on or with
respect to any fractional share, and such fractional share interests shall not
entitle the owner thereof to vote or to any other rights of a stockholder of
First Chicago. In lieu of the issuance of any such fractional share, NBD shall
pay to each former stockholder of First Chicago who otherwise would be
entitled to receive such fractional share an amount in cash determined by
multiplying (i) the average of the closing-sale prices of NBD Common Stock on
the New York Stock Exchange, Inc. (the "NYSE") as reported by The Wall Street
Journal for the five trading days immediately preceding the date of the
Effective Time by (ii) the fraction of a share (rounded to the nearest
thousandth when expressed as an Arabic number) of NBD Common Stock to which
such holder would otherwise be entitled to receive pursuant to Section 1.4.
(f) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of First Chicago for 12 months after the Effective Time shall be
paid to NBD. Any stockholders of First Chicago who have not theretofore
complied with this Article II shall thereafter look only to NBD for payment of
the shares of NBD Common Stock or NBD New Preferred Stock, cash in lieu of any
fractional shares and any unpaid dividends and distributions on the NBD Common
Stock or NBD New Preferred Stock deliverable in respect of each share of First
Chicago Common Stock or First Chicago Preferred Stock, as the case may be,
such stockholder holds as determined pursuant to this Agreement, in each case,
without any interest thereon. Notwithstanding the foregoing, none of First
Chicago, NBD, the Exchange Agent or any other person shall be liable to any
former holder of shares of First Chicago Common Stock or First Chicago
Preferred Stock for any amount delivered in good faith to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(g) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if reasonably required by
NBD, the posting by such person of a bond in such amount as NBD may determine
is reasonably necessary as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the shares of NBD
Capital Stock and any cash in lieu of fractional shares deliverable in respect
thereof pursuant to this Agreement.
ARTICLE III
Representations and Warranties of NBD
Except as disclosed in the NBD disclosure schedule delivered to First
Chicago concurrently herewith (the "NBD Disclosure Schedule") NBD hereby
represents and warrants to First Chicago as follows:
3.1 Corporate Organization. (a) NBD is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. NBD has
the corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted, and is duly
licensed or qualified to do business in each jurisdiction in which the nature
of the business conducted by it or the character or location of the properties
and assets owned or leased by it makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified would not
have a Material Adverse Effect on NBD. As used in this Agreement, the term
"Material Adverse Effect" means, with respect to First Chicago, NBD or the
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Surviving Corporation, as the case may be, a material adverse effect on the
business, results of operations, financial condition, or (insofar as they can
reasonably be foreseen) prospects of such party and its Subsidiaries taken as
a whole. As used in this Agreement, the word "Subsidiary" when used with
respect to any party means any bank, corporation, partnership, limited
liability company, or other organization, whether incorporated or
unincorporated, which is consolidated with such party for financial reporting
purposes. NBD is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHC Act") and as a savings and
loan holding company under the Home Owners' Loan Act ("HOLA"). True and
complete copies of the Certificate of Incorporation and By-Laws of NBD, as in
effect as of the date of this Agreement, have previously been made available
by NBD to First Chicago.
(b) Each NBD Subsidiary (i) is duly organized and validly existing as a
bank, corporation, partnership or limited liability company under the laws of
its jurisdiction of organization, (ii) is duly qualified to do business and in
good standing in all jurisdictions (whether federal, state, local or foreign)
where its ownership or leasing of property or the conduct of its business
requires it to be so qualified and in which the failure to be so qualified
would have a Material Adverse Effect on NBD, and (iii) has all requisite
corporate power and authority to own or lease its properties and assets and to
carry on its business as now conducted.
(c) The minute books of NBD accurately reflect in all material respects all
corporate actions held or taken since January 1, 1993 of its stockholders and
Board of Directors (including committees of the Board of Directors of NBD).
3.2 Capitalization. (a) The authorized capital stock of NBD consists of (i)
500,000,000 shares of NBD Common Stock, of which as of June 30, 1995,
157,139,395 shares were issued and outstanding and 3,743,613 shares were held
in treasury, and (ii) 10,460,000 shares of Preferred Stock (the "NBD Preferred
Stock"), of which as of June 30, 1995, (A) 10,000,000 shares were designated
and no shares were issued and outstanding as Preferred Stock, no par value,
and (B) 460,000 shares were designated and no shares were issued and
outstanding as Series A Preferred Stock, par value $1.00 per share. All of the
issued and outstanding shares of NBD Capital Stock have been duly authorized
and validly issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof. As of
the date of this Agreement, except pursuant to the terms of NBD's issued and
outstanding Preferred Stock Purchase Units ("NBD Units") and for the NBD
Option Agreement, NBD does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of NBD Capital
Stock or any other equity securities of NBD or any securities representing the
right to purchase or otherwise receive any shares of NBD Common Stock or NBD
Preferred Stock. As of June 30, 1995, no shares of NBD Common Stock were
reserved for issuance, except for (i) 2,152,022 shares reserved for issuance
upon the exercise of stock options pursuant to the NBD Stock Plans (as defined
in Section 6.7), (ii) 32,243 shares reserved for issuance as awards under the
NBD Directors Stock Award Plans and (iii) 546,170 shares reserved for issuance
upon the exercise of options granted in substitution for options assumed in
prior NBD acquisitions. The only shares of NBD Preferred Stock reserved for
issuance were 1,500,000 shares reserved pursuant to NBD Units. Since June 30,
1995, NBD has not issued any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock, other
than pursuant to the exercise of employee stock options granted prior to such
date. The shares of NBD Capital Stock to be issued pursuant to the Merger will
be duly authorized and validly issued and, at the Effective Time, all such
shares will be fully paid, nonassessable and free of preemptive rights, with
no personal liability attaching to the ownership thereof.
(b) NBD owns, directly or indirectly, all of the issued and outstanding
shares of capital stock of each of the NBD Subsidiaries, free and clear of any
liens, pledges, charges, encumbrances and security interests whatsoever
("Liens"), and all of such shares are duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. No NBD Subsidiary has or is
bound by any outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character calling for the purchase or issuance of any
shares of capital stock or any other equity security of such Subsidiary or any
securities representing the right to purchase or otherwise receive any shares
of capital stock or any other equity security of such Subsidiary.
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3.3 Authority; No Violation. (a) NBD has full corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly approved by the Board of Directors of NBD. The Board of Directors of
NBD has directed that this Agreement and the transactions contemplated hereby
be submitted to NBD's stockholders for approval at a meeting of such
stockholders and, except for the adoption of this Agreement by the affirmative
vote of the holders of a majority of the outstanding shares of NBD Common
Stock, no other corporate proceedings on the part of NBD are necessary to
approve this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by NBD and
(assuming due authorization, execution and delivery by First Chicago)
constitutes a valid and binding obligation of NBD, enforceable against NBD in
accordance with its terms.
(b) Neither the execution and delivery of this Agreement by NBD nor the
consummation by NBD of the transactions contemplated hereby, nor compliance by
NBD with any of the terms or provisions hereof, will (i) violate any provision
of the Certificate of Incorporation or By-Laws of NBD or (ii) assuming that
the consents and approvals referred to in Section 3.4 are duly obtained, (x)
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to NBD or any of its Subsidiaries or any of
their respective properties or assets, or (y) violate, conflict with, result
in a breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective properties or
assets of NBD or any of its Subsidiaries under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which NBD or any of its
Subsidiaries is a party, or by which they or any of their respective
properties or assets may be bound or affected, except (in the case of clause
(y) above) for such violations, conflicts, breaches or defaults which, either
individually or in the aggregate, will not have or be reasonably likely to
have a Material Adverse Effect on NBD or the Surviving Corporation.
3.4 Consents and Approvals. Except for (i) the filing of applications and
notices, as applicable, with the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") under the BHC Act and approval of such
applications and notices, (ii) the filing of any required applications with
the Office of Thrift Supervision (the "OTS") (iii) the filing of any required
applications or notices with any state or foreign agencies and approval of
such applications and notices (the "State Approvals"), (iv) the filing with
the Securities and Exchange Commission (the "SEC") of a joint proxy statement
in definitive form relating to the meetings of First Chicago's and NBD's
stockholders to be held in connection with this Agreement and the transactions
contemplated hereby (the "Joint Proxy Statement") and the registration
statement on Form S-4 (the "S-4") in which the Joint Proxy Statement will be
included as a prospectus, (v) the filing of the Certificate of Merger with the
Delaware Secretary pursuant to the DGCL, (vi) any notices to or filings with
the Small Business Administration ("SBA"), (vii) any consent, authorizations,
approvals, filings or exemptions in connection with compliance with the
applicable provisions of federal and state securities laws relating to the
regulation of broker-dealers or investment advisers, and federal commodities
laws relating to the regulation of futures commission merchants and the rules
and regulations thereunder and of any applicable industry self-regulatory
organization ("SRO"), and the rules of the NYSE, or which are required under
consumer finance, mortgage banking and other similar laws, (viii) such filings
and approvals as are required to be made or obtained under the securities or
"Blue Sky" laws of various states in connection with the issuance of the
shares of NBD Common Stock pursuant to this Agreement, and (ix) the approval
of this Agreement by the requisite vote of the stockholders of First Chicago
and NBD, no consents or approvals of or filings or registrations with any
court, administrative agency or commission or other governmental authority or
instrumentality (each a "Governmental Entity") or with any third party are
necessary in connection with (A) the execution and delivery by NBD of this
Agreement and (B) the consummation by NBD of the Merger and the other
transactions contemplated hereby.
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3.5 Reports. NBD and each of its Subsidiaries have timely filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, that they were required to file since January 1, 1993
with (i) the Federal Reserve Board, (ii) the Federal Deposit Insurance
Corporation, (iii) any state regulatory authority (each a "State Regulator"),
(iv) the Office of the Comptroller of the Currency (the "OCC"), (v) the OTS,
(vi) the SEC and (vii) any SRO (collectively "Regulatory Agencies"), and all
other reports and statements required to be filed by them since January 1,
1993, including, without limitation, any report or statement required to be
filed pursuant to the laws, rules or regulations of the United States, any
state, or any Regulatory Agency and have paid all fees and assessments due and
payable in connection therewith, except where the failure to file such report,
registration or statement or to pay such fees and assessments, either
individually or in the aggregate, will not have a Material Adverse Effect on
NBD. Except for normal examinations conducted by a Regulatory Agency in the
regular course of the business of NBD and its Subsidiaries, no Regulatory
Agency has initiated any proceeding or, to the best knowledge of NBD,
investigation into the business or operations of NBD or any of its
Subsidiaries since January 1, 1993, except where such proceedings or
investigation are not likely, either individually or in the aggregate, to have
a Material Adverse Effect on NBD. There is no unresolved violation, criticism,
or exception by any Regulatory Agency with respect to any report or statement
relating to any examinations of NBD or any of its Subsidiaries which, in the
reasonable judgment of NBD, is likely, either individually or in the
aggregate, to have a Material Adverse Effect on NBD.
3.6 Financial Statements. NBD has previously made available to First Chicago
copies of (a) the consolidated balance sheets of NBD and its Subsidiaries as
of December 31, for the fiscal years 1993 and 1994, and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for the fiscal years 1992 through 1994, inclusive, as reported in NBD's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994 filed
with the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in each case accompanied by the audit report of Deloitte &
Touche LLP, independent public accountants with respect to NBD, and (b) the
unaudited consolidated balance sheet of NBD and its Subsidiaries as of March
31, 1994 and March 31, 1995 and the related unaudited consolidated statements
of income, cash flows and changes in stockholders' equity for the three-month
periods then ended as reported in NBD's Quarterly Report on Form 10-Q for the
period ended March 31, 1995 filed with the SEC under the Exchange Act (the
"NBD March 31, 1995 Form 10-Q"). The December 31, 1994 consolidated balance
sheet of NBD (including the related notes, where applicable) fairly presents
the consolidated financial position of NBD and its Subsidiaries as of the date
thereof, and the other financial statements referred to in this Section 3.6
(including the related notes, where applicable) fairly present (subject, in
the case of the unaudited statements, to recurring audit adjustments normal in
nature and amount) the results of the consolidated operations and changes in
stockholders' equity and consolidated financial position of NBD and its
Subsidiaries for the respective fiscal periods or as of the respective dates
therein set forth; each of such statements (including the related notes, where
applicable) comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto; and each of such statements (including the related notes,
where applicable) has been prepared in all material respects in accordance
with generally accepted accounting principles ("GAAP") consistently applied
during the periods involved, except, in each case, as indicated in such
statements or in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q. The books and records of NBD and its Subsidiaries have
been, and are being, maintained in all material respects in accordance with
GAAP and any other applicable legal and accounting requirements and reflect
only actual transactions.
3.7 Broker's Fees. Neither NBD nor any NBD Subsidiary nor any of their
respective officers or directors has employed any broker or finder or incurred
any liability for any broker's fees, commissions or finder's fees in
connection with the Merger or related transactions contemplated by this
Agreement or the Option Agreements.
3.8 Absence of Certain Changes or Events. (a) Except as publicly disclosed
in NBD Reports (as defined in Section 3.12) filed prior to the date hereof,
since March 31, 1995, (i) NBD and its Subsidiaries taken as a whole have not
incurred any material liability, except in the ordinary course of their
business, and (ii) no event has occurred which has had, individually or in the
aggregate, a Material Adverse Effect on NBD or the Surviving Corporation.
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(b) Except as publicly disclosed in NBD Reports filed prior to the date
hereof, since March 31, 1995, NBD and its Subsidiaries have carried on their
respective businesses in all material respects in the ordinary and usual
course.
(c) Since December 31, 1994, neither NBD nor any of its Subsidiaries has (i)
except for such actions as are in the ordinary course of business consistent
with past practice or except as required by applicable law, (A) increased the
wages, salaries, compensation, pension, or other fringe benefits or
perquisites payable to any executive officer, employee, or director from the
amount thereof in effect as of December 31, 1994, or (B) granted any severance
or termination pay, entered into any contract to make or grant any severance
or termination pay, or paid any bonuses aggregating in excess of 5% of NBD's
1994 salary and employee benefits expenses, other than customary year-end
bonuses for fiscal 1994 and 1995, or (ii) suffered any strike, work stoppage,
slowdown, or other labor disturbance which, in the reasonable judgment of NBD,
is likely, either individually or in the aggregate, to have a Material Adverse
Effect on NBD.
3.9 Legal Proceedings. (a) Neither NBD nor any of its Subsidiaries is a
party to any, and there are no pending or, to the best of NBD's knowledge,
threatened, material legal, administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory investigations of any nature
against NBD or any of its Subsidiaries or challenging the validity or
propriety of the transactions contemplated by this Agreement or the NBD Option
Agreement as to which there is a reasonable probability of an adverse
determination and which, if adversely determined, would, individually or in
the aggregate, have a Material Adverse Effect on NBD.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction (other than those that apply to similarly situated bank holding
companies or banks) imposed upon NBD, any of its Subsidiaries or the assets of
NBD or any of its Subsidiaries which has had, or might reasonably be expected
to have, a Material Adverse Effect on NBD.
3.10 Taxes and Tax Returns. (a) Each of NBD and its Subsidiaries has duly
filed all federal, state, county, foreign and, to the best of NBD's knowledge,
local information returns and tax returns required to be filed by it on or
prior to the date hereof (all such returns being accurate and complete in all
material respects) and has duly paid or made provisions for the payment of all
Taxes (as defined in Section 3.10(b)) and other governmental charges which
have been incurred or are due or claimed to be due from it by federal, state,
county, foreign or local taxing authorities on or prior to the date of this
Agreement (including, without limitation, if and to the extent applicable,
those due in respect of its properties, income, business, capital stock,
deposits, franchises, licenses, sales and payrolls) other than (i) Taxes or
other charges which are not yet delinquent or are being contested in good
faith and have not been finally determined, or (ii) information returns, tax
returns, Taxes or other governmental charges the failure to file, pay or make
provision for, either individually or in the aggregate, are not likely, in the
reasonable judgment of NBD, to have a Material Adverse Effect on NBD. The
income tax returns of NBD and its Subsidiaries have been examined by the
Internal Revenue Service (the "IRS") and any liability with respect thereto
has been satisfied for all years to and including 1987, and either no material
deficiencies were asserted as a result of such examination for which NBD does
not have adequate reserves or all such deficiencies were satisfied. To the
best of NBD's knowledge, there are no material disputes pending, or claims
asserted for, Taxes or assessments upon NBD or any of its Subsidiaries for
which NBD does not have adequate reserves, nor has NBD or any of its
Subsidiaries given any currently effective waivers extending the statutory
period of limitation applicable to any federal, state, county or local income
tax return for any period. In addition, (A) proper and accurate amounts have
been withheld by NBD and its Subsidiaries from their employees for all prior
periods in compliance in all material respects with the tax withholding
provisions of applicable federal, state and local laws, except where failure
to do so would not have a Material Adverse Effect on NBD, (B) federal, state,
county and local returns which are accurate and complete in all material
respects have been filed by NBD and its Subsidiaries for all periods for which
returns were due with respect to income tax withholding, Social Security and
unemployment taxes, except where failure to do so would not have a Material
Adverse Effect on NBD, (C) the amounts shown on such federal, state, local or
county returns to be due and payable have been paid in full or adequate
provision therefor has been included by NBD in its consolidated
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financial statements as of December 31, 1994, except where failure to do so
would not have a Material Adverse Effect on NBD and (D) there are no Tax liens
upon any property or assets of NBD or its Subsidiaries except liens for
current taxes not yet due or liens that would not have a Material Adverse
Effect on NBD. Neither NBD nor any of its Subsidiaries has been required to
include in income any adjustment pursuant to Section 481 of the Code by reason
of a voluntary change in accounting method initiated by NBD or any of its
Subsidiaries, and the IRS has not initiated or proposed any such adjustment or
change in accounting method, in either case which has had or is reasonably
likely to have a Material Adverse Effect on NBD. Except as set forth in the
financial statements described in Section 3.6, neither NBD nor any of its
Subsidiaries has entered into a transaction which is being accounted for as an
installment obligation under Section 453 of the Code, which would be
reasonably likely to have a Material Adverse Effect on NBD.
(b) As used in this Agreement, the term "Tax" or "Taxes" means all federal,
state, county, local, and foreign income, excise, gross receipts, gross
income, ad valorem, profits, gains, property, capital, sales, transfer, use,
payroll, employment, severance, withholding, duties, intangibles, franchise,
backup withholding, and other taxes, charges, levies or like assessments
together with all penalties and additions to tax and interest thereon.
(c) Any amount that is reasonably likely to be received (whether in cash or
property or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer or director of NBD or
any of its affiliates who is a "Disqualified Individual" (as such term is
defined in proposed Treasury Regulation Section 1.280G-1) under any
employment, severance or termination agreement, other compensation arrangement
or NBD Benefit Plan (as defined in Section 3.11(a)) currently in effect should
not be characterized as an "excess parachute payment" (as such term is defined
in Section 280G(b)(1) of the Code).
(d) No disallowance of a deduction under Section 162(m) of the Code for
employee remuneration of any amount paid or payable by NBD or any Subsidiary
of NBD under any contract, plan, program, arrangement or understanding would
be reasonably likely to have a Material Adverse Effect on NBD.
3.11 Employees. (a) The NBD Disclosure Schedule sets forth a true and
complete list of each material employee benefit plan, arrangement or agreement
that is maintained as of the date of this Agreement (the "NBD Benefit Plans")
by NBD or any of its Subsidiaries or by any trade or business, whether or not
incorporated (an "NBD ERISA Affiliate"), all of which together with NBD would
be deemed a "single employer" within the meaning of Section 4001 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
(b) NBD has heretofore delivered to First Chicago true and complete copies
of each of the NBD Benefit Plans and certain related documents, including, but
not limited to, (i) the actuarial report for such NBD Benefit Plan (if
applicable) for each of the last two years, and (ii) the most recent
determination letter from the IRS (if applicable) for such Plan.
(c) (i) Each of the NBD Benefit Plans has been operated and administered in
all material respects with applicable laws, including, but not limited to,
ERISA and the Code, (ii) each of the NBD Benefit Plans intended to be
"qualified" within the meaning of Section 401(a) of the Code is so qualified,
(iii) with respect to each Plan which is subject to Title IV of ERISA, the
present value of accrued benefits under such Plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such Plan's actuary with respect to such Plan, did not, as of its
latest valuation date, exceed the then current value of the assets of such
Plan allocable to such accrued benefits, (iv) no NBD Benefit Plan provides
benefits, including, without limitation, death or medical benefits (whether or
not insured), with respect to current or former employees of NBD, its
Subsidiaries or any ERISA Affiliate beyond their retirement or other
termination of service, other than (A) coverage mandated by applicable law,
(B) death benefits or retirement benefits under any "employee pension plan"
(as such term is defined in Section 3(2) of ERISA), (C) deferred compensation
benefits accrued as liabilities on the books of NBD, its Subsidiaries or the
ERISA Affiliates or (D) benefits the full cost of which is borne by the
current or former employee (or his beneficiary), (v) no material liability
under Title IV of ERISA has been incurred by NBD, its Subsidiaries or any
ERISA Affiliate that has not been satisfied in full, and no condition exists
that presents a material risk to NBD, its Subsidiaries or any ERISA Affiliate
of incurring
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a material liability thereunder, (vi) no Plan is a "multiemployer pension
plan" (as such term is defined in Section 3(37) of ERISA), (vii) all
contributions or other amounts payable by NBD or its Subsidiaries as of the
Effective Time with respect to each NBD Benefit Plan in respect of current or
prior plan years have been paid or accrued in accordance with GAAP and Section
412 of the Code, (viii) neither NBD, its Subsidiaries nor any ERISA Affiliate
has engaged in a transaction in connection with which NBD, its Subsidiaries or
any ERISA Affiliate reasonably could be subject to either a material civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA or a material tax
imposed pursuant to Section 4975 or 4976 of the Code, and (ix) to the best
knowledge of NBD there are no pending, threatened or anticipated claims (other
than routine claims for benefits) by, on behalf of or against any of the NBD
Benefit Plans or any trusts related thereto which are, in the reasonable
judgment of NBD, likely, either individually or in the aggregate, to have a
Material Adverse Effect on NBD.
(d) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
material payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any director or
any employee of NBD or any of its affiliates from NBD or any of its affiliates
under any NBD Benefit Plan or otherwise, (ii) materially increase any benefits
otherwise payable under any NBD Benefit Plan or (iii) result in any
acceleration of the time of payment or vesting of any such benefits to any
material extent.
3.12 SEC Reports. NBD has previously made available to First Chicago an
accurate and complete copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement filed since
January 1, 1993 by NBD with the SEC pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act (the "NBD Reports") and
prior to the date hereof and (b) communication mailed by NBD to its
stockholders since January 1, 1993 and prior to the date hereof, and no such
registration statement, prospectus, report, schedule, proxy statement or
communication contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances in which they were
made, not misleading, except that information as of a later date shall be
deemed to modify information as of an earlier date. Since January 1, 1993, NBD
has timely filed all NBD Reports and other documents required to be filed by
it under the Securities Act and the Exchange Act, and, as of their respective
dates, all NBD Reports complied in all material respects with the published
rules and regulations of the SEC with respect thereto.
3.13 Compliance with Applicable Law. NBD and each of its Subsidiaries hold
all material licenses, franchises, permits and authorizations necessary for
the lawful conduct of their respective businesses under and pursuant to all,
and have complied in all material respects with and are not in default in any
material respect under any, applicable law, statute, order, rule, regulation,
policy and/or guideline of any Governmental Entity relating to NBD or any of
its Subsidiaries, except where the failure to hold such license, franchise,
permit or authorization or such noncompliance or default would not,
individually or in the aggregate, have a Material Adverse Effect on NBD.
3.14 Certain Contracts. (a) Neither NBD nor any of its Subsidiaries is a
party to or bound by any contract, arrangement, commitment or understanding
(whether written or oral) (i) with respect to the employment of any directors,
officers or employees other than in the ordinary course of business consistent
with past practice, (ii) which, upon the consummation of the transactions
contemplated by this Agreement will (either alone or upon the occurrence of
any additional acts or events) result in any payment (whether of severance pay
or otherwise) becoming due from First Chicago, NBD, the Surviving Corporation,
or any of their respective Subsidiaries to any officer or employee thereof,
(iii) which is a "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) to be performed after the date of
this Agreement that has not been filed or incorporated by reference in the NBD
Reports, (iv) which materially restricts the conduct of any line of business
by NBD, (v) with or to a labor union or guild (including any collective
bargaining agreement) or (vi) (including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan) any of
the benefits of which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement, or the value of any of the benefits of which
will be
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calculated on the basis of any of the transactions contemplated by this
Agreement. NBD has previously made available to First Chicago true and correct
copies of all employment and deferred compensation agreements which are in
writing and to which NBD is a party. Each contract, arrangement, commitment or
understanding of the type described in this Section 3.14(a), whether or not
set forth in the NBD Disclosure Schedule, is referred to herein as an "NBD
Contract", and neither NBD nor any of its Subsidiaries knows of, or has
received notice of, any violation of the above by any of the other parties
thereto which, individually or in the aggregate, would have a Material Adverse
Effect on NBD.
(b) (i) Each NBD Contract is valid and binding on NBD or any of its
Subsidiaries, as applicable, and in full force and effect, (ii) NBD and each
of its Subsidiaries has in all material respects performed all obligations
required to be performed by it to date under each NBD Contract, except where
such noncompliance, individually or in the aggregate, would not have a
Material Adverse Effect on NBD, and (iii) no event or condition exists which
constitutes or, after notice or lapse of time or both, would constitute, a
material default on the part of NBD or any of its Subsidiaries under any such
NBD Contract, except where such default, individually or in the aggregate,
would not have a Material Adverse Effect on NBD.
3.15 Agreements with Regulatory Agencies. Neither NBD nor any of its
Subsidiaries is subject to any cease-and-desist or other order issued by, or
is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or has been since
January 1, 1993, a recipient of any supervisory letter from, or since January
1, 1993, has adopted any board resolutions at the request of any Regulatory
Agency or other Governmental Entity that currently restricts in any material
respect the conduct of its business or that in any material manner relates to
its capital adequacy, its credit policies, its management or its business
(each, whether or not set forth in the NBD Disclosure Schedule, an "NBD
Regulatory Agreement"), nor has NBD or any of its Subsidiaries been advised
since January 1, 1993, by any Regulatory Agency or other Governmental Entity
that it is considering issuing or requesting any such Regulatory Agreement.
3.16 Other Activities of NBD and its Subsidiaries.
(a) Neither NBD nor any of its Subsidiaries that is neither a bank, a bank
operating subsidiary or a bank service corporation, directly or indirectly,
engages in any activity prohibited by the Federal Reserve Board. Without
limiting the generality of the foregoing, any equity investment of NBD and
each Subsidiary that is not a bank, a bank operating subsidiary or a bank
service corporation, is not prohibited by the Federal Reserve Board.
(b) To NBD's knowledge, each NBD Subsidiary which is a bank (a "NBD Bank
Subsidiary") currently performs all personal trust, corporate trust and other
fiduciary activities ("Trust Activities") with requisite authority under
applicable law of Governmental Entities and in accordance in all material
respects with the agreed-upon terms of the agreements and instruments
governing such Trust Activities, sound fiduciary principles and applicable law
and regulation (specifically including, but not limited to, Section 9 of Title
12 of the Code of Federal Regulations); there is no investigation or inquiry
by any Governmental Entity pending, or to the knowledge of NBD, threatened,
against or affecting NBD, or any Significant Subsidiary thereof relating to
the compliance by NBD or any such Significant Subsidiary (as such term is
defined in Rule 1-02(w) of Regulation S-X of the SEC) with sound fiduciary
principles and applicable regulations; and except where any such failure would
not have a Material Adverse Effect on NBD, each employee of a NBD Bank
Subsidiary had the authority to act in the capacity in which he or she acted
with respect to Trust Activities, in each case, in which such employee held
himself or herself out as a representative of a NBD Bank Subsidiary; and each
NBD Bank Subsidiary has established policies and procedures for the purpose of
complying with applicable laws of Governmental Entities relating to Trust
Activities, has followed such policies and procedures in all material respects
and has performed appropriate internal audit reviews of, and has engaged
independent accountants to perform audits of, Trust Activities, which audits
since January 1, 1993 have disclosed no material violations of applicable laws
of Governmental Entities or such policies and procedures.
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3.17 Investment Securities. Each of NBD and its Subsidiaries has good and
marketable title to all securities held by it (except securities sold under
repurchase agreements or held in any fiduciary or agency capacity), free and
clear of any Lien, except to the extent such securities are pledged in the
ordinary course of business consistent with prudent banking practices to
secure obligations of NBD or any of its Subsidiaries. Such securities are
valued on the books of NBD in accordance with GAAP.
3.18 Interest Rate Risk Management Instruments. All interest rate swaps,
caps, floors and option agreements and other interest rate risk management
arrangements, whether entered into for the account of NBD or for the account
of a customer of NBD or one of its Subsidiaries, were entered into in the
ordinary course of business and, to NBD's knowledge, in accordance with
prudent banking practice and applicable rules, regulations and policies of any
Regulatory Authority and with counterparties believed to be financially
responsible at the time and are legal, valid and binding obligations of NBD or
one of its Subsidiaries enforceable in accordance with their terms (except as
may be limited by bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the rights of creditors generally and the availability
of equitable remedies), and are in full force and effect. NBD and each of its
Subsidiaries have duly performed in all material respects all of their
material obligations thereunder to the extent that such obligations to perform
have accrued; and, to NBD's knowledge, there are no material breaches,
violations or defaults or allegations or assertions of such by any party
thereunder.
3.19 Undisclosed Liabilities. Except for those liabilities that are fully
reflected or reserved against on the consolidated balance sheet of NBD
included in the NBD March 31, 1995 Form 10-Q and for liabilities incurred in
the ordinary course of business consistent with past practice, since March 31,
1995, neither NBD nor any of its Subsidiaries has incurred any liability of
any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether due or to become due) that, either alone or when combined with all
similar liabilities, has had, or could reasonably be expected to have, a
Material Adverse Effect on NBD.
3.20 Environmental Liability. Except as set forth in the NBD Disclosure
Schedule, there are no legal, administrative, arbitral or other proceedings,
claims, actions, causes of action, private environmental investigations or
remediation activities or governmental investigations of any nature seeking to
impose, or that could reasonably result in the imposition, on NBD of any
liability or obligation arising under common law or under any local, state or
federal environmental statute, regulation or ordinance including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), pending or threatened against
NBD, which liability or obligation could reasonably be expected to have a
Material Adverse Effect on NBD. To the knowledge of NBD, there is no
reasonable basis for any such proceeding, claim, action or governmental
investigation that would impose any material liability or obligation that
could reasonably be expected to have a Material Adverse Effect on NBD. NBD is
not subject to any agreement, order, judgment, decree, letter or memorandum by
or with any court, governmental authority, regulatory agency or third party
imposing any material liability or obligation that could reasonably be
expected to have a Material Adverse Effect on NBD.
3.21 State Takeover Laws. The Board of Directors of NBD has approved the
transactions contemplated by this Agreement and the Option Agreements such
that the provisions of Section 203 of the DGCL will not apply to this
Agreement or the Option Agreements or any of the transactions contemplated
hereby or thereby.
3.22 Pooling of Interests. As of the date of this Agreement, NBD has no
reason to believe that the Merger will not qualify as a "pooling of interests"
for accounting purposes.
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ARTICLE IV
Representations and Warranties of First Chicago
Except as disclosed in the First Chicago disclosure schedule delivered to
NBD concurrently herewith (the "First Chicago Disclosure Schedule") First
Chicago hereby represents and warrants to NBD as follows:
4.1 Corporate Organization. (a) First Chicago is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware. First Chicago has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is
now being conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed or qualified would not have a Material Adverse Effect on First
Chicago. First Chicago is duly registered as a bank holding company under the
BHC Act. True and complete copies of the Certificate of Incorporation and By-
Laws of First Chicago, as in effect as of the date of this Agreement, have
previously been made available by First Chicago to NBD.
(b) Each First Chicago Subsidiary (i) is duly organized and validly existing
as a bank, corporation, partnership or limited liability company under the
laws of its jurisdiction of organization, (ii) is duly qualified to do
business and in good standing in all jurisdictions (whether Federal, state,
local or foreign) where its ownership or leasing of property or the conduct of
its business requires it to be so qualified and in which the failure to be so
qualified would have a Material Adverse Effect on First Chicago, and (iii) has
all requisite corporate power and authority to own or lease its properties and
assets and to carry on its business as now conducted.
(c) The minute books of First Chicago accurately reflect in all material
respects all corporate actions held or taken since January 1, 1993 of its
stockholders and Board of Directors (including committees of the Board of
Directors of First Chicago).
4.2 Capitalization. (a) The authorized capital stock of First Chicago
consists of 150,000,000 shares of First Chicago Common Stock, of which, as of
June 30, 1995, 89,719,497 were issued and outstanding, and 15,000,000 shares
of Preferred Stock, no par value (the "First Chicago Preferred Stock", of
which (i) 2,500,000 shares were designated and 2,410,000 shares were issued
and outstanding as Preferred Stock with Cumulative and Adjustable Dividends
("First Chicago Series A Cumulative Adjustable Rate Preferred Stock"), (ii)
1,250,000 shares were designated and 1,191,000 shares were issued and
outstanding as Preferred Stock with Cumulative and Adjustable Dividends,
Series B ("First Chicago Series B Cumulative Adjustable Rate Preferred
Stock"), (iii) 750,000 shares were designated and 713,800 were issued and
outstanding as Preferred Stock with Cumulative and Adjustable Dividends,
Series C ("First Chicago Series C Cumulative Adjustable Rate Preferred
Stock"), (iv) 160,000 shares were designated and 160,000 shares were issued
and outstanding as 8.45% Cumulative Preferred Stock, Series E ("First Chicago
8.45% Series E Cumulative Fixed Rate Preferred Stock"), and (v) 40,000 shares
were designated and 40,000 shares were issued and outstanding as 5 3/4%
Cumulative Convertible Preferred Stock, Series B ("First Chicago Convertible
Preferred Stock"). As of June 30, 1995, 3,710,822 shares of First Chicago
Common Stock were held in First Chicago's treasury. On June 30, 1995, no
shares of First Chicago Common Stock or First Chicago Preferred Stock were
reserved for issuance, except for (i) 5,877,204 shares of First Chicago Common
Stock reserved for issuance upon the exercise of stock options pursuant to the
First Chicago Stock Plans, (ii) shares of First Chicago Series A Junior
Participating Preferred Stock were reserved for issuance upon exercise of the
rights (the "First Chicago Rights") distributed to holders of First Chicago
Common Stock pursuant to the Rights Agreement, dated as of November 18, 1988,
between First Chicago and Bankers Trust Company, as Rights Agent (the "First
Chicago Rights Agreement"), (iii) the shares of First Chicago Common Stock
issuable pursuant to the First Chicago Option Agreement, (iv) shares of First
Chicago Common Stock reserved for issuance pursuant to the First Chicago
Dividend Reinvestment and Stock Purchase Plan (the "First Chicago DRIP"), (v)
shares of First Chicago Common Stock reserved for issuance pursuant to the
1994 offering of the First Chicago Employee Stock Purchase and Savings Plan
(as in
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effect as of the Effective Time, the "First Chicago ESPSP"), and (vi) shares
of First Chicago Common Stock reserved for issuance upon conversion of First
Chicago Convertible Preferred Stock. All of the issued and outstanding shares
of First Chicago Common Stock and First Chicago Preferred Stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. As of the date of this Agreement, except for the First Chicago Rights
Agreement, the First Chicago Option Agreement, the First Chicago Convertible
Preferred Stock, the First Chicago DRIP, the First Chicago ESPSP and the First
Chicago Stock Plans, First Chicago does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any shares of First
Chicago Common Stock or First Chicago Preferred Stock or any other equity
securities of First Chicago or any securities representing the right to
purchase or otherwise receive any shares of First Chicago Common Stock or
First Chicago Preferred Stock. Assuming compliance by NBD with Article I of
this Agreement, after the Effective Time, there will not be any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character by which First Chicago or any of its Subsidiaries will be bound
calling for the purchase or issuance of any shares of the capital stock of
First Chicago. First Chicago has previously provided NBD with a list of the
option holders, the date of each option to purchase First Chicago Common Stock
granted, the number of shares subject to each such option, the expiration date
of each such option, and the price at which each such option may be exercised
under an applicable First Chicago Stock Plan. Since June 30, 1995, First
Chicago has not issued any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock, other
than pursuant to (i) the exercise of employee stock options granted prior to
such date, (ii) the First Chicago DRIP, and (iii) the First Chicago ESPSP.
(b) First Chicago owns, directly or indirectly, all of the issued and
outstanding shares of capital stock of each of the First Chicago Subsidiaries,
free and clear of any Liens, and all of such shares are duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof. No
First Chicago Subsidiary has or is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling
for the purchase or issuance of any shares of capital stock or any other
equity security of such Subsidiary or any securities representing the right to
purchase or otherwise receive any shares of capital stock or any other equity
security of such Subsidiary.
4.3 Authority; No Violation. (a) First Chicago has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
and validly approved by the Board of Directors of First Chicago. The Board of
Directors of First Chicago has directed that this Agreement and the
transactions contemplated hereby be submitted to First Chicago's stockholders
for approval at a meeting of such stockholders and except for the adoption of
this Agreement by the affirmative vote of the holders of a majority of the
outstanding shares of First Chicago Common Stock, no other corporate
proceedings on the part of First Chicago are necessary to approve this
Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by First Chicago
and (assuming due authorization, execution and delivery by NBD) constitutes a
valid and binding obligation of First Chicago, enforceable against First
Chicago in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by First Chicago,
nor the consummation by First Chicago of the transactions contemplated hereby,
nor compliance by First Chicago with any of the terms or provisions hereof,
will (i) violate any provision of the Certificate of Incorporation or By-Laws
of First Chicago or (ii) assuming that the consents and approvals referred to
in Section 4.4 are duly obtained, (x) violate any statute, code, ordinance,
rule, regulation, judgment, order, writ, decree or injunction applicable to
First Chicago or any of its Subsidiaries or any of their respective properties
or assets, or (y) violate, conflict with, result in a breach of any provision
of or the loss of any benefit under, constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
result in the termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation of any Lien
upon any of the respective properties or assets of First Chicago or any of its
Subsidiaries under, any of the terms, conditions
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or provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which First Chicago or
any of its Subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected, except (in the case
of clause (y) above) for such violations, conflicts, breaches or defaults
which either individually or in the aggregate will not have or be reasonably
likely to have a Material Adverse Effect on First Chicago.
4.4 Consents and Approvals. Except for (i) the filing of applications and
notices, as applicable, with the Federal Reserve Board under the BHC Act and
approval of such applications and notices, (ii) the State Approvals, (iii) the
filing with the SEC of the Joint Proxy Statement and the S-4, (iv) the filing
of the Certificate of Merger with the Delaware Secretary pursuant to the DGCL,
(v) any notices to or filings with the SBA, (vi) any consent, authorizations,
approvals, filings or exemptions in connection with compliance with the
applicable provisions of federal and state securities laws relating to the
regulation of broker-dealers or investment advisers, and federal commodities
laws relating to the regulation of futures commission merchants and the rules
and regulations thereunder and of any applicable SRO, and the rules of the
NYSE, or which are required under consumer finance, mortgage banking and other
similar laws and (vii) the approval of this Agreement by the requisite vote of
the stockholders of First Chicago and NBD, no consents or approvals of or
filings or registrations with any Governmental Entity or with any third party
are necessary in connection with (A) the execution and delivery by First
Chicago of this Agreement and (B) the consummation by First Chicago of the
Merger and the other transactions contemplated hereby.
4.5 Reports. First Chicago and each of its Subsidiaries have timely filed
all reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required to file
since January 1, 1993 with the Regulatory Agencies, and all other reports and
statements required to be filed by them since January 1, 1993, including,
without limitation, any report or statement required to be filed pursuant to
the laws, rules or regulations of the United States, any state, or any
Regulatory Agency and have paid all fees and assessments due and payable in
connection therewith, except where the failure to file such report,
registration or statement or to pay such fees and assessments, either
individually or in the aggregate, will not have a Material Adverse Effect on
First Chicago. Except for normal examinations conducted by a Regulatory Agency
in the regular course of the business of First Chicago and its Subsidiaries,
no Regulatory Agency has initiated any proceeding or, to the best knowledge of
First Chicago, investigation into the business or operations of First Chicago
or any of its Subsidiaries since January 1, 1993, except where such
proceedings or investigation are not likely, either individually or in the
aggregate, to have a Material Adverse Effect on First Chicago. There is no
unresolved violation, criticism, or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of First
Chicago or any of its Subsidiaries which, in the reasonable judgment of First
Chicago, is likely, either individually or in the aggregate, to have a
Material Adverse Effect on First Chicago.
4.6 Financial Statements. First Chicago has previously made available to NBD
copies of (a) the consolidated balance sheets of First Chicago and its
Subsidiaries as of December 31, for the fiscal years 1993 and 1994, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the fiscal years 1992 through 1994, inclusive, as reported in
First Chicago's Annual Report on Form 10-K for the fiscal year ended December
31, 1994 filed with the SEC under the Exchange Act, in each case accompanied
by the audit report of Arthur Andersen LLP, independent public accountants
with respect to First Chicago, and (b) the unaudited consolidated balance
sheet of First Chicago and its Subsidiaries as of March 31, 1994 and March 31,
1995 and the related unaudited consolidated statements of income, cash flows
and changes in stockholders' equity for the three-month periods then ended as
reported in First Chicago's Quarterly Report on Form 10-Q for the period ended
March 31, 1995 filed with the SEC under the Exchange Act (the "First Chicago
March 31, 1995 Form 10-Q"). The December 31, 1994 consolidated balance sheet
of First Chicago (including the related notes, where applicable) fairly
presents the consolidated financial position of First Chicago and its
Subsidiaries as of the date thereof, and the other financial statements
referred to in this Section 4.6 (including the related notes, where
applicable) fairly present (subject, in the case of the unaudited statements,
to recurring audit adjustments normal in nature and amount) the results of the
consolidated operations and changes in stockholders' equity and consolidated
financial position of First Chicago and its Subsidiaries for the respective
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fiscal periods or as of the respective dates therein set forth; each of such
statements (including the related notes, where applicable) comply in all
material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto; and each of
such statements (including the related notes, where applicable) has been
prepared in all material respects in accordance with GAAP consistently applied
during the periods involved, except in each case as indicated in such
statements or in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q. The books and records of First Chicago and its
Subsidiaries have been, and are being, maintained in all material respects in
accordance with GAAP and any other applicable legal and accounting
requirements and reflect only actual transactions.
4.7 Broker's Fees. Neither First Chicago nor any First Chicago Subsidiary
nor any of their respective officers or directors has employed any broker or
finder or incurred any liability for any broker's fees, commissions or
finder's fees in connection with the Merger or related transactions
contemplated by this Agreement or the Option Agreements.
4.8 Absence of Certain Changes or Events. (a) Except as publicly disclosed
in First Chicago Reports (as defined in Section 4.12) filed prior to the date
hereof, since March 31, 1995, (i) First Chicago and its Subsidiaries taken as
a whole have not incurred any material liability, except in the ordinary
course of their business and (ii) no event has occurred which has had,
individually or in the aggregate, a Material Adverse Effect on First Chicago.
(b) Except as publicly disclosed in First Chicago Reports filed prior to the
date hereof, since March 31, 1995, First Chicago and its Subsidiaries have
carried on their respective businesses in all material respects in the
ordinary and usual course.
(c) Since December 31, 1994, neither First Chicago nor any of its
Subsidiaries has (i) except for such actions as are in the ordinary course of
business consistent with past practice or except as required by applicable
law, (A) increased the wages, salaries, compensation, pension, or other fringe
benefits or perquisites payable to any executive officer, employee, or
director from the amount thereof in effect as of December 31, 1994, or (B)
granted any severance or termination pay, entered into any contract to make or
grant any severance or termination pay, or paid any bonuses aggregating in
excess of 5% of First Chicago's 1994 salary and employee benefit expenses,
other than customary year-end bonuses for fiscal 1994 and 1995, or (ii)
suffered any strike, work stoppage, slowdown, or other labor disturbance
which, in the reasonable judgment of First Chicago is likely, either
individually or in the aggregate, to have a Material Adverse Effect on First
Chicago.
4.9 Legal Proceedings. (a) Neither First Chicago nor any of its Subsidiaries
is a party to any and there are no pending or, to the best of First Chicago's
knowledge, threatened, material legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of
any nature against First Chicago or any of its Subsidiaries or challenging the
validity or propriety of the transactions contemplated by this Agreement or
the First Chicago Option Agreement as to which there is a reasonable
probability of an adverse determination and which, if adversely determined,
would, individually or in the aggregate, have a Material Adverse Effect on
First Chicago.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction (other than those that apply to similarly situated bank holding
companies or banks) imposed upon First Chicago, any of its Subsidiaries or the
assets of First Chicago or any of its Subsidiaries which has had, or might
reasonably be expected to have, a Material Adverse Effect on First Chicago or
the Surviving Corporation.
4.10 Taxes and Tax Returns. (a) Each of First Chicago and its Subsidiaries
has duly filed all federal, state, county, foreign and, to the best of First
Chicago's knowledge, local information returns and tax returns required to be
filed by it on or prior to the date hereof (all such returns being accurate
and complete in all material respects) and has duly paid or made provisions
for the payment of all Taxes and other governmental charges which have been
incurred or are due or claimed to be due from it by federal, state, county,
foreign or local taxing authorities on or prior to the date of this Agreement
(including, without limitation, if and to the extent applicable,
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those due in respect of its properties, income, business, capital stock,
deposits, franchises, licenses, sales and payrolls) other than (i) Taxes or
other charges which are not yet delinquent or are being contested in good
faith and have not been finally determined, or (ii) information returns, tax
returns, Taxes or other governmental charges the failure to file, pay or make
provision for, either individually or in the aggregate, is not likely, in the
reasonable judgment of First Chicago, to have a Material Adverse Effect on
First Chicago. The income tax returns of First Chicago and its Subsidiaries
have been examined by the IRS through 1991 and any liability with respect
thereto has been satisfied for all years to and including 1976, and either no
material deficiencies were asserted as a result of such examination for which
First Chicago does not have adequate reserves or all such deficiencies were
satisfied. To the best of First Chicago's knowledge, there are no material
disputes pending, or claims asserted for, Taxes or assessments upon First
Chicago or any of its Subsidiaries for which First Chicago does not have
adequate reserves, nor has First Chicago or any of its Subsidiaries given any
currently effective waivers extending the statutory period of limitation
applicable to any federal, state, county or local income tax return for any
period. In addition, (A) proper and accurate amounts have been withheld by
First Chicago and its Subsidiaries from their employees for all prior periods
in compliance in all material respects with the tax withholding provisions of
applicable federal, state and local laws, except where failure to do so would
not have a Material Adverse Effect on First Chicago, (B) federal, state,
county and local returns which are accurate and complete in all material
respects have been filed by First Chicago and its Subsidiaries for all periods
for which returns were due with respect to income tax withholding, Social
Security and unemployment taxes, except where failure to do so would not have
a Material Adverse Effect on First Chicago, (C) the amounts shown on such
federal, state, local or county returns to be due and payable have been paid
in full or adequate provision therefor has been included by First Chicago in
its consolidated financial statements as of December 31, 1994, except where
failure to do so would not have a Material Adverse Effect on First Chicago and
(D) there are no Tax liens upon any property or assets of First Chicago or its
Subsidiaries except liens for current taxes not yet due or liens that would
not have a Material Adverse Effect on First Chicago. Neither First Chicago nor
any of its Subsidiaries has been required to include in income any adjustment
pursuant to Section 481 of the Code by reason of a voluntary change in
accounting method initiated by First Chicago or any of its Subsidiaries, and
the IRS has not initiated or proposed any such adjustment or change in
accounting method, in either case, which has had or is reasonably likely to
have a Material Adverse Effect on First Chicago. Except as set forth in the
financial statements described in Section 4.6, neither First Chicago nor any
of its Subsidiaries has entered into a transaction which is being accounted
for as an installment obligation under Section 453 of the Code, which would be
reasonably likely to have a Material Adverse Effect on First Chicago.
(b) Any amount that is reasonably likely to be received (whether in cash or
property or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer or director of First
Chicago or any of its affiliates who is a "Disqualified Individual" (as such
term is defined in proposed Treasury Regulation Section 1.280G-1) under any
employment, severance or termination agreement, other compensation arrangement
or First Chicago Benefit Plan currently in effect should not be characterized
as an "excess parachute payment" (as such term is defined in Section
280G(b)(1) of the Code).
(c) No disallowance of a deduction under Section 162(m) of the Code for
employee remuneration of any amount paid or payable by First Chicago or any
Subsidiary of First Chicago under any contract, plan, program, arrangement or
understanding would be reasonably likely to have a Material Adverse Effect on
First Chicago.
4.11 Employees. (a) The First Chicago Disclosure Schedule sets forth a true
and complete list of each material employee benefit plan, arrangement or
agreement that is maintained as of the date of this Agreement (the "First
Chicago Benefit Plans") by First Chicago, any of its Subsidiaries or by any
trade or business, whether or not incorporated (a "First Chicago ERISA
Affiliate"), all of which together with First Chicago would be deemed a
"single employer" within the meaning of Section 4001 of ERISA.
(b) First Chicago has heretofore delivered to NBD true and complete copies
of each of the First Chicago Benefit Plans and certain related documents,
including, but not limited to, (i) the actuarial report for such First Chicago
Plan (if applicable) for each of the last two years, and (ii) the most recent
determination letter from the IRS (if applicable) for such First Chicago Plan.
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(c) (i) Each of the First Chicago Benefit Plans has been operated and
administered in all material respects with applicable laws, including, but not
limited to, ERISA and the Code, (ii) each of the First Chicago Benefit Plans
intended to be "qualified" within the meaning of Section 401(a) of the Code is
so qualified, (iii) with respect to each First Chicago Plan which is subject
to Title IV of ERISA, the present value of accrued benefits under such First
Chicago Plan, based upon the actuarial assumptions used for funding purposes
in the most recent actuarial report prepared by such First Chicago Plan's
actuary with respect to such First Chicago Plan, did not, as of its latest
valuation date, exceed the then current value of the assets of such First
Chicago Plan allocable to such accrued benefits, (iv) no First Chicago Plan
provides benefits, including, without limitation, death or medical benefits
(whether or not insured), with respect to current or former employees of First
Chicago, its Subsidiaries or any First Chicago ERISA Affiliate beyond their
retirement or other termination of service, other than (A) coverage mandated
by applicable law, (B) death benefits or retirement benefits under any
"employee pension plan" (as such term is defined in Section 3(2) of ERISA),
(C) deferred compensation benefits accrued as liabilities on the books of
First Chicago, its Subsidiaries or the First Chicago ERISA Affiliates or (D)
benefits the full cost of which is borne by the current or former employee (or
his beneficiary), (v) no material liability under Title IV of ERISA has been
incurred by First Chicago, its Subsidiaries or any First Chicago ERISA
Affiliate that has not been satisfied in full, and no condition exists that
presents a material risk to First Chicago, its Subsidiaries or any First
Chicago ERISA Affiliate of incurring a material liability thereunder, (vi) no
First Chicago Plan is a "multiemployer pension plan" (as such term is defined
in Section 3(37) of ERISA), (vii) all contributions or other amounts payable
by First Chicago or its Subsidiaries as of the Effective Time with respect to
each First Chicago Plan in respect of current or prior plan years have been
paid or accrued in accordance with GAAP and Section 412 of the Code, (viii)
neither First Chicago, its Subsidiaries nor any First Chicago ERISA Affiliate
has engaged in a transaction in connection with which First Chicago, its
Subsidiaries or any First Chicago ERISA Affiliate reasonably could be subject
to either a material civil penalty assessed pursuant to Section 409 or 502(i)
of ERISA or a material tax imposed pursuant to Section 4975 or 4976 of the
Code, and (ix) to the best knowledge of First Chicago there are no pending,
threatened or anticipated claims (other than routine claims for benefits) by,
on behalf of or against any of the First Chicago Benefit Plans or any trusts
related thereto which are, in the reasonable judgment of First Chicago,
likely, either individually or in the aggregate, to have a Material Adverse
Effect on NBD.
(d) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
material payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any director or
any employee of First Chicago or any of its affiliates from First Chicago or
any of its affiliates under any First Chicago Benefit Plan or otherwise, (ii)
materially increase any benefits otherwise payable under any First Chicago
Benefit Plan or (iii) result in any acceleration of the time of payment or
vesting of any such benefits to any material extent.
4.12 SEC Reports. First Chicago has previously made available to NBD an
accurate and complete copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement filed since
January 1, 1993 by First Chicago with the SEC pursuant to the Securities Act
or the Exchange Act (the "First Chicago Reports") and prior to the date hereof
and (b) communication mailed by First Chicago to its stockholders since
January 1, 1993 and prior to the date hereof, and no such registration
statement, prospectus, report, schedule, proxy statement or communication
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading, except that information as of a later date shall be deemed to
modify information as of an earlier date. Since January 1, 1993, First Chicago
has timely filed all First Chicago Reports and other documents required to be
filed by it under the Securities Act and the Exchange Act, and, as of their
respective dates, all First Chicago Reports complied in all material respects
with the published rules and regulations of the SEC with respect thereto.
4.13 Compliance with Applicable Law. First Chicago and each of its
Subsidiaries hold all material licenses, franchises, permits and
authorizations necessary for the lawful conduct of their respective businesses
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under and pursuant to all, and have complied in all material respects with and
are not in default in any material respect under any, applicable law, statute,
order, rule, regulation, policy and/or guideline of any Governmental Entity
relating to First Chicago or any of its Subsidiaries, except where the failure
to hold such license, franchise, permit or authorization or such noncompliance
or default would not, individually or in the aggregate, have a Material
Adverse Effect on First Chicago.
4.14 Certain Contracts. (a) Neither First Chicago nor any of its
Subsidiaries is a party to or bound by any contract, arrangement, commitment
or understanding (whether written or oral) (i) with respect to the employment
of any directors, officers or employees other than in the ordinary course of
business consistent with past practice, (ii) which, upon the consummation of
the transactions contemplated by this Agreement will (either alone or upon the
occurrence of any additional acts or events) result in any payment (whether of
severance pay or otherwise) becoming due from First Chicago, NBD, the
Surviving Corporation, or any of their respective Subsidiaries to any officer
or employee thereof, (iii) which is a "material contract" (as such term is
defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed after
the date of this Agreement that has not been filed or incorporated by
reference in the First Chicago Reports, (iv) which materially restricts the
conduct of any line of business by First Chicago, (v) with or to a labor union
or guild (including any collective bargaining agreement) or (vi) (including
any stock option plan, stock appreciation rights plan, restricted stock plan
or stock purchase plan) any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement, or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement. First Chicago has previously made available to
NBD true and correct copies of all employment and deferred compensation
agreements which are in writing and to which First Chicago is a party. Each
contract, arrangement, commitment or understanding of the type described in
this Section 4.14(a), whether or not set forth in the First Chicago Disclosure
Schedule, is referred to herein as a "First Chicago Contract", and neither
First Chicago nor any of its Subsidiaries knows of, or has received notice of,
any violation of the above by any of the other parties thereto which,
individually or in the aggregate, would have a Material Adverse Effect on
First Chicago.
(b) (i) Each First Chicago Contract is valid and binding on First Chicago or
any of its Subsidiaries, as applicable, and in full force and effect, (ii)
First Chicago and each of its Subsidiaries has in all material respects
performed all obligations required to be performed by it to date under each
First Chicago Contract, except where such noncompliance, individually or in
the aggregate, would not have a Material Adverse Effect on First Chicago, and
(iii) no event or condition exists which constitutes or, after notice or lapse
of time or both, would constitute, a material default on the part of First
Chicago or any of its Subsidiaries under any such First Chicago Contract,
except where such default, individually or in the aggregate, would not have a
Material Adverse Effect on First Chicago.
4.15 Agreements with Regulatory Agencies. Neither First Chicago nor any of
its Subsidiaries is subject to any cease-and-desist or other order issued by,
or is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or has been since
January 1, 1993, a recipient of any supervisory letter from, or since January
1, 1993, has adopted any board resolutions at the request of any Regulatory
Agency or other Governmental Entity that currently restricts in any material
respect the conduct of its business or that in any material manner relates to
its capital adequacy, its credit policies, its management or its business
(each, whether or not set forth in the First Chicago Disclosure Schedule, a
"First Chicago Regulatory Agreement"), nor has First Chicago or any of its
Subsidiaries been advised since January 1, 1993, by any Regulatory Agency or
other Governmental Entity that it is considering issuing or requesting any
such Regulatory Agreement.
4.16 Other Activities of First Chicago and its Subsidiaries.
(a) Neither First Chicago nor any of its Subsidiaries that is neither a
bank, a bank operating subsidiary or a bank service corporation, directly or
indirectly engages in any activity prohibited by the Federal Reserve Board.
Without limiting the generality of the foregoing, any equity investment of
First Chicago and each Subsidiary that is not a bank, a bank operating
subsidiary or a bank service corporation, is not prohibited by the Federal
Reserve Board.
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(b) To First Chicago's knowledge, each First Chicago Subsidiary which is a
bank (a "First Chicago Bank Subsidiary") currently performs all Trust
Activities with requisite authority under applicable law of Governmental
Entities and in accordance in all material respects with the agreed-upon terms
of the agreements and instruments governing such Trust Activities, sound
fiduciary principles and applicable law and regulation (specifically
including, but not limited to, Section 9 of Title 12 of the Code of Federal
Regulations); there is no investigation or inquiry by any Governmental Entity
pending, or, to the knowledge of First Chicago, threatened, against or
affecting First Chicago or any Significant Subsidiary thereof relating to the
compliance by First Chicago or any such Significant Subsidiary with sound
fiduciary principles and applicable regulations; and except where any such
failure would not have a Material Adverse Effect on First Chicago, each
employee of a First Chicago Bank Subsidiary had the authority to act in the
capacity in which he or she acted with respect to Trust Activities, in each
case, in which such employee held himself or herself out as a representative
of a First Chicago Bank Subsidiary; and each First Chicago Bank Subsidiary has
established policies and procedures for the purpose of complying with
applicable laws of Governmental Entities relating to Trust Activities, has
followed such policies and procedures in all material respects and has
performed appropriate internal audit reviews of, and has engaged independent
accountants to perform audits of, Trust Activities, which audits have
disclosed no material violations of applicable laws of Governmental Entities
or such policies and procedures.
4.17 Investment Securities. Each of First Chicago and its Subsidiaries has
good and marketable title to all securities held by it (except securities sold
under repurchase agreements or held in any fiduciary or agency capacity), free
and clear of any Lien, except to the extent such securities are pledged in the
ordinary course of business consistent with prudent banking practice to secure
obligations of First Chicago or any of its Subsidiaries. Such securities are
valued on the books of First Chicago in accordance with GAAP.
4.18 Interest Rate Risk Management Instruments. All interest rate swaps,
caps, floors and option agreements and other interest rate risk management
arrangements, whether entered into for the account of First Chicago or for the
account of a customer of First Chicago or one of its Subsidiaries, were
entered into in the ordinary course of business and, to First Chicago's
knowledge, in accordance with prudent banking practice and applicable rules,
regulations and policies of any Regulatory Authority and with counterparties
believed to be financially responsible at the time and are legal, valid and
binding obligations of First Chicago or one of its Subsidiaries enforceable in
accordance with their terms (except as may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights of
creditors generally and the availability of equitable remedies), and are in
full force and effect. First Chicago and each of its Subsidiaries has duly
performed in all material respects all of its material obligations thereunder
to the extent that such obligations to perform have accrued; and to First
Chicago's knowledge, there are no material breaches, violations or defaults or
allegations or assertions of such by any party thereunder.
4.19 Undisclosed Liabilities. Except for those liabilities that are fully
reflected or reserved against on the consolidated balance sheet of First
Chicago included in the First Chicago March 31, 1995 Form 10-Q and for
liabilities incurred in the ordinary course of business consistent with past
practice, since March 31, 1995, neither First Chicago nor any of its
Subsidiaries has incurred any liability of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether due or to become due)
that, either alone or when combined with all similar liabilities, has had, or
could reasonably be expected to have, a Material Adverse Effect on First
Chicago.
4.20 Environmental Liability. Except as set forth in the First Chicago
Disclosure Schedule, there are no legal, administrative, arbitral or other
proceedings, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations of any
nature seeking to impose, or that reasonably could result in the imposition,
on First Chicago of any liability or obligation arising under common law or
under any local, state or federal environmental statute, regulation or
ordinance including, without limitation, CERCLA, pending or threatened against
First Chicago, which liability or obligation could reasonably be expected to
have a Material Adverse Effect on First Chicago. To the knowledge of First
Chicago, there is no reasonable basis for any such proceeding, claim, action
or governmental investigation that would impose any
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material liability or obligation that could reasonably be expected to have a
Material Adverse Effect on First Chicago. First Chicago is not subject to any
agreement, order, judgment, decree, letter or memorandum by or with any court,
governmental authority, regulatory agency or third party imposing any material
liability or obligation that could reasonably be expected to have a Material
Adverse Effect on First Chicago.
4.21 State Takeover Laws. The Board of Directors of First Chicago has
approved the transactions contemplated by this Agreement and the Option
Agreements such that the provisions of Section 203 of the DGCL will not apply
to this Agreement or the Option Agreements or any of the transactions
contemplated hereby or thereby.
4.22 Rights Agreement. First Chicago has taken all action (including, if
required, redeeming all of the outstanding preferred stock purchase rights
issued pursuant to the First Chicago Rights Agreement or amending or
terminating the First Chicago Rights Agreement) so that the entering into of
this Agreement and the Option Agreements, the Merger, the acquisition of
shares pursuant to the Option Agreements and the other transactions
contemplated hereby and thereby do not and will not result in the grant of any
rights to any person under the First Chicago Rights Agreement or enable or
require the First Chicago Rights to be exercised, distributed or triggered.
4.23 Pooling of Interests. As of the date of this Agreement, First Chicago
has no reason to believe that the Merger will not qualify as a "pooling of
interests" for accounting purposes.
ARTICLE V
Covenants Relating to Conduct of Business
5.1 Conduct of Businesses Prior to the Effective Time.
During the period from the date of this Agreement to the Effective Time,
except as expressly contemplated or permitted by this Agreement (including the
NBD Disclosure Schedule and the First Chicago Disclosure Schedule) or the
Option Agreements, each of First Chicago and NBD shall, and shall cause each
of their respective Subsidiaries to, (a) conduct its business in the usual,
regular and ordinary course consistent with past practice, (b) use reasonable
best efforts to maintain and preserve intact its business organization,
employees and advantageous business relationships and retain the services of
its key officers and key employees and (c) take no action which would
adversely affect or delay the ability of either First Chicago or NBD to obtain
any necessary approvals of any Regulatory Agency or other governmental
authority required for the transactions contemplated hereby or to perform its
covenants and agreements under this Agreement or the Option Agreements.
5.2 Forbearances. During the period from the date of this Agreement to the
Effective Time, except as set forth in the First Chicago Disclosure Schedule
or the NBD Disclosure Schedule, as the case may be, and, except as expressly
contemplated or permitted by this Agreement or the Option Agreements, neither
First Chicago nor NBD shall, and neither First Chicago nor NBD shall permit
any of their respective Subsidiaries to, without the prior written consent of
the other:
(a) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money (other than short-term
indebtedness incurred to refinance short-term indebtedness and indebtedness
of NBD or any of its Subsidiaries to NBD or any of its Subsidiaries, on the
one hand, or of First Chicago or any of its Subsidiaries to First Chicago
or any of its Subsidiaries, on the other hand), assume, guarantee, endorse
or otherwise as an accommodation become responsible for the obligations of
any other individual, corporation or other entity, or make any loan or
advance (it being understood and agreed that incurrence of indebtedness in
the ordinary course of business shall include, without limitation, the
creation of deposit liabilities, purchases of Federal funds, sales of
certificates of deposit and entering into repurchase agreements);
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(b) (i) adjust, split, combine or reclassify any capital stock; (ii)
make, declare or pay any dividend or make any other distribution on, or
directly or indirectly redeem, purchase or otherwise acquire, any shares of
its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock (except, (A) in the case
of NBD, for regular quarterly cash dividends at a rate not in excess of
$.33 per share of NBD Common Stock, (B) in the case of First Chicago, for
regular quarterly cash dividends on First Chicago Common Stock at a rate
not in excess of $.60 per share of First Chicago Common Stock, (C) in the
case of First Chicago Preferred Stock, for regular quarterly or semiannual
cash dividends thereon at the rates set forth in the applicable certificate
of incorporation or certificate of designation for such securities and
except for dividends paid by any of the Subsidiaries of each of First
Chicago and NBD to First Chicago or NBD or any of their Subsidiaries,
respectively, and (D) except for dividends paid in the ordinary course of
business by any subsidiaries (whether or not wholly owned) of each of First
Chicago and NBD), (iii) grant any stock appreciation rights or grant any
individual, corporation or other entity any right to acquire any shares of
its capital stock (except for options to purchase stock granted in the
ordinary course of business consistent with past practice pursuant to the
First Chicago Stock Plans, the First Chicago ESPSP, and the NBD Stock
Plans) or (iv) issue any additional shares of capital stock except pursuant
to (A) the exercise of stock options or warrants outstanding as of the date
hereof, (B) the First Chicago Convertible Preferred Stock, (C) the Option
Agreements, (D) the First Chicago Rights Agreement, (E) the First Chicago
DRIP, or (F) the First Chicago ESPSP;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its
properties or assets to any individual, corporation or other entity other
than a Subsidiary, or cancel, release or assign any indebtedness to any
such person or any claims held by any such person, except in the ordinary
course of business consistent with past practice or pursuant to contracts
or agreements in force at the date of this Agreement;
(d) except for transactions in the ordinary course of business consistent
with past practice or pursuant to contracts or agreements in force at the
date of this Agreement, make any material investment either by purchase of
stock or securities, contributions to capital, property transfers, or
purchase of any property or assets of any other individual, corporation or
other entity other than a Subsidiary thereof;
(e) except for transactions in the ordinary course of business consistent
with past practice, enter into or terminate any material contract or
agreement, or make any change in any of its material leases or contracts,
other than renewals of contracts and leases without material adverse
changes of terms;
(f) increase in any manner the compensation or fringe benefits of any of
its employees or pay any pension or retirement allowance not required by
any existing plan or agreement to any such employees or become a party to,
amend or commit itself to any pension, retirement, profit-sharing or
welfare benefit plan or agreement or employment agreement with or for the
benefit of any employee other than in the ordinary course of business
consistent with past practice or accelerate the vesting of any stock
options or other stock-based compensation;
(g) solicit, encourage or authorize any individual, corporation or other
entity to solicit from any third party any inquiries or proposals relating
to the disposition of its business or assets, or the acquisition of its
voting securities, or the merger of it or any of its Subsidiaries with any
corporation or other entity other than as provided by this Agreement (and
each party shall promptly notify the other of all of the relevant details
relating to all inquiries and proposals which it may receive relating to
any of such matters);
(h) settle any claim, action or proceeding involving money damages,
except in the ordinary course of business consistent with past practice;
(i) take any action that would prevent or impede the Merger from
qualifying (i) for "pooling of interests" accounting treatment or (ii) as a
reorganization within the meaning of Section 368 of the Code; provided,
however, that nothing contained herein shall limit the ability of First
Chicago or NBD to exercise its rights under the NBD Option Agreement or the
First Chicago Option Agreement, as the case may be;
(j) amend its certificate of incorporation or articles of incorporation,
as the case may be, or its bylaws; or
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(k) other than in prior consultation with the other party to this
Agreement, restructure or materially change its investment securities
portfolio or its gap position, through purchases, sales or otherwise, or
the manner in which the portfolio is classified or reported;
(l) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time
prior to the Effective Time, or in any of the conditions to the Merger set
forth in Article VII not being satisfied or in a violation of any provision
of this Agreement, except, in every case, as may be required by applicable
law; or
(m) agree to, or make any commitment to, take any of the actions
prohibited by this Section 5.2.
ARTICLE VI
Additional Agreements
6.1 Regulatory Matters. (a) First Chicago and NBD shall promptly prepare and
file with the SEC the Joint Proxy Statement and NBD shall promptly prepare and
file with the SEC the S-4, in which the Joint Proxy Statement will be included
as a prospectus. Each of First Chicago and NBD shall use all reasonable
efforts to have the S-4 declared effective under the Securities Act as
promptly as practicable after such filing, and First Chicago and NBD shall
thereafter mail or deliver the Joint Proxy Statement to their respective
stockholders. NBD shall also use all reasonable efforts to obtain all
necessary state securities law or "Blue Sky" permits and approvals required to
carry out the transactions contemplated by this Agreement, and First Chicago
shall furnish all information concerning First Chicago and the holders of
First Chicago Capital Stock as may be reasonably requested in connection with
any such action.
(b) The parties hereto shall cooperate with each other and use their best
efforts to promptly prepare and file all necessary documentation, to effect
all applications, notices, petitions and filings, to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all third
parties and Governmental Entities which are necessary or advisable to
consummate the transactions contemplated by this Agreement (including, without
limitation, the Merger), and to comply with the terms and conditions of all
such permits, consents, approvals and authorizations of all such Governmental
Entities. First Chicago and NBD shall have the right to review in advance,
and, to the extent practicable, each will consult the other on, in each case
subject to applicable laws relating to the exchange of information, all the
information relating to NBD or First Chicago, as the case may be, and any of
their respective Subsidiaries, which appear in any filing made with, or
written materials submitted to, any third party or any Governmental Entity in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable. The parties hereto agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals
and authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and
each party will keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
(c) First Chicago and NBD shall, upon request, furnish each other with all
information concerning themselves, their Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or
advisable in connection with the Joint Proxy Statement, the S-4 or any other
statement, filing, notice or application made by or on behalf of First
Chicago, NBD or any of their respective Subsidiaries to any Governmental
Entity in connection with the Merger and the other transactions contemplated
by this Agreement.
(d) First Chicago and NBD shall promptly advise each other upon receiving
any communication from any Governmental Entity whose consent or approval is
required for consummation of the transactions contemplated by this Agreement
which causes such party to believe that there is a reasonable likelihood that
any Requisite Regulatory Approval will not be obtained or that the receipt of
any such approval will be materially delayed.
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6.2 Access to Information. (a) Upon reasonable notice and subject to
applicable laws relating to the exchange of information, each of First Chicago
and NBD shall, and shall cause each of their respective Subsidiaries to,
afford to the officers, employees, accountants, counsel and other
representatives of the other party, access, during normal business hours
during the period prior to the Effective Time, to all its properties, books,
contracts, commitments and records and, during such period, each of First
Chicago and NBD shall, and shall cause their respective Subsidiaries to, make
available to the other party (i) a copy of each report, schedule, registration
statement and other document filed or received by it during such period
pursuant to the requirements of federal securities laws or federal or state
banking laws, savings and loan or savings association laws (other than reports
or documents which First Chicago or NBD, as the case may be, is not permitted
to disclose under applicable law) and (ii) all other information concerning
its business, properties and personnel as such party may reasonably request.
Neither First Chicago nor NBD nor any of their respective Subsidiaries shall
be required to provide access to or to disclose information where such access
or disclosure would violate or prejudice the rights of First Chicago's or
NBD's, as the case may be, customers, jeopardize the attorney-client privilege
of the institution in possession or control of such information or contravene
any law, rule, regulation, order, judgment, decree, fiduciary duty or binding
agreement entered into prior to the date of this Agreement. The parties hereto
will make appropriate substitute disclosure arrangements under circumstances
in which the restrictions of the preceding sentence apply.
(b) Each of First Chicago and NBD shall hold all information furnished by or
on behalf of the other party or any of such party's Subsidiaries or
representatives pursuant to Section 6.2(a) in confidence to the extent
required by, and in accordance with, the provisions of the confidentiality
agreement, dated June 25, 1995, between First Chicago and NBD (the
"Confidentiality Agreement").
(c) No investigation by either of the parties or their respective
representatives shall affect the representations and warranties of the other
set forth herein.
6.3 Stockholders' Approvals. Each of First Chicago and NBD shall call a
meeting of its stockholders to be held as soon as reasonably practicable for
the purpose of voting upon the requisite stockholder approvals required in
connection with this Agreement and the Merger, and each shall use its best
efforts to cause such meetings to occur on the same date.
6.4 Legal Conditions to Merger. Each of First Chicago and NBD shall, and
shall cause its Subsidiaries to, use their best efforts (a) to take, or cause
to be taken, all actions necessary, proper or advisable to comply promptly
with all legal requirements which may be imposed on such party or its
Subsidiaries with respect to the Merger and, subject to the conditions set
forth in Article VII hereof, to consummate the transactions contemplated by
this Agreement and (b) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of, or any exemption by,
any Governmental Entity and any other third party which is required to be
obtained by NBD or First Chicago or any of their respective Subsidiaries in
connection with the Merger and the other transactions contemplated by this
Agreement.
6.5 Affiliates; Publication of Combined Financial Results. (a) Each of First
Chicago and NBD shall use its best efforts to cause each director, executive
officer and other person who is an "affiliate" (for purposes of Rule 145 under
the Securities Act and for purposes of qualifying the Merger for "pooling of
interests" accounting treatment) of such party to deliver to the other party
hereto, as soon as practicable after the date of this Agreement, and prior to
the date of the stockholders meetings called by First Chicago and NBD to
approve this Agreement, a written agreement, in the form of Exhibit 6.5(a)(1)
or (2), as applicable, hereto, providing that such person will not sell,
pledge, transfer or otherwise dispose of any shares of First Chicago Capital
Stock or NBD Capital Stock held by such "affiliate" and, in the case of the
"affiliates" of First Chicago, the shares of NBD Capital Stock to be received
by such "affiliate" in the Merger: (i) in the case of shares of NBD Capital
Stock to be received by "affiliates" of First Chicago in the Merger, except in
compliance with the applicable provisions of the Securities Act and the rules
and regulations thereunder; and (ii) except to the extent and under the
conditions permitted therein, during the period commencing 30 days prior to
the Merger and ending at the time of the publication of financial results
covering at least 30 days of combined operations of First Chicago and NBD.
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(b) The Surviving Corporation shall use its best efforts to publish as
promptly as reasonably practical but in no event later than 90 days after the
end of the first month after the Effective Time in which there are at least 30
days of post-Merger combined operations (which month may be the month in which
the Effective Time occurs), combined sales and net income figures as
contemplated by and in accordance with the terms of SEC Accounting Series
Release No. 135.
6.6 Stock Exchange Listing. NBD shall cause the shares of NBD Common Stock
to be issued in the Merger to be approved for listing on the NYSE, subject to
official notice of issuance, prior to the Effective Time and shall use its
best efforts to cause the shares of NBD Preferred Stock to be so approved.
6.7 Employee Benefit Plans. (a) From and after the Effective Time, unless
otherwise mutually determined, the NBD Benefit Plans and First Chicago Benefit
Plans in effect as of the date of this Agreement shall remain in effect with
respect to employees of NBD or First Chicago (or their Subsidiaries) covered
by such plans at the Effective Time until such time as the Surviving
Corporation shall, subject to applicable law, the terms of this Agreement and
the terms of such plans, adopt new benefit plans with respect to employees of
the Surviving Corporation and its Subsidiaries (the "New Benefit Plans").
Prior to the Closing Date, NBD and First Chicago shall cooperate in reviewing,
evaluating and analyzing the First Chicago Benefit Plans and NBD Benefit Plans
with a view towards developing appropriate New Benefit Plans for the employees
covered thereby subsequent to the Merger. It is the intention of NBD and First
Chicago to develop New Benefit Plans, effective as of the Effective Time,
which, among other things, (i) treat similarly situated employees on a
substantially equivalent basis, taking into account all relevant factors,
including, without limitation, duties, geographic location, tenure,
qualifications and abilities, and (ii) do not discriminate between employees
of the Surviving Corporation who were covered by NBD Benefit Plans, on the one
hand, and those covered by First Chicago Benefit Plans, on the other, at the
Effective Time.
(b) The foregoing nothwithstanding, the Surviving Corporation agrees to
honor in accordance with their terms all benefits vested as of the date hereof
under the First Chicago Benefit Plans or the NBD Benefit Plans or under other
contracts, arrangements, commitments, or understandings described in the First
Chicago Disclosure Schedule and the NBD Disclosure Schedule.
(c) Nothing in this Section 6.7 shall be interpreted as preventing the
Surviving Corporation from amending, modifying or terminating any First
Chicago Benefit Plans, NBD Benefit Plans, or other contracts, arrangements,
commitments or understandings, in accordance with their terms and applicable
law.
(d) NBD and First Chicago shall take all actions necessary, including
securing the consent of optionees, to amend the terms of NBD Benefits Plans
pursuant to which options to purchase NBD Common Stock have been issued or
granted ("NBD Stock Plans") and the First Chicago Stock Plans and any
severance or other agreements that provide for the surrender of stock options
issued thereunder in exchange for a cash payment ("LSARs") as a result of or
in connection with the Merger to provide that such LSARs shall be settled in
stock with a fair market value equal to the cash that would otherwise have
been payable thereunder.
6.8 Indemnification; Directors' and Officers' Insurance. (a) In the event of
any threatened or actual claim, action, suit, proceeding or investigation,
whether civil, criminal or administrative, including, without limitation, any
such claim, action, suit, proceeding or investigation in which any individual
who is now, or has been at any time prior to the date of this Agreement, or
who becomes prior to the Effective Time, a director or officer or employee of
First Chicago or any of its Subsidiaries, including any entity specified in
the First Chicago Disclosure Schedule (the "Indemnified Parties"), is, or is
threatened to be, made a party based in whole or in part on, or arising in
whole or in part out of, or pertaining to (i) the fact that he is or was a
director, officer or employee of First Chicago, any of the First Chicago
Subsidiaries or any entity specified in the First Chicago Disclosure Schedule
or any of their respective predecessors or (ii) this Agreement, the Option
Agreements or any of the transactions contemplated hereby or thereby, whether
in any case asserted or arising before or after the Effective Time, the
parties hereto agree to cooperate and use their best efforts to defend against
and respond thereto. It is understood and agreed that after the Effective
Time, NBD shall indemnify and hold harmless, as
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and to the fullest extent permitted by law, each such Indemnified Party
against any losses, claims, damages, liabilities, costs, expenses (including
reasonable attorney's fees and expenses in advance of the final disposition of
any claim, suit, proceeding or investigation to each Indemnified Party to the
fullest extent permitted by law upon receipt of any undertaking required by
applicable law), judgments, fines and amounts paid in settlement in connection
with any such threatened or actual claim, action, suit, proceeding or
investigation, and in the event of any such threatened or actual claim,
action, suit, proceeding or investigation (whether asserted of arising before
or after the Effective Time), the Indemnified Parties may retain counsel
reasonably satisfactory to them after consultation with NBD; provided,
however, that (A) NBD shall have the right to assume the defense thereof and
upon such assumption NBD shall not be liable to any Indemnified Party for any
legal expenses of other counsel or any other expenses subsequently incurred by
any Indemnified Party in connection with the defense thereof, except that if
NBD elects not to assume such defense or counsel for the Indemnified Parties
reasonably advises the Indemnified Parties that there are issues which raise
conflicts of interest between NBD and the Indemnified Parties, the Indemnified
Parties may retain counsel reasonably satisfactory to them after consultation
with NBD, and NBD shall pay the reasonable fees and expenses of such counsel
for the Indemnified Parties, (B) NBD shall be obligated pursuant to this
paragraph to pay for only one firm of counsel for all Indemnified Parties,
unless an Indemnified Party shall have reasonably concluded, based on the
advice of counsel, that in order to be adequately represented, separate
counsel is necessary for such Indemnified Party, in which case, NBD shall be
obligated to pay for such separate counsel, (C) NBD shall not be liable for
any settlement effected without its prior written consent (which consent shall
not be unreasonably withheld) and (D) NBD shall have no obligation hereunder
to any Indemnified Party when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law. Any Indemnified Party
wishing to claim Indemnification under this Section 6.8, upon learning of any
such claim, action, suit, proceeding or investigation, shall notify NBD
thereof, provided that the failure to so notify shall not affect the
obligations of NBD under this Section 6.8 except to the extent such failure to
notify materially prejudices NBD. NBD's obligations under this Section 6.8
continue in full force and effect for a period of six years from the Effective
Time (or the period of the applicable statute of limitations, if longer);
provided, however, that all rights to indemnification in respect of any claim
(a "Claim") asserted or made within such period shall continue until the final
disposition of such Claim.
(b) NBD shall use its best efforts to cause the individuals serving as
officers and directors of First Chicago, its Subsidiaries or any entity
specified in the First Chicago Disclosure Schedule immediately prior to the
Effective Time to be covered for a period of six (6) years from the Effective
Time (or the period of the applicable statute of limitations, if longer) by
the directors' and officers' liability insurance policy maintained by First
Chicago (provided that NBD may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are not less
advantageous than such policy) with respect to acts or omissions occurring
prior to the Effective Time which were committed by such officers and
directors in their capacity as such; provided, however, that in no event shall
NBD be required to expend more than 200% of the current amount expended by
First Chicago (the "Insurance Amount") to maintain or procure insurance
coverage pursuant hereto and provided further that if NBD is unable to
maintain or obtain the insurance called for by this Section 6.8(b), NBD shall
use its best efforts to obtain as much comparable insurance as available for
the Insurance Amount.
(c) In the event NBD or any of its successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger, or
(ii) transfers or conveys all or substantially all of its properties and
assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of NBD
assume the obligations set forth in this section.
(d) The provisions of this Section 6.8 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party and his or her heirs
and representatives.
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6.9 Additional Agreements. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement (including, without limitation, any merger between a Subsidiary of
NBD and a Subsidiary of First Chicago) or to vest the Surviving Corporation
with full title to all properties, assets, rights, approvals, immunities and
franchises of any of the parties to the Merger, the proper officers and
directors of each party to this Agreement and their respective Subsidiaries
shall take all such necessary action as may be reasonably requested by, and at
the sole expense of, NBD.
6.10 Advice of Changes. First Chicago and NBD shall promptly advise the
other party of any change or event having a Material Adverse Effect on it or
which it believes would or would be reasonably likely to cause or constitute a
material breach of any of its representations, warranties or covenants
contained herein.
6.11 Dividends. After the date of this Agreement, each of First Chicago and
NBD shall coordinate with the other the declaration of any dividends in
respect of First Chicago Common Stock and NBD Common Stock and the record
dates and payment dates relating thereto, it being the intention of the
parties hereto that holders of First Chicago Common Stock or NBD Common Stock
shall not receive two dividends, or fail to receive one dividend, for any
quarter with respect to their shares of First Chicago Common Stock and/or NBD
Common Stock and any shares of NBD Capital Stock any such holder receives in
exchange therefor in the Merger.
ARTICLE VII
Conditions Precedent
7.1 Conditions to Each Party's Obligation To Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the respective
requisite affirmative votes of the holders of NBD Common Stock and First
Chicago Common Stock entitled to vote thereon.
(b) NYSE Listing. The shares of NBD Common Stock which shall be issued to
the stockholders of First Chicago upon consummation of the Merger shall
have been authorized for listing on the NYSE, subject to official notice of
issuance.
(c) Other Approvals. All regulatory approvals required to consummate the
transactions contemplated hereby shall have been obtained and shall remain
in full force and effect and all statutory waiting periods in respect
thereof shall have expired (all such approvals and the expiration of all
such waiting periods being referred to herein as the "Requisite Regulatory
Approvals").
(d) S-4. The S-4 shall have become effective under the Securities Act and
no stop order suspending the effectiveness of the S-4 shall have been
issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other
legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger or any of the other transactions contemplated by
this Agreement shall be in effect. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered, promulgated or
enforced by any Governmental Entity which prohibits, materially restricts
or makes illegal consummation of the Merger.
(f) Federal Tax Opinion. First Chicago and NBD each shall have received
an opinion of Wachtell, Lipton, Rosen & Katz, in form and substance
reasonably satisfactory to First Chicago and NBD, dated as of the Effective
Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing at the Effective Time:
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(i) The Merger will constitute a tax free reorganization under
Section 368(a)(1)(A) of the Code and First Chicago and NBD will each be
a party to the reorganization;
(ii) No gain or loss will be recognized by First Chicago or NBD as a
result of the Merger;
(iii) No gain or loss will be recognized by the stockholders of First
Chicago who exchange their First Chicago Capital Stock solely for NBD
Capital Stock pursuant to the Merger (except with respect to cash
received in lieu of a fractional share interest in NBD Capital Stock);
(iv) The tax basis of the NBD Capital Stock received by stockholders
who exchange all of their First Chicago Capital Stock solely for NBD
Capital Stock in the Merger will be the same as the tax basis of the
First Chicago Capital Stock surrendered in exchange therefor (reduced
by any amount allocable to a fractional share interest for which cash
is received); and
(v) The holding period of NBD Capital Stock received by stockholders
of First Chicago in the Merger will include the period during which the
shares of First Chicago Capital Stock surrendered in exchange therefor
were held; provided, such First Chicago Capital Stock was held as a
capital asset by the holder of such First Chicago Capital Stock at the
Effective Time.
In rendering such opinion, counsel may require and rely upon
representations contained in certificates of officers of First Chicago, NBD
and others.
(g) Pooling of Interests. First Chicago and NBD shall each have received
a letter from their respective independent accountants addressed to NBD or
First Chicago, as the case may be, to the effect that the Merger will
qualify for "pooling of interests" accounting treatment.
7.2 Conditions to Obligations of First Chicago. The obligation of First
Chicago to effect the Merger is also subject to the satisfaction or waiver by
First Chicago at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and warranties of
NBD set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date. First Chicago
shall have received a certificate signed on behalf of NBD by the Chief
Executive Officer and the Chief Financial Officer of NBD to the foregoing
effect.
(b) Performance of Obligations of NBD. NBD shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and First Chicago shall have
received a certificate signed on behalf of NBD by the Chief Executive
Officer and the Chief Financial Officer of NBD to such effect.
7.3 Conditions to Obligations of NBD. The obligation of NBD to effect the
Merger is also subject to the satisfaction or waiver by NBD at or prior to the
Effective Time of the following conditions:
(a) Representations and Warranties. The representations and warranties of
First Chicago set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as
of the Closing Date as though made on and as of the Closing Date. NBD shall
have received a certificate signed on behalf of First Chicago by the Chief
Executive Officer and the Chief Financial Officer of First Chicago to the
foregoing effect.
(b) Performance of Obligations of First Chicago. First Chicago shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and NBD shall
have received a certificate signed on behalf of First Chicago by the Chief
Executive Officer and the Chief Financial Officer of First Chicago to such
effect.
(c) First Chicago Rights Agreement. The rights issued pursuant to the
First Chicago Rights Agreement shall not have become nonredeemable,
exercisable, distributed or triggered pursuant to the terms of such
agreement.
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ARTICLE VIII
Termination and Amendment
8.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the matters presented in
connection with the Merger by the stockholders of First Chicago or NBD:
(a) by mutual consent of First Chicago and NBD in a written instrument,
if the Board of Directors of each so determines by a vote of a majority of
the members of its entire Board;
(b) by either the Board of Directors of First Chicago or the Board of
Directors of NBD if any Governmental Entity which must grant a Requisite
Regulatory Approval has denied approval of the Merger and such denial has
become final and nonappealable or any Governmental Entity of competent
jurisdiction shall have issued a final nonappealable order permanently
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement;
(c) by either the Board of Directors of First Chicago or the Board of
Directors of NBD if the Merger shall not have been consummated on or before
the first anniversary of the date of this Agreement, unless the failure of
the Closing (as defined in Section 9.1) to occur by such date shall be due
to the failure of the party seeking to terminate this Agreement to perform
or observe the covenants and agreements of such party set forth herein;
(d) by either the Board of Directors of First Chicago or the Board of
Directors of NBD (provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other
agreement contained herein) if there shall have been a material breach of
any of the covenants or agreements or any of the representations or
warranties set forth in this Agreement on the part of the other party,
which breach is not cured within 45 days following written notice to the
party committing such breach, or which breach, by its nature or timing,
cannot be cured prior to the Closing Date; or
(e) by either First Chicago or NBD if any approval of the stockholders of
First Chicago or NBD required for the consummation of the Merger shall not
have been obtained by reason of the failure to obtain the required vote at
a duly held meeting of stockholders or at any adjournment or postponement
thereof.
8.2 Effect of Termination. In the event of termination of this Agreement by
either First Chicago or NBD as provided in Section 8.1, this Agreement shall
forthwith become void and have no effect, and none of First Chicago, NBD, any
of their respective Subsidiaries or any of the officers or directors of any of
them shall have any liability of any nature whatsoever hereunder, or in
connection with the transactions contemplated hereby, except that (i) Sections
6.2(b), 8.2, 9.2 and 9.3, shall survive any termination of this Agreement, and
(ii) notwithstanding anything to the contrary contained in this Agreement,
neither First Chicago nor NBD shall be relieved or released from any
liabilities or damages arising out of its willful breach of any provision of
this Agreement.
8.3 Amendment. Subject to compliance with applicable law, this Agreement may
be amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after approval of the
matters presented in connection with the Merger by the stockholders of NBD;
provided, however, that after any approval of the transactions contemplated by
this Agreement by the respective stockholders of First Chicago or NBD, there
may not be, without further approval of such stockholders, any amendment of
this Agreement which changes the amount or the form of the consideration to be
delivered to the holders of First Chicago Common Stock hereunder other than as
contemplated by this Agreement. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
8.4 Extension; Waiver. At any time prior to the Effective Time, the parties
hereto, by action taken or authorized by their respective Board of Directors,
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (b) waive
any inaccuracies in the
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representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein; provided, however, that after any approval of the
transactions contemplated by this Agreement by the respective stockholders of
First Chicago or NBD, there may not be, without further approval of such
stockholders, any extension or waiver of this Agreement or any portion thereof
which reduces the amount or changes the form of the consideration to be
delivered to the holders of First Chicago Common Stock hereunder other than as
contemplated by this Agreement. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party, but such extension or waiver or
failure to insist on strict compliance with an obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
9.1 Closing. Subject to the terms and conditions of this Agreement and the
Option Agreements, the closing of the Merger (the "Closing") will take place
at 10:00 a.m. on a date and at a place to be specified by the parties, which
shall be no later than five business days after the satisfaction or waiver
(subject to applicable law) of the latest to occur of the conditions set forth
in Article VII hereof, unless extended by mutual agreement of the parties (the
"Closing Date").
9.2 Nonsurvival of Representations, Warranties and Agreements. None of the
representations, warranties, covenants and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement (other than pursuant to
the Option Agreements, which shall terminate in accordance with its terms)
shall survive the Effective Time, except for those covenants and agreements
contained herein and therein which by their terms apply in whole or in part
after the Effective Time.
9.3 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expense, provided, however, that the costs and expenses of
printing and mailing the Joint Proxy Statement, and all filing and other fees
paid to the SEC in connection with the Merger, shall be borne equally by First
Chicago and NBD.
9.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation), mailed by registered or certified mail (return receipt
requested) or delivered by an express courier (with confirmation) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to First Chicago, to:
First Chicago Corporation
One First National Plaza, Suite O276
Chicago, Illinois 60670
Attn: General Counsel
Fax: (312) 732-1069
and
(b) if to NBD, to:
NBD Bancorp, Inc.
611 Woodward Avenue
Detroit, Michigan 48226
Attn: General Counsel
Fax: (313) 225-2070
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9.5 Interpretation. When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of or Exhibit or
Schedule to this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation". No provision of this Agreement shall be construed to require NBD,
First Chicago or any of their respective Subsidiaries or affiliates to take
any action which would violate any applicable law, rule or regulation.
9.6 Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
9.7 Entire Agreement. This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof other than the
Option Agreements and the Confidentiality Agreement.
9.8 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law.
9.9 Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
9.10 Publicity. Except as otherwise required by applicable law or the rules
of the NYSE, neither First Chicago nor NBD shall, or shall permit any of its
Subsidiaries to, issue or cause the publication of any press release or other
public announcement with respect to, or otherwise make any public statement
concerning, the transactions contemplated by this Agreement without the
consent of the other party, which consent shall not be unreasonably withheld.
9.11 Assignment; Third Party Beneficiaries. Neither this Agreement nor any
of the rights, interests or obligations shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns. Except as otherwise
specifically provided in Section 6.8, this Agreement (including the documents
and instruments referred to herein) is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
IN WITNESS WHEREOF, First Chicago and NBD have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
NBD Bancorp, Inc. First Chicago Corporation
/s/ Verne G. Istock /s/ Richard L. Thomas
By: _________________________________ By: _________________________________
Verne G. Istock Richard L. Thomas
Chairman and Chief Executive Chairman and Chief Executive
Officer Officer
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EXHIBIT B
[LETTERHEAD OF MONTGOMERY SECURITIES]
September 18, 1995
Members of the Board of Directors
NBD Bancorp, Inc.
611 Woodward Avenue
Detroit, Michigan 48226
Gentlemen:
We understand that NBD Bancorp, Inc., a Delaware corporation (the
"Company"), and First Chicago Corporation, a Delaware corporation ("First
Chicago"), have entered into an Agreement and Plan of Merger, dated as of July
11, 1995, as amended (the "Merger Agreement"), pursuant to which First Chicago
will be merged with and into the Company, which will be the surviving entity
(the "Merger"). Pursuant to the Merger, as more fully described in the Merger
Agreement, we understand that (i) each outstanding share of the common stock,
$5.00 par value per share, of First Chicago, except those shares held or
owned, directly or indirectly, by either party to the Merger Agreement or any
of their respective subsidiaries other than in a fiduciary capacity or in
respect of a debt previously contracted, will be converted into the right to
receive 1.81 shares of the common stock, $1.00 par value per share, of the
Company (the "Company Common Stock"), subject to certain adjustments, and (ii)
each outstanding share of each series of the preferred stock of First Chicago
will be converted into the right to receive one share of a series of preferred
stock of the Company with substantially the same terms as that of the
exchanged share (collectively, the "Consideration").
You have asked for our opinion as to whether the Consideration to be paid by
the Company pursuant to the Merger is fair to the Company from a financial
point of view, as of the date hereof.
In connection with our opinion, we have, among other things: (i) reviewed
certain publicly available financial and other data with respect to the
Company and First Chicago, including the consolidated financial statements for
recent years and interim periods to June 30, 1995 and certain other relevant
financial and operating data relating to the Company and First Chicago made
available to us from published sources and from the internal records of the
Company and First Chicago; (ii) reviewed the Merger Agreement; (iii) reviewed
certain historical market prices and trading volumes of the Company Common
Stock and the common stock of First Chicago as reported by the New York Stock
Exchange; (iv) compared the Company and First Chicago from a financial point
of view with certain other companies which we deemed to be relevant; (v)
considered the financial terms, to the extent publicly available, of selected
recent business combinations, including transactions which we deemed to be
mergers of equals, in the banking and savings and loan industries which we
deemed to be comparable, in whole or in part, to the Merger; (vi) reviewed and
discussed with representatives of the management of the Company and First
Chicago certain information of a business and financial nature regarding the
Company and First Chicago, furnished to us by them, including financial
forecasts and related assumptions of the Company and First Chicago; (vii) made
inquiries regarding and discussed the Merger, the Merger Agreement and other
matters related thereto with the Company's counsel; and (viii) performed such
other analyses and examinations as we have deemed appropriate.
In connection with our review, we have not assumed any obligation
independently to verify any of the foregoing information and have relied on
all such information being complete and accurate in all material respects.
With respect to the financial forecasts for the Company and First Chicago
provided to us by their respective managements, we have assumed for purposes
of our opinion that the forecasts have been reasonably prepared on bases
reflecting the best available estimates and judgments of their respective
managements at the time of preparation as to the future financial performance
of the Company and First Chicago and that they provide a reasonable basis upon
which we can form our opinion. We have also assumed that there have been no
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material changes in the Company's or First Chicago's assets, financial
condition, results of operations, business or prospects since the respective
dates of their last financial statements made available to us. We have relied
on advice of counsel as to all legal matters with respect to the Company,
First Chicago, the Merger and the Merger Agreement. We have also assumed that
you will conduct the Merger in a manner that complies in all respects with the
applicable provisions of the Securities Act of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended, and
all other applicable federal and state statutes, rules and regulations. In
addition, we are not an expert in the evaluation of loan portfolios for
purposes of assessing the adequacy of the allowances for losses with respect
thereto and have assumed, with your consent, that such allowances for each of
the Company and First Chicago are in the aggregate adequate to cover such
losses. In addition, we have not assumed responsibility for reviewing any
individual credit files or making an independent evaluation, appraisal or
physical inspection of the assets or individual properties of the Company or
First Chicago, nor have we been furnished with any such appraisals. Finally,
our opinion is based on economic, monetary and market and other conditions as
in effect on, and the information made available to us as of, the date hereof.
We have further assumed, with your consent, that the Merger will be
consummated in accordance with the terms and provisions of the Merger
Agreement, without any amendments thereto, and without any waiver by the
Company or First Chicago of any of the material conditions to their respective
obligations thereunder.
In the ordinary course of our business, we actively trade the equity
securities of the Company and First Chicago for our own account and for the
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities. We have also performed various investment banking
services for the Company.
Based upon the foregoing and in reliance thereon, it is our opinion that the
Consideration to be paid by the Company pursuant to the Merger is fair to the
Company from a financial point of view, as of the date hereof.
This opinion is furnished pursuant to our engagement letter dated June 13,
1995. This opinion is addressed to the Board of Directors of the Company and
is not intended to be and shall not be deemed to constitute a recommendation
to any stockholder as to how such stockholder should vote with respect to the
Merger. Except as provided in such engagement letter, this opinion may not be
used or referred to by the Company, or quoted or disclosed to any person in
any manner without our prior written consent. In furnishing this opinion, we
do not admit that we are experts within the meaning of the term "experts" as
used in the Securities Act and the rules and regulations promulgated
thereunder, nor do we admit that this opinion constitutes a report or
valuation within the meaning of Section 11 of the Securities Act.
Very truly yours,
MONTGOMERY SECURITIES
B-2
<PAGE>
EXHIBIT C
[Letterhead of Lazard Freres & Co. LLC]
September 18, 1995
The Board of Directors First Chicago Corporation One First National Plaza
Chicago, Illinois 60670
Dear Members of the Board:
We understand that First Chicago Corporation ("First Chicago") and NBD
Bancorp, Inc. ("NBD") have entered into an Agreement and Plan of Merger, dated
as of July 11, 1995, as amended (the "Agreement"), pursuant to which First
Chicago proposes to merge with and into NBD (the "Merger"). In connection with
their entering into the Agreement, we note that First Chicago and NBD also
entered into separate stock option agreements pursuant to which (i) First
Chicago has granted to NBD an option to purchase, at a price and on terms and
conditions set forth therein, up to 19.9% of the outstanding shares of common
stock, par value $5.00 per share ("First Chicago Common Stock"), of First
Chicago and (ii) NBD has granted to First Chicago an option to purchase, at a
price set forth therein and on substantially the same terms and conditions as
those of the option issued by First Chicago to NBD, up to 19.9% of the
outstanding shares of common stock, par value $1.00 per share ("NBD Common
Stock"), of NBD.
You have requested our opinion as to the fairness, from a financial point of
view, to the holders of shares of First Chicago Common Stock, of the exchange
ratio (the "Exchange Ratio") of 1.81 shares of NBD Common Stock to be
exchanged for each share of First Chicago Common Stock in the Merger, as
provided in the Agreement. In connection with this opinion, we have:
(i) Reviewed the financial terms and conditions of the Agreement;
(ii) Analyzed certain historical business and financial information
relating to First Chicago and NBD;
(iii) Reviewed various financial forecasts and other data provided to us by
First Chicago and NBD with respect to the businesses and prospects of
First Chicago and NBD, respectively, the strategic objectives of
each, and possible financial benefits which might be realized
following the Merger;
(iv) Participated in discussions with members of the senior managements of
First Chicago and NBD with respect to the businesses and prospects of
First Chicago and NBD, respectively, the strategic objectives of each,
and possible financial benefits which might be realized following the
Merger;
(v) Reviewed public information with respect to certain other bank holding
companies, the securities of which are publicly traded;
(vi) Reviewed the financial terms of certain comparable business
combinations involving bank holding companies;
(vii) Reviewed the historical stock prices and trading volumes of shares of
First Chicago Common Stock and NBD Common Stock; and
(viii) Conducted such other financial studies, analyses and investigations
as we deemed appropriate.
C-1
<PAGE>
We have relied upon the accuracy and completeness of the financial and other
information provided by First Chicago and NBD and reviewed by us for purposes
of this opinion, and have not assumed any responsibility for any independent
verification of such information. With respect to financial forecasts, as well
as projected cost savings, revenue enhancements and operating synergies, we
have assumed that they have been reasonably prepared on bases reflecting the
best currently available estimates and judgments of management of First
Chicago and NBD as to the future financial performance of First Chicago and
NBD, respectively, and we have assumed that such forecasts and projections
will be realized in the amounts and at the times contemplated thereby. We
assume no responsibility for and express no view as to such forecasts and
projections or the assumptions on which they are based. We are not experts in
the evaluation of loan portfolios or the allowances for loan losses with
respect thereto and have assumed with your consent that such allowances for
First Chicago and NBD are in the aggregate adequate to cover such losses. In
addition, we have not reviewed individual credit files nor have we made an
independent appraisal of the assets and liabilities of First Chicago or NBD or
any of their subsidiaries and we have not been furnished with any such
evaluation or appraisal. Finally, you have informed us and we have assumed,
with your consent, that the Merger will be recorded as a pooling of interests
in accordance with generally accepted accounting principles.
Further, our opinion is necessarily based on economic, monetary, market and
other conditions as in effect on, and the information made available to us as
of, the date hereof.
In rendering our opinion, we have assumed that the Merger will be
consummated on the terms described in the Agreement, without any waiver of any
material terms or conditions by First Chicago and that obtaining the necessary
regulatory approvals for the Merger will not have an adverse effect on First
Chicago, NBD or the combined company.
Lazard Freres & Co. LLC is acting as financial advisor to First Chicago in
connection with the Merger and will receive fees for our services, including a
fee for rendering this opinion and additional fees for our other services as
financial advisor. A substantial portion of such additional fees is contingent
upon the closing of the Merger. Also, as you are aware, we have from time to
time provided investment banking and financial advisory services to First
Chicago for which we previously have received fees.
Further, our opinion is limited to the fairness, from a financial point of
view, to the holders of First Chicago Common Stock of the Exchange Ratio and
does not address First Chicago's underlying business decision to undertake the
Merger. Moreover, this letter, and the opinion expressed herein, does not
constitute a recommendation to any stockholder as to any approval of the
Merger or the Agreement. It is understood that this letter may not be
disclosed or otherwise referred to without our prior written consent, except
as may otherwise be required by law or by a court of competent jurisdiction.
Based on and subject to the foregoing, we are of the opinion that, as of the
date hereof, the Exchange Ratio is fair to the holders of First Chicago Common
Stock from a financial point of view.
Very truly yours,
Lazard Freres & Co. LLC
Kendrick R. Wilson, III
By___________________________________
Managing Director
C-2
<PAGE>
LOGO OF NBD
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Eighth of the Registrant's Restated Certificate of Incorporation, as
amended, provides for indemnification of directors and officers. The provision
provides that any person shall be indemnified and reimbursed by the Registrant
for expenses and liabilities imposed upon the person in connection with any
action, suit or proceeding, civil or criminal, or threat thereof, in which the
person may be involved by reason of the person being or having been a
director, officer, employee or agent of the Registrant, or of any corporation
or organization which the person served in any capacity at the request of the
Registrant, if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
Registrant and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person's conduct was unlawful; provided,
however, that no indemnification shall be made in respect of any matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of the person's duty to the Registrant unless
the Court of Chancery of Delaware or the court in which such action or suit
was brought shall determine upon application that such person is fairly and
reasonably entitled to indemnity.
The directors and officers of the Registrant are covered by an insurance
policy, indemnifying them against certain civil liabilities, including
liabilities under the federal securities laws, which might be incurred by them
in such capacity.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. The following is a list of Exhibits to this Registration
Statement:
<TABLE>
<C> <S>
2 Agreement and Plan of Merger, dated as of July 11, 1995, between
NBD Bancorp, Inc. ("NBD") and First Chicago Corporation ("First
Chicago"), as amended (included in Part I of this Registration
Statement as Exhibit A to the Joint Proxy Statement-Prospectus)
3(i) Restated Certificate of Incorporation of NBD (incorporated by
reference to Exhibit 3 to NBD's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993)
3(ii) Amended By-laws of NBD
4(a) Form of Proposed Amended and Restated Certificate of Incorporation
of First Chicago NBD Corporation
4(b) Instruments defining the rights of security holders, including
indentures (NBD has no instruments defining the rights of holders
of equity or debt securities where the amount of securities
authorized thereunder exceeds 10% of the total assets of NBD and
its subsidiaries on a consolidated basis. NBD hereby agrees to
furnish to the Commission upon request a copy of any instrument
covering securities the amount of which does not exceed 10% of the
total assets of NBD and its subsidiaries on a consolidated basis)
4(c) Form of Certificate of Designation Preferences, Rights and
Limitations relating to the NBD Preferred Stock with Cumulative and
Adjustable Dividends, Series B
4(d) Form of Certificate of Designation Preferences, Rights and
Limitations relating to the NBD Preferred Stock with Cumulative and
Adjustable Dividends, Series C
4(e) Form of Certificate of Designation Preferences, Rights and
Limitations relating to the NBD 8.45% Cumulative Preferred Stock,
Series E
4(f) Form of Certificate of Designation Preferences, Rights and
Limitations relating to the NBD 5 3/4% Cumulative Convertible
Preferred Stock, Series B
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
4(g) Deposit Agreement relating to the 5 3/4% Cumulative Convertible
Preferred Stock, Series B (incorporated by reference to Exhibit 4(k)
to First Chicago's Registration Statement on Form S-3 (No. 33-51408)
as filed on First Chicago's Current Report on Form 8-K dated March
5, 1993)
4(h) Deposit Agreement relating to the NBD 8.45% Cumulative Preferred
Stock, Series E (incorporated by reference to Exhibit 4(h) to First
Chicago's Registration Statement on Form S-3 (No. 33-51408) as filed
on First Chicago's Current Report on Form 8-K dated November 13,
1992)
5 Opinion of Daniel T. Lis as to legality of securities being issued
8 Form of Opinion of Wachtell, Lipton, Rosen & Katz as to federal
income tax matters
12 Computation of Consolidated Ratios of Earnings to Fixed Charges
21 Subsidiaries of NBD
23(a) Consent of Deloitte & Touche LLP
23(b) Consent of Arthur Andersen LLP
23(c) Consent of Montgomery Securities, Inc.
23(d) Consent of Lazard, Freres & Co. LLC
23(e) Consent of Daniel T. Lis (included in Exhibit 5 hereof)
23(f) Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 8
hereof)
24 Powers of Attorney (included on signature pages to this Registration
Statement)
99(a) Form of Proxy for NBD
99(b) Form of Plan Participant Instruction Card for NBD
99(c) Form of Proxy for First Chicago
99(d) Form of Plan Participant Instruction Card for First Chicago
99(e) Stock Option Agreement, dated as of July 11, 1995, between First
Chicago (as "Issuer") and NBD (as "Grantee") (incorporated by
reference to Exhibit 2 to NBD's Current Report on Form 8-K dated
July 19, 1995)
99(f) Stock Option Agreement, dated as of July 11, 1995, between NBD (as
"Issuer") and First Chicago (as "Grantee") (incorporated by
reference to Exhibit 3 to NBD's Current Report on Form 8-K dated
July 19, 1995)
</TABLE>
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's and First Chicago's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through
the date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the Registration Statement when it became effective.
The undersigned Registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
The Registrant undertakes that every prospectus (i) that is filed pursuant
to paragraph (1) immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415, will be filed
as a part of an amendment to the Registration Statement and will not be used
until such amendment is effective, and that, for purposes of determining any
liability under the Securities Act, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to Item 20 of this Registration Statement, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES AND AMENDMENTS
Each person whose signature appears below constitutes and appoints the
Chairman and Chief Executive Officer, the Chief Financial Officer or the
Secretary of the Registrant, or any one of them, acting alone, such person's
true and lawful attorney-in-fact, with full power and authority to execute in
the name, place and stead of each such person in any and all capacities and to
file an amendment or amendments to the Registration Statement (and all
exhibits thereto) and any documents relating thereto, which amendments may
make such changes in the Registration Statement as said officer or officers so
acting deem(s) advisable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all
requirements for filing on Form S-4 and has duly caused this Form S-4
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Detroit and State of Michigan on
August 21, 1995.
NBD BANCORP, INC.
By: /s/ Verne G. Istock
_____________________________________
VERNE G. ISTOCK
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on August 21, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ Verne G. Istock Chairman, Chief Executive Officer and
____________________________________ Director
Verne G. Istock
/s/ Philip S. Jones Executive Vice President, Treasurer and
____________________________________ Chief Financial Officer (Principal
Philip S. Jones Financial Officer)
/s/ Gerald K. Hanson Senior Vice President and Comptroller
____________________________________ (Principal Accounting Officer)
Gerald K. Hanson
/s/ Terence E. Adderley Director
____________________________________
Terence E. Adderley
/s/ James K. Baker Director
____________________________________
James K. Baker
/s/ Don H. Barden Director
____________________________________
Don H. Barden
/s/ Siegfried Buschmann Director
____________________________________
Siegfried Buschmann
/s/ Bernard B. Butcher Director
____________________________________
Bernard B. Butcher
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ John W. Day Director
____________________________________
John W. Day
/s/ Maureen A. Fay, O.P. Director
____________________________________
Maureen A. Fay, O.P.
/s/ Charles T. Fisher III Director
____________________________________
Charles T. Fisher III
/s/ Alfred R. Glancy III Director
____________________________________
Alfred R. Glancy III
Director
____________________________________
Dennis J. Gormley
/s/ Joseph L. Hudson, Jr. Director
____________________________________
Joseph L. Hudson, Jr.
/s/ Thomas H. Jeffs II Director
____________________________________
Thomas H. Jeffs II
/s/ John E. Lobbia Director
____________________________________
John E. Lobbia
/s/ Richard A. Manoogian Director
____________________________________
Richard A. Manoogian
/s/ William T. McCormick, Jr. Director
____________________________________
William T. McCormick, Jr.
/s/ Thomas E. Reilly, Jr. Director
____________________________________
Thomas E. Reilly, Jr.
/s/ Irving Rose Director
____________________________________
Irving Rose
/s/ Robert C. Stempel Director
____________________________________
Robert C. Stempel
Director
____________________________________
Peter W. Stroh
Director
____________________________________
Ormand J. Wade
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
2 Agreement and Plan of Merger, dated as of July 11, 1995,
between NBD Bancorp, Inc. ("NBD") and First Chicago
Corporation ("First Chicago") as amended (included in
Part I as Exhibit A to the Joint Proxy Statement-
Prospectus in this Registration Statement)
3(i) Restated Certificate of Incorporation of NBD
(incorporated by reference to Exhibit 3 to NBD's Annual
Report on Form 10-K for the fiscal year ended December
31, 1993)
3(ii) Amended By-laws of NBD
4(a) Form of Proposed Amended and Restated Certificate of
Incorporation of First Chicago NBD Corporation
4(b) Instruments defining the rights of security holders,
including indentures (NBD has no instruments defining the
rights of holders of equity or debt securities where the
amount of securities authorized thereunder exceeds 10% of
the total assets of NBD and its subsidiaries on a
consolidated basis. NBD hereby agrees to furnish to the
Commission upon request a copy of any instrument covering
securities the amount of which does not exceed 10% of the
total assets of NBD and its subsidiaries on a
consolidated basis)
4(c) Form of Certificate of Designation Preferences, Rights
and Limitations relating to the NBD Preferred Stock with
Cumulative and Adjustable Dividends, Series B
4(d) Form of Certificate of Designation Preferences, Rights
and Limitations relating to the NBD Preferred Stock with
Cumulative and Adjustable Dividends, Series C
4(e) Form of Certificate of Designation Preferences, Rights
and Limitations relating to the NBD 8.45% Cumulative
Preferred Stock, Series E
4(f) Form of Certificate of Designation Preferences, Rights
and Limitations relating to the NBD 5 3/4% Cumulative
Convertible Preferred Stock, Series B
4(g) Deposit Agreement relating to the 5 3/4% Cumulative
Convertible Preferred Stock, Series B (incorporated by
reference to Exhibit 4(k) to First Chicago's Registration
Statement on Form S-3 (No. 33-51408) as filed on First
Chicago's Current Report on Form 8-K dated March 5, 1993)
4(h) Deposit Agreement relating to the NBD 8.45% Cumulative
Preferred Stock, Series E (incorporated by reference to
Exhibit 4(h) to First Chicago's Registration Statement on
Form S-3 (No. 33-51408) as filed on First Chicago's
Current Report on Form 8-K dated November 13, 1992)
5 Opinion of Daniel T. Lis as to legality of securities
being issued
8 Form of Opinion of Wachtell, Lipton, Rosen & Katz as to
federal income tax matters
12 Computation of Consolidated Ratios of Earnings to Fixed
Charges
21 Subsidiaries of NBD
23(a) Consent of Deloitte & Touche LLP
23(b) Consent of Arthur Andersen LLP
23(c) Consent of Montgomery Securities, Inc.
23(d) Consent of Lazard, Freres & Co. LLC
23(e) Consent of Daniel T. Lis (included in Exhibit 5 hereof)
23(f) Consent of Wachtell, Lipton, Rosen & Katz (included in
Exhibit 8 hereof)
24 Powers of Attorney (included on signature pages to this
Registration Statement)
99(a) Form of Proxy for NBD
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
99(b) Form of Plan Participant Instruction Card for NBD
99(c) Form of Proxy for First Chicago
99(d) Form of Plan Participant Instruction Card for First
Chicago
99(e) Stock Option Agreement, dated as of July 11, 1995,
between First Chicago (as "Issuer") and NBD (as
"Grantee") (incorporated by reference to Exhibit 2 to
NBD's Current Report on Form 8-K dated July 19, 1995)
99(f) Stock Option Agreement, dated as of July 11, 1995,
between NBD (as "Issuer") and First Chicago (as
"Grantee") (incorporated by reference to Exhibit 3 to
NBD's Current Report on Form 8-K dated July 19, 1995)
</TABLE>
<PAGE>
EXHIBIT 3(ii)
-------------
BY-LAWS
As Adopted December 29, 1972
(As last amended effective August 21, 1995)
NBD BANCORP, INC.
(A Delaware Corporation)
--------------------------------------------------------------------------------
ARTICLE I
Offices
Section 1. Registered Office. The registered office of the Corporation is
located at 32 Loockerman Square, Suite L-100, Dover, Delaware 19901. The
Corporation may, by resolution of the Board of Directors, change the location to
any other place in Delaware.
Section 2. Other offices. The Corporation may have such other offices, within
or without the State of Delaware, as the Board of Directors may from time to
time establish.
ARTICLE II
Meetings of Stockholders
Section 1. Annual Meetings. The annual meeting of the stockholders for the
election of directors and for the transaction of any other business as may
properly come before the meeting shall be held on the third Monday in May of
each year at eleven o'clock in the forenoon or at such other date and hour as
from time to time may be designated by the Board of Directors.
Section 2. Special Meetings. A special meeting of the stockholders may be
called at any time only by the Board of Directors pursuant to a resolution
approved by a majority of the Board of Directors.
Section 3. Place of Meetings. The Board of Directors may designate any place,
either within or without the State of Delaware, as the place of meeting for any
annual meeting or for any special meeting of stockholders.
Section 4. Notice of Meetings. Written notice stating the place, date and hour
of the meeting and, in the case of a special meeting, the purpose or purposes
for which the meeting is called, shall be given by or under the direction of the
Secretary, to each stockholder of record entitled to vote at such meeting.
Except as otherwise required by statute, the written notice shall be given not
less than ten nor more than sixty days before the date of the meeting. If
mailed, such notice shall be deemed to be given when deposited in the United
States mail, postage prepaid, directed to the stockholder at his address as it
appears on the records of the Corporation. Attendance of a person at a
- 1 -
<PAGE>
meeting of stockholders shall constitute a waiver of notice of such meeting,
except when the stockholder attends for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
Section 5. Adjourned Meetings. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 6. Voting Lists. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders of record entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder of record
who is present.
Section 7. Quorum. Except as otherwise required by statute, the presence at
any meeting, in person or by proxy, of the holders of record of a majority of
the shares then issued and outstanding and entitled to vote shall be necessary
and sufficient to constitute a quorum for the transaction of business. In the
absence of a quorum, the stockholders of record entitled to vote, present in
person or by proxy, may adjourn the meeting from time to time until a quorum is
present.
Section 8. Proxies. Each stockholder of record entitled to vote at a meeting
of stockholders may authorize another person or persons (but no more than three)
to act for him by proxy, but no such proxy shall be voted or acted upon other
than at the meeting specified in the proxy or any adjournment of such meeting.
Section 9. Voting Rights. Except as otherwise provided by statute or by the
Certificate of Incorporation, and subject to the provisions of Article VII of
these By-Laws, each stockholder of record shall at every meeting of the
stockholders be entitled to one vote for each share of the capital stock having
voting power held by such stockholder.
Section 10. Required Vote. Except as otherwise required by statute or by the
Certificate of Incorporation, the holders of record of a majority of the capital
stock having voting power, present in person or by proxy, shall decide any
question brought before a meeting of the stockholders at which a quorum is
present.
Section 11. Elections of Directors. Elections of directors need not be by
written ballot.
ARTICLE III
Board of Directors
Section 1. General Powers. The business of the Corporation shall be managed by
the Board of Directors, except as otherwise provided by statute or by the
Certificate of Incorporation.
Section 2. Number. The number of the Directors of the Corporation shall be
fixed from time to time by resolution adopted by the affirmative vote of a
majority of the entire Board of Directors of the Corporation, except that the
minimum number of directors shall be fixed at no less than 15 and the maximum
number of directors shall be fixed at no more than 30. The directors shall be
divided into three classes, designated Class I, Class II and Class III. Each
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class shall consist, as nearly equal in number as possible, of one-third of the
total number of directors constituting the entire Board of Directors. At the
1986 annual meeting of stockholders, Class I directors shall be elected for a
one-year term, Class II directors for a two-year term and Class III directors
for a three-year term. At each succeeding annual meeting of stockholders
beginning in 1987, successors of the class of directors whose term expires at
that annual meeting shall be elected for a three-year term. If the number of
directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as nearly equal
as possible.
Section 3. Election and Term of Office. Except as otherwise provided in these
By-laws, directors shall be elected at the annual meeting of stockholders.
Newly created directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other cause shall be filled by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum, or by a sole remaining director. Any director of any
class chosen to fill a vacancy in such class shall hold office for a term that
shall coincide with the remaining term of that class, but in no case will a
decrease in the number of directors shorten the term of any incumbent director.
A director shall hold office until the next annual meeting for the year in which
his or her term expires and until such director's successor shall have been
elected and qualified.
Section 4. First Meetings. The first meeting of each newly elected Board of
Directors shall be held without notice immediately after the annual meeting of
the stockholders for the purpose of the organization of the Board, the election
of officers, and the transaction of such other business as may properly come
before the meeting.
Section 5. Regular Meetings. Regular meetings of the Board of Directors may be
held without notice at such times and at such places, within or without the
State of Delaware, as shall from time to time be determined by the Board.
Section 6. Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board, the President, any Director who is a Vice
Chairman of the Board or the Secretary, and shall be called by the Secretary on
the written request of three directors. Such meetings shall be held at such
times and at such places, within or without the State of Delaware, as shall be
determined by the officer calling or by the directors requesting the meeting.
Notice of the time and place thereof shall be mailed to each director, addressed
to him at his address as it appears on the records of the Corporation, at least
two days before the day on which the meeting is to be held, or sent to him at
such place by telegraph, radio or cable, or telephoned or delivered to him
personally, not later than the day before the day on which the meeting is to be
held. Such notice need not state the purposes of the meeting. Any or all
directors may waive notice of any meeting, either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except when the director attends for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
Section 7. Quorum, Required Vote, and Adjournment. The presence, at any
meeting, of a majority of the whole Board shall be necessary and sufficient to
constitute a quorum for the transaction of business. Except as otherwise
required by statute or by the Certificate of Incorporation, the vote of a
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors. In the absence of a quorum, a
majority of the directors present at the time and place of any meeting may
adjourn such meeting from time to time until a quorum be present.
Section 8. Consent of Directors in Lieu of Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or any committee
thereof may be taken without a meeting if all the members of the Board or
committee consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board or Committee.
Section 9. Participation - Meeting by Telephone. A member of the Board or any
committee thereof may participate in a meeting of such Board or committee by
means of conference telephone or similar communications equipment by means of
which all persons
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participating in the meeting can hear each other, and participation in a meeting
pursuant to this subsection shall constitute presence in person at such meeting.
Section 10. Compensation. The Board of Directors may authorize the payment to
directors of a fixed fee and expenses for attendance at meetings of the board or
any committee thereof, and annual fees for service as directors. No such
payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
ARTICLE IV
Executive Committee
Section 1. Number and Qualifications. There shall be a committee composed of
not less than four (4) members to be known as the Executive Committee which
shall consist of all the officer-directors of the Corporation and two (2) other
directors appointed as shall be provided by the Board of Directors. Provision
shall be made by the Board of Directors for the appointment of alternates from
among the directors, to act for members in the event of their absence or
disability.
Section 2. Presiding Officer. The Chairman of the Board shall act as presiding
officer of any meeting of the Executive Committee. In the event of the absence
or disability of the Chairman of the Board, the President shall act as presiding
officer. In the event of the absence or disability of the Chairman of the Board
and the President, another officer-director, if present, shall act as the
presiding officer. If no officer-director is present, the other members present
at the meeting shall elect one of their number as presiding officer.
Section 3. Quorum. Any two (2) persons each of whom is a member or alternate
member of the Executive Committee, of whom not less than one (1) shall be non-
officer directors, shall constitute a quorum for the transaction of business at
any meeting of the Executive Committee.
Section 4. Duties. The Executive Committee shall function from day to day or
such other short intervals as shall be found requisite and expedient in carrying
on of the business and affairs of the Corporation, and between meetings of the
Board of Directors, said Committee shall have and may exercise, so far as may be
permitted by law, all power and authority of the Board of Directors (including
the right to authorize the seal of the Corporation to be affixed to all
instruments on which the same may be required or appropriate). A record of the
meetings of the Committee shall be kept, which shall be accessible to inspection
by the Directors at all times, and the Committee shall, at each regular meeting
of the Board of Directors and at such other times as the Board of Directors may
request, submit in writing a full report of its actions. The Board of Directors
shall approve or disapprove the report of the Executive Committee, such action
to be recorded in the minutes of the meeting; provided, however, that no rights
of third parties shall be affected by any action of the Board of Directors, if
such rights have attached by virtue of action of the Executive Committee.
ARTICLE V
Other Committees
The Board of Directors may, by resolution, designate one or more other regular
and special committees, consisting of directors, officers or other persons which
shall have and may exercise such powers and functions as the Board may prescribe
in the management of the business and affairs of the Corporation.
Such committees shall keep regular minutes of their proceedings and report the
same to the Board of Directors when required.
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<PAGE>
The Board of Directors may from time to time suspend, alter, continue or
terminate any such committee or the powers and functions thereof.
ARTICLE VI
Officers
Section 1. Number, Election, Term of Office and Qualification. The number,
titles and duties of the officers shall be determined by the Board of Directors
from time to time, subject to the provisions of applicable law, the Certificate
of Incorporation, and these By-Laws. Each officer shall be elected by the Board
of Directors and shall hold office until such officer's successor is elected and
qualified or until such officer's death, resignation or removal. The election
of officers shall be held annually at the first meeting of the Board of
Directors held after each annual meeting of stockholders, subject to the power
of the Board of Directors to designate any office at any time and elect any
person thereto. The officers shall include a Chairman of the Board, a
President, and may include one or more Vice Chairman of the Board, one or more
Vice Presidents, a Secretary, a Treasurer, and such other officers as the Board
of Directors may determine. The same person may hold any two or more offices,
and in any such case, these By-Laws shall be construed and understood
accordingly; provided that the same person may not hold the offices of Chairman
of the Board and Secretary or President and Secretary. No officer other than
the Chairman of the Board, President or Vice Chairman of the Board need be a
director of the Corporation.
Section 2. Removal. Any officer or agent may be removed at any time, with or
without cause, by the Board of Directors.
Section 3. Vacancies. Any vacancy occurring in any office of the Corporation
may be filled for the unexpired term in the manner prescribed by these By-Laws
for the regular election to such office.
Section 4. Chief Executive Officer. The Board of Directors shall designate one
of the officers to be the Chief Executive Officer. Subject to the direction and
under the supervision of the Board of Directors, the Chief Executive Officer
shall have general charge of the business, affairs and property of the
Corporation, and control over its officers, agents and employees.
Section 5. The Secretary. The Secretary shall keep the minutes of the
proceedings of the stockholders and of the Board of Directors in one or more
books to be kept for that purpose. He shall have custody of the seal of the
Corporation and shall have authority to cause such seal to be affixed to, or
impressed or otherwise reproduced upon, all documents the execution and delivery
of which on behalf of the Corporation shall have been duly authorized. He shall
in general, perform all duties and have all powers incident to the office of
Secretary and shall perform such other duties and have such other powers as may
from time to time be assigned to him by these By-Laws, by the Board of Directors
or by the Chief Executive Officer.
Section 6. Treasurer. The Treasurer shall have custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation. He shall cause all moneys
and other valuable effects to be deposited in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of Directors.
He shall cause the funds of the Corporation to be disbursed when such
disbursements have been duly authorized, taking proper vouchers for such
disbursements, and shall render to the Chief Executive Officer and the Board of
Directors, whenever requested, an account of all his transactions as Treasurer
and of the financial condition of the Corporation. He shall, in general,
perform all duties and have all powers incident to the office of Treasurer and
shall perform such other duties and have such other powers as may from time to
time be assigned to him by these By-Laws, by the Board of Directors or by the
Chief Executive Officer.
ARTICLE VII
Fixing Record Date
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In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which shall not be
more than sixty days nor less than ten days before the date of such meeting, nor
more than sixty days prior to any other action. If no record date is fixed, the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is held
and the record date for determining stockholders for any other purpose shall be
at the close of business on the day on which the Board of Directors adopts the
resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
ARTICLE VIII
Execution of Instruments
Section 1. Execution of Instruments Generally. All documents, instruments or
writings of any nature shall be signed, executed, verified, acknowledged and
delivered by such officer or officers or such agent or agents of the Corporation
and in such manner as the Board of Directors from time to time may determine.
Section 2. Checks, Drafts, Etc. All notes, drafts, acceptances, checks,
endorsements, and all evidence of indebtedness of the Corporation whatsoever,
shall be signed by such officer or officers or such agent or agents of the
Corporation and in such manner as the Board of Directors from time to time may
determine. Endorsements for deposit to the credit of the Corporation in any of
its duly authorized depositories shall be made in such manner as the Board of
Directors from time to time may determine.
Section 3. Proxies and Consents. Proxies to vote and written consent with
respect to shares of stock of other corporations owned by or standing in the
name of the Corporation may be executed and delivered from time to time on
behalf of the Corporation by two officers, one of whom shall be the Chairman,
President, Vice Chairman, or a Vice President and the other of whom shall be the
Secretary or an Assistant Secretary of the Corporation; or by any other person
or persons duly authorized by the Board of Directors.
ARTICLE IX
Capital Stock
Section 1. Stock Certificates. The interest of every holder of stock in the
Corporation shall be evidenced by a certificate or certificates signed by, or in
the name of the Corporation by the Chairman, President, Vice Chairman or a Vice
President, and by the Secretary or an Assistant Secretary of the Corporation
certifying the number of shares owned by him in the Corporation and in such form
not inconsistent with the Certificate of Incorporation or applicable law as the
Board of Directors may from time to time prescribe. If such certificate is
countersigned (1) by a transfer agent, whether or not a subsidiary of the
Corporation, other than the Corporation or its employee, or (2) by a registrar,
whether or not a subsidiary of the Corporation, other than the Corporation or
its employee, the signatures of the officers of the Corporation may be
facsimiles. In case any officer who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer at the date of issue.
Section 2. Transfer of Stock. Shares of stock of the Corporation shall only be
transferred on the books of the Corporation by the holder of record thereof or
by his attorney duly authorized in writing, upon surrender to the Corporation of
the certificates for such shares endorsed by the appropriate person or persons,
with such evidence of
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the authenticity of such endorsement, transfer, authorization and other matters
as the Corporation may reasonably require, and accompanied by all necessary
stock transfer tax stamps. In that event it shall be the duty of the Corporation
to issue a new certificate to the person entitled thereto, cancel the old
certificate, and record the transaction on its books.
Section 3. Rights of Corporation with Respect to Registered Owners. Prior to
the surrender to the Corporation of the certificates for shares of stock with a
request to record the transfer of such shares, the Corporation may treat the
registered owner as the person entitled to receive dividends, to vote, to
receive notifications, and otherwise to exercise all the rights and powers of an
owner.
Section 4. Transfer Agents and Registrars. The Board of Directors may make
such rules and regulations as it may deem expedient concerning the issuance and
transfer of certificates for shares of the stock of the Corporation and may
appoint transfer agents or registrars or both, and may require all certificates
of stock to bear the signature of either or both. Nothing herein shall be
construed to prohibit the Corporation or any subsidiary of it from acting as its
own transfer agent or registrar at any of its offices.
Section 5. Lost, Destroyed and Stolen Certificates. Where the owner of a
certificate for shares claims that such certificate has been lost, destroyed or
wrongfully taken, the Corporation shall issue a new certificate in place of the
original certificate if the owner satisfies such reasonable requirements,
including evidence of such loss, destruction, or wrongful taking, as may be
imposed by the Corporation, including but without limitation, the delivery to
the Corporation of an indemnity bond satisfactory to it.
ARTICLE X
Seal
The corporate seal, subject to alteration by the Board of Directors, shall be in
the form of a circle and shall bear the name of the Corporation and the year of
its incorporation and shall indicate its formation under the laws of the State
of Delaware. Such seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
ARTICLE XI
Fiscal Year
The fiscal year of the Corporation shall be the calendar year except as
otherwise provided by the Board of Directors.
ARTICLE XII
Amendments
The By-Laws of the Corporation may be amended or repealed, or new By-Laws not
inconsistent with law or any provision of the Certificate of Incorporation, as
amended, may be made and adopted by a majority vote of the whole Board of
Directors at any regular or special meeting of the Board.
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EXHIBIT 4(a)
------------
FORM OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF FIRST CHICAGO NBD CORPORATION
(As last amended effective _________ __, 1995)
FIRST: The name of the corporation is
FIRST CHICAGO NBD CORPORATION
SECOND: The address of its registered office in the State of Delaware is
32 Lockerman Square, Suite L-100, Dover, Delaware 19901. The name of its
registered agent at such address is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
corporation shall have authority to issue is 1,010,000,000 shares which shall be
divided into three classes as follows:
(a) 10,000,000 shares of Preferred Stock without par value; and
(b) 1,000,000,000 shares of Common Stock of the par value of $1.00 per
share (Common Stock).
The designations, voting power, preference and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions of the above classes of stock and other general provisions relating
thereto shall be as follows:
PART I
PREFERRED STOCK
(a) Shares of Preferred Stock may be issued in one or more series at such
time or times and for such consideration or considerations as the Board of
Directors may determine. All shares of any one series shall be of equal rank
and identical in all respects except that the dates from which dividends accrue
or accumulate with respect thereto may vary.
(b) The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of Preferred Stock in one or
more series, with such voting powers, full or limited, or without voting powers,
and
<PAGE>
with such designations, preferences and relative, participating, optional or
other special rights, and qualifications or restrictions thereof, as shall be
stated and expressed in the resolution or resolutions providing for the issue
thereof adopted by the Board of Directors, and as are not stated and expressed
in this Certificate of Incorporation, or any amendment thereto, including (but
without limiting the generality of the foregoing) the following:
(i) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the Board of
Directors in creating such series) be increased or decreased (but not below the
number of shares then outstanding) from time to time by action of the Board of
Directors.
(ii) The dividend rate or rates on the shares of such series and the
relation which such dividends shall bear to the dividends payable on any other
class of capital stock or on any other series of Preferred Stock, the terms and
conditions upon which and the periods in respect of which dividends shall be
payable, whether and upon what conditions such dividends shall be cumulative
and, if cumulative, the date or dates from which dividends shall accumulate.
(iii) Whether the shares of such series shall be redeemable, and, if
redeemable, whether redeemable for cash, property or rights, including
securities of any other corporation, at the option of either the holder or the
corporation or upon the happening of a specified event, the limitations and
restrictions with respect to such redemption, the time or times when, the price
or prices or rate or rates at which, the adjustments with which and the manner
in which such shares shall be redeemable, including the manner of selecting
shares of such series for redemption if less than all shares are to be redeemed.
(iv) The rights to which the holders of shares of such series shall be
entitled, and the preferences, if any, over any other series (or of any other
series over such series), upon the voluntary or involuntary liquidation,
dissolution, distribution or winding up of the corporation, which rights may
vary depending on whether such liquidation, dissolution, distribution or winding
up is voluntary or involuntary, and, if voluntary, may vary at different dates.
(v) Whether the shares of such series shall be subject to the
operations of a purchase, retirement or sinking fund, and, if so, whether and
upon what conditions such purchase, retirement or sinking fund
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shall be cumulative or noncumulative, the extent to which and the manner in
which such fund shall be applied to the purchase or redemption of the shares of
such series for retirement or to other corporate purposes and the terms and
provisions relative to the operation thereof.
(vi) Whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or of any other series of any class
of capital stock of the corporation, and, if so convertible or exchangeable, the
price or prices or the rate or rates of conversion or exchange and the method,
if any, of adjusting the same, and any other terms and conditions of such
conversion or exchange.
(vii) The voting powers, full and/or limited, if any, of the shares of
such series, and whether and under what conditions the shares of such series
(along or together with the shares of one or more other series having similar
provisions) shall be entitled to vote separately as a single class, for the
election of one or more additional directors of the corporation in case of
dividend arrearages or other specified events, or upon other matters.
(viii) Whether the issuance of any additional shares of such series,
or of any shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such other series.
(ix) Any other preferences, privileges and powers and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions of such series, as the Board of Directors may deem advisable and
as shall not be inconsistent with the provisions of this Certificate of
Incorporation.
(c) Unless and except to the extent otherwise required by law or
provided in the resolution or resolutions of the Board of Directors creating any
series of Preferred Stock pursuant to this Part I, the holders of the Preferred
Stock shall have no voting power with respect to any matter whatsoever. In no
event shall the Preferred Stock be entitled to more than one vote in respect of
each share of stock.
(d) Shares of Preferred Stock redeemed, converted, exchanged,
purchased, retired or surrendered to the corporation, or which have been issued
and reacquired in any manner, may, upon compliance with any applicable
provisions of the General Corporation Law of the State of Delaware, be given the
status of authorized and unissued shares of Preferred Stock and may be reissued
by the Board of Directors as part of the series
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of which they were originally a part or may be reclassified into and reissued as
part of a new series or as a part of any other series, all subject to the
protective conditions or restrictions of any outstanding series of Preferred
Stock.
PART II
COMMON STOCK
(a) Except as otherwise required by law or by any amendment to this
Certificate of Incorporation, each holder of Common Stock shall have one vote
for each share of stock held by him on all matters voted upon by the
stockholders.
(b) Subject to the preferential dividend rights, if any, applicable
to shares of Preferred Stock and subject to applicable requirements, if any,
with respect to the setting aside of sums for purchase, retirement or sinking
funds for Preferred Stock, the holders of Common Stock shall be entitled to
receive, to the extent permitted by law, such dividends as may be declared from
time to time by the Board of Directors.
(c) In the event of the voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the corporation, after
distribution in full of the preferential amounts, if any, to be distributed to
the holders of shares of Preferred Stock, holders of Common Stock shall be
entitled to receive all of the remaining assets of the corporation of whatever
kind available for distribution to stockholders ratably in proportion to the
number of shares of Common Stock held by them respectively. The Board of
Directors may distribute in kind to the holders of Common Stock such remaining
assets of the corporation, or may sell, transfer, or otherwise dispose of all or
any part of such remaining assets to any corporation, trust or entity, or any
combination thereof, and may sell all or any part of the consideration so
received and distribute any balance thereof in kind to holders of Common Stock.
The merger or consolidation of the corporation into or with any other
corporation, or the merger of any other corporation into it, or any purchase or
redemption of shares of stock of the corporation of any class, shall not be
deemed to be a dissolution, liquidation or winding up of the corporation for the
purposes of this paragraph.
(d) Such numbers of shares of Common Stock as may from time to time
be required for such purpose shall be reserved for issuance (i) upon conversion
of any shares of Preferred Stock or any obligation of the corporation
convertible into shares of Common Stock which is at the time outstanding or
issuable upon exercise of any options or warrants at the time outstanding and
(ii) upon exercise of any options or warrants at the time outstanding to
purchase shares of Common Stock.
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PART III
GENERAL PROVISIONS
(a) At any meeting of stockholders, the presence in person or by
proxy of the holders of record of a majority of the outstanding shares of stock
of the corporation entitled to be voted at such meeting shall constitute a
quorum for all purposes, except as otherwise provided by this Certificate of
Incorporation or required by applicable law.
(b) Subject to the protective conditions or restrictions of any
outstanding series of Preferred Stock, any amendment to this Certificate of
Incorporation which shall increase or decrease the authorized capital stock of
any class or classes may be adopted by the affirmative vote of the holders of a
majority of the stock of the corporation entitled to vote.
(c) No holder of stock of any class of the corporation shall be
entitled as a matter of right to purchase or subscribe for any part of any
unissued stock of any class, or of any additional stock of any class of capital
stock of the corporation, or of any bonds, certificates of indebtedness,
debentures, or other securities, whether or not convertible into stock of the
corporation, now or hereafter authorized, but any such stock or other securities
may be issued and disposed of pursuant to resolution by the Board of Directors
to such persons, firms, corporations or associations and upon such terms and for
such consideration (not less than the par value or stated value thereof) as the
Board of Directors in the exercise of its discretion may determine and may be
permitted by law without action by the stockholders. The Board of Directors may
provide for payment therefor to be received by the corporation in cash, personal
property, real property (or leases thereof) or services. Any and all shares of
stock so issued for which the consideration so fixed has been paid or delivered,
shall be deemed fully paid and not liable to any further call or assessment.
FIFTH: The names and mailing addresses of the incorporators are as
follows:
<TABLE>
<CAPTION>
Name Mailing Address
---- -------------------
<S> <C>
Robert M. Surdam 611 Woodward Avenue
Detroit, Michigan 48226
Charles T. Fisher III 611 Woodward Avenue
Detroit, Michigan 48226
Norman B. Weston 611 Woodward Avenue
Detroit, Michigan 48226
William G. McClintock 611 Woodward Avenue
Detroit, Michigan 48226
</TABLE>
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SIXTH: Subject to any provision contained in any resolution of the
Board of Directors adopted pursuant to Part I of Article Fourth of this
Certificate of Incorporation requiring an increase or increases in the number of
directors, the number of directors constituting the Board of Directors shall be
that number as shall be fixed from time to time in the manner provided by
Article Eleventh of this Restated Certificate of Incorporation and by By-laws in
conformity therewith. Election of directors need not be by written ballot
unless the By-laws of the corporation shall so provide.
In addition to all of the powers conferred by statute, the Board of
Directors is expressly authorized to make, alter or repeal the By-laws of the
corporation.
Wherever the term "Board of Directors" is used in this Certificate of
Incorporation, such term shall mean the Board of Directors of the corporation;
provided, however, that, to the extent any committee of directors of the
corporation is lawfully entitled to exercise the powers of the Board of
Directors, such committee may exercise any right or authority of the Board of
Directors under this Certificate of Incorporation.
SEVENTH: No contract or transaction between the corporation and one
or more of its directors or officers, or between the corporation and any other
corporation, partnership, association, or other organization in which one or
more of its directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the
Board of Directors or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if:
(a) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of Directors
or the committee, and the Board of Directors or committee in good faith
authorizes the contract or transaction by the affirmative votes of a majority of
the disinterested directors, even though the disinterested directors be less
than a quorum; or
(b) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders.
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Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
EIGHTH: (a) The corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) The corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery of Delaware
or such other court shall deem proper. Any person entitled to indemnification
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against expenses under this paragraph (b) shall, to the extent not prohibited by
the laws of Delaware and any other applicable law, also be entitled to
indemnification, and the corporation shall indemnify him, against judgments and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action or suit, upon the same terms and conditions and subject to the
same limitations as provided with respect to expenses.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraphs (a) and (b) of this Article
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
(d) Any indemnification under paragraphs (a) and (b) of this Article
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (a) and (b). Such
determination shall be made (i) by the Board of Directors by a majority vote of
a quorum (as defined in the By-laws of the corporation) consisting of directors
who were not parties to such action, suit or proceeding, or (ii) if such quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion or (iii) by the
stockholders. Notwithstanding the failure or refusal of the directors, counsel
and stockholders to make provision therefor, such indemnification shall be made
if a court of competent jurisdiction makes a determination that the director,
officer, employee or agent has a right to indemnification hereunder in any
specific case upon the application of such director, officer, employee or agent.
(e) Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the Board of Directors in
the specific case upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation.
(f) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any statute, by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the
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benefit of the heirs, executors and administrators of such a person.
(g) The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability under the provisions of this Article.
(h) For the purposes of this Article, references to "the corporation"
include all constituent corporations absorbed in a consolidation or merger as
well as the resulting or surviving corporation so that any person who is or was
a director, officer, employee or agent of such a constituent corporation or is
or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise shall stand in the same position under the provisions
of this Article with respect to the resulting or surviving corporation as he
would if he had served the resulting or surviving corporation in the same
capacity.
(i) Neither the corporation nor its directors or officers nor any
person acting on its behalf shall be liable to anyone for any determination as
to the existence or absence of conduct which would provide a basis for making or
refusing to make any payment under this Article or for taking or omitting to
take any other action under this Article, in reliance upon the advice of
counsel.
(j) A director of the corporation shall not be personally liable to
the corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its shareholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit. If the Delaware General Corporation Law is amended after
approval by the shareholders of this provision to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.
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Any repeal or modification of the foregoing paragraph by the
shareholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
NINTH: The corporation shall have perpetual existence.
TENTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by the laws of Delaware, and all rights
conferred herein upon stockholders and directors are granted subject to this
reservation.
ELEVENTH: Board of Directors.
(a) Number, Election and Terms of Directors: The business and
affairs of the corporation shall be managed by or under the direction of a Board
of Directors. The number of the directors of the corporation shall be fixed
from time to time by resolution adopted by the affirmative vote of a majority of
the entire Board of Directors of the corporation, except that the minimum number
of directors shall be fixed at no less than 15 and the maximum number of
directors shall be fixed at no more than 30. The directors shall be divided
into three classes, designated Class I, Class II and Class III. Each class
shall consist, as nearly equal in number as possible, of one-third of the total
number of directors constituting the entire Board of Directors. At the 1986
annual meeting of stockholders, Class I directors shall be elected for a one-
year term, Class II directors for a two-year term and Class III directors for a
three-year term. At each succeeding annual meeting of stockholders beginning in
1987, successors of the class of directors whose term expires at that annual
meeting shall be elected for a three-year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal as possible.
(b) Stockholder Nomination of Director Candidates: Nominations for
election to the Board of Directors of the corporation at a meeting of
stockholders may be made by the Board of Directors, on behalf of the Board of
Directors by any nominating committee appointed by the Board of Directors, or by
any stockholder of the corporation entitled to vote for the election of
directors at the meeting. Nominations, other than those made by or on behalf of
the Board of Directors, shall be made by notice in writing delivered to or
mailed, postage prepaid, and received by the Secretary of the Corporation at
least 60 days but no more than 90 days prior to the anniversary date of the
immediately preceding Annual Meeting of Stockholders. The notice shall set
forth (i) the name and address of the stockholder who intends to make the
nomination; (ii) the name,
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age, business address and, if known, residence address of each nominee; (iii)
the principal occupation or employment of each nominee; (iv) the number of
shares of stock of the corporation which are beneficially owned by each nominee
and by the nominating stockholder; (v) any other information concerning the
nominee that must be disclosed of nominees in proxy solicitation pursuant to
Regulation 14A of the Securities Exchange Act of 1934 (or any subsequent
provisions replacing such Regulation); and (vi) the executed consent of each
nominee to serve as a director of the corporation, if elected. The chairman of
the meeting of stockholders may, if the facts warrant, determine that a
nomination was not made in accordance with the foregoing procedures, and if the
chairman should so determine, the chairman shall so declare to the meeting and
the defective nomination shall be disregarded.
(c) Newly Created Directorships and Vacancies: Newly created
directorships resulting from any increase in the number of directors and any
vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled by the affirmative vote
of a majority of the remaining directors then in office, even though less than a
quorum, or by a sole remaining director. Any director of any class chosen to
fill a vacancy in such class shall hold office for a term that shall coincide
with the remaining term of that class, but in no case will a decrease in the
number of directors shorten the term of any incumbent director. A director
shall hold office until the next annual meeting for the year in which his or her
term expires and until such director's successor shall have been elected and
qualified.
(d) Removal: Any director may be removed from office only for cause
and only by the affirmative vote of the holders of at least a majority of the
voting power of all the shares of the corporation entitled to vote generally in
the election of directors, voting together as a single class.
(e) Preferred Stock: Notwithstanding the foregoing paragraphs,
whenever the holders of any one or more classes or series of Preferred Stock
issued by the corporation shall have the right, voting separately by class or
series, to elect directors at an annual or special meeting of stockholders, the
election, term of office, filling of vacancies and other features of such
directorships shall be governed by the terms of the Certificate of Incorporation
applicable thereto. The then authorized number of directors of the corporation
shall be increased by the number of additional directors to be elected, and such
directors so elected shall not be divided into classes pursuant to this Article
Eleventh unless expressly provided by such terms.
(f) Amendment or Repeal: Notwithstanding anything contained in this
Certificate of Incorporation or the By-laws of the corporation to the contrary,
the affirmative vote of the
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holders of at least 80% of the voting power of all the shares of the corporation
entitled to vote generally in the election of directors, voting together as a
single class, shall be required to alter, amend, repeal or adopt any provision
inconsistent with the purpose and intent of this Article ELEVENTH.
TWELFTH: Stockholder Action.
Any action required or permitted to be taken by any stockholders of
the corporation must be effected at a duly called annual or special meeting of
such stockholders and may not be effected by any consent in writing by such
stockholders. Except as may be otherwise required by law, special meetings of
stockholders of the corporation may be called only by the Board of Directors
pursuant to a resolution approved by a majority of the Board of Directors.
Notwithstanding anything contained in this Certificate of Incorporation or the
By-laws of the corporation to the contrary, the affirmative vote of at least 80%
of the voting power of all the shares of the corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to alter, amend or adopt any provision inconsistent with the purpose
and intent of this Article TWELFTH.
THIRTEENTH: (a) In addition to any affirmative vote required by law
or by or under this Restated Certificate of Incorporation or the By-laws and
except as otherwise expressly herein provided in this Article Thirteenth, the
approval or authorization of a Business Combination (which together with certain
other terms used in this Article, are hereinafter defined) shall require the
affirmative vote of a majority of the voting power of all the shares of Voting
Stock held by stockholders other than an Interested Stockholder, with which or
by or on whose behalf, directly or indirectly, a Business Combination is
proposed, voting together as a single class. Such affirmative vote shall be
required notwithstanding the fact that no vote may be required or that a lesser
percentage or separate class vote may be otherwise required.
(b) The provisions of paragraph (a) of this Article shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only such affirmative vote, if any, as is required by law or by or
under any other provision of this Restated Certificate of Incorporation, or the
By-laws of the corporation, or otherwise, if all the conditions specified in
either of the following paragraphs First or Second are met:
First: The Business Combination shall have been approved by a
majority (whether such approval is made prior to or subsequent to the
acquisition of beneficial ownership of the Voting Stock that caused the
Interested Stockholder to become an Interested Stockholder) of the Continuing
Directors; or
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Second: All of the following conditions shall have been met:
(1) The aggregate amount of the cash and the Fair Market Value as of
the date of the consummation of the Business Combination of consideration other
than cash to be received per share by holders of Common Stock in such Business
Combination shall be at least equal to the highest amount determined under
subparagraphs (i) and (ii) below:
(i) The highest per share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by or on behalf of the
Interested Stockholder for any shares of Common Stock in connection with the
acquisition by the Interested Stockholder of beneficial ownership of shares of
Common Stock (a) within the two-year period immediately prior to the first
public announcement of the proposed Business Combination (the "Announcement
Date") or (b) in the transaction in which it became an Interested Stockholder,
whichever is higher; and
(ii) The Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Stockholder became an
Interested Stockholder (the "Determination Date"), whichever is higher.
All per share prices shall be adjusted to reflect any intervening
stock splits, stock dividends, and reverse stock splits.
(2) The aggregate amount of the cash and the Fair Market Value as of
the date of the consummation of the Business Combination of consideration other
than cash to be received per share by holders of shares of any class or series
of outstanding Voting Stock, other than Common Stock, shall be at least equal to
the highest amount determined under clauses (i), (ii), and (iii) below.
(i) The highest per share price (including any brokerage commissions,
transfer taxes, and soliciting dealers' fees) paid by or on behalf of the
Interested Stockholder for any share of such class or series of Voting Stock in
connection with the acquisition by the Interested Stockholder of beneficial
ownership of shares of such class or series of Voting Stock (a) within the two-
year period immediately prior to the Announcement Date or (b) in the transaction
in which it became an Interested Stockholder, whichever is higher.
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(ii) The Fair Market Value per share of such class or series of Voting
Stock on the Announcement Date or on the Determination Date, whichever is
higher; and
(iii) The highest preferential amount per share to which the holders
of shares of such class or series of Voting Stock would be entitled, if any, in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the corporation, regardless of whether the Business Combination to be
consummated constitutes such an event.
All per share prices shall be adjusted for intervening stock splits, stock
dividends, and reverse stock splits.
The provisions of this paragraph Second (2) shall be required to be met
with respect to every class or series of outstanding Voting Stock, whether or
not the Interested Stockholder has previously acquired beneficial ownership of
any shares of a particular class or series of Voting Stock.
(3) After such Interested Stockholder has become an Interested Stockholder
and prior to the consummation of such Business Combination: (i) except as
approved by a majority of the Continuing Directors, there shall have been no
failure to declare and pay at the regular date therefor any full periodic
dividends (whether or not cumulative) in accordance with the terms of any
outstanding Preferred Stock; (ii) there shall have been (a) no reduction in the
annual rate of dividend paid on the Common Stock (except as necessary to reflect
any stock split, stock dividend or subdivision of the Common Stock), except as
approved by a majority of the Continuing Directors, and (b) an increase in such
annual rate of dividends as necessary to reflect any reclassification (including
any reverse stock split), recapitalization, reorganization, or any similar
transaction which has the effect of reducing the number of outstanding shares of
Common Stock, unless the failure so to increase such annual rate is approved by
a majority of the Continuing Directors, and (iii) such Interested Stockholder
shall have not become the beneficial owner of any additional shares of Voting
Stock except as part of the transaction which results in such Interested
Stockholder becoming an Interested Stockholder and except in a transaction that,
after giving effect thereto, would not result in any increase in the Interested
Stockholder's percentage of beneficial ownership of any class or series of
capital stock.
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(4) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges, or other financial assistance or any tax credits
or other tax advantages provided by the corporation, whether in anticipation of
or in connection with such Business Combination or otherwise.
(5) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange Act
of 1934 and the rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to stockholders of the
corporation at least 30 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is required to
be mailed pursuant to such Act or subsequent provisions).
(6) Such Interested Stockholder shall not have made any major change in
the corporation's business or equity capital structure without the approval of a
majority of the Continuing Directors.
(c) For the purposes of this Article Thirteenth:
(i) The term "Business Combination" shall mean:
(a) any merger or consolidation of the corporation or any Subsidiary (as
hereinafter defined) with (a) any Interested Stockholder or (b) any other
company (whether or not such other company is an Interested Stockholder) which
is, or after such merger or consolidation would be, an Affiliate or Associate of
an Interested Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition or security arrangement, investment, loan, advance, guarantee,
agreement to purchase, agreement to pay, extension of credit, joint venture
participation or other arrangement (in one transaction or a series of
transactions) with or for the benefit of any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder involving any Substantial
Part of the assets, securities or commitments of the corporation, any Subsidiary
or any Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder; or
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(c) the adoption of any plan or proposal for the liquidation or
dissolution of the corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate or Associate of any Interested Stockholder; or
(d) any reclassification of securities (including any reverse stock
split), or recapitalization of the corporation or any merger or consolidation of
the corporation with any of its Subsidiaries or any other transaction (whether
or not with or otherwise involving an Interested Stockholder) that has the
effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class or series of Voting Stock, or any securities
convertible into Voting Stock, or into equity securities of any Subsidiary, that
is beneficially owned by an Interested Stockholder or any Affiliate or Associate
of any Interested Stockholder; or
(e) any agreement, contract, or other arrangement providing for any one or
more of the actions specified in the foregoing clauses (a) through (d).
(ii) The term "Voting Stock" shall mean all outstanding shares of
capital stock of the corporation of whatever class or series which is entitled
to vote under any circumstances in the election of directors of the corporation.
(iii) A "person" shall mean any individual, firm, corporation,
partnership, trust or other entity and shall include any group comprised of any
person and any other person with whom such person or any Affiliate or Associate
of such person has any agreement, arrangement or understanding, directly or
indirectly, for the purpose of acquiring, holding, voting, or disposing of
Voting Stock.
(iv) "Interested Stockholder" shall mean any person (other than the
corporation or any Subsidiary and other than any profit-sharing, employee stock
ownership or other employee benefit plan of the corporation or any Subsidiary or
any trustee of or fiduciary with respect to any such plan when acting in such
capacity) who or which:
(a) is a person who is the beneficial owner, directly or indirectly, of
more than 10% of the voting power of the then outstanding Voting Stock; or
(b) is an Affiliate or Associate of the corporation and at any time within
the two-year
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period immediately prior to the date in question was the beneficial owner of 10%
or more of the voting power of the then outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any shares of Voting
Stock which were at any time within the two-year period immediately prior to the
date in question beneficially owned by any Interested Stockholder, if such
assignment or succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the meaning of the
Securities Act of 1933.
(v) A person shall be a "beneficial owner" of any Voting Stock:
(a) which such person or any of its Affiliates or Associates beneficially
owns, directly or indirectly; or
(b) which such person or any of its Affiliates or Associates has (1) the
right to acquire (whether such right is exercisable immediately or only after
the passage of time), pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights, warrants or options, or
otherwise, or (2) the right to vote pursuant to any agreement, arrangement or
understanding; or
(c) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any shares of Voting Stock. For the purposes of
determining whether a person is an Interested Stockholder pursuant to paragraph
(c)(iv) of this Article, the number of shares of capital stock deemed to be
outstanding shall include shares deemed beneficially owned by such person
through application of paragraph (c)(v) of this Article but shall not include
any other shares of Voting Stock that may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
(vi) An "Affiliate" of, or a person "affiliated" with, a specified
person, is a person that directly
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or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the person specified.
(vii) "Associate" used to indicate a relationship with any person,
means (1) any corporation or organization (other than the corporation or a
majority-owned subsidiary of the corporation) of which such person is an officer
or partner or is, directly or indirectly, the beneficial owner of 10% or more of
any class of equity securities, (2) any trust or other estate in which such
person has a substantial beneficial interest or as to which such person serves
as trustee or in a similar fiduciary capacity, and (3) any relative or spouse of
such person, or any relative of such spouse, who has the same home as such
person.
(viii) "Subsidiary" means any company of which a majority of any class
of equity security is owned, directly or indirectly, by the corporation.
(ix) The term "Substantial Part" shall mean an amount equal to or
greater than an amount equal to fifteen percent of the stockholders' equity of
the corporation as reflected in the most recent fiscal year-end consolidated
balance sheet of the corporation.
(x) "Continuing Director" means any member of the Board of Directors
of the corporation (the "Board") while such person is a member of the Board, who
is not an Affiliate or Associate or representative of the Interested Stockholder
and was a member of the Board prior to the time that the Interested Stockholder
became an Interested Stockholder, and any successor of a Continuing Director,
while such successor is a member of the Board, who is not an Affiliate or
Associate or representative of the Interested Stockholder and is recommended to
succeed the Continuing Director by a majority of Continuing Directors then on
the Board.
(xi) "Fair Market Value" means (a) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape
for the New York Stock Exchange, or if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which such stock is listed, or if such
stock is not listed on any such
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exchange, the highest closing bid quotation with respect to a share of such
stock during the 30-day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations System or any
system then in use, or if no such quotations are available, the Fair Market
Value on the date in question of a share of such stock as determined by a
majority of the Continuing Directors in good faith and (b) in the case of
property other than cash or stock, the Fair Market Value of such property on the
date in question as determined in good faith by a majority of Continuing
Directors then on the Board.
(xii) In the event of any Business Combination in which the
corporation survives, the phrase "consideration other than cash to be received"
as used in paragraphs (b) Second (1) and (2) of this Article shall include the
shares of Common Stock and/or the shares of any other class of outstanding
Voting Stock retained by the holders of such shares.
(d) The Board shall have the power and duty to determine for the
purposes of this Article Thirteenth, on the basis of information known to it
after reasonable inquiry (i) whether a person is an Interested Stockholder; (ii)
the number of shares of Voting Stock beneficially owned by any person; (iii)
whether a person is an Affiliate or Associate of another; (iv) whether the
requirements of paragraph (b) Second of this Article have been met with respect
to any Business Combination; and (v) whether any sale, lease, exchange,
mortgage, pledge, transfer or other disposition or security arrangement,
investment, loan, advance, guarantee, agreement to purchase, agreement to pay,
extension of credit, joint venture participation or other arrangement (in one
transaction or a series of transactions) with or for the benefit of any
Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder involving any assets, securities or commitments of the corporation,
any Subsidiary, or any Interested Stockholder, or any Affiliate or Associate of
any Interested Stockholder constitutes a Substantial Part. Any such
determination made in good faith shall be binding and conclusive on all parties.
(e) The Board of Directors shall not approve, adopt or recommend any
proposal to enter into a Business Combination, or any offer of any person, other
than the corporation, to make a tender or exchange offer for any capital stock
of the corporation, unless and until the Board of Directors shall first
establish a procedure for evaluating, and shall have evaluated, the proposal or
offer, and determined that it would be in compliance with all applicable laws
and in the best interests of the corporation and its stockholders. In
connection with its evaluation, the Board of Directors may seek and obtain the
advice of independent investment counsel, may seek and rely upon
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an opinion of legal counsel and other independent advisers, and may test such
compliance with laws in any state or federal court or before any state or
federal administrative agency which may have appropriate jurisdiction. In
connection with its evaluation as to the best interests of the corporation and
its stockholders, the Board of Directors shall consider all factors which it
deems relevant, or the stockholders might deem relevant, including without
limitation: (i) the adequacy and fairness of the consideration to be received
by the corporation and/or its stockholders considering the future prospects for
the corporation and its business, historical trading prices of the corporation's
capital stock, the price that might be achieved in a negotiated sale of the
corporation as a whole, and premiums over trading prices which have been
proposed or offered with respect to the securities of other companies in the
past in connection with similar offers; (ii) the business, financial condition
and earnings prospects of the acquiring person or entity and the competence,
experience and integrity of the acquiring person or entity and their or its
management, and (iii) the potential social and economic impact of the offer and
its consummation on the communities in which the corporation and its
subsidiaries operate or are located and upon the corporation, its subsidiaries,
and their employees, depositors, and loan and other customers.
(f) The Board of Directors shall not approve, adopt or recommend any
offer of any person, other than the corporation, to make a tender or exchange
offer for any capital stock of the corporation in which the Fair Market Value
per share of the consideration to be received by one or more stockholders is
substantially more than the Fair Market Value per share of the consideration to
be received by other stockholders holding shares of the same class and series,
or any tender or exchange offer the consummation of which is reasonably likely,
in the good faith determination of the Board of Directors, in one transaction or
a series of transactions, to have that result.
(g) Nothing contained in this Article Thirteenth shall be construed
to relieve any Interested Stockholder from any fiduciary obligation imposed by
law.
(h) The fact that any Business Combination complies with the
provisions of paragraph (b) Second of this Article Thirteenth shall not be
construed to impose any fiduciary duty, obligation, or responsibility on the
Board of Directors, or any member thereof, to approve such Business Combination
or recommend its adoption or approval to the stockholders of the corporation,
nor shall such compliance limit, prohibit or otherwise restrict in any manner
the Board of Directors, or any member thereof, with respect to evaluations of or
actions and responses taken with respect to such Business Combination.
(i) Notwithstanding any other provisions of this Restated Certificate
of Incorporation or the By-laws of the
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<PAGE>
corporation (and notwithstanding the fact that a lesser percentage may be
specified by law, this Restated Certificate of Incorporation or the By-laws of
the corporation), the affirmative vote of the holders of at least 80% of the
voting power of all the shares of the Voting Stock, voting together as a single
class, shall be required to alter, amend or adopt any provisions inconsistent
with or to repeal this Article Thirteenth; provided, however, that if such
action has been proposed, directly or indirectly, on behalf of an Interested
Stockholder, it must also be approved by the affirmative vote of a majority of
the voting power of all the shares of Voting Stock held by stockholders other
than such Interested Stockholder.
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<PAGE>
EXHIBIT 4(c)
------------
FORM OF
CERTIFICATE OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, WHICH HAVE NOT BEEN SET FORTH IN THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OR IN ANY AMENDMENT THEREOF,
OF THE
PREFERRED STOCK WITH CUMULATIVE AND ADJUSTABLE DIVIDENDS,
SERIES B
(Without Par Value)
OF
NBD BANCORP, INC.
-----------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-----------------------
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors of NBD BANCORP, INC., a Delaware
corporation (hereinafter called the "Corporation"), at a meeting duly convened
and held on July 11, 1995, at which a quorum was present and acting
throughout:
"RESOLVED, that pursuant to authority conferred upon the Board of
Directors (the "Board") of NBD Bancorp, Inc., a Delaware corporation (the
"Corporation"), by the Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") of the Corporation, the Board hereby provides
for and authorizes the issuance of a series of Preferred Stock of the
Corporation to consist of 1,250,000 shares, and hereby fixes the voting powers,
designation, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series, in addition to those set forth in the Certificate of
Incorporation, as follows:
(a) Designation. The designation of the series of Preferred Stock
-----------
created by this resolution shall be "Preferred Stock with Cumulative and
Adjustable Dividends, Series B" (hereinafter called this "Series") and the
number of shares constituting this Series is 1,250,000. Shares of this Series
shall have a stated value of $100 per share. The number of authorized shares of
this Series
<PAGE>
may be reduced by further resolution duly adopted by the Board and by the filing
of a certificate pursuant to the provisions of the General Corporation Law of
the State of Delaware stating that such reduction has been so authorized, but
the number of authorized shares of this Series shall not be increased.
(b) Dividend Rate.
-------------
(1) Dividend rates on the shares of this Series shall be: for each
quarterly dividend period (hereinafter referred to as a "Quarterly Dividend
Period"; and any Quarterly Dividend Period being hereinafter individually
referred to as a "Dividend Period" and collectively referred to as "Dividend
Periods"), which Quarterly Dividend Periods shall commence on March 1, June 1,
September 1 and December 1 in each year and shall end on and include the day
next preceding the first day of the next Quarterly Dividend Period, at a rate
per annum of the stated value thereof 3.75% below the Applicable Rate (as
defined in paragraph (2) of this Section (b)) in respect of such Quarterly
Dividend Period. Anything to the contrary herein notwithstanding, the dividend
rate for any Quarterly Dividend Period shall in no event be less than 6.00% or,
greater than 12.00% per annum. Such dividends shall be cumulative from the date
of original issue of such shares and shall be payable, when and as declared by
the Board, on the last day of February, May, August and November of each year,
commencing the last day of February, 1996. Each such dividend shall be paid to
the holders of record of shares of this Series as they appear on the stock
register of the Corporation on such record date, not exceeding 30 days preceding
the payment date thereof, as shall be fixed by the Board. Dividends on account
of arrears for any past Dividend Periods may be declared and paid at any time,
without reference to any regular dividend payment date, to holders of record on
such date, not exceeding 45 days preceding the payment date thereof, as may be
fixed by the Board.
(2) Except as provided below in this paragraph, the "Applicable Rate"
for any Quarterly Dividend Period shall be the highest of the Treasury Bill
Rate, the Ten Year Constant Maturity Rate or the Twenty Year Constant Maturity
Rate (each as hereinafter defined) for such Dividend Period. In the event that
the Corporation determines in good faith that for any reason one or more of such
rates cannot be determined for any Quarterly Dividend Period, then the
Applicable Rate for such Dividend Period shall be
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<PAGE>
the higher of whichever of such rates can be so determined. In the event that
the Corporation determines in good faith that none of such rates can be
determined for any Quarterly Dividend Period, then the Applicable Rate in effect
for the preceding Dividend Period shall be continued for such Dividend Period.
(3) Except as provided below in this paragraph, the "Treasury Bill
Rate" for each Quarterly Dividend Period shall be the arithmetic average of the
two most recent weekly per annum market discount rates (or the one weekly per
annum market discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for three-month U.S. Treasury bills,
as published weekly by the Federal Reserve Board during the Calendar Period
immediately prior to the ten calendar days immediately preceding the last day of
February, May, August or November, as the case may be, prior to the Quarterly
Dividend Period for which the dividend rate on this Series is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum market discount rate during such Calendar Period, then the Treasury Bill
Rate for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for three-month U.S. Treasury bills,
as published weekly during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Corporation. In the
event that a per annum market discount rate for three-month U.S. Treasury bills
shall not be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such Calendar Period,
then the Treasury Bill Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum market discount rates (or the
one weekly per annum market discount rate, if only one such rate shall be
published during the relevant Calendar Period as provided below) for all of the
U.S. Treasury bills then having maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board shall not publish such rates, by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good faith that
for any reason no such U.S. Treasury Bill Rates are published as provided above
during such Calendar Period, then the Treasury Bill Rate for such Dividend
Period shall be
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<PAGE>
the arithmetic average of the per annum market discount rates based upon the
closing bids during such Calendar Period for each of the issues of marketable
noninterest-bearing U.S. Treasury securities with a maturity of not less than 80
nor more than 100 days from the date of each such quotation, as quoted daily for
each business day in New York City (or less frequently if daily quotations shall
not be generally available) to the Corporation by at least three recognized U.S.
Government securities dealers selected by the Corporation. In the event that
the Corporation determines in good faith that for any reason the Corporation
cannot determine the Treasury Bill Rate for any Quarterly Dividend Period as
provided above in this paragraph, the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the issues
of marketable interest-bearing U.S. Treasury securities with a maturity of not
less than 80 nor more than 100 days from the date of each such quotation, as
quoted daily for each business day in New York City (or less frequently if daily
quotations shall not be generally available) to the Corporation by at least
three recognized U.S. Government securities dealers selected by the Corporation.
(4) Except as provided below in this paragraph, the "Ten Year
Constant Maturity Rate" for each Quarterly Dividend Period shall be the
arithmetic average of the two most recent weekly per annum Ten Year Average
Yields (or the one weekly per annum Ten Year Average Yield, if only one such
Yield shall be published during the relevant Calendar Period as provided below),
as published weekly by the Federal Reserve Board during the Calendar Period
immediately prior to the ten calendar days immediately preceding the last day of
February, May, August or November, as the case may be, prior to the Quarterly
Dividend Period for which the dividend rate on this Series is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum Ten Year Average Yield during such Calendar Period, then the Ten Year
Constant Maturity Rate for such Dividend Period shall be the arithmetic average
of the two most recent weekly per annum Ten Year Average Yields (or the one
weekly per annum Ten Year Average Yield, if only one such Yield shall be
published during the relevant Calendar Period as provided below), as published
weekly during such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the event that
a per annum Ten Year Average Yield shall not be published by the Federal Reserve
Board or by any Federal
-4-
<PAGE>
Reserve Bank or by any U.S. Government department or agency during such Calendar
Period, then the Ten Year Constant Maturity Rate for such Dividend Period shall
be the arithmetic average of the two most recent weekly per annum average yields
to maturity (or the one weekly average yield to maturity, if only one such yield
shall be published during the relevant Calendar Period as provided below) for
all of the actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) then having maturities of not less
than eight nor more than twelve years, as published during such Calendar Period
by the Federal Reserve Board or, if the Federal Reserve Board shall not publish
such yields, by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. In the event that the Corporation
determines in good faith that for any reason the Corporation cannot determine
the Ten Year Constant Maturity Rate for any Quarterly Dividend Period as
provided above in this paragraph, then the Ten Year Constant Maturity Rate for
such Dividend Period shall be the arithmetic average of the per annum average
yields to maturity based upon the closing bids during such Calendar Period for
each of the issues of actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) with a final maturity date not
less than eight nor more than twelve years from the date of each such quotation,
as quoted daily for each business day in New York City (or less frequently if
daily quotations shall not be generally available) to the Corporation by at
least three recognized U.S. Government securities dealers selected by the
Corporation.
(5) Except as provided below in this paragraph, the "Twenty Year
Constant Maturity Rate" for each Quarterly Dividend Period shall be the
arithmetic average of the two most recent weekly per annum Twenty Year Average
Yields (or the one weekly per annum Twenty Year Average Yield, if only one such
Yield shall be published during the relevant Calendar Period as provided below),
as published weekly by the Federal Reserve Board during the Calendar Period
immediately prior to the ten calendar days immediately preceding the last day of
February, May, August or November, as the case may be, prior to the Quarterly
Dividend Period for which the dividend rate on this Series is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum Twenty Year Average Yield during such Calendar Period, then the Twenty
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Twenty Year Average Yields (or
the one weekly
-5-
<PAGE>
per annum Twenty Year Average Yield, if only one such Yield shall be published
during the relevant Calendar Period as provided below), as published weekly
during such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the event that
a per annum Twenty Year Average Yield shall not be published by any Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Twenty Year Constant
Maturity Rate for such Dividend Period shall be the arithmetic average of the
two most recent weekly per annum average yields to maturity (or the average
yield to maturity, if only one such yield shall be published during the relevant
Calendar Period as provided below) for all of the actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special Securities)
then having maturities of not less than eighteen nor more than twenty-two years,
as published during such Calendar Period by the Federal Reserve Board or, if the
Federal Reserve Board shall not publish such yields, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Corporation. In
the event that the Corporation determines in good faith that for any reason the
Corporation cannot determine the Twenty Year Constant Maturity Rate for any
Quarterly Dividend Period as provided above in this paragraph, then the Twenty
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the per annum average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special Securities)
with a final maturity date not less than eighteen nor more than twenty-two years
from the date of each such quotation, as quoted daily for each business day in
New York City (or less frequently if daily quotations shall not be generally
available) to the Corporation by at least three recognized U.S. Government
securities dealers selected by the Corporation.
(6) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and
the Twenty Year Constant Maturity Rate shall each be rounded to the nearest five
hundredths of a percentage point.
(7) The dividend rate with respect to each Quarterly Dividend Period
will be calculated as promptly as practicable by the Corporation according to
the appropriate method described herein. The mathematical accuracy of
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<PAGE>
each such calculation will be confirmed in writing by independent accountants of
recognized standing. The Corporation will cause each dividend rate to be
published in a newspaper of general circulation in New York City prior to the
commencement of the new Quarterly Dividend Period to which it applies and will
cause notice of such dividend rate to be enclosed with the dividend payment
checks next mailed to the holders of shares of this Series.
(8) For purposes of this Section (b), the term
(i) "Calendar Period" shall mean 14 calendar days;
(ii) "Special Securities" shall mean securities which can, at the
option of the holder, be surrendered at face value in payment of any Federal
estate tax or which provide tax benefits to the holder and are priced to reflect
such tax benefits or which were originally issued at a deep or substantial
discount;
(iii) "Ten Year Average Yield" shall mean the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years); and
(iv) "Twenty Year Average Yield" shall mean the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of 20 years).
(9) No full dividends shall be declared or paid or set apart for payment
on Preferred Stock of any series ranking, as to dividends, on a parity with or
junior to this Series for any period unless full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on this Series for all dividend
payment periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as aforesaid, upon
the shares of this Series and any other Preferred Stock ranking on a parity as
to dividends with this Series, all dividends declared upon shares of this Series
and any other Preferred Stock ranking on a parity as to dividends with this
Series shall be declared pro rata so that the amount of dividends declared per
share on this Series and such other Preferred Stock shall in all cases bear to
each other the same ratio that accrued dividends per share on the shares of this
Series and such other Preferred Stock bear to each
-7-
<PAGE>
other. Holders of shares of this Series shall not be entitled to any dividend,
whether payable in cash, property or stocks, in excess of full cumulative
dividends, as herein provided, on this Series. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on this Series which may be in arrears.
(10) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation and other than as provided in
paragraph (9) of this Section (b)) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or upon any
other stock ranking junior to or on a parity with this Series as to dividends or
upon liquidation, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with this Series as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of this Series shall have been
paid for all past dividend payment periods.
(11) Dividends payable on each share of this Series for each full
Quarterly Dividend Period shall be computed by dividing the dividend rate for
such Quarterly Dividend Period by four and applying such rate against the stated
value per share of this Series. Dividends payable on this Series for any period
less than a full Quarterly Dividend Period, and for the Initial Dividend Period,
shall be computed on the basis of a 360 day year consisting of 30 day months.
(c) Redemption.
----------
(1) The Corporation, at its option, may redeem shares of this Series, as a
whole or in part, at any time or from time to time, at a redemption price of
$100 per share, plus, in each case, accrued and unpaid dividends thereon to the
date fixed for redemption.
(2) In the event that fewer than all the outstanding shares of this Series
are to be redeemed, the number of
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<PAGE>
shares to be redeemed shall be determined by the Board and the shares to be
redeemed shall be determined by lot or pro rata as may be determined by the
Board or by any other method as may be determined by the Board in its sole
discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series,
notice of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the redemption date, to
each holder of record of the shares to be redeemed, at such holder's address as
the same appears on the stock register of the Corporation. Each such notice
shall state: (i) the redemption date; (ii) the number of shares of this Series
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
(4) Notice having been mailed as aforesaid, from and after the redemption
date (unless default shall be made by the Corporation in providing money for the
payment of the redemption price) dividends on the shares of this Series so
called for redemption shall cease to accrue, and said shares shall no longer be
deemed to be outstanding, and all rights of the holders thereof as stockholders
of the Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed or assigned for
transfer, if the Board shall so require and the notice shall so state), such
shares shall be redeemed by the Corporation at the redemption price aforesaid.
In case fewer than all the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares
without cost to the holder thereof.
(5) Any shares of this Series which shall at any time have been redeemed
shall, after such redemption, have the status of authorized but unissued shares
of Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the Board.
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<PAGE>
(6) Notwithstanding the foregoing provisions of this Section (c), if
any dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any shares
of this Series; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of this Series pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
this Series.
(d) Conversion or Exchange. The holders of shares of this Series
----------------------
shall not have any rights herein to convert such shares into or exchange such
shares for shares of any other class or classes or of any other series of any
class or classes of capital stock of the Corporation.
(e) Voting. The shares of this Series shall not have any voting
------
powers either general or special, except that
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66-2/3% of all of the shares of this Series at the time outstanding, given in
person or by proxy, either in writing or by a vote at a meeting called for the
purpose at which the holders of shares of this Series shall vote together as a
separate class, shall be necessary for authorizing, effecting or validating the
amendment, alteration, or repeal of any of the provisions of the Certificate of
Incorporation or of any certificate amendatory thereof or supplemental thereto
(including any Certificate of Designation, Preferences and Rights or any similar
document relating to any series of Preferred Stock) which would adversely affect
the preferences, rights, powers or privileges of this Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least 66-
2/3% of all of the shares of this Series and all other series of Preferred Stock
ranking on a parity with shares of this Series, either as to dividends or upon
liquidation, at the time outstanding, given in person or by proxy, either in
writing or by a vote at a meeting called for the purpose at which the holders of
shares of this Series and such other series of Preferred Stock shall vote
together as a single class without regard to series, shall be necessary for
authorizing, effecting or validating the creation, authorization or issue of any
shares of any class of stock of the Corporation ranking prior to the shares of
this
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<PAGE>
Series as to dividends or upon liquidation, or the reclassification of any
authorized stock of the Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares;
(3) If at the time of any annual meeting of stockholders for the election
of directors a default in preference dividends on the Preferred Stock shall
exist, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two, and the holders of the Preferred Stock of
all series shall have the right at such meeting, voting together as a single
class without regard to series, to the exclusion of the holders of Common Stock,
to elect two directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no dividends in
arrears upon the Preferred Stock. Each director elected by the holders of
shares of Preferred Stock (herein called a "Preferred Director") shall continue
to serve as such director for the full term for which he shall have been
elected, notwithstanding that prior to the end of such term a default in
preference dividends shall cease to exist. Any Preferred Director may be
removed by, and shall not be removed except by, the vote of the holders of
record of the outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the stockholders, or of the
holders of shares of Preferred Stock, called for that purpose. So long as a
default in any preference dividends on the Preferred Stock shall exist, (A) any
vacancy in the office of a Preferred Director may be filled (except as provided
in the following clause (B)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (B) in the case of the
removal of any Preferred Director, the vacancy may be filled by the vote of the
holders of the outstanding shares of Preferred Stock, voting together as a
single class without regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a Preferred Director.
Whenever the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be reduced by two.
For the purposes hereof, a "default in preference dividends" on the Preferred
Stock shall be deemed to have occurred whenever the amount of
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<PAGE>
accrued dividends upon any series of the Preferred Stock shall be equivalent to
six full quarter-yearly dividends or more, and, having so occurred, such default
shall be deemed to exist thereafter until, but only until, all accrued dividends
on all shares of Preferred Stock of each and every series then outstanding shall
have been paid to the end of the last preceding quarterly dividend period.
(f) Liquidation Rights.
------------------
(1) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive out of the
assets of the Corporation, before any payment or distribution shall be made on
the Common Stock or on any other class of stock ranking junior to the Preferred
Stock upon liquidation, the amount of $100 per share, plus a sum equal to all
dividends (whether or not earned or declared) on such shares accrued and unpaid
thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or business
of the Corporation, nor the merger or consolidation of the Corporation into or
with any other corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes of this
Section (f).
(3) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section (f), the holders of this
Series as such shall have no right or claim to any of the remaining assets of
the Corporation.
(4) In the event the assets of the Corporation available for distribution
to the holders of shares of this Series upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are entitled
pursuant to paragraph (1) of this Section (f), no such distribution shall be
made on account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably, in proportion to the full
distributable amounts for which holders of all such parity shares are
respectively entitled upon such dissolution, liquidation or winding up.
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<PAGE>
(5) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of this Series then outstanding shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders all amounts to which such holders are entitled
pursuant to paragraph (1) of this Section (f) before any payment shall be made
to the holders of any class of capital stock of the Corporation ranking junior
upon liquidation to this Series.
(g) For purposes of this resolution, any stock of any class or classes of
the Corporation shall be deemed to rank:
(1) prior to the shares of this Series, either as to dividends or
upon liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in preference
or priority to the holders of shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any,
be different from those of this Series, if such share is the Corporation's
Preferred Stock with Cumulative and Adjustable Dividends, Series C (without par
value), the Corporation's 8.45% Cumulative Preferred Stock, Series E (stated
value $625 per share) or the Corporation's 5 3/4% Cumulative Convertible
Preferred Stock, Series B (stated value $5,000 per share), or if the holders of
such stock shall be entitled to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation, as
the case may be, in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as between the
holders of such stock and the holders of shares of this Series; and
(3) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares of
this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation, as
the case may be, in preference or priority to the holders of shares of such
class or classes."
IN WITNESS WHEREOF, NBD Bancorp, Inc. has caused its corporate seal to
be hereunto affixed and this certificate to be signed by _________________, its
___________, and the same
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<PAGE>
to be attested by _______________, its ____________________, this ___th day of
October __, 1995.
NBD BANCORP, INC.
________________________________
[Title]
(Corporate Seal)
ATTEST:
By: _______________________________
[Title]
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EXHIBIT 4(d)
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FORM OF
CERTIFICATE OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, WHICH HAVE NOT BEEN SET FORTH IN THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OR IN ANY AMENDMENT THEREOF,
OF THE
PREFERRED STOCK WITH CUMULATIVE AND ADJUSTABLE DIVIDENDS,
SERIES C
(Without Par Value)
OF
NBD BANCORP, INC.
_________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
_________________________
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors of NBD Bancorp, Inc., a Delaware
corporation (hereinafter called the "Corporation"), at a meeting duly convened
and held on July 11, 1995, at which a quorum was present and acting
throughout:
"RESOLVED, that pursuant to authority conferred upon the Board of
Directors (the "Board") of NBD Bancorp, Inc., a Delaware corporation (the
"Corporation"), by the Restated Certificate of Incorporation (the "Certificate
of Incorporation") of the Corporation, the Board hereby provides for and
authorizes the issuance of a series of Preferred Stock of the Corporation to
consist of 750,000 shares, and hereby fixes the voting powers, designation,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, of the shares of such
series, in addition to those set forth in the Certificate of Incorporation, as
follows:
(a) Designation. The designation of the series of Preferred Stock created
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by this resolution shall be "Preferred Stock with Cumulative and Adjustable
Dividends, Series C" (hereinafter called this "Series") and the number of shares
constituting this Series is 750,000. Shares of this Series shall have a stated
value of $100 per share. The number of authorized shares of this Series may
<PAGE>
be reduced by further resolution duly adopted by the Board and by the filing of
a certificate pursuant to the provisions of the General Corporation Law of the
State of Delaware stating that such reduction has been so authorized, but the
number of authorized shares of this Series shall not be increased.
(b) Dividend Rate.
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(1) Dividend rates on the shares of this Series shall be: for each
quarterly dividend period (hereinafter referred to as a "Quarterly Dividend
Period"; and any Quarterly Dividend Period being hereinafter individually
referred to as a "Dividend Period" and collectively referred to as "Dividend
Periods"), which Quarterly Dividend Periods shall commence on, March 1, June 1,
September 1 and December 1 in each year and shall end on and include the day
next preceding the first day of the next Quarterly Dividend Period, at a rate
per annum of the stated value thereof 1.80% below the Applicable Rate (as
defined in paragraph (2) of this Section (b)) in respect of such Quarterly
Dividend Period. Anything to the contrary herein notwithstanding, the dividend
rate for any Quarterly Dividend Period shall in no event be less than 6.50% or
greater than 12.50% per annum. Such dividends shall be cumulative from the date
of original issue of such shares and shall be payable, when and as declared by
the Board, on the last day of February, May, August and November of each year,
commencing the last day of February, 1996. Each such dividend shall be paid to
the holders of record of shares of this Series as they appear on the stock
register of the Corporation on such record date, not exceeding 30 days preceding
the payment date thereof, as shall be fixed by the Board Dividends on account of
arrears for any past Dividend Periods may be declared and paid at any time,
without reference to any regular dividend payment date, to holders of record on
such date, not exceeding 45 days preceding the payment date thereof, as may be
fixed by the Board.
(2) Except as provided below in this paragraph, the "Applicable Rate" for
any Quarterly Dividend Period shall be the highest of the Treasury Bill Rate,
the Ten Year Constant Maturity Rate or the Twenty Year Constant Maturity Rate
(each as hereinafter defined) for such Dividend Period. In the event that the
Corporation determines in good faith that for any reason one or more of such
rates cannot be determined for any Quarterly Dividend Period, then the
Applicable Rate for such Dividend Period shall be
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the higher of whichever of such rates can be so determined. In the event that
the Corporation determines in good faith that none of such rates can be
determined for any Quarterly Dividend Period, then the Applicable Rate in effect
for the preceding Dividend Period shall be continued for such Dividend Period.
(3) Except as provided below in this paragraph, the "Treasury Bill Rate"
for each Quarterly Dividend Period shall be the arithmetic average of the two
most recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for three-month U.S. Treasury bills,
as published weekly by the Federal Reserve Board during the Calendar Period
immediately prior to the ten calendar days immediately preceding the last day of
February, May, August or November, as the case may be, prior to the Quarterly
Dividend Period for which the dividend rate on this Series is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum market discount rate during such Calendar Period, then the Treasury Bill
Rate for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for three-month U.S. Treasury bills,
as published weekly during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Corporation. In the
event that a per annum market discount rate for three-month U.S. Treasury bills
shall not be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such Calendar Period,
then the Treasury Bill Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum market discount rates (or the
one weekly per annum market discount rate, if only one such rate shall be
published during the relevant Calendar Period as provided below) for all of the
U.S. Treasury bills then having maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board shall not publish such rates, by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good faith that
for any reason no such U.S. Treasury Bill Rates are published as provided above
during such Calendar Period, then the Treasury Bill Rate for such Dividend
Period shall be
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the arithmetic average of the per annum market discount rates based upon the
closing bids during such Calendar Period for each of the issues of marketable
noninterest-bearing U.S. Treasury securities with a maturity of not less than 80
nor more than 100 days from the date of each such quotation, as quoted daily for
each business day in New York City (or less frequently if daily quotations shall
not be generally available) to the Corporation by at least three recognized U.S.
Government securities dealers selected by the Corporation. In the event that
the Corporation determines in good faith that for any reason the Corporation
cannot determine the Treasury Bill Rate for any Quarterly Dividend Period as
provided above in this paragraph, the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the issues
of marketable interest-bearing U.S. Treasury securities with a maturity of not
less than 80 nor more than 100 days from the date of each such quotation, as
quoted daily for each business day in New York City (or less frequently if daily
quotations shall not be generally available) to the Corporation by at least
three recognized U.S. Government securities dealers selected by the Corporation.
(4) Except as provided below in this paragraph, the "Ten Year Constant
Maturity Rate" for each Quarterly Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (or the
one weekly per annum Ten Year Average Yield, if only one such Yield shall be
published during the relevant Calendar Period as provided below), as published
weekly by the Federal Reserve Board during the Calendar Period immediately prior
to the ten calendar days immediately preceding the last day of February, May,
August or November, as the case may be, prior to the Quarterly Dividend Period
for which the dividend rate on this Series is being determined. In the event
that the Federal Reserve Board does not publish such a weekly per annum Ten Year
Average Yield during such Calendar Period, then the Ten Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum Ten Year Average Yields (or the one weekly per annum Ten
Year Average Yield, if only one such Yield shall be published during the
relevant Calendar Period as provided below), as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S. Government department
or agency selected by the Corporation. In the event that a per annum Ten Year
Average Yield shall not be published by the Federal Reserve Board or by any
Federal
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Reserve Bank or by any U.S. Government department or agency during such Calendar
Period, then the Ten Year Constant Maturity Rate for such Dividend Period shall
be the arithmetic average of the two most recent weekly per annum average yields
to maturity (or the one weekly average yield to maturity, if only one such yield
shall be published during the relevant Calendar Period as provided below) for
all of the actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) then having maturities of not less
than eight nor more than twelve years, as published during such Calendar Period
by the Federal Reserve Board or, if the Federal Reserve Board shall not publish
such yields, by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. In the event that the Corporation
determines in good faith that for any reason the Corporation cannot determine
the Ten Year Constant Maturity Rate for any Quarterly Dividend Period as
provided above in this paragraph, then the Ten Year Constant Maturity Rate for
such Dividend Period shall be the arithmetic average of the per annum average
yields to maturity based upon the closing bids during such Calendar Period for
each of the issues of actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) with a final maturity date not
less than eight nor more than twelve years from the date of each such quotation,
as quoted daily for each business day in New York City (or less frequently if
daily quotations shall not be generally available) to the Corporation by at
least three recognized U.S. Government securities dealers selected by the
Corporation.
(5) Except as provided below in this paragraph, the "Twenty Year Constant
Maturity Rate" for each Quarterly Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Twenty Year Average Yields (or
the one weekly per annum Twenty Year Average Yield, if only one such Yield shall
be published during the relevant Calendar Period as provided below), as
published weekly by the Federal Reserve Board during the Calendar Period
immediately prior to the ten calendar days immediately preceding the last day of
February, May, August or November, as the case may be, prior to the Quarterly
Dividend Period for which the dividend rate on this Series is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum Twenty Year Average Yield during such Calendar Period, then the Twenty
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Twenty Year Average Yields (or
the one weekly
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per annum Twenty Year Average Yield, if only one such Yield shall be published
during the relevant Calendar Period as provided below), as published weekly
during such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the event that
a per annum Twenty Year Average Yield shall not be published by any Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Twenty Year Constant
Maturity Rate for such Dividend Period shall be the arithmetic average of the
two most recent weekly per annum average yields to maturity (or the one weekly
average yield to maturity, if only one such yield shall be published during the
relevant Calendar Period as provided below) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than Special
Securities) then having maturities of not less than eighteen nor more than
twenty-two years, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board shall not publish such yields, by
any Federal Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. In the event that the Corporation determines in good faith
that for any reason the Corporation cannot determine the Twenty Year Constant
Maturity Rate for any Quarterly Dividend Period as provided above in this
paragraph, then the Twenty Year Constant Maturity Rate for such Dividend Period
shall be the arithmetic average of the per annum average yields to maturity
based upon the closing bids during such Calendar Period for each of the issues
of actively traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) with a final maturity date not less than
eighteen nor more than twenty-two years from the date of each such quotation, as
quoted daily for each business day in New York City (or less frequently if daily
quotations shall not be generally available) to the Corporation by at least
three recognized U.S. Government securities dealers selected by the Corporation.
(6) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Twenty Year Constant Maturity Rate shall each be rounded to the nearest five
hundredths of a percentage point.
(7) The dividend rate with respect to each Quarterly Dividend Period will
be calculated as promptly as practicable by the Corporation according to the
appropriate method described herein. The mathematical accuracy of each such
calculation will be confirmed in writing by
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independent accountants of recognized standing. The Corporation will cause each
dividend rate to be published in a newspaper of general circulation in New York
City prior to the commencement of the new Quarterly Dividend Period to which it
applies and will cause notice of such dividend rate to be enclosed with the
dividend payment checks next mailed to the holders of shares of this Series.
(8) For purposes of this Section (b), the term
(i) "Calendar Period" shall mean 14 calendar days;
(ii) "Special Securities" shall mean securities which can, at the option of
the holder, be surrendered at face value in payment of any Federal estate tax or
which provide tax benefits to the holder and are priced to reflect such tax
benefits or which were originally issued at a deep or substantial discount;
(iii) "Ten Year Average Yield" shall mean the average yield to maturity
for actively traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of ten years); and
(iv) "Twenty Year Average Yield" shall mean the average yield to maturity
for actively traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of 20 years).
(9) No full dividends shall be declared or paid or set apart for payment on
Preferred Stock of any series ranking, as to dividends, on a parity with or
junior to this Series for any period unless full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on this Series for all dividend
payment periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as aforesaid, upon
the shares of this Series and any other Preferred Stock ranking on a parity as
to dividends with this Series, all dividends declared upon shares of this Series
and any other Preferred Stock ranking on a parity as to dividends with this
Series shall be declared pro rata so that the amount of dividends declared per
share on this Series and such other Preferred Stock shall in all cases bear to
each other the same ratio that accrued dividends per share on the shares of this
Series and such other Preferred Stock bear to each
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other. Holders of shares of this Series shall not be entitled to any dividend,
whether payable in cash, property or stocks, in excess of full cumulative
dividends, as herein provided, on this Series. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on this Series which may be in arrears.
(10) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation and other than as provided in
paragraph (9) of this Section (b)) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or upon any
other stock ranking junior to or on a parity with this series as to dividends or
upon liquidation, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with this Series as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of this Series shall have been
paid for all past dividend payment periods.
(11) Dividends payable on each share of this Series for each full
Quarterly Dividend Period shall be computed by dividing the dividend rate for
such Quarterly Dividend Period by four and applying such rate against the stated
value per share of this Series. Dividends payable on this Series for any period
less than a full Quarterly Dividend Period, and for the Initial Dividend Period,
shall be computed on the basis of a 360 day year consisting of 30 day months.
(c) Redemption.
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(1) The Corporation, at its option, may redeem shares of this Series, as a
whole or in part, at any time or from time to time, at a redemption price of
$100 per share, plus, in each case, accrued and unpaid dividends thereon to the
date fixed for redemption.
(2) In the event that fewer than all the outstanding shares of this Series
are to be redeemed, the number of
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shares to be redeemed shall be determined by the Board and the shares to be
redeemed shall be determined by lot or pro rata as may be determined by the
Board or by any other method as may be determined by the Board in its sole
discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series, notice
of such redemption shall be given by first class mail, postage prepaid, mailed
not less than 30 nor more than 60 days prior to the redemption date, to each
holder of record of the shares to be redeemed, at such holder's address as the
same appears on the stock register of the Corporation. Each such notice shall
state: (i) the redemption date; (ii) the number of shares of this Series to be
redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
(4) Notice having been mailed as aforesaid, from and after the redemption
date (unless default shall be made by the Corporation in providing money for the
payment of the redemption price) dividends on the shares of this Series so
called for redemption shall cease to accrue, and said shares shall no longer be
deemed to be outstanding, and all rights of the holders thereof as stockholders
of the Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so redeemed (properly endorsed or assigned for
transfer, if the Board shall so require and the notice shall so state), such
shares shall be redeemed by the Corporation at the redemption price aforesaid.
In case fewer than all the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares
without cost to the holder thereof.
(5) Any shares of this Series which shall at any time have been redeemed
shall, after such redemption, have the status of authorized but unissued shares
of Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the Board.
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(6) Notwithstanding the foregoing provisions of this Section (c), if any
dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any shares
of this Series; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of this Series pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
this Series.
(d) Conversion or Exchange. The holders of shares of this Series shall not
----------------------
have any rights herein to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
(e) Voting. The shares of this Series shall not have any voting powers
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either general or special, except that
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66-2/3% of all of the shares of this Series at the time outstanding, given in
person or by proxy, either in writing or by a vote at a meeting called for the
purpose at which the holders of shares of this Series shall vote together as a
separate class, shall be necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the provisions of the Certificate of
Incorporation or of any certificate amendatory thereof or supplemental thereto
(including any Certificate of Designation, Preferences and Rights or any similar
document relating to any series of Preferred Stock) which would adversely affect
the preferences, rights, powers or privileges of this Series;
(2) Unless the vote or consent of the holders of a greater number of shares
shall then be required by law, the consent of the holders of at least 66-2/3% of
all of the shares of this Series and all other series of Preferred Stock ranking
on a parity with shares of this Series, either as to dividends or upon
liquidation, at the time outstanding, given in person or by proxy, either in
writing or by a vote at a meeting called for the purpose at which the holders of
shares of this Series and such other series of Preferred Stock shall vote
together as a single class
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without regard to series, shall be necessary for authorizing, effecting or
validating the creation, authorization or issue of any shares of any class of
stock of the Corporation ranking prior to the shares of this Series as to
dividends or upon liquidation, or the reclassification of any authorized stock
of the Corporation into any such prior shares, or the creation, authorization or
issue of any obligation or security convertible into or evidencing the right to
purchase any such prior shares;
(3) If at the time of any annual meeting of stockholders for the election
of directors a default in preference dividends on the Preferred Stock shall
exist, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two, and the holders of the Preferred Stock of
all series shall have the right at such meeting, voting together as a single
class without regard to series, to the exclusion of the holders of Common Stock,
to elect two directors of the Corporation to fill such newly created
directorships. Such right shall continue until there are no dividends in
arrears upon the Preferred Stock. Each director elected by the holders of
shares of Preferred Stock (herein called a "Preferred Director") shall continue
to serve as such director for the full term for which he shall have been
elected, notwithstanding that prior to the end of such term a default in
preference dividends shall cease to exist. Any Preferred Director may be
removed by, and shall not be removed except by, the vote of the holders of
record of the outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the stockholders, or of the
holders of shares of Preferred Stock, called for that purpose. So long as a
default in any preference dividends on the Preferred Stock shall exist, (A) any
vacancy in the office of a Preferred Director may be filled (except as provided
in the following clause (B)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (B) in the case of the
removal of any Preferred Director, the vacancy may be filled by the vote of the
holders of the outstanding shares of Preferred Stock, voting together as a
single class without regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all
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purposes hereof, to be a Preferred Director. Whenever the term of office of the
Preferred Directors shall end and a default in preference dividends shall no
longer exist, the number of directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes hereof, a "default in
preference dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the Preferred Stock
shall be equivalent to six full quarter-yearly dividends or more, and, having so
occurred, such default shall be deemed to exist thereafter until, but only
until, all accrued dividends on all shares of Preferred Stock of each and every
series then outstanding shall have been paid to the end of the last preceding
quarterly dividend period.
(f) Liquidation Rights.
------------------
(1) Upon the dissolution, liquidation or winding up of the Corporation, the
holders of the shares of this Series shall be entitled to receive out of the
assets of the Corporation, before any payment or distribution shall be made on
the Common Stock or on any other class of stock ranking junior to the Preferred
Stock upon liquidation, the amount of $100 per share, plus a sum equal to all
dividends (whether or not earned or declared) on such shares accrued and unpaid
thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or business
of the Corporation, nor the merger or consolidation of the Corporation into or
with any other corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes of this
Section (f).
(3) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section (f), the holders of this
Series as such shall have no right or claim to any of the remaining assets of
the Corporation.
(4) In the event the assets of the Corporation available for distribution
to the holders of shares of this Series upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are entitled
pursuant to paragraph (1) of
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this Section (f), no such distribution shall be made on account of any shares of
any other class or series of Preferred Stock ranking on a parity with the shares
of this Series upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
this Series, ratably, in proportion to the full distributable amounts for which
holders of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
(5) Upon the dissolution, liquidation or winding up of the Corporation, the
holders of shares of this Series then outstanding shall be entitled to be paid
out of the assets of the Corporation available for distribution to its
stockholders all amounts to which such holders are entitled pursuant to
paragraph (1) of this Section (f) before any payment shall be made to the
holders of any class of capital stock of the Corporation ranking junior upon
liquidation to this Series.
(g) For purposes of this resolution, any stock of any class or classes of
the Corporation shall be deemed to rank:
(1) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon dissolution, liquidation
or winding up of the Corporation, as the case may be, in preference or priority
to the holders of shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or upon
liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any,
be different from those of this Series, if such stock is the Corporation's
Preferred Stock with Cumulative and Adjustable Dividends, Series B (without par
value), the Corporation's 8.45% Cumulative Preferred Stock, Series E (stated
value $625 per share), or the Corporation's 5 3/4% Cumulative Convertible
Preferred Stock, Series B (stated value $5,000 per share), or if the holders of
such stock shall be entitled to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation, as
the case may be, in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as between the
holders of such stock and the holders of shares of this Series; and
(3) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares of
this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
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Corporation, as the case may be, in preference or priority to the holders of
shares of such class or classes."
IN WITNESS WHEREOF, NBD Bancorp, Inc. has caused its corporate seal to
be hereunto affixed and this certificate to be signed by _________________, its
__________, and the same to be attested by __________, its __________, this __
day of October, 1995.
NBD BANCORP, INC.
by
/s/
-----------------------------------
[Title]
(Corporate Seal)
Attest:
/s/
--------------------------------
[Title]
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EXHIBIT 4(e)
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Form of
CERTIFICATE OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, WHICH HAVE NOT BEEN SET FORTH IN THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OR IN ANY AMENDMENT THEREOF,
OF THE
8.45% CUMULATIVE PREFERRED STOCK,
SERIES E
(Stated Value $625 per share)
OF
NBD BANCORP, INC.
-----------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-----------------------
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors of NBD Bancorp, Inc., a Delaware
corporation (hereinafter called the "Corporation"), at a meeting duly convened
and held on July 11 1995, at which a quorum was present and acting throughout:
"RESOLVED, that pursuant to authority conferred upon the Board of
Directors (the "Board") of NBD Bancorp, Inc., a Delaware corporation (the
"Corporation"), by the Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") of the Corporation, the Board hereby provides
for and authorizes the issuance of a series of Preferred Stock of the
Corporation to consist of 160,000 shares, and hereby fixes the voting powers,
designation, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series, in addition to those set forth in the Certificate of
Incorporation, as follows:
(a) Designation. The designation of the series of Preferred Stock
-----------
created by this resolution shall be "8.45% Cumulative Preferred Stock, Series E"
(hereinafter called this "Series") and the number of shares constituting this
Series is 160,000. Shares
<PAGE>
of this Series shall have a stated value of $625 per share. The number of
authorized shares of this Series may be reduced by further resolution duly
adopted by the Board of Directors and by the filing of a certificate pursuant to
the provisions of the General Corporation Law of the State of Delaware stating
that such reduction has been so authorized, but the number of authorized shares
of this Series shall not be increased.
(b) Dividend Rate.
-------------
(1) Shares of this Series shall be entitled to receive dividends at a
fixed annual rate of $52.8125 per share. Such dividends shall be cumulative
from the date of original issue of such shares, that is, January 1, 1996, and
shall be payable, when and as declared by the Board of Directors, on the first
day of January, April, July and October of each year, commencing the first day
of January, 1996. Each such dividend shall be paid to the holders of record of
shares of this Series as they appear on the stock register of the Corporation on
the applicable record date, not exceeding 30 days preceding the payment date
thereof, as shall be fixed by the Board of Directors. Dividends on account of
arrears for any past dividend periods may be declared and paid at any time,
without reference to any regular dividend payment date, to holders of record on
such date as may be fixed by the Board of Directors which shall not exceed 45
days preceding such dividend payment date thereof.
(2) No full dividends shall be declared or paid or set apart for
payment on Preferred Stock of any series ranking, as to dividends, on a parity
with this Series for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on this Series for all dividend
payment periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as aforesaid, upon
the shares of this Series and any other Preferred Stock ranking on a parity as
to dividends with this Series, all dividends declared upon shares of this Series
and any other Preferred Stock ranking on a parity as to dividends with this
Series shall be declared pro rata so that the amount of dividends declared per
share on this Series and
-2-
<PAGE>
such other Preferred Stock shall in all cases bear to each other the same ratio
that accrued dividends per share on the shares of this Series and such other
Preferred Stock bear to each other. Holders of shares of this Series shall not
be entitled to any dividend, whether payable in cash, property or stocks, in
excess of full cumulative dividends, as herein provided, on this Series. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on this Series which may be in arrears.
(3) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation and other than as provided in
paragraph (2) of this Section (b)) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or upon any
other stock ranking junior to or on a parity with this Series as to dividends or
upon liquidation, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with this Series as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of this Series shall have been
paid for all past dividend payment periods.
(4) Dividends payable on this Series for any period less than a full
quarterly dividend period, and for the dividend period beginning on the date of
issuance of the shares of this Series, shall be computed on the basis of a 360-
day year consisting of twelve 30-day months. The amount of dividends payable on
shares of this Series for each full quarterly dividend period shall be computed
by dividing by four the annual rate per share set forth in Section (b)(1).
(c) Redemption.
----------
(1) The shares of this Series shall not be redeemable prior to
November 16, 1997. On and after
-3-
<PAGE>
November 16, 1997, the Corporation, at its option, and with the prior consent of
the Board of Governors of the Federal Reserve System may redeem shares of this
Series, as a whole or in part, at any time or from time to time, at a redemption
price per share of $625, plus, in each case, accrued and unpaid dividends
thereon to the date fixed for redemption.
(2) In the event that fewer than all the outstanding shares of this
Series are to be redeemed, the number of shares to be redeemed shall be
determined by the Board of Directors and the shares to be redeemed shall be
determined by lot or pro rata as may be determined by the Board of Directors or
by any other method as may be determined by the Board of Directors in its sole
discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series,
notice of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the redemption date, to
each holder of record of the shares to be redeemed, at such holder's address as
the same appears on the stock register of the Corporation. Each such notice
shall state: (i) the redemption date; (ii) the number of shares of this Series
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
money for the payment of the redemption price) dividends on the shares of this
Series so called for redemption shall cease to accrue, and said shares shall no
longer be deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors shall so require
and the notice shall so state), such shares shall be redeemed by the Corporation
at the
-4-
<PAGE>
redemption price aforesaid. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.
(5) Any shares of this Series which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board of
Directors.
(6) Notwithstanding the foregoing provisions of this Section (c), if
any dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any shares
of this Series; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of this Series pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
this Series.
(d) Conversion. The holders of shares of this Series shall not have
----------
any rights herein to convert such shares into or exchange such shares for shares
of any other class or classes or of any other series of any class or classes of
capital stock of the Corporation.
(e) Voting. The shares of this Series shall not
------
have any voting powers either general or special, except that:
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series at the time outstanding, given in
person or by proxy, either in writing or by a vote at a meeting called for the
purpose at which the holders of shares of this Series shall vote together as a
separate class, shall be necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the provisions of the Certificate of
Incorporation
-5-
<PAGE>
or of any certificate amendatory thereof or supplemental thereto (including any
Certificate of Designation, Preferences and Rights or any similar document
relating to any series of Preferred Stock) which would adversely affect the
preferences, rights, powers or privileges of this Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least 66
2/3% of all of the shares of this Series and all other series of Preferred Stock
ranking on a parity with shares of this Series, either as to dividends or upon
liquidation, at the time outstanding, given in person or by proxy, either in
writing or by a vote at a meeting called for the purpose at which the holders of
shares of this Series and such other series of Preferred Stock shall vote
together as a single class without regard to series, shall be necessary for
authorizing, effecting or validating the creation, authorization or issue of any
shares of any class of stock of the Corporation ranking prior to the shares of
this Series as to dividends or upon liquidation, or the reclassification of any
authorized stock of the Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares;
(3) If at the time of any annual meeting of stockholders for the
election of directors a default in preference dividends (as defined below) on
the Preferred Stock shall exist, the number of directors constituting the Board
of Directors of the Corporation shall be increased by two, and the holders of
the Preferred Stock of all series shall have the right at such meeting, voting
together as a single class without regard to series, to the exclusion of the
holders of Common Stock, to elect two directors of the Corporation to fill such
newly created directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director elected by the
holders of shares of Preferred Stock (herein called a "Preferred Director")
shall continue to serve as such director for the full term for
-6-
<PAGE>
which he shall have been elected, notwithstanding that prior to the end of such
term a default in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except by, the vote of the
holders of record of the outstanding shares of Preferred Stock, voting together
as a single class without regard to series, at a meeting of the stockholders, or
of the holders of shares of Preferred Stock, called for that purpose. So long
as a default in any preference dividends on the Preferred Stock shall exist, (i)
any vacancy in the office of a Preferred Director may be filled (except as
provided in the following clause (ii)) by an instrument in writing signed by the
remaining Preferred Director and filed with the Corporation and (ii) in the case
of the removal of any Preferred Director, the vacancy may be filled by the vote
of the holders of the outstanding shares of Preferred Stock, voting together as
a single class without regard to series, at the same meeting at which such
removal shall be voted. Each director appointed as aforesaid by the remaining
Preferred Director shall be deemed, for all purposes hereof, to be a Preferred
Director. Whenever the term of office of the Preferred Directors shall end and
a default in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be reduced by two.
For the purposes hereof, a "default in preference dividends" on the Preferred
Stock shall be deemed to have occurred whenever the amount of accrued dividends
upon any series of the Preferred Stock shall be equivalent to six full quarter-
yearly dividends or more, and, having so occurred, such default shall be deemed
to exist thereafter until, but only until, all accrued dividends on all shares
of Preferred Stock of each and every series then outstanding shall have been
paid to the end of the last preceding quarterly dividend period.
(4) A holder of shares of this Series shall be entitled to one vote
per share of the Series held by him when such holder is permitted to vote
pursuant to the foregoing.
-7-
<PAGE>
(f) Liquidation Rights.
------------------
(1) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of the shares of this Series shall be entitled to
receive out of the assets of the Corporation, before any payment or distribution
shall be made on the Common Stock or on any other class of stock ranking junior
to the Preferred Stock upon liquidation, the amount of $625 per share, plus a
sum equal to all dividends (whether or not earned or declared) on such shares
accrued and unpaid thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or
business of the Corporation, nor the merger or consolidation of the Corporation
into or with any other corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes of this
Section (f).
(3) After the payment to the holders of the shares of this Series of
the full preferential amounts provided for in this Section (f), the holders of
this Series as such shall have no right or claim to any of the remaining assets
of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to paragraph (1) of this Section (f), no such distribution
shall be made on account of any shares of any other class or series of Preferred
Stock ranking on a parity with the shares of this Series upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably, in proportion to the full
distributable amounts for which holders of all such parity shares are
respectively entitled upon such dissolution, liquidation or winding up.
-8-
<PAGE>
(5) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of this Series then outstanding shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders all amounts to which such holders are entitled
pursuant to paragraph (1) of this Section (f) before any payment shall be made
to the holders of any class of capital stock of the Corporation ranking junior
upon liquidation to this Series.
(g) Priority. For purposes of this resolution, any stock of any
--------
class or classes of the Corporation shall be deemed to rank:
(1) prior to the shares of this Series, either as to dividends or
upon liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in preference
or priority to the holder of shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any,
be different from those of this Series, if such stock is the Corporation's
Preferred Stock with Cumulative and Adjustable Dividends, Series B (Without Par
Value), Preferred Stock with Cumulative and Adjustable Dividends, Series C
(Without Par Value) or the Corporation's 5 3/4% Cumulative Convertible Preferred
Stock, Series B (stated value $5,000 per share), or if the holders of such stock
shall be entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may be,
in proportion to their respective dividend rates or liquidation prices, without
preference or priority, one over the other, as between the holders of such stock
and the holders of shares of this Series; and
(3) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares of
this Series shall be entitled
-9-
<PAGE>
to receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in preference
or priority to the holders of shares of such class or classes.
(h) Sinking or Retirement Fund. The shares of this Series shall not
--------------------------
be entitled to the benefit of a sinking or retirement fund to be applied to the
purchase or redemption of such stock.
IN WITNESS WHEREOF, NBD Bancorp, Inc. has caused its corporate seal to
be hereunto affixed and this certificate to be signed by _________________, its
_________, and the same to be attested by __________, its __________, this __
day of October, 1995.
NBD BANCORP, INC.
By:__________________________________
[Title]
(Corporate Seal)
ATTEST:
By:________________________________
[Title]
-10-
<PAGE>
EXHIBIT 4(f)
------------
FORM OF
CERTIFICATE OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, WHICH HAVE NOT BEEN SET FORTH IN THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OR IN ANY AMENDMENT THEREOF,
OF THE
5 3/4% CUMULATIVE CONVERTIBLE PREFERRED STOCK,
SERIES B
(Stated Value $5,000 per share)
OF
NBD BANCORP, INC.
---------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
---------------
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors of NBD Bancorp, Inc., a Delaware
corporation (hereinafter called the "Corporation"), at a meeting duly convened
and held on July 11, 1995, at which a quorum was present and acting throughout:
"RESOLVED, that pursuant to authority conferred upon the Board of
Directors (the "Board") of NBD Bancorp, Inc., a Delaware corporation (the
"Corporation"), by the Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") of the Corporation, the Board hereby provides
for and authorizes the issuance of a series of Preferred Stock of the
Corporation to consist of 40,000 shares, and hereby fixes the voting powers,
designation, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series, in addition to those set forth in the Certificate of
Incorporation, as follows:
(a) Designation. The designation of the series of Preferred Stock
-----------
created by this resolution shall be "5 3/4% Cumulative Convertible Preferred
Stock, Series B" (hereinafter called this "Series") and the number of shares
constituting this Series is 40,000.
<PAGE>
Shares of this Series shall have a stated value of $5,000 per share. The number
of authorized shares of this Series may be reduced by further resolution duly
adopted by the Board of Directors and by the filing of a certificate pursuant to
the provisions of the General Corporation Law of the State of Delaware stating
that such reduction has been so authorized, but the number of authorized shares
of this Series shall not be increased.
(b) Dividend Rate.
-------------
(1) Shares of this Series shall be entitled to receive dividends at a
fixed annual rate of $287.50 per share. Such dividends shall be cumulative from
the date of original issue of such share, that is, January 1, 1996, and shall be
payable, when and as declared by the Board of Directors, on the first day of
January, April, July and October of each year, commencing the first day of
January, 1996. Each such dividend shall be paid to the holders of record of
shares of this Series as they appear on the stock register of the Corporation on
the applicable record date, not exceeding 30 days preceding the payment date
thereof, as shall be fixed by the Board of Directors. Dividends on account of
arrears for any past dividend periods may be declared and paid at any time,
without reference to any regular dividend payment date, to holders of record on
such date as may be fixed by the Board of Directors which shall not exceed 45
days prior to such dividend payment date thereof.
(2) No full dividends shall be declared or paid or set apart for
payment on Preferred Stock of any series ranking, as to dividends, on a parity
with this Series for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on this Series for all dividend
payment periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as aforesaid, upon
the shares of this Series and any other Preferred Stock ranking on a parity as
to dividends with this Series, all dividends declared upon shares of this Series
and any other Preferred Stock ranking on a parity as to dividends with this
Series shall be declared pro rata so that the amount
-2-
<PAGE>
of dividends declared per share on this Series and such other Preferred Stock
shall in all cases bear to each other the same ratio that accrued dividends per
share on the shares of this Series and such other Preferred Stock bear to each
other. Holders of shares of this Series shall not be entitled to any dividend,
whether payable in cash, property or stocks, in excess of full cumulative
dividends, as herein provided, on this Series. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on this Series which may be in arrears.
(3) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation and other than as provided in
paragraph (2) of this Section (b)) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or upon any
other stock ranking junior to or on a parity with this Series as to dividends or
upon liquidation, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with this Series as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to this
series as to dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of this series shall have been
paid for all past dividend payment periods.
(4) Dividends payable on this Series for any period less than a full
quarterly dividend period, and for the dividend period beginning on the date of
issuance of the shares of this Series, shall be computed on the basis of a 360-
day year consisting of twelve 30-day months. The amount of dividends payable on
shares of this Series for each full quarterly dividend period shall be computed
by dividing by four the annual rate per share set forth in Section (b)(1).
-3-
<PAGE>
(c) Redemption.
----------
(1) The shares of this series shall not be redeemable prior to April
1, 1997. On and after April 1, 1997, the Corporation, at its option, and with
the prior consent of the Board of Governors of the Federal Reserve System may
redeem shares of this Series, as a whole or in part, at any time or from time to
time, at a redemption price as set forth below, plus, in each case, accrued and
unpaid dividends thereon to the date fixed for redemption:
<TABLE>
<CAPTION>
If Redeemed During the
Twelve-Month Period Redemption Price
Beginning on April 1, per share
---------------------- ----------------
<S> <C>
1997 $5,172.50
1998 5,143.75
1999 5,115.00
2000 5,086.25
2001 5,057.50
2002 5,028.75
2003 and thereafter 5,000.00
</TABLE>
(2) In the event that fewer than all the outstanding shares of this
series are to be redeemed, the number of shares to be redeemed shall be
determined by the Board of Directors and the shares to be redeemed shall be
determined by lot or pro rata as may be determined by the Board of Directors or
by any other method as may be determined by the Board of Directors in its sole
discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series,
notice of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the redemption date, to
each holder of record of the shares to be redeemed, at such holder's address as
the same appears on the stock register of the Corporation. Each such notice
shall state: (i) the redemption date; (ii) the number of shares of this Series
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the then current Conversion Price (as defined herein),
together with a statement that all conversion rights with respect to the shares
of the Series called for redemption will terminate at the close of business on
-4-
<PAGE>
the fifth Business Day preceding the redemption date; (v) the place or places
where certificates for such shares are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be redeemed will cease
to accrue on such redemption date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
money for the payment of the redemption price) dividends on the shares of this
Series so called for redemption shall cease to accrue, and said shares shall no
longer be deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors shall so require
and the notice shall so state), such shares shall be redeemed by the Corporation
at the redemption price aforesaid. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder thereof.
(5) Any shares of this Series which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board of
Directors.
(6) Notwithstanding the foregoing provisions of this Section (c), if
any dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any shares
of this Series; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of this Series (i) upon the conversion of
shares of the Series into shares of Common Stock pursuant to Section (d) hereof
or (ii) pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding shares of this Series.
-5-
<PAGE>
(d) Conversion.
----------
(1) (A) Subject to the provisions for adjustment hereinafter set
forth, each share of the Series shall be convertible at the option of the holder
thereof, in whole or part, in the manner hereinafter set forth, into fully paid
and nonassessable shares of Common Stock (as hereinafter defined) at the
conversion price, determined as hereinafter provided, in effect on the date of
conversion, each share of the Series being credited at its stated value;
provided that if any shares of the Series are called for redemption, the
conversion rights pertaining thereto will terminate at the close business on the
fifth Business Day preceding the redemption date, unless the Corporation shall
default in providing money for the payment of the redemption price as provided
in Section (c) hereof. The price at which shares of Common Stock shall be
delivered upon conversion of the shares of the Series (hereinafter referred to
as the "Conversion Price") shall be initially $29.6271 per share of Common
Stock. The Conversion Price shall be adjusted in certain instances as provided
in paragraph (2) of this Section (d).
(B) Any holder of shares of the Series desiring to convert such stock
into shares of Common Stock shall surrender the certificate or certificates for
the shares of the Series being converted, duly endorsed or assigned to the
Corporation or in blank, at the principal office of the Corporation for that
purpose, accompanied by a written notice of conversion specifying the number of
shares of the Series to be converted and the name or names in which such holder
wishes the certificate or certificates for shares of Common Stock to be issued;
in case such notice shall specify a name or names other than that of such
holder, such notice shall be accompanied by payment of all transfer taxes
payable upon the issue of shares of Common Stock in such name or names. In case
less than all of the shares of the Series represented by a certificate are to be
converted by a holder, upon such conversion the Corporation shall issue and
deliver or cause to be issued and delivered to such holder a certificate or
certificates for the shares of the Series not so converted. The holders of
shares of the Series at the close of business on a dividend payment record date
shall be entitled to receive the dividend payable on such shares of the Series
(except shares of the Series redeemed on a
-6-
<PAGE>
redemption date between such record date and the dividend payment date) on the
corresponding dividend payment date notwithstanding the subsequent conversion
thereof or the Corporation's default in payment of the dividend due on such
dividend payment date. However, shares of Series surrendered for conversion
during the period from the close of business on any dividend payment record date
for the Series to the opening of business on the corresponding dividend payment
date (except shares of the Series called for redemption on a redemption date
after the dividend payment record date and on or before the fifth business day
following the dividend payment date) must be accompanied by payment of an amount
equal to the dividend payable on such shares of the Series on such dividend
payment date. A holder of shares of the Series on a dividend payment record
date who (or whose transferee) converts shares of the Series on a dividend
payment date will receive the dividend payable on such shares of the Series by
the Corporation on such date, and the converting holder need not include payment
in the amount of such dividend upon surrender of shares of the Series for
conversion. Except as provided above, no payment or adjustment will be made on
account of accrued or unpaid dividends upon the conversion of shares of the
Series.
(C) As promptly as practicable after the surrender of certificates for
shares of the Series as aforesaid, the Corporation shall issue and shall deliver
at such office to such holder, or on his or her written order, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such share in accordance with the provisions of this Section (d),
and any fractional interest in respect of a share of Common Stock arising upon
such conversion shall be promptly settled as provided in paragraph (11) of this
Section (d).
(D) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for shares
of the Series shall have been surrendered and such notice (and if applicable,
payment of an amount equal to the dividend payable on such shares) received by
the Corporation as aforesaid; the shares of the Series so surrendered for
conversion shall no longer be deemed to be outstanding and all rights with
respect to such shares of the Series shall
-7-
<PAGE>
cease, except the right of the holders thereof to receive full shares of Common
Stock in exchange therefor and payment for any fractional shares; and the person
or persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares represented thereby at such
time on such date and such conversion shall be at the Conversion Price in effect
at such time on such date, unless the stock transfer books of the Corporation
shall be closed on that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close of business
on the next succeeding day on which stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such shares shall have been surrendered and such notice received by the
Corporation. All shares of Common Stock delivered upon conversion of shares of
the Series will upon delivery be duly and validly issued and fully paid and
nonassessable.
(2) The Conversion Price shall be adjusted from time to time as
follows:
(A) In case the Corporation shall pay or make a dividend or other
distribution on any class of capital stock of the Corporation in shares of
Common Stock, the Conversion Price in effect at the opening of business on the
date following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination, and the denominator shall be the sum of (i) such number
of shares and (ii) the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately after the
opening of business on the date following the date fixed for such determination.
(B) In case the Corporation shall issue rights or warrants to all
holders of its shares of Common Stock entitling
-8-
<PAGE>
them to subscribe for or purchase Common Stock at a price per share less than
the current market price per share (determined as provided in paragraph (3)) of
the Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Price in effect at
the opening of business on the date following the date fixed for such
determination shall be reduced by multiplying such Conversion Price by a
fraction of which the numerator shall be the sum of (i) the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus (ii) the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered for
subscription or purchase would purchase at such current market price, and the
denominator shall be the sum of (x) the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus (y) the number of shares of Common Stock so offered for subscription or
purchase, such reduction to become effective immediately after the opening of
business on the date following the date fixed for such determination.
(C) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of shares of Common Stock evidences of indebtedness or
assets (including securities, but excluding any rights or warrants referred to
in paragraph (2)(B), any dividend or distribution paid in cash out of the
surplus or retained earnings of the Corporation and any dividend or distribution
referred to in paragraph (2)(A)), the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (3)) of the Common Stock on the date fixed
for such determination, less the then fair market value (as determined by the
Board of Directors of the Corporation, whose determination shall be
-9-
<PAGE>
conclusive) of the portion of the assets or evidences of indebtedness so
distributed allocable to one share of Common Stock, and the denominator shall be
such current market price per share of Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
distribution. Notwithstanding the foregoing, in the event that the Corporation
shall distribute or shall have distributed any rights or warrants to acquire
capital stock ("Rights") pursuant to this subparagraph (C), the distribution of
separate certificates representing the Rights subsequent to their initial
distribution (whether or not the initial distribution of the Rights shall have
occurred prior to the date of the issuance of the Series) shall be deemed to be
the distribution of the Rights for purposes of this subparagraph (C); provided
that the Corporation may, in lieu of making any adjustment pursuant to this
subparagraph (C) upon a distribution of separate certificates representing the
Rights, make proper provision so that each holder of the Series who converts the
shares of this Series (or any portion hereof) (i) on or before the record date
for such distribution of separate certificates shall be entitled to receive upon
conversion shares of Common Stock issued with Rights and (ii) after such record
date and prior to the expiration, redemption or termination of the Rights shall
be entitled to receive upon conversion, in addition to the shares of Common
Stock issuable upon conversion, the same number of Rights as would a holder of
the number of shares of Common Stock that the shares of such Series so converted
would have entitled the holder thereof to purchase in accordance with the terms
and provisions applicable to the Rights if the shares of such Series 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
required under this subparagraph (C).
(D) In case the outstanding shares of Common Stock shall be subdivided
into a greater
-10-
<PAGE>
number of shares, the Conversion Price in effect at the opening of business on
the date following the date upon which such subdivision becomes effective shall
be proportionately reduced, and, conversely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares, the
Conversion Price in effect at the opening of business on the date following the
date upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the date upon
which such subdivision or combination becomes effective.
(E) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger to
which paragraph (6) applies) shall be deemed to involve (i) a distribution of
such securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
the "date fixed for such determination" within the meaning of paragraph (2)(C)),
and (ii) a subdivision or combination, as the case may be, of the number of
shares of Common Stock outstanding immediately prior to such reclassification
into the number of shares of Common Stock outstanding immediately thereafter
(and the effective date of such reclassification shall be deemed to be "the day
upon which such subdivision becomes effective," or "the day upon which such
combination becomes effective," as the case may be, and "the day upon which such
subdivision or combination becomes effective" within the meaning of paragraph
(2)(D) of this Section (d)).
(3) For the purpose of any computation under paragraphs (2)(B) and
2(C), the current market price per share of Common Stock on any day shall be
deemed to be the average of the daily Closing Prices (as hereinafter defined)
per share of Common Stock for the 30 consecutive Trading Days (as hereinafter
defined) ending on the fifth Trading Day before the day in question.
-11-
<PAGE>
(4) Notwithstanding the provisions of paragraph (2) above, no
adjustment in the Conversion Price shall be required unless such adjustment
(plus any adjustments not previously made by reason of this paragraph (4)) would
require an increase or decrease of at least 1% in such price; provided, however,
-------- -------
that any adjustments which by reason of this paragraph (4) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. Notwithstanding any other provisions of this Section (d), the
Corporation shall not be required to make any adjustment of the Conversion Price
for the issuance of any shares of Common Stock pursuant to any plan providing
for the reinvestment of dividends or interest payable on securities of the
Corporation and the investment of additional optional amounts in shares of
Common Stock under such plan. All calculations under this Section (d) shall be
made to the nearest 1/100 of a cent (with $.00005 being rounded upward), as the
case may be.
(5) The Corporation may make such reductions in the Conversion Price,
in addition to those required by this Section (d), as it considers to be
advisable in order to avoid or diminish any income tax to any holder of shares
of Common Stock resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons. The
Corporation shall have the power to resolve any ambiguity or correct any error
in this Section (d) and its actions in so doing shall be final and conclusive.
(6) In case the Corporation shall effect any capital reorganization of
the Common Stock (other than a subdivision, combination, capital reorganization
or reclassification provision for in paragraph (2)) or shall consolidate, merge
or engage in a statutory share exchange with or into any other corporation
(other than a consolidation, merger or share exchange in which the Corporation
is the surviving corporation and each share of Common Stock outstanding
immediately prior to such consolidation or merger is to remain outstanding
immediately after such consolidation or merger) or shall sell or transfer all or
substantially all its assets to any other corporation, lawful provision shall be
made as a part of the terms of such transaction whereby the holders of shares of
the Series shall receive upon conversion
-12-
<PAGE>
thereof, in lieu of each share of Common Stock which would have been issuable
upon conversion of such stock if converted immediately prior to the consummation
of such transaction, the same kind and amount of stock (or other securities,
cash or property, if any) as may be issuable or distributable in connection with
such transaction with respect to each share of Common Stock outstanding at the
effective time of such transaction subject to subsequent adjustments for
subsequent stock dividends and distributions, subdivisions or combinations of
shares, capital reorganizations, reclassifications, consolidations, mergers or
share exchanges, as nearly equivalent as possible to the adjustments provided
for in this Section (d).
(7) Whenever the Conversion Price is adjusted as herein provided:
(A) the Corporation shall compute the adjusted Conversion Price and
shall cause to be prepared a certificate signed by the chief financial or
accounting officer of the Corporation setting forth the adjusted Conversion
Price and showing in reasonable detail the facts upon which such adjustment is
based and the computation thereof and such certificate shall forthwith be filed
with each transfer agent for the Series; and
(B) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall, as soon as practicable, be
mailed to the holders of record of outstanding shares of the Series.
(8) In case:
(A) the Corporation shall declare a dividend or other distribution on
the Common Stock other than in cash out of its surplus or retained earnings;
(B) the Corporation shall authorize the granting to the holders of the
Common Stock of rights or warrants entitling them to subscribe for or purchase
any shares of capital
-13-
<PAGE>
stock of any class or of any other rights;
(C) of any reclassification of the Common Stock (other than a
subdivision or combination of outstanding shares of Common Stock), or of any
consolidation, merger or share exchange to which the Corporation is a party and
for which approval of any stockholders of the Corporation is required, or of the
sale or transfer of all or substantially all the assets of the Corporation; or
(D) of the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;
then the Corporation shall cause to be mailed to each transfer agent for the
Series and to the holders of record of the outstanding shares of the Series, at
least 20 days (or 10 days in any case specified in paragraph (A) or (B) above)
prior to the applicable record or effective date hereinafter specified, a notice
stating (i) the date as of which the holders of record of shares of Common Stock
to be entitled to such dividend, distribution, rights or warrants are to be
determined, or (ii) the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, liquidation, dissolution or winding up
is expected to become effective and the date as of which it is expected that
holders of record of Common Stock shall be entitled to exchange their shares for
securities or other property, if any, deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, liquidation, dissolution
or winding up. Such notice shall also state whether such transaction will
result in any adjustment in the Conversion Price applicable to the Series and,
if so, shall state what the adjusted Conversion Price will be and when it will
become effective. Neither the failure to give the notice required by this
paragraph (8), nor any defect therein, to any particular holder shall affect the
sufficiency of the notice or the legality or validity of the proceedings
described in paragraphs (8)(A) through (8)(D).
(9) Any shares of this Series which shall at any time have been
converted shall, after such
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<PAGE>
conversion, have the status as authorized but unissued shares of Preferred
Stock, without designation as to series until such shares are once more
designated as part of a particular series by the Board of Directors. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock for the purpose of issuance upon conversion
of shares of the Series, the full number of shares of Common Stock then issuable
upon the conversion of all shares of the Series then outstanding and shall take
all action necessary so that shares of Common Stock so issued will be validly
issued, fully paid and nonassessable; provided, however, that nothing contained
herein shall preclude the Corporation from satisfying its obligations in respect
of the conversion of the shares by delivery of purchased shares of Common Stock
which are held in the treasury of the Corporation.
(10) The Corporation will pay any and all stamp or similar taxes that
may be payable in respect of the issuance or delivery of shares of Common Stock
on conversion of shares of the Series. The Corporation shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of shares of Common Stock in a name other than that
in which the shares of the Series so converted were registered, and no such
issuance or delivery shall be made unless and until the person requesting such
issuance has paid to the Corporation the amount of any such tax or has
established to the satisfaction of the Corporation that such tax has been paid.
(11) No fractional shares or scrip representing fractional shares of
Common Stock shall be issued upon the conversion of shares of the Series. If
any such conversion would otherwise require the issuance of such a fractional
share (determined to the extent of four decimal places after taking into account
all shares of the Series being converted into Common Stock by the holder), an
amount equal to such fraction multiplied by the Closing Price per share of
Common Stock for the day of conversion shall be paid to the holder in cash by
the Corporation. Any share of the Series may be converted, at the request of
its holder, in part into Common Stock. If a part of a share of the Series is
converted, then the Corporation will convert such shares into the requested
shares of Common Stock (subject to this paragraph
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<PAGE>
(11)) and issue a fractional share of the Series evidencing the remaining
interest of such holder.
(12) Notwithstanding anything elsewhere contained herein, any funds
which at any time shall have been deposited by the Corporation or on its behalf
with any paying agent for the purpose of paying dividends on, or the redemption
price of, any shares of the Series and which shall not be required for such
purposes because of the conversion of such shares shall after such conversion be
repaid to the Corporation by the paying agent.
(13) In any case in which paragraph (2) of this Section (d) provides
that an adjustment shall become effective on the day next following a record
date for an event, the Corporation may defer until the occurrence of such event
(a) issuance to the holder of any share of this Series converted after such
record date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (B) paying to such holder any amount
in cash in lieu of any fraction pursuant to paragraph (11) of this Section (d).
(14) If any action or transaction would require adjustment of the
Conversion Price pursuant to more than one paragraph of this Section 7, only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value.
(15) If the Corporation shall take any action affecting the Common
Stock, other than action described in this Section (d), that in the opinion of
the Board of Directors would materially adversely affect the conversion rights
of the holders of the shares of the Series, the Conversion Price for the Series
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances.
(16) The certificate of any independent firm of public accountants of
recognized standing selected by the Board shall be presumptive evidence
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<PAGE>
of the correctness of any computation made under this Section (d).
(17) For purposes of this resolution, the following terms shall have
the following meanings:
(i) "Closing Price" shall mean the last sale price as shown on the New
York Stock Exchange Composite Transactions Tape, or in case such sale takes
place on such day, the average of the closing bid and asked prices on the New
York Stock Exchange, or, if the Common Stock is not listed or admitted to
trading on such Exchange, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or, if it is not listed or
admitted to trading on any national securities exchange, on the National
Association of Securities Dealers Automated Quotations National Market System,
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange or quoted on such National Market System, the average of the
closing bid and asked prices as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors for such purposes
(other than the Corporation or a subsidiary thereof).
(ii) "Common Stock" shall mean the Corporation's Common Stock, $1.00
par value per share, as the same exists at the date of filing of the Certificate
of Designation relating to this Series or any other class of stock resulting
from successive changes or reclassifications of such Common Stock consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value.
(iii) "Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Stock is listed or admitted to trading
is open for the transaction of business or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, a day which is a
Business Day.
(iv) "Business Day" shall mean a day which is not a Saturday, Sunday
or other day on which commercial banking institutions in the
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<PAGE>
City of Chicago, Illinois or The City of New York, New York are authorized or
obligated by law or executive order to close.
(e) Voting. The shares of this Series shall not have any voting powers
------
either general or special, except that:
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least 66
2/3% of all of the share of this Series at the time outstanding, given in person
or by proxy, either in writing or by a vote at a meeting called for the purpose
at which the holders of shares of this Series shall vote together as a separate
class, shall be necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the provisions of the Certificate of
Incorporation or of any certificate amendatory thereof or supplemental thereto
(including any Certificate of Designation, Preferences and Rights or any similar
document relating to any series of Preferred Stock) which would adversely affect
the preferences, rights, powers or privileges of this Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be acquired by law, the consent of the holders of at least 66
2/3% of all of the shares of this Series and all other series of Preferred Stock
ranking on a parity with shares of this Series, either as to dividends or upon
liquidation, at the time outstanding, given in person or by
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<PAGE>
proxy, either in writing or by a vote at a meeting called for the purpose at
which the holders of shares of this Series and such other series of Preferred
Stock shall vote together as a single class without regard to series, shall be
necessary for authorizing, effecting or validating the creation, authorization
or issue of any shares of any class of stock of the Corporation ranking prior to
the shares of this Series as to dividends or upon liquidation, or the
reclassification of any authorized stock of the Corporation into any such prior
shares, or the creation, authorization or issue of any obligation or security
convertible into or evidencing the right to purchase any such prior shares;
(3) If at the time of any annual meeting of stockholders for the election
of directors a default in preference dividends (as defined below) on the
Preferred Stock shall exist, the number of directors constituting the Board of
Directors of the Corporation shall be increased by two, and the holders of the
Preferred Stock of all series shall have the right at such meeting, voting
together as a single class without regard to series, to the exclusion of the
holders of Common Stock, to elect two directors of the Corporation to fill such
newly created directorships. Such right shall continue until there are no
dividends in arrears upon he Preferred Stock. Each director elected by the
holders of shares of Preferred Stock (herein called a "Preferred Director")
shall continue to serve as such director for the full term for which he shall
have been elected, notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred Director may be
removed by, and shall not be removed except by, the vote of the holders of
record of the outstanding shares of Preferred Stock, voting together as a single
class without regard to series, at a meeting of the stockholders, or of the
holders of shares of Preferred Stock, called for that purpose. So long as a
default in any preference dividends on the Preferred Stock shall exist, (i) any
vacancy in the office of a Preferred Director may be filled (except as provided
in the following clause (ii)) by an instrument in writing signed by the
Preferred Director and filed with the
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<PAGE>
Corporation and (ii) in the case of the removal of any Preferred Director, the
vacancy may be filled by the vote of holders of the outstanding shares of
Preferred Stock, voting together as a single class without regard to series, at
the same meeting at which such removal shall be voted. Each director appointed
as aforesaid by the remaining Preferred Director shall be deemed, for all
purposes hereof, to be a Preferred Director. Whenever the term of office of the
Preferred Directors shall end and a default in preference dividends shall no
longer exist, the number of directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes hereof, a "default in
preference dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the Preferred stock
shall be equivalent to six full quarter-yearly dividends or more, and, having so
occurred, such default shall be deemed to exist thereafter until, but only
until, all accrued dividends on all shares of Preferred Stock of each and every
series then outstanding shall have been paid to the end of the last preceding
quarterly dividend period.
(4) A holder of shares of this Series shall be entitled to one vote per
share of the Series held by him when such holder is permitted to vote pursuant
to the foregoing.
(f) Liquidation Rights.
------------------
(1) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of the shares of this Series shall be entitled to
receive out of the assets of the Corporation, before any payment or distribution
shall be made on the Common Stock or on any other class of stock ranking junior
to the Preferred Stock upon liquidation, the amount of $5,000 per share, plus a
sum equal to all dividends (whether or not earned or declared) on such shares
accrued and unpaid thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or
business of the Corporation, nor the merger or consolidation of the Corporation
into or with any other corporation or the merger
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<PAGE>
or consolidation of any other corporation into or with the Corporation, shall be
deemed to be a dissolution, liquidation or winding up, voluntary or involuntary,
for the purposes of this Section (f).
(3) After the payment to the holders of the shares of this Series of
the full preferential amounts provided for in this Section (f), the holders of
this Series as such shall have no right or claim to any of the remaining assets
of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to paragraph (1) of this Section (f), no such distribution
shall be made on account of any shares of any other class or series of Preferred
Stock ranking on a parity with the shares of this Series upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably, in proportion to the full
distributable amounts for which holders of all such parity shares are
respectively entitled upon such dissolution, liquidation or winding up.
(5) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of this Series then outstanding shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders all amounts to which such holders are entitled
pursuant to paragraph (1) of this Section (f) before any payment shall be made
to the holders of any class of capital stock of the Corporation ranking junior
upon liquidation to this Series.
(g) Priority. For purposes of this resolution, any stock of any class
--------
or classes of the Corporation shall be deemed to rank:
(1) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon dissolution, liquidation
or winding up of the
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<PAGE>
Corporation, as the case may be, in preference or priority to the holder of
shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any,
be different from those of this Series, if such stock is the Corporation's
Preferred Stock with Cumulative and Adjustable Dividends, Series B (Without Par
Value), Preferred Stock with Cumulative and Adjustable Dividends, Series C
(Without Par Value), or the Corporation's 8.45% Cumulative Preferred Stock,
Series E (Stated Value $625 per share), or if the holders of such stock shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may be,
in proportion to their respective dividend rates or liquidation prices, without
preference or priority, one over the other, as between the holders of such stock
and the holders of shares of this Series; and
(3) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or the holders of shares of
this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation, as
the case may be, in preference or priority to the holders of shares of such
class or classes.
(h) Sinking or Retirement Fund. The shares of this Series shall not
--------------------------
be entitled to the benefit of a sinking or retirement fund to be applied to the
purchase or redemption of such stock.
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<PAGE>
IN WITNESS WHEREOF, NBD Bancorp, Inc. has caused its corporate seal to
be hereunto affixed and this certificate to be signed by _______________, its
Treasurer, and the same to be attested by Michael Lipsitz, its Assistant
_________, this ___ day of _____, 1995.
NBD BANCORP, INC.
By:_______________________________
[Title]
(Corporate Seal)
ATTEST:
By: ___________________________
[Title]
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<PAGE>
EXHIBIT 5
---------
Dated the Effective Date of the Registration Statement
NBD Bancorp, Inc.
611 Woodward Avenue
Detroit, Michigan 48226
Subject: Registration Statement on Form S-4
Ladies and Gentlemen:
Reference is made to the registration statement on Form S-4 (the
"Registration Statement") being filed by NBD Bancorp, Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission for the
purpose of registering under the Securities Act of 1933, as amended (the
"Securities Act"), 180,754,063 shares of the Company's common stock, $1 par
value and 2,104,800 shares of the Company's preferred stock, without par
value (consisting of shares of the Company's Preferred Stock with Cumulative and
Adjustable Dividends, Series B, Preferred Stock with Cumulative and Adjustable
Dividends, Series C, 8.45% Cumulative Preferred Stock, Series E, and 5-3/4%
Cumulative Convertible Preferred Stock, Series B, some of which may be
represented by depositary shares), to be issued or reserved for issuance in
connection with the merger (the "Merger") between the Company and First Chicago
Corporation as described in the Registration Statement (such shares of the
Company's common stock and preferred stock, the "Shares").
I have examined originals or copies, certified or otherwise identified to
my satisfaction, of such corporate records, certificates of public officials,
and other documents as I have deemed necessary or relevant as a basis for my
opinion set forth herein.
Based on the foregoing, it is my opinion that:
1. The Company is a corporation duly organized and validly existing under
the laws of the State of Delaware.
2. When the Shares have been issued in the Merger in the manner
contemplated by the Registration Statement, while the Registration Statement is
effective and in compliance with applicable state securities laws, the Shares
will be validly issued, fully paid, and nonassessable.
I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me under
<PAGE>
NDB Bancorp, Inc.
Page 2
the caption "Legal Opinion" in the Joint Proxy Statement-Prospectus forming a
part of the Registration Statement. In giving this consent, I do not thereby
admit that I am in the category of persons whose consent is required under
Section 7 of the Securities Act.
Very truly yours,
/s/ Daniel T. Lis
-----------------
Daniel T. Lis, Esq.
<PAGE>
EXHIBIT 8
---------
Dated the Effective Date of the Registration Statement
NBD Bancorp, Inc.
611 Woodward Avenue
Detroit, Michigan 48226
First Chicago Corporation
One First National Plaza
Chicago, Illinois 60670
Ladies/Gentlemen:
We have acted as special counsel to First Chicago Corporation, a Delaware
corporation ("First Chicago"), in connection with the proposed merger (the
"Merger") of First Chicago with and into NBD Bancorp, Inc., a Delaware
corporation ("NBD"), upon the terms and conditions set forth in the Agreement
and Plan of Merger (the "Agreement") dated as of July 11, 1995 by and between
NBD and First Chicago. At your request, and pursuant to Section 7.1(f) of the
Agreement, we are rendering our opinion concerning the material federal income
tax consequences of the Merger.
For purposes of the opinion set forth below, we have relied, with the
consent of NBD and the consent of First Chicago, upon the accuracy and
completeness of the statements and representations (which statements and
representations we have neither investigated nor verified) contained,
respectively, in the certificates of the officers of NBD and of First Chicago
(copies of which are attached hereto and which are incorporated herein by
reference), and we have assumed that such certificates will be complete and
accurate as of the Effective Time. Any capitalized term used and not defined
herein has the meaning given to it in the Joint Proxy Statement-Prospectus of
NBD and First Chicago dated September 18, 1995 (the "Joint Proxy Statement-
Prospectus").
<PAGE>
NBD Bancorp, Inc.
First Chicago Corporation
Page 2
We have also assumed that the transactions contemplated by the Agreement
will be consummated in accordance with the Agreement and as described in the
Joint Proxy Statement-Prospectus and that the Merger will qualify as a statutory
merger under the applicable laws of the State of Delaware.
Based upon and subject to the foregoing, it is our opinion that, under
presently applicable law, that:
1. The Merger will constitute a tax-free reorganization under Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code") and
First Chicago and NBD will each be a party to the reorganization;
2. No gain or loss will be recognized by First Chicago or NBD as a result
of the Merger;
3. No gain or loss will be recognized by the stockholders of First Chicago
who exchange their First Chicago Capital Stock solely for NBD Common Stock
and/or New Preferred Stock pursuant to the Merger (except with respect to cash
received in lieu of a fractional share interest in NBD Common Stock);
4. The tax basis of the NBD Common Stock and New Preferred Stock received
by stockholders who exchange all of their First Chicago Common Stock and First
Chicago Preferred Stock solely for NBD Common Stock or New Preferred Stock in
the Merger will be the same as the tax basis of the First Chicago Capital Stock
surrendered in exchange therefor (reduced by any amount allocable to a
fractional share interest for which cash is received); and
5. The holding period of NBD Common Stock and New Preferred Stock received
by stockholders of First Chicago in the Merger will include the period during
which the shares of First Chicago Common Stock and/or First Chicago Preferred
Stock surrendered in exchange therefor were held; provided, such First Chicago
Common Stock and/or First Chicago Preferred Stock was held as a capital asset by
the holder of such first Chicago Common Stock and/or First Chicago Preferred
Stock at the Effective Time.
<PAGE>
NBD Bancorp, Inc.
First Chicago Corporation
Page 3
This opinion may not be applicable to First Chicago stockholders who
received their First Chicago Common Stock pursuant to the exercise of employee
stock options or otherwise as compensation or who are not citizens or residents
of the United States.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an Exhibit to the Registration Statement on Form S-4 (the
"Registration Statement") in respect of the shares of NBD Common Stock to be
issued in connection with the Merger, and to the reference to this opinion under
the caption "THE MERGER--Certain Federal Income Tax Consequences" and elsewhere
in the Joint-Proxy Statement-Prospectus included therein. In giving such
consent, we do not hereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
WACHTELL, LIPTON, ROSEN & KATZ
<PAGE>
EXHIBIT 12
----------
NBD BANCORP, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31 JUNE 30
---------------------------------------------------------- ----------------------
1994 1993 1992 1991 1990 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS:
Income before income taxes, extraordinary item
and cumulative effect of accounting change..... $ 814,032 $ 701,976 $ 472,380 $ 483,822 $ 447,868 $ 430,485 $381,679
Add: Fixed charges excluding
interest on deposits.......................... 431,933 250,989 238,818 262,722 360,419 330,225 167,284
---------- ---------- ---------- ---------- ---------- ---------- --------
Earnings available for fixed charges excluding
interest on deposits........................... 1,245,965 952,965 711,198 746,544 808,287 760,710 548,963
Add: Interest on deposits..................... 873,190 827,875 1,108,714 1,551,287 1,728,399 604,061 390,829
---------- ---------- ---------- ---------- ---------- ---------- --------
Earnings available for fixed charges including
interest on deposits........................... $2,119,155 $1,780,840 $1,819,912 $2,297,831 $2,536,686 $1,364,771 $939,792
========== ========== ========== ========== ========== ========== ========
FIXED CHARGES:
Interest expense excluding
interest on deposits.......................... $ 417,436 $ 236,838 $ 225,312 $ 249,472 $ 349,524 $ 322,707 $160,080
Estimated interest factor of rentals (1)....... 14,497 14,151 13,506 13,250 10,895 7,518 7,204
---------- ---------- ---------- ---------- ---------- ---------- --------
Fixed charges excluding interest on deposits.... 431,933 250,989 238,818 262,722 360,419 330,225 167,284
Add: Interest on deposits..................... 873,190 827,875 1,108,714 1,551,287 1,728,399 604,061 390,829
---------- ---------- ---------- ---------- ---------- ---------- --------
Fixed charges including interest on deposits.... $1,305,123 $1,078,864 $1,347,532 $1,814,009 $2,088,818 $ 934,286 $558,113
========== ========== ========== ========== ========== ========== ========
RATIO OF EARNINGS TO FIXED CHARGES:
Excluding interest on deposits................. 2.88 x 3.80 x 2.98 x 2.84 x 2.24 x 2.30 x 3.28 x
Including interest on deposits................. 1.62 x 1.65 x 1.35 x 1.21 x 1.21 x 1.46 x 1.68 x
</TABLE>
---------------
(1) Calculated at one third of rental expense
<PAGE>
EXHIBIT 21
----------
NBD BANCORP, INC. SUBSIDIARIES
(Direct and Indirect)
Bank Holding Company Subsidiaries Jurisdiction of Organization
--------------------------------- ----------------------------
NBD Illinois, Inc. Delaware
NBD Indiana, Inc. Delaware
Bank Subsidiaries Jurisdiction of Organization
----------------- ----------------------------
NBD Bank (Detroit, MI) Michigan
NBD Bank, N.A.
(Indianapolis, IN) U.S.A.
NBD Bank (Columbus, OH) Ohio
NBD Bank (Elkhart, IN) Indiana
NBD Bank (Wheaton, IL) Illinois
NBD Bank, FSB (Venice, FL) U.S.A.
NBD Bank, Canada Canada
NBD Bank, N.A. (Fox River
Grove, IL) U.S.A.
National Bank of Detroit-
Dearborn U.S.A.
Bank-Related Subsidiaries Jurisdiction of Organization
------------------------- ----------------------------
Charter Oak Insurance Agency
of Michigan, Inc. Michigan
Deer Insurance Services, Inc. Illinois
International Bank of Detroit U.S.A.
NBD Brokerage Services, Inc. Indiana
NBD Community Development
Corporation Michigan
NBD Equipment Finance, Inc. Delaware
NBD Insurance Agency, Inc. Michigan
NBD Insurance Company Arizona
NBD Mortgage Company Delaware
NBD Neighborhood Revitalization
Corporation Indiana
NBD Real Estate Services, Inc. Indiana
NBD Securities, Inc. Michigan
NBD Service Corp. Delaware
Seed-Roberts Agency, Inc. Michigan
<PAGE>
EXHIBIT 23(a)
-------------
INDEPENDENT AUDITORS' CONSENT
-----------------------------
We consent to the incorporation by reference in this Registration Statement of
NBD Bancorp, Inc. on Form S-4 of our report dated January 17, 1995, appearing in
the Annual Report on Form 10-K of NBD Bancorp, Inc. for the year ended December
31, 1994, and appearing in the Current Report on Form 8-K of First Chicago
Corporation dated July 21, 1995. We also consent to the reference to us under
the heading "Experts" in the Joint Proxy Statement-Prospectus, which is part of
this Registration Statement.
DELOITTE & TOUCHE LLP
Detroit, Michigan
September 14, 1995
<PAGE>
EXHIBIT 23(b)
-------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To NBD Bancorp, Inc.:
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our report dated
January 17, 1995, on the consolidated financial statements of First Chicago
Corporation, incorporated by reference in the Annual Report on Form 10-K of
First Chicago Corporation for the year ended December 31, 1994, and to the
reference to our Firm under the caption "Experts" included in this Registration
Statement.
ARTHUR ANDERSEN & CO. LLP
Chicago, Illinois
September 13, 1995
<PAGE>
EXHIBIT 23(c)
September 14, 1995
NBD Bancorp, Inc.
611 Woodward Avenue
Detroit, Michigan 48226
Gentlemen:
This letter will constitute our consent to the inclusion of our opinion
regarding the merger of equals between NBD Bancorp, Inc. ("NBD") and First
Chicago Corporation, in NBD's registration statement on Form S-4 (the
"Registration Statement") and to the inclusion of the summary of such opinion
and the use of our name in the Registration Statement. In giving the foregoing
consent, we do not admit that we come within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended
(the "Securities Act"), or the rules and regulations of the Securities and
Exchange Commission (the "Commission") with respect to any part of such
Registration Statement within the meaning of the term "experts" as used in the
Securities Act and the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
MONTGOMERY SECURITIES
By /s/ James C. Hale III
---------------------
Managing Director
<PAGE>
EXHIBIT 23(d)
-------------
September 14, 1995
Board of Directors
First Chicago Corporation
One First National Plaza
Chicago, Illinois 60670
Gentlemen:
We hereby consent to the references to our firm and to the inclusion of our firm
to be dated the date of the Joint Proxy Statement/Prospectus of NBD Bancorp,
Inc. and First Chicago Corporation in the Registration Statement on Form S-4 of
NBD Bancorp, Inc., of which the Joint Proxy Statement/Prospectus is to be a
part, filed with the Securities and Exchange Commission on September 14, 1995.
In giving the foregoing consent, we do not admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1993, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
LAZARD FRERES & CO. LLC
By: /s/ Kendrick R. Wilson, III
---------------------------
Managing Director
<PAGE>
EXHIBIT 99.(a)
P NBD BANCORP, INC.
R
O THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X FOR THE SPECIAL MEETING OF STOCKHOLDERS, OCTOBER 20, 1995
Y
THE UNDERSIGNED HEREBY APPOINTS RICHARD J. MCCULLEN AND MONICA M. BARBOUR AS
PROXIES, EACH WITH THE POWER TO APPOINT HIS OR HER SUBSTITUTE, AND HEREBY
AUTHORIZES THEM TO REPRESENT AND VOTE ALL THE SHARES OF THE COMMON STOCK OF
NBD BANCORP, INC. WHICH THE UNDERSIGNED WOULD BE ENTITLED TO VOTE IF
PERSONALLY PRESENT AT THE SPECIAL MEETING TO BE HELD ON OCTOBER 20, 1995, OR
AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF, AS SPECIFIED BELOW ON THE MATTER
LISTED AND MORE FULLY DESCRIBED IN THE NOTICE OF SPECIAL MEETING AND JOINT
PROXY STATEMENT-PROSPECTUS FOR SAID MEETING, RECEIPT OF WHICH IS
ACKNOWLEDGED.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. A SPECIFIC CHOICE MAY BE MADE ON THE REVERSE SIDE OF THIS PROXY.
IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED "FOR" THE PROPOSAL DESCRIBED ON
THE REVERSE SIDE OF THIS CARD.
PLEASE DATE AND SIGN THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED
BUSINESS REPLY ENVELOPE.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
SEE REVERSE
SIDE
<PAGE>
[X] PLEASE 3630
MARK VOTE AS IN
THIS EXAMPLE
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY PROPOSES AND RECOMMENDS A VOTE "FOR" THE
FOLLOWING PROPOSAL:
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
[_] [_] [_]
1. Approval and adoption of an Agreement and Plan of Merger, dated as of July
11, 1995, by and between NBD Bancorp, Inc., a Delaware corporation ("NBD")
and First Chicago Corporation, a Delaware corporation ("First Chicago") and
the consummation of the transactions contemplated thereby, upon the terms
and subject to the conditions set forth in the Merger Agreement, as are more
fully described in the accompanying Joint Proxy Statement-Prospectus,
pursuant to which, among other effects, First Chicago will be merged with
and into NBD, with NBD continuing as the surviving corporation, the name of
NBD will be changed to "First Chicago NBD Corporation", the number of
authorized shares of common stock of NBD will be increased to 750,000,000,
the NBD Series A Preferred Stock, no shares of which are currently
issued and outstanding, will be deleted, and certain series of new preferred
stock will be designated.
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date
-------------------
----------------------------------------
Stockholder sign here
-------------------------------
Co-Owner sign here
-------------------------------
Please return this executed proxy promptly using the enclosed envelope.
THIS PROXY WILL BE VOTED FOR THE PROPOSAL UNLESS INSTRUCTIONS TO THE CONTRARY
ARE INDICATED. PLEASE NOTE THAT ABSTAINING FROM THE VOTE ON THE PROPOSAL WILL
HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSAL. THE SIGNER HEREBY REVOKES
ALL PROXIES PREVIOUSLY GIVEN BY THE SIGNER TO VOTE AT THE MEETING OR ANY
ADJOURNMENTS THEREOF.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, PERSONAL REPRESENTATIVE, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY AN
AUTHORIZED OFFICER. IF A PARTNERSHIP OR SIMILAR ENTITY, PLEASE SIGN IN THE
ENTITY'S NAME BY AN AUTHORIZED PERSON.
<PAGE>
EXHIBIT 99.(b)
P NBD BANCORP, INC.
R
O INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X FOR THE SPECIAL MEETING OF STOCKHOLDERS, OCTOBER 20, 1995
Y
TO: NBD BANK, TRUSTEE FOR THE NBD BANCORP, INC. EMPLOYEES' SAVINGS AND
INVESTMENT PLAN
THE UNDERSIGNED HEREBY INSTRUCTS THE TRUSTEE TO VOTE, IN PERSON OR BY PROXY,
ALL THE SHARES OF THE COMMON STOCK OF NBD BANCORP, INC. HELD BY THE TRUSTEE
AND CREDITED TO THE PARTICIPANT'S ACCOUNT IN THE PLAN AT THE SPECIAL MEETING
TO BE HELD ON OCTOBER 20, 1995, OR AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF,
AS SPECIFIED BELOW ON THE MATTER LISTED AND MORE FULLY DESCRIBED IN THE NOTICE
OF SPECIAL MEETING AND JOINT PROXY STATEMENT-PROSPECTUS FOR SAID MEETING,
RECEIPT OF WHICH IS ACKNOWLEDGED.
THIS INSTRUCTION WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED HEREIN BY
THE PARTICIPANT. A SPECIFIC CHOICE MAY BE MADE ON THE REVERSE SIDE OF THIS
INSTRUCTION CARD. PLEASE NOTE THAT ABSTAINING FROM THE VOTE ON THE PROPOSAL
WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSAL. IF NO DIRECTION IS
GIVEN, THE TRUSTEE SHALL EXERCISE VOTING RIGHTS WITH RESPECT TO SHARES
CREDITED TO THE PARTICIPANT'S ACCOUNT IN THE TRUSTEE'S DISCRETION SOLELY IN
THE INTERESTS OF THE PARTICIPANT AND HIS OR HER BENEFICIARIES.
PLEASE DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED
BUSINESS REPLY ENVELOPE BY OCTOBER 16, 1995.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
SEE
REVERSE
SIDE
<PAGE>
[X] PLEASE MARK 3630
VOTE AS IN
THIS EXAMPLE
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY PROPOSES AND RECOMMENDS A VOTE "FOR" THE
FOLLOWING PROPOSAL:
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
[_] [_] [_]
1. Approval and adoption of an Agreement and Plan of Merger, dated as of July
11, 1995, by and between NBD Bancorp, Inc., a Delaware corporation ("NBD"),
and First Chicago Corporation, a Delaware corporation ("First Chicago"), and
the consummation of the transactions contemplated thereby, upon the terms
and subject to the conditions set forth in the Merger Agreement, as are more
fully described in the accompanying Joint Proxy Statement-Prospectus,
pursuant to which, among other effects, First Chicago will be merged with
and into NBD, with NBD continuing as the surviving corporation, the name of
NBD will be changed to "First Chicago NBD Corporation", the number of
authorized shares of common stock of NBD will be increased to 750,000,000,
the NBD Series A Preferred Stock, no shares of which are currently issued
and outstanding, will be deleted, and certain series of new preferred stock
will be designated.
Please be sure to sign and date this instruction card. Date
-----------
Participant sign here
-------------------------------------------
Please return this executed instruction card promptly using the enclosed
envelope.
<PAGE>
EXHIBIT 99.(c)
P FIRST CHICAGO CORPORATION
R
O THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X FOR THE SPECIAL MEETING OF STOCKHOLDERS, OCTOBER 20, 1995
Y
THE UNDERSIGNED HEREBY APPOINTS W.G. JURGENSEN AND JOHN W. BALLANTINE AS
PROXIES, EACH WITH THE POWER TO APPOINT HIS SUBSTITUTE, AND HEREBY AUTHORIZES
THEM TO REPRESENT AND VOTE ALL THE SHARES OF THE COMMON STOCK OF FIRST CHICAGO
CORPORATION WHICH THE UNDERSIGNED IS ENTITLED TO VOTE AT THE SPECIAL MEETING
OF STOCKHOLDERS TO BE HELD ON OCTOBER 20, 1995, AND AT ANY ADJOURNMENT OR
POSTPONEMENT THEREOF, AS SPECIFIED BELOW ON THE MATTER LISTED AND MORE FULLY
DESCRIBED IN THE NOTICE OF SPECIAL MEETING AND JOINT PROXY STATEMENT-
PROSPECTUS OF SAID MEETING, RECEIPT OF WHICH IS ACKNOWLEDGED.
THIS CARD ALSO PROVIDES VOTING INSTRUCTIONS FOR ANY SHARES HELD IN THE
CORPORATION'S DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE UNDER-
SIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED FOR THE
PROPOSAL DESCRIBED ON THE REVERSE SIDE OF THIS CARD. SPECIFIC CHOICES MAY BE
MADE ON THE REVERSE SIDE OF THIS PROXY.
PLEASE DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED
BUSINESS REPLY ENVELOPE.
SEE
REVERSE
SIDE
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE>
X PLEASE MARK YOUR 3630
VOTES AS IN THIS
EXAMPLE.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE FOLLOWING
PROPOSAL:
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
[_] [_] [_]
1. Approval and adoption of an Agreement and Plan of Merger, dated as of July
11, 1995, by and between First Chicago Corporation, a Delaware corporation
("First Chicago") and NBD Bancorp, Inc., a Delaware corporation ("NBD"),
and the consummation of the transactions contemplated thereby, pursuant to
which First Chicago will be merged with and into NBD upon the terms and
subject to the conditions set forth in the Merger Agreement, as are more
fully described in the enclosed Joint Proxy Statement--Prospectus.
THIS PROXY WILL BE VOTED FOR THE PROPOSAL UNLESS INSTRUCTIONS TO THE CONTRARY
ARE INDICATED. PLEASE NOTE THAT ABSTAINING FROM THE VOTE ON THE PROPOSAL WILL
HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSAL.
THE SIGNER HEREBY REVOKES ALL PROXIES HERETOFORE GIVEN BY THE SIGNER TO VOTE AT
SAID MEETING OR ANY ADJOURNMENTS THEREOF.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY. JOINT OWNERS SHOULD EACH
SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH.
-------------------------------------------------------
-------------------------------------------------------
Signature(s) Date
<PAGE>
EXHIBIT 99.(d)
FIRST CHICAGO CORPORATION
INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS, OCTOBER 20, 1995
TO: THE FIRST NATIONAL BANK OF CHICAGO, TRUSTEE FOR THE SAVINGS INCENTIVE
PLAN.
THE UNDERSIGNED HEREBY INSTRUCTS THE TRUSTEE TO VOTE, IN PERSON OR BY PROXY,
THE SHARES OF THE COMMON STOCK OF FIRST CHICAGO CORPORATION HELD BY IT AND
CREDITED TO MY ACCOUNT IN THE PLAN AT THE SPECIAL MEETING OF STOCKHOLDERS TO
BE HELD ON OCTOBER 20, 1995, AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF,
AS SPECIFIED BELOW ON THE MATTER LISTED AND MORE FULLY DESCRIBED IN THE NOTICE
OF SPECIAL MEETING AND JOINT PROXY STATEMENT-PROSPECTUS OF SAID MEETING,
RECEIPT OF WHICH IS ACKNOWLEDGED.
THESE INSTRUCTIONS WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED HEREIN BY
THE UNDERSIGNED PLAN PARTICIPANT. IF NO DIRECTION IS GIVEN, THESE INSTRUCTIONS
WILL BE VOTED FOR THE PROPOSAL DESCRIBED ON THE REVERSE SIDE OF THIS CARD.
SPECIFIC CHOICES MAY BE MADE ON THE REVERSE SIDE OF THIS PROXY.
PLEASE DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED
BUSINESS REPLY ENVELOPE BY OCTOBER 16, 1995. THE TRUSTEE WILL VOTE STOCK FOR
WHICH IT HAS NOT RECEIVED TIMELY VOTING INSTRUCTIONS PROPORTIONATELY IN THE
SAME MANNER AS THE TRUSTEE VOTES THE STOCK FOR WHICH IT HAS RECEIVED SUCH
INSTRUCTIONS.
SEE
REVERSE
SIDE
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE>
X PLEASE MARK YOUR 3630
VOTES AS IN THIS
EXAMPLE.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE FOLLOWING
PROPOSAL:
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
[_] [_] [_]
1. Approval and adoption of an Agreement and Plan of Merger, dated as of July
11, 1995, by and between First Chicago Corporation, a Delaware corporation
("First Chicago"), and NBD Bancorp, Inc., a Delaware corporation ("NBD"),
and the consummation of the transactions contemplated thereby, pursuant to
which First Chicago will be merged with and into NBD upon the terms and
subject to the conditions set forth in the Merger Agreement, as are more
fully described in the enclosed Joint Proxy Statement-Prospectus.
THESE INSTRUCTIONS WILL BE VOTED FOR THE PROPOSAL UNLESS INSTRUCTIONS TO THE
CONTRARY ARE INDICATED. PLEASE NOTE THAT ABSTAINING FROM THE VOTE ON THE
PROPOSAL WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSAL.
THE SIGNER HEREBY REVOKES ALL INSTRUCTIONS HERETOFORE GIVEN BY THE SIGNER TO
VOTE AT SAID MEETING OR ANY ADJOURNMENTS THEREOF. PLEASE SIGN EXACTLY AS NAME
APPEARS HEREON.
-------------------------------------------------------------------
Signature(s) Date
