<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 33-65431
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 1, 1996)
$150,000,000
FIRST CHICAGO NBD CORPORATION
6 1/8% SUBORDINATED NOTES DUE FEBRUARY 15, 2006
The Notes will mature on February 15, 2006 and may not be redeemed prior to
their stated maturity. Interest on the Notes is payable semiannually on
February 15 and August 15 of each year, beginning August 15, 1996.
The Notes will be unsecured and will be subordinate to Senior Indebtedness
and General Obligations of the Company. Payment of principal of the Notes may
be accelerated only in the case of the bankruptcy or reorganization of the
Company. There is no right of acceleration in the case of a default in the
payment of interest on the Notes or in the performance of any other covenant
of the Company.
----------------
THESE SECURITIES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER
OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
<S> <C> <C> <C>
Per Note................................ 99.736% .650% 99.086%
Total................................... $149,604,000 $975,000 $148,629,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from February 21, 1996 to the date of
delivery.
(2) The Company has agreed to indemnify the Underwriters against and
contribute toward certain liabilities, including liabilities under
applicable securities laws.
(3) Before deducting expenses payable by the Company estimated to be $150,000.
----------------
The Notes are offered subject to receipt and acceptance by the Underwriters,
to prior sale and to the Underwriters' right to reject any order in whole or
in part and to withdraw, cancel or modify the offer without notice. It is
expected that delivery of the Notes in book-entry form only will be made
through the facilities of The Depository Trust Company on or about February
21, 1996.
The Company or one or more of its subsidiaries may from time to time
purchase or acquire a position in the Notes and may, at its option, hold or
resell such Notes. First Chicago Capital Markets, Inc., an indirect wholly
owned subsidiary of the Company, expects to offer and sell previously issued
Notes in the course of its business as a broker-dealer. First Chicago Capital
Markets, Inc. may act as principal or agent in such transactions. The
accompanying Prospectus and this Prospectus Supplement may be used by the
Company or any of its subsidiaries, including First Chicago Capital Markets,
Inc., in connection with such transactions. Such sales, if any, will be made
at varying prices related to prevailing market prices at the time of sale.
FIRST CHICAGO CAPITAL MARKETS, INC.
LEHMAN BROTHERS
SALOMON BROTHERS INC
The date of this Prospectus Supplement is February 13, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Securities
and Exchange Commission (the "Commission") pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") are
incorporated herein by reference:
(i) The Company's Current Reports on Form 8-K dated December 4, 1995,
December 8, 1995, January 16, 1996 and January 26, 1996.
The following documents heretofore filed by NBD Bancorp, Inc. ("NBD") (File
No. 1-7127) with the Commission pursuant to Section 13 of the Exchange Act are
incorporated herein by reference:
(i) NBD's Annual Report on Form 10-K for the fiscal year ended December 31,
1994;
(ii) NBD's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1995, June 30, 1995 and September 30, 1995;
(iii) NBD's Current Reports on Form 8-K dated July 19, 1995, July 21, 1995,
August 15, 1995, September 21, 1995, November 10, 1995, November 14,
1995 and December 1, 1995; and
(iv) NBD's Registration Statement on Form S-4 (Registration No. 33-62713).
The following documents heretofore filed by First Chicago Corporation
("First Chicago") (File No. 1-6052) with the Commission pursuant to Section 13
of the Exchange Act are incorporated herein by reference:
(1) First Chicago's Annual Report on Form 10-K for the year ended December
31, 1994;
(ii) First Chicago's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995, June 30, 1995 and September 30, 1995; and
(iii) 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, August 15, 1995, October 16, 1995, October 20, 1995, November
7, 1995, November 10, 1995, November 14, 1995 and December 1, 1995.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus Supplement and prior to
the termination of the offering of the Notes shall be deemed to be
incorporated by reference into this Prospectus Supplement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus
Supplement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus Supplement.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS SUPPLEMENT MAY OBTAIN WITHOUT
CHARGE, UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN, EXCEPT FOR THE EXHIBITS TO SUCH DOCUMENTS
(UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH
DOCUMENTS). REQUESTS SHOULD BE ADDRESSED TO FIRST CHICAGO NBD CORPORATION, ONE
FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670, ATTENTION: INVESTOR RELATIONS
(312) 732-4812.
S-2
<PAGE>
SELECTED FINANCIAL DATA
This selected financial data of the Company is qualified in its entirety by
the detailed information and financial statements incorporated herein by
reference. See "Incorporation of Certain Documents by Reference" in this
Prospectus Supplement.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------
1994 1993 1992 1991 1995 1994
-------- ------- ------- ------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
SUMMARY OF INCOME
Net interest income... $ 2,956 $ 2,784 $ 2,692 $ 2,418 $ 2,374 $ 2,200
Provision for credit
losses............... 276 390 653 606 300 180
Provision for assets
held for accelerated
disposition(1)....... -- -- 625 -- -- --
Noninterest income.... 2,393 2,769 2,018 1,703 1,936 1,771
Merger-related
charges.............. -- -- 76 -- -- --
Noninterest expense... 3,220 3,161 3,084 2,867 2,447 2,414
Income before
cumulative effect of
changes in accounting
principles........... 1,221 1,290 224 478 1,024 906
Net income............ 1,221 1,290 394 478 1,024 906
EARNINGS PER SHARE
Primary
Income before
cumulative effect
of changes in
accounting
principles......... $ 3.62 $ 3.91 $ 0.60 $ 1.56 $ 3.07 $ 2.68
Net income.......... 3.62 3.91 1.17 1.56 3.07 2.68
Fully Diluted
Income before
cumulative effect
of changes in
accounting
principles......... 3.58 3.79 0.60 1.55 3.03 2.65
Net income.......... 3.58 3.79 1.17 1.55 3.03 2.65
PERIOD-END BALANCES
Total assets.......... $112,763 $93,140 $90,011 $87,573 $124,056 $111,041
Long-term debt........ 7,246 5,250 4,175 3,822 8,445 7,203
Total stockholders'
equity............... 7,809 7,499 6,323 5,660 8,445 7,776
COMMON SHARE DATA
Dividends declared.... $ 1.23 $ 1.08 $ 1.04 $ 0.95 $ 0.99 $ 0.90
Book value, period-
end.................. 22.60 21.25 18.27 18.06 24.96 22.21
Market price, period-
end.................. 27 3/8 29 3/4 32 3/4 29 3/4 38 1/4 28 5/8
CAPITAL RATIOS (2)
Common equity-to-
assets ratio......... 6.8% 7.6% 6.5% 6.0% 6.8% 6.7%
Regulatory leverage
ratio................ 7.3 7.8 6.6 6.5 6.9 7.3
Risk-based capital
Tier 1 ratio........ 8.6 9.0 7.4 6.5 8.2 8.9
Total capital ratio. 13.0 13.6 11.3 9.8 12.4 13.2
</TABLE>
- --------
(1) Of the total provision, $491 million relates to loans and $134 million
relates to other real estate held for accelerated disposition.
(2) Net of investment in First Chicago Capital Markets, Inc.
S-3
<PAGE>
RECENT DEVELOPMENTS
PENDING ACQUISITION
On January 26, 1996, the Company announced the execution of a definitive
agreement with Barrington Bancorp, Inc. ("Barrington Bancorp") for the Company
to acquire all the outstanding shares of Barrington Bancorp for approximately
$17.1 million of the Company's common stock, or $25.85 per share.
The exchange ratio for the shares will be based on the average closing price
of the Company's common stock during a ten day period prior to the closing of
the transaction. Following the closing of the transaction, the Company expects
to repurchase the number of shares of its common stock equal to the number
issued for the acquisition. The acquisition will be accounted for as a
purchase.
Barrington Bancorp also has granted the Company an option to purchase up to
19.9% of Barrington Bancorp's currently issued and outstanding shares of
common stock upon the occurrence of certain events.
Barrington Bancorp, which has approximately $68 million in assets, is the
holding company for First Federal Savings Bank of Barrington (Barrington,
Illinois). The transaction, which is subject to the approval of Barrington
Bancorp's stockholders and various regulatory authorities, is expected to
close in mid-1996, at which time First Federal Savings Bank of Barrington will
merge into The First National Bank of Chicago.
RECENT FINANCIAL RESULTS
General
The Company reported fourth quarter 1995 net income of $126 million, or
$0.37 per common share on a fully diluted basis. Earnings for the quarter were
$318 million, or $0.96 per share, before merger-related charges and investment
securities losses. The operating return on common stockholders' equity was
15%.
For 1995, net income was $1.150 billion, or $3.41 per share. Before merger-
related charges and the fourth quarter investment securities losses, full-year
1995 net income was $1.341 billion, or $3.99 per share, representing a return
on common equity of 16.8%. Full-year 1994 net income was $1.221 billion, or
$3.58 per share. Return on common equity was 16.6% for 1994.
Net income was $315 million, or $0.93 per common share, in the 1994 fourth
quarter, and $357 million, or $1.06 per share, in the 1995 third quarter.
Noteworthy factors contributing to the 1995 full year and fourth quarter
results included the following:
. The merger-related charges were $267 million, including direct merger and
restructuring related charges totaling $225 million as well as the effect of
conforming several accounting practices between First Chicago and NBD, which
represent charges of $42 million.
. Investment securities losses were $19 million for the fourth quarter, or
$0.04 per share. As part of the Company's previously announced $25 billion
asset reduction goal, $1.5 billion of investment securities were sold during
the quarter. Since June 30, 1995, investment securities have been reduced by
approximately $4.2 billion. Other short-term assets targeted for reduction
decreased $2.2 billion from June 30, 1995 to year-end. In addition, the
Company reclassified all "held-to-maturity" investments as "available-for-
sale." At December 31, 1995, unrealized appreciation in the investment
securities portfolio totaled approximately $175 million.
. Managed credit card receivables increased 34% to $17.5 billion at December
31, 1995, compared with $13.1 billion at year-end 1994. A record 3.4 million
new credit card accounts were added during 1995. The total securitized
credit card portfolio was $7.9 billion at year-end 1995.
. Other loans, excluding credit card receivables, increased 14% from year-end
1994 to year-end 1995, principally reflecting increases in loans to middle
market and retail customers.
S-4
<PAGE>
. Trading profits were $48 million in the fourth quarter, up sharply from the
year-ago quarter, but down from 1995's third quarter. For the year, combined
trading profits were $210 million, substantially higher than the $86 million
recorded in 1994.
. Equity securities gains totaled $72 million in the fourth quarter, due
principally to an excellent market for initial public offerings. Equity
securities gains for 1995 totaled $253 million, largely from the venture
capital portfolio.
. Credit quality ratios remained superior at year-end 1995. Nonperforming
assets of $397 million represented 0.6% of loans and other real estate. The
allowance for credit losses as a percentage of nonperforming loans was 369%
at year-end. For the fourth quarter, the provision for credit losses
increased to $210 million, due primarily to significant growth in credit
card receivables and charge-offs.
. The Company's book value increased to $25.25 per common share at December
31, 1995, from $22.60 a year earlier and $24.96 at September 30.
Net Interest Income
Net interest income on a tax-equivalent basis was $864 million for the
fourth quarter. The net interest margin was 3.23%, and average earning assets
were $106.2 billion.
Adjusted for the effects of credit card securitization and the activities of
First Chicago Capital Markets, Inc., net interest margin was 3.93%, up from
3.92% a year earlier and 3.79% in the 1995 third quarter. For 1995, the
adjusted net interest margin was 3.89%, down from 4.02% in 1994. The adjusted
net interest margin has been relatively constant, reflecting the Company's
policy to maintain a neutral interest rate risk position.
Noninterest Income
Total noninterest income was $655 million for the fourth quarter and $2.591
billion for 1995.
Credit card fee revenues were $228 million for the quarter. When adjusted
for the impact of securitization and the change in the classification of
payments to United Airlines for the Mileage Plus program, these revenues
increased 22% from the year-ago quarter.
Market-driven revenues, which include trading profits and securities gains,
totaled $101 million, including a $19 million loss on the sale of investment
securities. Market-driven revenues were $88 million in the year-ago quarter
and $153 million in the 1995 third quarter. Combined trading profits were $48
million, up from $18 million in the year-ago quarter and down from $85 million
in the 1995 third quarter, which benefited from robust foreign exchange
activity.
Equity securities gains for the fourth quarter were $72 million, including
$69 million from the venture capital portfolio and $3 million related to
corporate finance activities. Equity securities gains were $71 million in the
year-ago quarter and $66 million in the third quarter of 1995.
Fiduciary and investment management fees increased to $114 million in the
fourth quarter, from $94 million in the fourth quarter of 1994 and $97 million
in the 1995 third quarter.
Noninterest Expense
Noninterest expense was $821 million in the fourth quarter before the $267
million of merger-related costs. Noninterest expense was $806 million in the
year-ago quarter and $827 million in the third quarter of 1995. The ratio of
total operating expenses to total revenues (net interest income and
noninterest income) was 54% for the fourth quarter and 55% for the full year.
In 1994, noninterest expense included Mileage Plus payments that now reduce
credit card fee revenue. Adjusted for this, merger-related costs and certain
special items in both years, 1995's noninterest expenses increased 4% over
1994.
S-5
<PAGE>
Credit Quality
The provision for credit losses was $210 million in the fourth quarter,
including $173 million for the consumer portfolios and $37 million for
commercial credits. This compares with a combined provision for credit losses
of $96 million in the fourth quarter of 1994 and $125 million in the third
quarter of 1995. For the year, the provision for credit losses was $510
million, compared with $276 million in 1994. A significant portion of the
increase in the provision was related to record growth in credit card
receivables during 1995 and increases in the charge-off rate on credit cards.
Nonperforming assets were $397 million at December 31, 1995, compared with
$351 million at year-end 1994 and $332 million at September 30, 1995.
Nonperforming assets were just 0.6% of loans and other real estate.
The Company's allowance for credit losses was $1.338 billion at December 31,
1995, representing 369% of nonperforming loans. Of the total allowance, $996
million was related to commercial exposure and $342 million to the consumer
portfolios. The allowance related to commercial exposure was 274% of
commercial nonperforming loans.
Net charge-offs in the fourth quarter were $107 million. Consumer net
charge-offs were $84 million, and commercial net charge-offs were $23 million.
For the full year, consumer net charge-offs were $252 million, primarily
related to credit cards, and commercial net charge-offs were $12 million.
The net charge-off rate for managed credit card receivables was 4.4% for the
fourth quarter, compared with 3.5% a year earlier and 3.9% in the third
quarter. For the year, the net charge-off rate for managed credit card
receivables was 4.0% compared with 3.5% in 1994.
Capital Management
The estimated Tier 1 risk-adjusted capital ratio was 7.8% at December 31,
1995, and the total risk-adjusted capital ratio was approximately 11.8%. Both
ratios remain significantly above the "well-capitalized" regulatory
guidelines.
In the fourth quarter, the Company announced a 9% increase in the quarterly
common stock dividend rate to $0.36 per share, which was paid January 1, 1996.
CERTAIN TERMS OF THE NOTES
The following description of the particular terms of the Notes supplements,
and to the extent inconsistent therewith replaces, the description of the
general terms and provisions of the Notes set forth in the accompanying
Prospectus, to which description reference is hereby made.
GENERAL
The Notes will be limited to $150,000,000 aggregate principal amount, will
mature on February 15, 2006, and will constitute a separate series of
Subordinated Notes for the purposes of the Subordinated Indenture between the
Company and The Chase Manhattan Bank (National Association) ("Chase" or the
"Trustee"). The Notes may not be redeemed prior to their stated maturity.
Interest at the annual rate set forth on the cover page of this Prospectus
Supplement will accrue from February 21, 1996. Interest will be payable
semiannually on February 15 and August 15 of each year, beginning August 15,
1996, to the person in whose name the Note (or any Predecessor Note, as
defined in the Subordinated Indenture) is registered at the close of business
on February 1 or August 1, as the case may be, next preceding such Interest
Payment Date. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
S-6
<PAGE>
The Notes initially will be represented by a global security (the "Global
Security") deposited with the Depository Trust Company ("DTC") and registered
in the name of a nominee of DTC, except as set forth below. The Notes will be
available for purchase in denominations of $1,000 (representing 1/150,000 of
the Global Security) and integral multiples thereof in book-entry form only.
Unless and until certificated Notes are issued under the limited circumstances
described below, no beneficial owner of a Note shall be entitled to receive a
definitive certificate representing a Note. So long as DTC or any successor
depositary (collectively, the "Depositary") or its nominee is the registered
owner of the Global Security, the Depositary, or such nominee, as the case may
be, will be considered to be the sole owner or holder of the Notes for all
purposes of the Subordinated Indenture. Unless and until it is exchanged in
whole or in part for the Notes represented thereby, the Global Security may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee to a successor
depositary or any nominee of such successor.
Principal of and interest on the Notes is payable at the office of Chase,
the Company's Paying Agent in The City of New York, presently located at
Institutional Trust Group Window, 1 Chase Manhattan Plaza, Floor 1-B, New
York, New York 10081, and at the principal office of The First National Bank
of Chicago, the principal Paying Agent, presently located at One First
National Plaza, Chicago, Illinois 60670. Payment of interest, other than at
maturity, may be made at the option of the Company by check mailed to the
address of the registered holder entitled thereto. So long as the Global
Security represents the Notes, such payments of interest and principal will be
made to the Depositary or its nominee. Payments to beneficial owners of the
Notes will be made through the Depositary or its nominee, as described below.
Neither the Company, the Trustee under the Subordinated Indenture, any Paying
Agent, nor the Note Registrar for the Notes will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Global Security for such
Notes or for maintaining, supervising or reviewing any records relating to
such beneficial interests.
BOOK ENTRY SYSTEM
DTC is a limited-purpose trust company organized under the laws of the State
of New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York UCC, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participating organizations (the "Participants")
and facilitate the clearance and settlement of securities transactions between
Participants through electronic book-entry changes in accounts of its
Participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and may include certain other
organizations (including the Underwriters). Indirect access to the DTC system
also is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (the "Indirect Participants").
Beneficial owners of the Notes that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of,
or other interest in, the Notes may do so only through Participants and
Indirect Participants.
Payments with respect to any Global Security will be made by the Paying
Agent to DTC or any successor depositary, or its nominee. The Company expects
that any such Depositary, or its nominee, upon receipt of any payment of
principal of or interest on the Global Security will credit the accounts of
its Participants with payments in amounts proportionate to such Participants'
ownership interest in the Global Security. Beneficial owners of the Notes,
directly or indirectly, will receive distributions of principal and interest
in proportion to their beneficial ownership through the Participants.
Consequently, any payments to beneficial owners of the Notes will be subject
to the terms, conditions and time of payment required by the Depositary, the
Participants and Indirect Participants, as applicable. The Company expects
that such payments will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers registered in "street name". Such payments will be the
responsibility of such Participants and Indirect Participants.
S-7
<PAGE>
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among
Participants on whose behalf it acts with respect to the Notes and is required
to receive and transmit distributions of principal of and interest on the
Notes. Participants and Indirect Participants with which beneficial owners of
the Notes have accounts similarly are required to make book-entry transfers
and receive and transmit such payments on behalf of their respective
beneficial owners of the Notes. Accordingly, although beneficial owners of the
Notes will not possess certificated Notes, beneficial owners will receive
payments and will be able to transfer their interests.
Since it is anticipated that the only Noteholder will be the Depositary or
its nominee, beneficial owners of the Notes will not be recognized as
Noteholders under the Subordinated Indenture, unless certificated definitive
Notes are issued. So long as the Notes are represented by the Global Security,
beneficial owners of the Notes will only be permitted to exercise the rights
of Noteholders indirectly through the Participants who in turn will exercise
the rights of Noteholders through the Depositary.
If DTC is at any time unwilling, unable or ineligible to continue as
depositary and a successor depositary is not appointed by the Company within
90 days, the Company will issue certificated Notes in definitive form in
exchange for the Global Security. In addition, the Company may at any time
determine not to have the Notes represented by the Global Security and, in
such event, will issue certificated Notes in definitive form in exchange for
the Global Security. In either instance, an owner of a beneficial interest in
the Global Security will be entitled to physical delivery of certificated
Notes in definitive form equal in principal amount to such beneficial interest
and to have such certificated Notes registered in its name. Certificated Notes
so issued in definitive form will be issued in denominations of $1,000 and
integral multiples thereof and will be issued in registered form only, without
coupons.
SAME-DAY FUNDS SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds.
Secondary trading in long-term notes of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, the Notes will trade
in the Depositary's Same-Day Funds Settlement System until maturity, and
secondary market trading activity in the Notes will therefore be required by
the Depositary to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds
on trading activity in the Notes.
SUBORDINATION
The Notes will be unsecured and will be subordinate and junior in right of
payment to the Company's obligations to the holders of Senior Indebtedness and
General Obligations of the Company as described under "Description of Debt
Securities--Subordinated Securities--Subordination" in the Prospectus. At
September 30, 1995, the aggregate amount of Senior Indebtedness and General
Obligations of the Company was approximately $2.7 billion.
LIMITED RIGHT OF ACCELERATION
Payment of principal of the Notes may be accelerated only in the case of the
bankruptcy or reorganization of the Company. There is no right of acceleration
in the case of a default in the payment of interest on the Notes or in the
performance of any other covenant of the Company in the Subordinated Indenture
or in the Notes. See "Description of Debt Securities--Subordinated
Securities--Events of Default, Defaults, Waivers, etc." in the Prospectus.
REGARDING THE TRUSTEE
Chase has a principal corporate trust office at 4 Chase MetroTech Center,
Brooklyn, New York 11245. The Company has normal banking relationships with
Chase.
S-8
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below and
each of the Underwriters has severally agreed to purchase, the principal
amount of Notes set forth opposite its name.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS OF NOTES
------------ ----------------
<S> <C>
First Chicago Capital Markets, Inc...................... $ 50,000,000
Lehman Brothers Inc..................................... 50,000,000
Salomon Brothers Inc.................................... 50,000,000
------------
Total............................................. $150,000,000
============
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all the Notes if
any Notes are purchased. In the event of default by any Underwriter, the
Underwriting Agreement provides that, in certain circumstances, purchase
commitments of nondefaulting Underwriters may be increased or the Underwriting
Agreement may be terminated. The Company has been advised by the several
Underwriters that they propose initially to offer the Notes to the public at
the public offering price set forth on the cover page of this Prospectus
Supplement, and to certain dealers at such price less a concession not in
excess of .40% of the principal amount of the Notes. Underwriters may allow
and such dealers may reallow a concession not in excess of .25% of such
principal amount. After the initial public offering, the public offering price
and such concessions may be changed.
The Underwriting Agreement provides that the Company will indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, or contribute to payments the
Underwriters may be required to make in respect thereof.
Certain of the Underwriters and their associates may be customers of, engage
in transactions with, and perform services for, the Company and its
subsidiaries in the ordinary course of business.
The Company has been advised by the Underwriters that one or more of them
may make a market in the Notes; however, the Company cannot provide any
assurance that a secondary market for the Notes will develop.
First Chicago Capital Markets, Inc. ("FCCM") is an indirect wholly owned
subsidiary of the Company. The participation of FCCM in the offer and sale of
the Notes will comply with the requirements of Schedule E of the By-laws of
the National Association of Securities Dealers, Inc. (the "NASD") regarding
the offer and sale of securities of an affiliate. No NASD members
participating in offers and sales of securities will execute a transaction in
the Notes in a discretionary account without the prior specific written
approval of the member's customer.
This Prospectus Supplement may be used by FCCM in connection with offers and
sales related to secondary market transactions in the Notes. FCCM, to the
extent permitted by law, may act as principal or agent in such transactions.
Such sales will be made at prices related to prevailing market prices at the
time of sale.
LEGAL OPINIONS
The validity of the Notes will be passed upon for the Company by Sherman I.
Goldberg, Esq., Executive Vice President, Secretary and General Counsel of the
Company, and for the Underwriters by Cravath, Swaine & Moore, 825 Eighth
Avenue, New York, New York 10019. Cravath, Swaine & Moore has represented and
continues to represent the Company from time to time in other matters. As of
December 31, 1995, Sherman I. Goldberg was the record and beneficial owner of
149,572 shares of Common Stock of the Company and held options to purchase
252,713 shares of Common Stock of the Company.
S-9
<PAGE>
EXPERTS
The consolidated financial statements of NBD incorporated in this Prospectus
Supplement 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.
The supplemental consolidated financial statements of the Company appearing
in the Current Report on Form 8-K dated December 4, 1995 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.
S-10
<PAGE>
PROSPECTUS
FIRST CHICAGO NBD CORPORATION
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
FOREIGN CURRENCY WARRANTS, STOCK-INDEX WARRANTS AND OTHER WARRANTS
PREFERRED STOCK, DEPOSITARY SHARES AND PREFERRED STOCK WARRANTS
COMMON STOCK WARRANTS
First Chicago NBD Corporation (the "Company") may issue from time to time,
together or separately, (i) in one or more series, its unsecured debt
securities ("Debt Securities"), which may be either senior (the "Senior
Securities") or subordinated (the "Subordinated Securities") in priority of
payment, both of which may be convertible or exchangeable into common stock,
par value $1.00 per share, of the Company ("Common Stock"), preferred stock of
the Company ("Preferred Stock"), other Debt Securities, Debt Warrants, Common
Stock Warrants, Preferred Stock Warrants or Depositary Shares (each as defined
herein); (ii) warrants ("Debt Warrants") to purchase Debt Securities; (iii)
options, warrants or other rights relating to the exchange of certain
currencies ("Currency Warrants"); (iv) options, warrants or other rights
entitling the holder to receive an amount in cash determined by reference to
increases ("Stock-Index Call Warrants") and decreases ("Stock-Index Put
Warrants" and, collectively with Stock-Index Call Warrants, being referred to
herein as the "Stock-Index Warrants") in the level of a specified stock-index
which may be based on one or more U.S. or foreign stocks or a combination
thereof; (v) options, warrants or other rights relating to other items or
indices ("Other Warrants"); (vi) shares of Preferred Stock which may be
convertible into shares of Common Stock or exchangeable for Debt Securities;
(vii) shares of Preferred Stock represented by depositary shares ("Depositary
Shares"); (viii) warrants to purchase shares of Preferred Stock ("Preferred
Stock Warrants"); and (ix) warrants to purchase shares of Common Stock
("Common Stock Warrants"), in amounts, at prices and on terms to be determined
at the time of the offering. The Debt Warrants, Currency Warrants, Stock-Index
Warrants, Other Warrants, Preferred Stock Warrants and Common Stock Warrants
are collectively referred to herein as the "Warrants"; and the Debt
Securities, Warrants, shares of Preferred Stock and Depositary Shares are
collectively referred to herein as the "Securities".
The Company may issue Securities for proceeds up to an aggregate of
$2,000,000,000, or the equivalent thereof if any of the Securities are
denominated in a foreign currency or a foreign currency unit, including the
European Currency Unit ("ECU"). The Securities of each series will be offered
on terms determined at the time of sale. The Securities may be sold for U.S.
dollars, foreign currencies or foreign currency units, and the principal of,
and any interest on, the Debt Securities may be payable in U.S. dollars,
foreign currencies or foreign currency units.
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Subordinated Securities will be
unsecured and subordinated as described under "Subordinated Securities".
Unless otherwise specified in the Prospectus Supplement relating to
Subordinated Securities, payment of the principal of Subordinated Securities
may be accelerated only in the case of certain events involving the bankruptcy
or insolvency of the Company, and no right of acceleration will exist in the
case of default in the payment of principal or interest or in the performance
of any covenant.
When a particular series of Securities, in respect of which this Prospectus
is being delivered, is offered, a supplement to this Prospectus (the
"Prospectus Supplement") setting forth certain terms of the offered Securities
will be delivered together with this Prospectus. The applicable Prospectus
Supplement, among other things and where applicable, will include: (i) with
regard to Debt Securities, the specific designation, priority, aggregate
principal amount, currency or currency unit, rate (or method of calculation)
and time of payment of any interest, authorized denominations, maturity,
offering price, place or places of payment, redemption terms, terms of any
repayment at the option of the holder, special provisions relating to Debt
Securities in bearer form, terms for sinking fund payments, terms for
conversion or exchange into other securities, provisions regarding original
issue discount securities and other terms of such Debt Securities; (ii) with
regard to Warrants, where applicable, the duration, aggregate amount, offering
price, exercise price, and detachability; (iii) with regard to Debt Warrants,
Preferred Stock Warrants and Common Stock Warrants, the applicable type and
amount of Securities covered thereby; (iv) with regard to Stock-Index Warrants
or Other Warrants, the applicable securities index or other items or indices
with respect to which such warrants shall apply and the method of determining
the cash value payable in connection with the exercise of such warrants; (v)
with regard to Currency Warrants, the currency to which U.S. Dollars will be
compared, the method of determining the cash value payable in connection with
the exercise of such Currency Warrants, the manner in which such Currency
Warrants may be exercised and any restrictions on exercise of such Currency
Warrants; (vi) with regard to Preferred Stock, the specific number of shares,
title, stated value and liquidation preference of each share, issuance price,
dividend rate or method of calculation, dividend periods, dividend payment
dates, any redemption or sinking fund provisions, any conversion or exchange
provisions, whether fractional interests in shares of Preferred Stock will be
offered through depositary arrangements and other specific terms of each
series of Preferred Stock; and (vii) in the case of Depositary Shares, the
fraction of a share of Preferred Stock which each such Depositary Share will
represent.
The Prospectus Supplement will also contain information, where applicable,
about certain U.S. federal income tax considerations relating to, and any
listing on a securities exchange of, the Securities covered by the Prospectus
Supplement.
The Securities may be sold by the Company directly, through agents
designated from time to time, through underwriting syndicates led by one or
more managing underwriters or through one or more underwriters acting alone.
If any agent of the Company, or any underwriter, is involved in the sale of
the Securities, the name of such agent or underwriter, the principal or stated
amount to be purchased by it, any applicable commissions or discounts and the
net proceeds to the Company from such sale will be set forth in, or may be
calculated from, the Prospectus Supplement. The aggregate net proceeds to the
Company from the sale of all the Securities will be the public offering or
purchase price of the Securities sold less the aggregate of such commissions
and discounts and other expenses of issuance and distribution. An affiliate of
the Company may from time to time act as an agent or underwriter in connection
with the sale of Securities to the extent permitted by applicable law. See
"Plan of Distribution".
This Prospectus and applicable Prospectus Supplement may be used by First
Chicago Capital Markets, Inc. ("FCCM"), a wholly owned subsidiary of the
Company, in connection with offers and sales related to secondary market
transactions in the Securities to the extent permitted by applicable law. FCCM
may act as principal or agent in such transactions. Such sales will be made at
prices related to the prevailing market prices at the time of sale.
THESE SECURITIES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER
OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE
FUND OR ANY OTHER GOVERNMENTAL AGENCY.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
The date of this Prospectus is February 1, 1996.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND THE PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING MADE
HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANOTHER PERSON.
THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Information, as of particular dates, concerning
directors and executive officers, their compensation, options granted to them,
the principal holders of securities of the Company and any material interest
of such persons in transactions with the Company is disclosed in proxy
statements distributed to stockholders of the Company and filed with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the Public Reference Room of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and the Commission's Regional
Offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
Seven World Trade Center (13th Floor), New York, New York 10048. Copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. In addition, such reports, proxy statements and other material
concerning the Company can be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York; the Chicago Stock Exchange, 440
South LaSalle Street, Chicago, Illinois; and the Pacific Stock Exchange, 301
Pine Street, San Francisco, California.
The Company has filed with the Commission a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities being offered by this Prospectus. This Prospectus does not contain
all the information set forth in the Registration Statement, certain portions
of which have been omitted as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the
Securities, reference is made to the Registration Statement, including the
exhibits thereto. The Registration Statement may be inspected by anyone
without charge at the principal office of the Commission in Washington, D.C.
and copies of all or any part of it may be obtained from the Commission upon
payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to Section 13 of the Exchange Act are incorporated herein by
reference:
(i) The Company's Current Reports on Form 8-K dated December 4, 1995,
December 8, 1995, January 16, 1996 and January 26, 1996.
The following documents heretofore filed by NBD Bancorp, Inc. ("NBD") (File
No. 1-7127) with the Commission pursuant to Section 13 of the Exchange Act are
incorporated herein by reference:
(i) NBD's Annual Report on Form 10-K for the fiscal year ended December
31, 1994;
(ii) NBD's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995, June 30, 1995 and September 30, 1995;
(iii) NBD's Current Reports on Form 8-K dated July 19, 1995, July 21,
1995, August 15, 1995, September 21, 1995, November 10, 1995, November 14,
1995 and December 1, 1995;
(iv) NBD's Registration Statement on Form S-4 (Registration No. 33-
62713); and
2
<PAGE>
(v) 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.
The following documents heretofore filed by First Chicago Corporation
("First Chicago") (File No. 1-6052) with the Commission pursuant to Section 13
of the Exchange Act are incorporated herein by reference:
(i) First Chicago's Annual Report on Form 10-K for the year ended
December 31, 1994;
(ii) First Chicago's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995, June 30, 1995 and September 30, 1995; and
(iii) 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,
August 15, 1995, October 16, 1995, October 20, 1995, November 7, 1995,
November 10, 1995, November 14, 1995 and December 1, 1995.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN WITHOUT CHARGE,
UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN, EXCEPT FOR THE EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS).
REQUESTS SHOULD BE ADDRESSED TO FIRST CHICAGO NBD CORPORATION, ONE FIRST
NATIONAL PLAZA, CHICAGO, ILLINOIS 60670, ATTENTION: INVESTOR RELATIONS (312)
732-4812.
FIRST CHICAGO NBD CORPORATION
GENERAL
The Company is a multi-bank holding company registered under the Bank
Holding Company Act, as amended ("the "BHC Act"), which was incorporated under
the laws of the State of Delaware in 1972. The Company is the surviving
corporation resulting from the merger (the "Merger"), effective December 1,
1995, of First Chicago, a Delaware corporation and registered bank holding
company, with and into NBD, a Delaware corporation and registered bank holding
company. The Company's lead bank is The First National Bank of Chicago
("FNBC"). The Company also is the parent corporation of NBD Bank, Detroit,
Michigan ("NBD Michigan"), American National Bank and Trust Company of Chicago
("ANB"), FCC National Bank ("FCCNB") and NBD Bank, N.A., Indianapolis, Indiana
("NBD Indiana"). FCCNB is a Delaware-based national banking association
primarily engaged in the issuance of VISA and MasterCard credit cards.
Through its banking subsidiaries, the Company provides domestic retail
banking, worldwide corporate and institutional banking, and trust and
investment management services. In addition, the Company, directly or
indirectly, owns the stock of various nonbank companies engaged in businesses
related to banking and finance, including venture capital, leasing, investment
management, mortgage lending and servicing, insurance, community development,
discount brokerage and data processing activities.
In addition to its equity investment in subsidiaries, the Company, directly
or indirectly, raises funds principally to finance the operations of its
nonbank subsidiaries. A substantial portion of the Company'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.
Because the Company is a holding company, its rights and the rights of its
creditors, including the holders of the Debt Securities, to participate in the
assets of any subsidiary upon the subsidiary's liquidation or recapitalization
would be subject to the prior claims of such subsidiary's creditors except to
the extent that the Company may itself be a creditor with recognized claims
against the subsidiary.
3
<PAGE>
The Company's executive offices are located at One First National Plaza,
Chicago, Illinois 60670, and the telephone number is (312) 732-4000.
SUPERVISION AND REGULATION
The operations of financial institutions may be affected by legislative
changes and by the policies of various regulatory authorities. In particular,
bank holding companies and their subsidiaries are affected by the credit
policies of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") through its regulation of the national supply of bank credit.
Among the instruments of monetary policy used by the Federal Reserve Board to
implement its objectives are open market operations in U.S. Government
securities, changes in the discount rate on bank borrowings and changes in
reserve requirements on bank deposits.
Bank holding companies, banks and financial institutions generally are
highly regulated, with numerous federal and state laws and regulations
governing their activities. As a bank holding company, the Company is subject
to regulation under the BHC Act and is subject to examination and supervision
by the Federal Reserve Board. Under the BHC Act, the Company is prohibited,
with certain exceptions, from acquiring or retaining direct or indirect
ownership or control of voting shares of any company which is not a bank or
bank holding company, and from engaging in activities other than those of
banking or of managing or controlling banks, other than subsidiary companies
and activities which the Federal Reserve Board determines to be so closely
related to the business of banking as to be a proper incident thereto. The
acquisition of direct or indirect ownership or control of a bank or bank
holding company by the Company is also subject to certain restrictions under
the BHC Act and applicable state laws.
The Company is a legal entity separate and distinct from the Company's
banking subsidiaries (the "Banks") and the Company's other affiliates.
Investors should be aware of the various legal limitations on the extent to
which the Banks can finance or otherwise supply funds to the Company or
various of its affiliates. In particular, the Banks are subject to certain
restrictions imposed by the laws of the United States on any extensions of
credit to the Company or, with certain exceptions, other affiliates, on
investments in stock or other securities thereof, on the taking of such
securities as collateral for loans, and on the terms of transactions between
the Banks and other subsidiaries. The Company and its subsidiaries, including
the Banks, are also subject to certain restrictions with respect to engaging
in the issuance, flotation, underwriting, public sale or distribution of
securities.
Various federal and state laws govern the operations of the Banks. The
national bank subsidiaries of the Company, including FNBC, ANB, FCCNB and NBD
Indiana, are supervised, examined and regulated by the Office of the
Comptroller of the Currency (the "Comptroller") under the National Bank Act,
as amended. Since national banks are also members of the Federal Reserve
System and their deposits are insured by the Federal Deposit Insurance
Corporation (the "FDIC"), they are also subject to the applicable provisions
of the Federal Reserve Act, as amended, and the Federal Deposit Insurance Act,
as amended, and, in certain respects, to state laws applicable to financial
institutions. NBD Michigan and the other state-chartered bank subsidiaries of
the Company are, in general, subject to the same or similar restrictions and
regulations, but with more extensive regulation and examination by state
banking departments, the Federal Reserve Board for state banks which are
members of the Federal Reserve System, and the FDIC for state banks which are
not members of the Federal Reserve System. In addition, the Banks' operations
in other countries are subject to various restrictions imposed by the laws of
such countries.
Federal law prohibits the Company and certain of its affiliates from
borrowing from the Banks without the prior approval of the respective Bank's
Board of Directors and unless such loans are secured by U.S. Treasury or other
specified obligations. Further, such secured loans and investments by any of
the Banks are limited in amount as to the Company or any other such affiliate
to 10% of the respective Bank's capital and surplus and as to the Company and
all such affiliates to an aggregate 20% of the respective Bank's capital and
surplus. Under Federal Reserve Board policy, the Company is expected to act as
a source of financial strength to each Bank and to commit resources to support
such Bank in circumstances where it might not do so absent such policy. In
addition, any capital loans by the Company to any of the Banks would be
subordinate in right of payment to deposits and to certain other indebtedness
of such Bank.
4
<PAGE>
Additionally, there are certain federal and state regulatory limitations on
the payment of dividends to the Company by the Banks. Dividend payments by
national banks are limited to the lesser of (i) the level of "undivided
profits then on hand" less the amount of bad debts, as defined, in excess of
the allowance for credit losses and (ii) absent regulatory approval, an amount
not in excess of "net profits" for the current year combined with "retained
net profits" for the preceding two years. As of January 1, 1995, the Banks
could have declared additional dividends of approximately $1.553 billion
without the approval of banking regulatory agencies. The payment of dividends
by any Bank may also be affected by other factors, such as the maintenance of
adequate capital for such Bank. Bank regulatory agencies have the authority to
prohibit the banking organizations they supervise from paying dividends if, in
the bank regulator's opinion, the payment of dividends would, in light of the
financial condition of such bank, constitute an unsafe or unsound practice.
As a bank holding company, the Company and its subsidiaries are prohibited
from engaging in certain tie-in arrangements in connection with extensions of
credit or providing property or services.
CAPITAL ADEQUACY
The Federal Reserve Board has adopted risk-based capital guidelines for bank
holding companies that require bank holding companies to maintain a minimum
ratio of total capital to risk-weighted assets (including certain off-balance-
sheet items, such as standby letters of credit) of 8%. At least half of total
capital must be composed of common stockholders' equity, noncumulative
perpetual preferred stock and a limited amount of cumulative perpetual
preferred stock, less disallowed intangibles and other adjustments (primarily
goodwill) ("Tier I capital"). The remainder ("Tier II capital") may consist of
subordinated debt, other preferred stock, certain other instruments and a
limited amount of loan loss reserves. At September 30, 1995, the Company's
consolidated Tier I capital and total capital ratios were 8.2% and 12.4%,
respectively.
In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum ratio of Tier I capital to total average assets (the "leverage ratio")
of 3% for bank holding companies that meet certain specified criteria,
including those having the highest regulatory rating. All other bank holding
companies generally are required to maintain a leverage ratio of at least 3%
plus an additional cushion of 100 to 200 basis points. The Company's leverage
ratio at September 30, 1995, was 6.9%. The guidelines also provide that bank
holding companies experiencing internal growth or making acquisitions will be
expected to maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets.
Furthermore, the Federal Reserve Board has indicated that it will consider a
"tangible Tier I capital leverage ratio" (deducting all intangibles) and other
indicia of capital strength in evaluating proposals for expansion or new
activities.
Each of the Banks is subject to similar risk-based and leverage capital
requirements adopted by its applicable federal banking agency. Each of the
Company's Banks was in compliance with the applicable minimum capital
requirements as of September 30, 1995. Neither the Company nor any of the
Banks has been advised by any federal banking agency of any specific minimum
leverage ratio requirement applicable to it.
Failure to meet capital requirements could subject a bank to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business, which are described below
under "FDICIA and FIRREA".
Bank regulators continue to indicate their desire to raise capital
requirements applicable to banking organizations beyond their current levels.
However, the management of the Company is unable to predict whether higher
capital requirements would be imposed and, if so, at what levels and on what
schedule.
FDICIA AND FIRREA
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
significantly expanded the regulatory and enforcement powers of federal
banking regulators, in particular the FDIC, and has important consequences for
the Company, the Banks and other depository institutions located in the United
States.
A major feature of FDICIA is the comprehensive directions it gives to
federal banking regulators to promptly direct or require the correction of
problems at inadequately capitalized banks in the manner that is least costly
to the federal deposit insurance funds. The degree of corrective regulatory
involvement in the operations
5
<PAGE>
and management of banks and their holding companies is, under FDICIA, largely
determined by the actual or anticipated capital positions of the subject
institution.
FDICIA established five tiers of capital measurement for regulatory purposes
ranging from "well capitalized" to "critically undercapitalized." Under
regulations adopted by the federal banking agencies, a depository institution
is well capitalized if it significantly exceeds the minimum level required by
regulation for each relevant capital measure, adequately capitalized if it
meets such measure, undercapitalized if it fails to meet any such measure,
significantly undercapitalized if it is significantly below such measure and
critically undercapitalized if its tangible equity is not greater than 2% of
total tangible assets. A depository institution may be deemed to be in a
capitalization category lower than is indicated by its actual capital position
if it receives an unsatisfactory examination rating. FDICIA requires banking
regulators to take increasingly strong corrective steps, based on the capital
tier of any subject bank, to cause such bank to achieve and maintain capital
adequacy. Even if a bank is adequately capitalized, however, the banking
regulators are authorized to apply corrective measures if the bank is
determined to be in an unsafe or unsound condition or engaging in an unsafe or
unsound activity.
Depending on the level of capital of an insured depository institution, the
banking regulatory agencies' corrective powers can include: requiring a
capital restoration plan; placing limits on asset growth and restrictions on
activities; requiring the institution to reduce total assets; requiring the
institution to issue additional stock (including voting stock) or to be
acquired; placing restrictions on transactions with affiliates; restricting
the interest rate the institution may pay on deposits; ordering a new election
for the institution's board of directors; requiring that certain senior
executive officers or directors be dismissed; prohibiting the institution from
accepting deposits from correspondent banks; requiring the institution to
divest certain subsidiaries; prohibiting the payment of principal or interest
on subordinated debt; prohibiting the institution's parent bank holding
company from making capital distributions without prior regulatory approval;
and, ultimately, appointing a receiver for the institution.
If the insured depository institution is undercapitalized, the parent bank
holding company is required to guarantee that the institution will comply with
any capital restoration plan submitted to, and approved by, the appropriate
federal banking agency in an amount equal to the lesser of (i) 5% of the
institution's total assets at the time the institution became undercapitalized
or (ii) the amount which is necessary (or would have been necessary) to bring
the institution into compliance with all applicable capital standards as of
the time the institution fails to comply with the capital restoration plan. If
such parent bank holding company guarantee is not obtained, the capital
restoration plan may not be accepted by the banking regulators. As a result,
such institution would be subject to the more severe restrictions imposed on
significantly undercapitalized institutions. Further, the failure of such a
depository institution to submit an acceptable capital plan is grounds for the
appointment of a conservator or receiver.
FDICIA also contains a number of other provisions affecting depository
institutions, including additional reporting and independent auditing
requirements, the establishment of safety and soundness standards, the
changing of FDIC insurance premiums from flat amounts to the system of risk-
based assessments described below under "FDIC Insurance," a review of
accounting standards, and supplemental disclosures and limits on the ability
of all but well capitalized depository institutions to acquire brokered
deposits. The Riegle-Community Development and Regulatory Improvement Act of
1994, however, among other things, contains a number of specific provisions
easing the regulatory burden on banks and bank holding companies, including
some imposed by FDICIA, and making the bank regulatory system more efficient.
Federal banking regulators are taking actions to implement these provisions.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), among other things, provides generally that, upon the default of
any bank of a multi-unit holding company, the FDIC may assess an affiliated
insured depository institution for the estimated losses incurred by the FDIC.
Specifically, FIRREA provides that a depository institution insured by the
FDIC can be held liable for any loss incurred by, or reasonably expected to be
incurred ~by, the FDIC, in connection with (i) the default of a commonly
controlled FDIC-insured depository institution or (ii) any assistance provided
by the FDIC to a commonly controlled FDIC-insured depository institution in
danger of a default. "Default" is defined generally as the appointment of a~
conservator or receiver. "In danger of a default" is defined generally as the
existence of certain conditions
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indicating that a default is likely to occur in the absence of regulatory
assistance. All of the Banks are FDIC-insured depository institutions.
FDIC INSURANCE
The Banks are subject to FDIC deposit insurance assessments. Under the
FDIC's risk-based assessment system effective January 1, 1994, the assessment
rate is based on classification of a depository institution in one of nine
risk assessment categories. Such classification is based upon the
institution's capital level and upon certain supervisory evaluations of the
institution by its primary regulator. The assessment rate schedule, effective
January 1, 1996, creates a 0.27% spread in assessment rates, ranging from
0.27% per annum on the amount of domestic deposits for banks classified as
weakest by the FDIC down to the statutory annual minimum of $2,000 for banks
classified as strongest by the FDIC.
INTERSTATE BANKING AND BRANCHING
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Riegle-Neal Act") significantly revised prior laws applicable to interstate
acquisitions of banks and bank holding companies and the branching powers of
national banks. Prior to the Riegle-Neal Act, the Federal Reserve Board was
not permitted to approve an application to acquire shares of a bank located
outside the state in which the operations of the applicant's bank subsidiaries
were principally conducted unless the acquisition were specifically authorized
by a statute of the acquired bank's state. Effective September 29, 1995, the
Federal Reserve Board is authorized to approve an application of an adequately
capitalized and adequately managed bank holding company to acquire control of
a bank located in another state without regard to whether such transaction is
prohibited under the law of such state. The Federal Reserve Board may not,
however, approve such an application if, following the acquisition, the
applicant would control either (1) more than 10% of all insured depository
institution deposits in the United States or (2) under certain circumstances,
30% or more of all insured depository institution deposits in any state where
either the applicant or the acquired bank is located. The 30% limit on
aggregate deposits that may be controlled by an applicant can be adjusted by
the states on a non-discriminatory basis.
The Riegle-Neal Act also revises the rules applicable to mergers between
insured banks located in different states. Before passage of the Riegle-Neal
Act, such mergers generally were not authorized. Commencing June 1, 1997,
however, adequately capitalized and adequately managed insured banks in
different states may merge without regard to whether the merger is authorized
under the law of any state. States may elect to prohibit interstate bank
mergers or may elect to permit early interstate bank mergers by adopting,
prior to June 1, 1997, legislation that expressly so provides, and that
applies on equal terms to all out-of-state banks. The Riegle-Neal Act provides
that an interstate merger involving the acquisition of a branch (as
distinguished from an entire bank) or the de novo establishment of a national
bank branch in another state may be approved only if the law of the host state
expressly permits such action. An interstate merger may not be approved if,
following the merger, the resulting bank would control (1) more than 10% of
all insured depository institution deposits in the United States or (2) under
certain circumstances, 30% or more of all insured depository institution
deposits in any state where the resulting bank will be located. The 30% limit
on aggregate deposits that may be controlled by the resulting bank can be
adjusted by the states on a non-discriminatory basis. The laws of the host
state regarding community reinvestment, consumer protection, fair lending and
the establishment of intrastate branches will apply to any out-of-state branch
of a national bank unless preempted by federal law or the Comptroller
determines that application of such laws would have a discriminatory effect on
the national bank.
The Riegle-Neal Act contains a number of other provisions related to banks
and bank holding companies, including: authorization of interstate branching
by foreign banks; additional branch closing notice requirements for interstate
banks proposing to close a branch in a low or moderate income area; amendments
to the Community Reinvestment Act of 1977 to require separate written
evaluations of an insured depository institution
7
<PAGE>
for each state in which it maintains branches; a prohibition on interstate
banks maintaining out-of-state deposit production offices; and authorization
for a bank subsidiary of a bank holding company to receive deposits, renew
time deposits, close and service loans and receive payments on loans as agent
for a depository institution affiliate of such bank.
The extent to, and terms on, which full interstate branching and certain
other actions authorized under the Riegle-Neal Act are implemented will depend
on the actions of entities other than the Company and the Banks, including the
legislatures of the various states. Further developments by state and federal
authorities, including legislation, with respect to matters covered by the
Riegle-Neal Act reasonably can be anticipated to occur in the future. In
addition, there may be new, significant banking legislation introduced in the
current Congress related to bank holding companies and their powers; the
likelihood of passage and effect, if any, of such legislation on the Company
and the Banks cannot be predicted.
The Illinois Bank Holding Company Act (the "Illinois Act") permits
intrastate acquisitions throughout Illinois by Illinois-based bank holding
companies, such as the Company. The approval of the Illinois Commissioner of
Banks and Trust Companies is required to complete such an intrastate
acquisition. Interstate and intrastate bank acquisitions by the Company are
subject to the approval of the Federal Reserve Board.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for the Company, which 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, are
set forth below for the periods indicated. Also set forth below are the ratios
of earnings to combined fixed charges and preferred stock dividends, which are
computed on the basis of the total enterprise by dividing earnings before
fixed charges and income taxes by fixed charges and preferred stock dividend
requirements for the periods indicated. Fixed charges consist principally of
interest expense on all long- and short-term borrowings, excluding or
including interest on deposits as indicated. The ratios below are computed on
a combined basis for both First Chicago and NBD.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------- -------------
1994 1993 1992 1991 1990 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding interest expense on
deposits......................... 2.2x 3.0x 1.3x 1.6x 1.6x 1.9x
Including interest expense on
deposits......................... 1.6x 1.8x 1.1x 1.1x 1.1x 1.4x
Earnings to Combined Fixed Charges
and Preferred Dividends:
Excluding interest expense on
deposits......................... 2.1x(1) 2.7x 1.2x 1.5x 1.5x 1.8x
Including interest expense on
deposits......................... 1.5x(1) 1.7x 1.1x 1.1x 1.1x 1.4x
</TABLE>
- --------
(1) For 1994, preferred dividends include a $4.5 million premium related to
the redemption of the 10% Cumulative Preferred Stock, Series D of First
Chicago.
USE OF PROCEEDS
Unless otherwise provided in the Prospectus Supplement, the Company will use
the net proceeds from the sale of the Securities for general corporate
purposes, including the funding of investments in, or extensions of credit to,
the Company's subsidiaries. Pending the uses described above, the Company may
temporarily invest the net proceeds from the sale of the Securities in various
short-term securities or apply the net proceeds to
8
<PAGE>
reduce short-term indebtedness. Based upon the historic and anticipated future
growth of the Company and the financial needs of its subsidiaries, the Company
anticipates that it will, on a recurrent basis, engage in additional
financings in character and amount to be determined.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will constitute either Senior Securities or Subordinated
Securities. The Senior Securities will be issued under an Indenture dated as
of December 1, 1995 (the "Senior Indentures"), between the Company and Marine
Midland Bank, as Trustee ("Marine Midland"). The Subordinated Securities will
be issued under an Indenture dated as of December 1, 1995 (the "Subordinated
Indenture"), between the Company and The Chase Manhattan Bank (National
Association), as Trustee ("Chase"). The Senior Indenture and the Subordinated
Indenture are collectively referred to herein as the "Indentures". References
to the "Trustee" shall mean Marine Midland or Chase, as applicable. The
statements under this caption are brief summaries of certain provisions
contained in the Indentures, do not purport to be complete and are qualified
in their entirety by reference to the applicable Indenture, copies of which
are exhibits to the Registration Statement. Whenever defined terms are used
but not defined herein, such terms shall have the meanings ascribed to them in
the applicable Indenture, it being intended that such defined terms shall be
incorporated herein by reference.
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of any Debt Securities
and the extent, if any, to which such general provisions may apply to such
Debt Securities will be described in the Prospectus Supplement relating to
such Debt Securities.
None of the Indentures limits the amount of Debt Securities which may be
issued thereunder, and each Indenture provides that Debt Securities of any
series may be issued thereunder up to the aggregate principal amount which may
be authorized from time to time by the Company and may be denominated in any
currency or currency unit designated by the Company. Neither the Indentures
nor the Debt Securities will limit or otherwise restrict the amount of other
indebtedness which may be incurred or the other securities which may be issued
by the Company or any of its subsidiaries.
Debt Securities of a series may be issuable in registered form without
coupons ("Registered Securities"), in bearer form with or without coupons
attached ("Bearer Securities") or in the form of one or more global securities
in registered or bearer form (each a "Global Security"). Bearer Securities, if
any, will be offered only to non-United States persons and to offices located
outside the United States of certain United States financial institutions.
Reference is made to the Prospectus Supplement for a description of the
following terms, where applicable, of each series of Debt Securities in
respect of which this Prospectus is being delivered: (1) the title of such
Debt Securities; (2) the limit, if any, on the aggregate principal amount or
aggregate initial public offering price of such Debt Securities; (3) the
priority of payment of such Debt Securities; (4) the price or prices (which
may be expressed as a percentage of the aggregate principal amount thereof) at
which the Debt Securities will be issued; (5) the date or dates on which the
principal of the Debt Securities will be payable; (6) the rate or rates (which
may be fixed or variable) per annum at which such Debt Securities will bear
interest, if any, or the method of determining the same; (7) the date or dates
from which such interest, if any, on the Debt Securities will accrue, the date
or dates on which such interest, if any, will be payable, the date or dates on
which payment of such interest, if any, will commence and the Regular Record
Dates for such Interest Payment Dates; (8) the extent to which any of the Debt
Securities will be issuable in temporary or permanent global form, or the
manner in which any interest payable on a temporary or permanent global Debt
Security will be paid; (9) each office or agency where, subject to the terms
of the applicable Indenture, the Debt Securities may be presented for
registration of transfer or exchange; (10) the place or places where the
principal of (and premium, if any) and interest, if any,
9
<PAGE>
on the Debt Securities will be payable; (11) the date or dates, if any, after
which such Debt Securities may be redeemed or purchased in whole or in part,
at the option of the Company or mandatorily pursuant to any sinking, purchase
or analogous fund or may be required to be purchased or redeemed at the option
of the holder, and the redemption or repayment price or prices thereof; (12)
the denomination or denominations in which such Debt Securities are authorized
to be issued; (13) the currency, currencies or units (including ECU) based on
or related to currencies for which the Debt Securities may be purchased and
the currency, currencies or currency units (including ECU) in which the
principal of, premium, if any, and any interest on such Debt Securities may be
payable; (14) any index used to determine the amount of payments of principal
of, premium, if any, and interest on the Debt Securities; (15) whether any of
the Debt Securities are to be issuable as Bearer Securities and/or Registered
Securities, and if issuable as Bearer Securities, any limitations on issuance
of such Bearer Securities and any provisions regarding the transfer or
exchange of such Bearer Securities (including exchange for registered Debt
Securities of the same series); (16) the payment of any additional amounts
with respect to the Debt Securities; (17) whether any of the Debt Securities
will be issued as Original Issue Discount Securities (as defined below); (18)
information with respect to book-entry procedures, if any; (19) the terms, if
any, upon which the Debt Securities may be convertible into or exchanged for
Common Stock, Preferred Stock (which may be represented by Depositary Shares),
other Debt Securities, Debt Warrants, Common Stock Warrants or Preferred Stock
Warrants or any other securities of the Company and the terms and conditions
upon which such conversion or exchange will be effected, including the initial
conversion or exchange price or rate, the conversion or exchange period and
any other provision in addition to or in lieu of those described herein; (20)
any additional covenants or Events of Default not currently set forth in the
applicable Indenture; and (21) any other terms of such Debt Securities not
inconsistent with the provisions of the applicable Indenture.
If any of the Debt Securities are sold for one or more foreign currencies or
foreign currency units or if the principal of, premium, if any, or interest on
any series of Debt Securities is payable in one or more foreign currencies or
foreign currency units, the restrictions, elections, tax consequences,
specific terms and other information with respect to such issue of Debt
Securities and such currencies or currency units will be set forth in the
Prospectus Supplement relating thereto.
Debt Securities may be issued as original issue discount Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) ("Original Issue Discount Securities"), to be sold at a
substantial discount below the stated principal amount thereof due at the
stated maturity of such Debt Securities. There may not be any periodic
payments of interest on Original Issue Discount Securities as defined herein.
In the event of an acceleration of the maturity of any Original Issue Discount
Security, the amount payable to the holder of such Original Issue Discount
Security upon such acceleration will be determined in accordance with the
Prospectus Supplement, the terms of such security and the Indenture, but will
be an amount less than the amount payable at the maturity of the principal of
such Original Issue Discount Security. Federal income tax considerations with
respect to Original Issue Discount Securities will be set forth in the
Prospectus Supplement relating thereto.
REGISTRATION AND TRANSFER
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities will be issued only as Registered Securities. If Bearer Securities
are issued, the United States Federal income tax consequences and other
special considerations, procedures and limitations applicable to such Bearer
Securities will be described in the Prospectus Supplement relating thereto.
Debt Securities issued as Registered Securities will be without coupons.
Debt Securities issued as Bearer Securities shall have interest coupons
attached, unless issued as zero coupon securities.
Registered Securities (other than a Global Security) may be presented for
transfer (with the form of transfer endorsed thereon duly executed) or
exchanged for other Debt Securities of the same series at the office of the
Note Registrar specified according to the terms of the applicable Indenture.
The Company has agreed in each of the Indentures that, with respect to
Registered Securities having The City of New York as a place of payment,
10
<PAGE>
the Company will appoint a Note Registrar or Co-Note Registrar located in The
City of New York for such transfer or exchange. Such transfer or exchange
shall be made without service charge, but the Company may require payment of
any taxes or other governmental charges as described in the applicable
Indenture. Provisions relating to the exchange of Bearer Securities for other
Debt Securities of the same series (including, if applicable, Registered
Securities) will be described in the applicable Prospectus Supplement. In no
event, however, will Registered Securities be exchangeable for Bearer
Securities.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued in either
registered or bearer form and in either temporary or permanent form. Unless
and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Security may not be transferred
except as a whole by the Depositary for such Global Security to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by the Depositary or any nominee to a
successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities and certain limitations and restrictions relating to a series
of Bearer Securities in the form of one or more Global Securities, will be
described in the Prospectus Supplement relating to such series. The Company
anticipates that the following provisions will generally apply to depositary
arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depositary. Such accounts shall be designated by the
underwriters or agents with respect to such Debt Securities. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("participants") or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants).
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global
Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of any such Debt Securities of such series in definitive
form and will not be considered the owners or holders thereof under the
Indenture governing such Debt Securities.
Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. Neither the Company, the Trustee for such
Debt Securities, any Paying Agent, nor the Note Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
11
<PAGE>
Subject to certain restrictions relating to Bearer Securities, the Company
expects that the Depositary for a series of Debt Securities or its nominee,
upon receipt of any payment of principal, premium or interest in respect of a
permanent Global Security representing any of such Debt Securities will credit
participants' accounts immediately with payments in amounts proportionate to
their respective beneficial interests in the principal amount of such Global
Security for such Debt Securities as shown on the records of such Depositary
or its nominee. The Company also expects that payments by participants to
owners of beneficial interests in such Global Security held through such
participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name". Such payments will be
the responsibility of such participants. With respect to owners of beneficial
interests in a temporary Global Security representing Bearer Securities,
receipt by such beneficial owners of payments of principal, premium or
interest in respect thereof will be subject to additional restrictions.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is
not appointed by the Company within 90 days, the Company will issue individual
Debt Securities of such series in definitive form in exchange for the Global
Security representing such series of Debt Securities. In addition, the Company
may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Debt Securities,
determine not to have any Debt Securities of a series represented by one or
more Global Securities and, in such event, will issue individual Debt
Securities of such series in definitive form in exchange for the Global
Security or Securities representing such series of Debt Securities. Further,
if the Company so specifies with respect to the Debt Securities of a series,
an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company, Trustee and
the Depositary for such Global Security, receive Debt Securities of such
series in definitive form in exchange for such beneficial interests, subject
to any limitations described in the Prospectus Supplement relating to such
Debt Securities. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in definitive form of
Debt Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name (if the Debt Securities of such series are issuable as
Registered Securities). Debt Securities of such series so issued in definitive
form will be issued (a) as Registered Securities in denominations, unless
otherwise specified by the Company, of $1,000 and integral multiples thereof
if the Debt Securities of such series are issuable as Registered Securities,
(b) as Bearer Securities in the denomination, unless otherwise specified by
the Company, of $5,000 if the Debt Securities of such series are issuable as
Bearer Securities or (c) as either Registered or Bearer Securities, if the
Debt Securities of such series are issuable in either form. Certain
restrictions may apply, however, on the issuance of a Bearer Security in
definitive form in exchange for an interest in a Global Security.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, premium, if any, and any interest on Registered Securities
will be made at the office of such Paying Agent or Paying Agents as the
Company may designate from time to time, except that, at the option of the
Company, payment of any interest may be made (i) by check mailed to the
address of the person entitled thereto as such address shall appear in the
applicable Note Register or (ii) by wire transfer to an account maintained by
the person entitled thereto as specified in the applicable Note Register.
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
any installment of interest on Registered Securities will be made to the
person in whose name such Debt Security is registered at the close of business
on the Regular Record Date for such payment.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, premium, if any, and any interest on Bearer Securities will
be payable, subject to any applicable laws and regulations, at the offices of
such Paying Agents outside the United States as the Company may designate from
time to time, at the option of the Holder, by check or by transfer to an
account maintained by the payee with a bank located outside the United States.
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Securities will be made only against surrender of the
coupon relating to such Interest Payment Date. No
12
<PAGE>
payment with respect to any Bearer Security will be made at any office or
agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank
located in the United States.
LEVERAGED AND OTHER TRANSACTIONS
Each Indenture and the Debt Securities do not contain, among other things,
provisions which would afford holders of the Debt Securities protection in the
event of a highly leveraged or other transaction involving the Company which
could adversely affect the holders of Debt Securities.
MODIFICATION OF THE INDENTURE; WAIVER OF COVENANTS
Each Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Debt
Securities of each affected series, modifications and alterations of such
Indenture may be made which affect the rights of the holders of such Debt
Securities; provided, however, that no such modification or alteration may be
made without the consent of the holder of each Debt Security so affected which
would, among other things, (i) change the maturity of the principal of, or of
any installment of interest (or premium, if any) on, any Debt Security issued
pursuant to such Indenture, or reduce the principal amount thereof or any
premium thereon, or change the method of calculation of interest or the
currency of payment of principal or interest (or premium, if any) on, or
reduce the minimum rate of interest thereon, or impair the right to institute
suit for the enforcement of any such payment on or with respect to any such
Debt Security, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof; or (ii) reduce the above-stated percentage in principal amount of
outstanding Debt Securities required to modify or alter such Indenture.
CONVERTIBLE DEBT SECURITIES
Certain Debt Securities (the "Convertible Debt Securities") may be
convertible into other Securities of the Company. The holders of such
Convertible Debt Securities of a specified series may be entitled or, if so
provided in the applicable Prospectus Supplement, may be required at such time
or times specified in the applicable Prospectus Supplement, subject to prior
redemption, repayment or repurchase, to convert any Convertible Debt
Securities of such series (in denominations set forth in the applicable
Prospectus Supplement) into Common Stock, Preferred Stock, Common Stock
Warrants, Preferred Stock Warrants, another series of Debt Securities, Debt
Warrants or Depositary Shares, as the case may be, (collectively, the
foregoing securities into which the Convertible Debt Securities may convert
are referred to herein as "Conversion Securities") at the conversion price set
forth in the applicable Prospectus Supplement, subject to adjustment as
described below, and in the applicable Prospectus Supplement. The relevant
provisions for each series of Convertible Debt Securities will be set forth in
the applicable Prospectus Supplement. Except as described below or in the
applicable Prospectus Supplement, no adjustment will be made upon conversion
of any Convertible Debt Securities for interest accrued thereon or for
dividends on any Conversion Securities issued. If any Convertible Debt
Securities not called for redemption are converted between a Regular Record
Date for the payment of interest and the next succeeding Interest Payment
Date, such Convertible Debt Securities must be accompanied by funds equal to
the interest payable on such succeeding Interest Payment Date on the principal
amount so converted. The Company is not required to issue fractional shares of
Common Stock or Preferred Stock upon conversion of Convertible Debt Securities
that are convertible into Common Stock or Preferred Stock, respectively, and,
in lieu thereof, will pay a cash adjustment, in the case of Convertible Debt
Securities convertible into Common Stock, based upon the market value of the
Common Stock, and in the case of Convertible Debt Securities convertible into
Preferred Stock, based upon the liquidation preference of such series of
Preferred Stock, unless otherwise specified in the Prospectus Supplement. In
the case of Convertible Debt Securities convertible into securities other than
Common Stock or Preferred Stock, such adjustment will be based on such method
as is set forth in the Prospectus Supplement.
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<PAGE>
The conversion price for a series of Convertible Debt Securities that are
convertible into Common Stock is subject to adjustment upon the occurrence of
certain events under formulas that will be set forth in the applicable
Prospectus Supplement.
In the event of a taxable distribution to holders of Common Stock or
Preferred Stock (or other transaction) which results in any adjustment of the
conversion price of Convertible Debt Securities that are convertible into
Common Stock or Preferred Stock, the holders of such Convertible Debt
Securities may, in certain circumstances, be deemed to have received a
distribution subject to United States Federal income tax as a dividend; in
certain other circumstances, the absence of such an adjustment may result in a
taxable dividend to the holders of Common Stock or Preferred Stock acquired
upon conversion of such Convertible Debt Securities.
CONSOLIDATION, MERGER OR SALE OF ASSETS
Each Indenture provides that the Company may, without the consent of the
holders of any of the Debt Securities outstanding under the applicable
Indenture, consolidate with, merge into or transfer its assets substantially
as an entirety to any person, provided that (i) any such successor assumes the
Company's obligations on the applicable Debt Securities and under the
applicable Indenture, (ii) after giving effect thereto, no Event of Default
(as defined in the Senior Indenture) in the case of the Senior Securities, or
Default (as defined in the Subordinated Indenture) in the case of the
Subordinated Securities, shall have happened and be continuing and (iii)
certain other conditions under the applicable Indenture are met. Accordingly,
any such consolidation, merger or transfer of assets substantially as an
entirety, which meets the conditions described above, would not create any
Event of Default or Default which would entitle holders of the Debt
Securities, or the Trustee on their behalf, to take any of the actions
described below under "Senior Securities--Events of Default, Waivers, etc." or
"Subordinated Securities--Events of Default, Waivers, etc."
SENIOR SECURITIES
The Senior Securities will be direct, unsecured obligations of the Company
and will rank pari passu with all outstanding unsecured senior indebtedness of
the Company.
EVENTS OF DEFAULT, WAIVERS, ETC.
An Event of Default with respect to Senior Securities of any series is
defined in the Senior Indenture as (i) default in the payment of principal of
or premium, if any, on any of the Senior Securities of that series outstanding
under the Senior Indenture when due; (ii) default in the payment of interest
on any of the Senior Securities of that series outstanding under the Senior
Indenture when due and continuance of such default for 30 days; (iii) default
in the performance of any other covenant of the Company in the Senior
Indenture with respect to Senior Securities of such series and continuance of
such default for 60 days after written notice; (iv) due acceleration of any
indebtedness for borrowed money in principal amount in excess of $1,000,000 of
the Company under the terms of the instrument under which such indebtedness is
issued or secured, if such acceleration is not rescinded or annulled or such
indebtedness is not discharged within 30 days after written notice; (v)
certain events of bankruptcy, insolvency or reorganization of the Company; and
(vi) any other event that may be specified in a Prospectus Supplement with
respect to any series of Senior Securities. If an Event of Default with
respect to any series of Senior Securities for which there are Senior
Securities outstanding under the Senior Indenture occurs and is continuing,
either the applicable Trustee or the holders of not less than 25% in aggregate
principal amount of the Senior Securities of such series outstanding may
declare the principal amount (or if such Senior Securities are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) of all Senior Securities of that series to be
immediately due and payable. The holders of a majority in aggregate principal
amount of the Senior Securities of any series outstanding under the Senior
Indenture may waive an Event of Default resulting in acceleration of such
Senior Securities, but only if all Events of Default with respect to Senior
Securities of such series have been remedied
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and all payments due (other than those due as a result of acceleration) have
been made. If an Event of Default occurs and is continuing, the applicable
Trustee may, in its discretion, and at the written request of holders of not
less than a majority in aggregate principal amount of the Senior Securities of
any series outstanding under the Senior Indenture and upon reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request and subject to certain other conditions set forth
in the Senior Indenture shall, proceed to protect the rights of the holders of
all the Senior Securities of such series. Prior to acceleration of maturity of
the Senior Securities of any series outstanding under the Senior Indenture,
the holders of a majority in aggregate principal amount of such Senior
Securities may waive any past default under the Senior Indenture except a
default in the payment of principal of, premium, if any, or interest on the
Senior Securities of such series.
The Senior Indenture provides that upon the occurrence of an Event of
Default specified in clauses (i) or (ii) of the immediately preceding
paragraph, the Company will, upon demand of the applicable Trustee, pay to it,
for the benefit of the holder of any such Senior Security, the whole amount
then due and payable on such Senior Securities for principal, premium, if any,
and interest. The Senior Indenture further provides that if the Company fails
to pay such amount forthwith upon such demand, such Trustee may, among other
things, institute a judicial proceeding for the collection thereof.
A judgment for money damages by courts in the United States, including a
money judgment based on an obligation expressed in a foreign currency, will
ordinarily be rendered only in U.S. dollars. New York statutory law provides
that a court shall render a judgment or decree in the foreign currency of the
underlying obligation and that the judgment or decree shall be converted into
U.S. dollars at the exchange rate prevailing on the date of entry of the
judgment or decree.
The Senior Indenture also provides that notwithstanding any other provision
of the Senior Indenture, the holder of any Senior Security of any series shall
have the right to institute suit for the enforcement of any payment of
principal of, premium, if any, and interest on such Senior Securities when due
and that such right shall not be impaired without the consent of such holder.
The Company is required to file annually with the Trustees a written
statement of officers as to the existence or non-existence of defaults under
the Senior Indenture or the Senior Securities.
REGARDING MARINE MIDLAND
Marine Midland, the Trustee under the Senior Indenture, has its principal
corporate trust office at 140 Broadway, 12th Floor, New York, New York 10005.
The Company has normal banking relationships with Marine Midland.
SUBORDINATED SECURITIES
The Subordinated Securities will be direct, unsecured obligations of the
Company and will be subject to the subordination provisions described below.
The Subordinated Securities will be subordinated to the senior indebtedness
and general obligations of the Company.
SUBORDINATION
It is the intent of the Company that Subordinated Securities issued by the
Company be treated as capital for calculation of regulatory capital ratios.
The Federal Reserve Board ~ has issued interpretations of its capital
regulations indicating, among other things, that subordinated debt of bank
holding companies issued on or after September 4, 1992, is includable in
capital for calculation of regulatory capital ratios only if the subordination
of
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the debt meets certain criteria and if the debt may be accelerated only for
bankruptcy, insolvency and similar matters (the "Subordination
Interpretations"). Accordingly, the Subordinated Indenture contains
subordination and acceleration provisions for the Subordinated Securities
which are intended to be consistent with the Subordination Interpretations.
Subordinated debt of the Company (including subordinated debt issued prior to
the Merger by First Chicago and NBD) issued after September 4, 1992, which
meets the Subordination Interpretations are referred to herein as "New
Subordinated Securities". Unless otherwise specified in the Prospectus
Supplement relating to a particular series of Subordinated Securities offered
thereby, Subordinated Securities offered pursuant to this Prospectus will
constitute New Subordinated Securities. See "Events of Default, Defaults,
Waivers, etc." below.
Upon any distribution of assets of the Company upon any dissolution, winding
up, liquidation or reorganization, the payment of the principal of, premium,
if any, and interest on the Subordinated Securities is to be subordinated in
right of payment, to the extent provided in the Subordinated Indenture, to the
prior payment in full of all Senior Indebtedness. In certain events of
bankruptcy or insolvency, the payment of the principal of and interest on the
Subordinated Securities will, to the extent provided in the Subordinated
Indenture, also be effectively subordinated in right of payment to the prior
payment in full of all General Obligations.
Upon any distribution of assets of the Company upon any dissolution, winding
up, liquidation or reorganization, the holders of Senior Indebtedness will
first be entitled to receive payment in full of all amounts due or to become
due before the holders of the Subordinated Securities will be entitled to
receive any payment in respect of the principal of, premium, if any, or
interest on the Subordinated Securities. If upon any such payment or
distribution of assets there remain, after giving effect to such subordination
provisions in favor of the holders of Senior Indebtedness, any amounts of
cash, property or securities available for payment or distribution in respect
of the Subordinated Securities ("Excess Proceeds") and if, at such time, any
creditors in respect of General Obligations have not received payment in full
of all amounts due or to become due on or in respect of such General
Obligations, then such Excess Proceeds shall first be applied to pay or
provide for the payment in full of such General Obligations before any payment
or distribution may be made in respect of the Subordinated Securities. The
other New Subordinated Securities issued prior to the date of this Prospectus
contain similar provisions subordinating any payment or distribution on such
New Subordinated Securities to the payment of amounts due or to become due on
or in respect of general obligations of the Company.
In addition, no payment may be made of the principal of, premium, if any, or
interest on the Subordinated Securities, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Subordinated
Securities, at any time when (i) there is a default in the payment of the
principal of, premium, if any, interest on or otherwise in respect of any
Senior Indebtedness or (ii) any event of default with respect to any Senior
Indebtedness has occurred and is continuing, or would occur as a result of
such payment on the Subordinated Securities or any redemption, retirement,
purchase or other acquisition of any of the Subordinated Securities,
permitting the holders of such Senior Indebtedness to accelerate the maturity
thereof. Except as described above, the obligation of the Company to make
payment of the principal of, premium, if any, or interest on the Subordinated
Securities will not be affected.
By reason of such subordination in favor of the holders of Senior
Indebtedness, in the event of a distribution of assets upon any dissolution,
winding up, liquidation or reorganization, certain creditors of the Company
who are not holders of Senior Indebtedness or of the Subordinated Securities
may recover less, ratably, than holders of Senior Indebtedness and may recover
more, ratably, than holders of the Subordinated Securities. By reason of the
subordination of payments and distributions on the New Subordinated Securities
to creditors in respect of general obligations, in the event of a distribution
of assets upon any dissolution, winding up, liquidation or reorganization,
holders of Old Subordinated Indebtedness (as defined herein) may recover less,
ratably, than creditors in respect of general obligations and may recover
more, ratably, than the holders of New Subordinated Securities.
Subject to payment in full of all Senior Indebtedness, the rights of the
holders of Subordinated Securities will be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to Senior Indebtedness.
Subject to payment in full of all General Obligations, the rights of the
holders of the Subordinated Securities will be subrogated to the rights
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of the creditors in respect of General Obligations to receive payments or
distributions of cash, property or securities of the Company applicable to
such creditors in respect of General Obligations.
"Senior Indebtedness" is defined in the Subordinated Indenture as the
principal of, premium, if any, and interest on (i) all of the Company's
indebtedness for money borrowed, other than the Subordinated Securities, the
Company's Floating Rate Subordinated Capital Notes Due December 1996, the
Company's 9 7/8% Subordinated Notes Due July 1999, the Company's 9%
Subordinated Notes Due June 15, 1999, the Company's 9 7/8% Subordinated Notes
Due August 15, 2000, the Company's 11 1/4% Subordinated Notes Due February 20,
2001, the Company's 10 1/4% Subordinated Notes Due May 1, 2001, the Company's
9 1/4% Subordinated Notes Due November 15, 2001, the Company's 8 7/8%
Subordinated Notes Due March 15, 2002, the Company's 8 1/4% Subordinated Notes
Due June 15, 2002, the Company's 9 1/5% Subordinated Notes Due December 17,
2001, the Company's 7 5/8% Subordinated Notes Due January 15, 2003 (the
"January 2003 Notes"), the Company's 6 7/8% Subordinated Notes Due June 15,
2003 (the "June 2003 Notes"), the Company's Floating Rate Subordinated Notes
Due July 28, 2003 (the "July 2003 Notes"), the Company's 6 3/8% Subordinated
Notes Due January 30, 2009 (the "January 2009 Notes"), the Company's 7 1/8%
Subordinated Notes Due 2007 (the "2007 Notes"), the Company's 7 1/4%
Subordinated Debentures Due 2004 (the "2004 Notes"), the Company's 8.10%
Subordinated Notes Due 2002, the Company's 7.40% Subordinated Debenture due
May 10, 2023 (the "2023 Debentures") and the Company's Floating Rate
Subordinated Notes Due 2005 (collectively, all of the foregoing notes and
debentures are hereinafter referred to as the "Existing Subordinated
Indebtedness"), whether outstanding on the date of execution of the
Subordinated Indenture or thereafter created, assumed or incurred, except such
indebtedness as is by its terms expressly stated to be not superior in right
of payment to the Subordinated Securities or the Existing Subordinated
Indebtedness or to rank pari passu with the Subordinated Securities or the
Existing Subordinated Indebtedness and; (ii) any deferrals, renewals or
extensions of any such Senior Indebtedness. The term "indebtedness for money
borrowed" as used in the prior sentence includes, without limitation, any
obligation of, or any obligation guaranteed by, the Company for the repayment
of borrowed money, whether or not evidenced by bonds, debentures, notes or
other written instruments, and any deferred obligation for the payment of the
purchase price of property or assets. The Subordinated Indenture contains no
limitation on the issuance of additional Senior Indebtedness of the Company.
The January 2003 Notes, the June 2003 Notes, the July 2003 Notes, the
January 2009 Notes, the 2007 Notes and the 2023 Debentures all constitute New
Subordinated Securities; all other Existing Subordinated Indebtedness
constitutes Old Subordinated Securities.
The Subordinated Securities rank and will rank pari passu with the Existing
Subordinated Indebtedness, subject to the obligations of the holders of
Subordinated Securities (and, generally, holders of other New Subordinated
Securities) to pay over any proceeds remaining after payments and
distributions to holders of Senior Indebtedness to creditors in respect of
general obligations. Thus, in the event of a distribution of assets of the
Company upon any dissolution, winding up, liquidation or reorganization, the
holders of the New Subordinated Securities (including holders of the
Subordinated Securities offered hereby) may receive less, ratably, than
holders of Old Subordinated Securities.
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Subordinated Securities offered thereby, "General
Obligations", with respect to the Subordinated Securities, means all
obligations of the Company to make payment on account of claims in respect of
derivative products such as interest and foreign exchange rate contracts,
commodity contracts and similar arrangements, other than (i) obligations on
account of Senior Indebtedness, (ii) obligations on account of indebtedness
for money borrowed ranking pari passu with or subordinate to the Subordinated
Securities and (iii) obligations which by their terms are expressly stated not
to be superior in right of payment to the Subordinated Securities or to rank
on parity with the Subordinated Securities; provided, however, that
notwithstanding the foregoing, in the event that any rule, guideline or
interpretation promulgated or issued by the Federal Reserve Board (or other
competent regulatory agency or authority), as from time to time in effect,
establishes or specifies criteria for the inclusion in
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regulatory capital of subordinated debt of a bank holding company requiring
that such subordinated debt be subordinated to obligations to creditors in
addition to those set forth above, then the term "General Obligations" shall
also include such additional obligations to creditors, as from time to time in
effect pursuant to such rules, guidelines or interpretations. For purposes of
this definition, "claim" shall have the meaning assigned thereto in Section
101(4) of the Bankruptcy Code 1978, as amended to the date of the Subordinated
Indenture.
As of September 30, 1995, the aggregate amount of Senior Indebtedness and
General Obligations of the Company was approximately $2.7 billion.
LIMITED RIGHTS OF ACCELERATION
Unless otherwise specified in the Prospectus Supplement relating to any
series of Subordinated Securities, payment of principal of the Subordinated
Securities may be accelerated only in case of the bankruptcy or reorganization
of the Company. There is no right of acceleration in the case of a default in
the payment of principal of, premium, if any, or interest on the Subordinated
Securities or the performance of any other covenant of the Company in the
Subordinated Indenture. Payment of principal of the Old Subordinated
Securities may be accelerated in the case of the bankruptcy, insolvency or
reorganization of the Company. Such payment may also be accelerated in the
case of certain events of insolvency or receivership of FNBC or NBD Michigan,
as the case may be.
EVENTS OF DEFAULT, DEFAULTS, WAIVERS, ETC.
An Event of Default with respect to Subordinated Securities of any series is
defined in the Subordinated Indenture as certain events involving the
bankruptcy or reorganization of the Company and any other Event of Default
provided with respect to Subordinated Securities of that series. A Default
with respect to Subordinated Securities of any series is defined in the
Subordinated Indenture as (i) an Event of Default with respect to such series,
(ii) default in the payment of the principal of or premium, if any, on any
Subordinated Security of such series when due, (iii) default in the payment of
interest upon any Subordinated Security of such series when due and the
continuance of such default for a period of 30 days, (iv) default in the
performance of any other covenant or agreement of the Company in the
Subordinated Indenture with respect to Subordinated Securities of such series
and continuance of such default for 60 days after written notice, or (v) any
other Default provided with respect to Subordinated Securities of any series.
If an Event of Default with respect to any series of Subordinated Securities
for which there are Subordinated Securities outstanding under the Subordinated
Indenture occurs and is continuing, either Chase, as Trustee, or the holders
of not less than 25% in aggregate principal amount of the Subordinated
Securities of such series may declare the principal amount (or if such
Subordinated Securities are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of
all Subordinated Securities of that series to be immediately due and payable.
The holders of a majority in aggregate principal amount of the Subordinated
Securities of any series outstanding under the Subordinated Indenture may
waive an Event of Default resulting in acceleration of such Subordinated
Securities, but only if all Defaults have been remedied and all payments due
(other than those due as a result of acceleration) have been made. If a
Default occurs and is continuing, Chase may in its discretion, and at the
written request of holders of not less than a majority in aggregate principal
amount of the Subordinated Securities of any series outstanding under the
Subordinated Indenture and upon reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request and
subject to certain other conditions set forth in the Subordinated Indenture
shall, proceed to protect the rights of the holders of all the Subordinated
Securities of such series. Prior to acceleration of maturity of the
Subordinated Securities of any series outstanding under the Subordinated
Indenture, the holders of a majority in aggregate principal amount of such
Subordinated Securities may waive any past default under the Subordinated
Indenture except a default in the payment of principal of, premium, if any, or
interest on the Subordinated Securities of such series.
The Subordinated Indenture provides that in the event of a Default specified
in clauses (ii) or (iii) of the immediately preceding paragraph in payment of
principal of, premium, if any, or interest on any Subordinated Security of any
series, the Company will, upon demand of Chase, pay to it, for the benefit of
the holder of any such Subordinated Security, the whole amount then due and
payable on such Subordinated Security for principal,
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premium, if any, and interest. The Subordinated Indenture further provides
that if the Company fails to pay such amount forthwith upon such demand, Chase
may, among other things, institute a judicial proceeding for the collection
thereof.
The Subordinated Indenture also provides that notwithstanding any other
provision of the Subordinated Indenture, the holder of any Subordinated
Security of any series shall have the right to institute suit for the
enforcement of any payment of principal of, premium, if any, and interest on
such Subordinated Security on the respective Stated Maturities (as defined in
the Subordinated Indenture) expressed in such Subordinated Security and that
such right shall not be impaired without the consent of such holder.
The Company is required to file annually with Chase a written statement of
officers as to the existence or non-existence of defaults under the
Subordinated Indenture or the Subordinated Securities.
REGARDING CHASE
Chase, the Trustee under the Subordinated Indenture, has a principal
corporate trust office at 4 Chase MetroTech Center, Brooklyn, New York 11245.
The Company has normal banking relationships with Chase. Chase also serves as
trustee for the 2004 Notes under an Indenture dated as of July 15, 1992,
originally entered into with NBD.
DESCRIPTION OF DEBT WARRANTS
The Company may issue Debt Warrants for the purchase of Debt Securities.
Debt Warrants may be issued independently or together with any Debt Securities
offered by any Prospectus Supplement and may be attached to or separate from
such Debt Securities. The Debt Warrants are to be issued under warrant
agreements (each a "Debt Warrant Agreement") to be entered into between the
Company and a warrant agent which will be designated in the applicable
Prospectus Supplement (the "Debt Warrant Agent"), all as set forth in the
Prospectus Supplement relating to the particular issue of Debt Warrants (the
"Offered Debt Warrants"). The Debt Warrant Agent will act solely as an agent
of the Company in connection with the Debt Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Debt Warrants. The following summaries of certain
provisions of the form of Debt Warrant Agreement and the warrant certificates
representing the Debt Warrants (the "Debt Warrant Certificates"), if any, do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Debt Warrant Agreement and
the Debt Warrant Certificates, respectively, including the definitions therein
of certain terms, which Agreement and Certificates will be filed as exhibits
to or incorporated by reference in the Registration Statement of which this
Prospectus forms a part.
If Debt Warrants are offered, the Prospectus Supplement will describe the
terms of the Offered Debt Warrants, the Debt Warrant Agreement relating to the
Offered Debt Warrants and the Debt Warrant Certificates representing the
Offered Debt Warrants, if any, including the following: (1) the offering
price; (2) the currency or currency unit in which the price for the Offered
Debt Warrants may be payable; (3) the designation, aggregate principal amount
and terms of the Debt Securities purchasable upon exercise of the Offered Debt
Warrants; (4) if applicable, the designation and terms of the Debt Securities
with which the Offered Debt Warrants are issued and the number of Offered Debt
Warrants issued with each such Debt Security; (5) if the Debt Securities
purchasable upon exercise of Offered Debt Warrants are denominated in a
currency or currency unit other than U.S. dollars, the denomination of such
Debt Securities and the currency or units based on or relating to currencies
(including ECU) in which the principal of, premium, if any, and interest on
such Debt Securities will be payable; (6) if applicable, the date on and after
which the Offered Debt Warrants and the related Debt Securities will be
separately transferable; (7) the principal amount of Debt Securities
purchasable upon exercise of an Offered Debt Warrant and the price at which,
and currency or currency units based on or relating to currencies (including
ECU) in which, such principal amount of Debt Securities may be purchased upon
such exercise; (8) the date on which the right to exercise the Offered Debt
Warrants shall commence and the date on which such right shall expire; (9) if
applicable, a discussion of certain Federal income tax, accounting and other
special considerations, procedures and limitations; (10) whether the Debt
Warrants represented by the Debt Warrant Certificates will be issued as
Registered Securities or Bearer Securities; and (11) any other terms of the
Offered Debt Warrants, including terms, procedures and limitations relating to
the exchange and exercise of the Offered Debt Warrants.
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DESCRIPTION OF CURRENCY WARRANTS
The Company may issue Currency Warrants which, upon exercise at a permitted
time or times in the future, entitle any holder thereof to receive the Cash
Settlement Value (as defined below) of two designated currencies. Currency
Warrants may be issued independently or together with any Debt Securities
offered by any Prospectus Supplement and may be attached to or separate from
such Debt Securities. The Currency Warrants are to be issued under warrant
agreements (each a "Currency Warrant Agreement") to be entered into between
the Company and a warrant agent which will be designated in the applicable
Prospectus Supplement (the "Currency Warrant Agent"), all as set forth in the
Prospectus Supplement relating to the particular issue of Currency Warrants
(the "Offered Currency Warrants"). The Currency Warrant Agent will act solely
as an agent of the Company in connection with the Currency Warrants and will
not assume any obligation or relationship of agency or trust for or with any
holder or beneficial owners of Currency Warrants. The following summaries of
certain provisions of the form of Currency Warrant Agreement do not purport to
be complete and are subject to and are qualified in their entirety by
reference to all the provisions of the Currency Warrant Agreement and the form
of certificate, if any, representing the Currency Warrants (the "Currency
Warrant Certificates"), respectively, including the definitions therein of
certain terms which Agreement and Certificate, if any, will be filed as an
exhibit to or incorporated by reference in the Registration Statement of which
this Prospectus forms a part.
The Currency Warrants will not require, or entitle, any holder thereof to
sell any foreign currency to the Company. The Company will make only a U.S.
dollar cash settlement upon exercise of a Currency Warrant and will not be
obligated to purchase or take delivery of any foreign currency from any holder
of a Currency Warrant.
The "Cash Settlement Value" of an exercised Currency Warrant will be an
amount stated in U.S. dollars which is the greater of (i) zero and (ii) an
amount equal to (a) the nominal amount of such Currency Warrant, minus (b) an
amount equal to the nominal amount of such Currency Warrant times a fraction,
the numerator of which is the Strike Price of such Currency Warrant and the
denominator of which is the Spot Rate of such Currency Warrant on the Exercise
Date. The "nominal amount" of a Currency Warrant refers to the principal
amount, expressed in U.S. dollars, of a currency (the "Base Currency") which
is to be compared to another currency (the "Second Currency") upon exercise of
such Currency Warrant. Unless otherwise specified in the applicable Prospectus
Supplement, the Base Currency shall be U.S. dollars. The "Strike Price" is the
designated rate of exchange of the Base Currency for the Second Currency which
the Company will specify in the Prospectus Supplement relating to the Offered
Currency Warrants. The "Spot Rate" refers to the floating rate of exchange of
the Base Currency for the Second Currency on any given date, as quoted by a
reference bank or banks or other institution at a designated time of day, such
source of quotations and time to be specified in the applicable Prospectus
Supplement. The "Exercise Date" refers to the effective date on which the
holder of a Currency Warrant exercises such Currency Warrant.
If Currency Warrants are offered, the Prospectus Supplement will describe
the terms of the Offered Currency Warrants, the Currency Warrant Agreement
relating to the Offered Currency Warrants and, if applicable, Currency Warrant
Certificates, including the following: (1) the aggregate number of Offered
Currency Warrants; (2) the Nominal Amount of each Offered Currency Warrant;
(3) the price of the Offered Currency Warrants; (4) the Base Currency and the
Second Currency; (5) the Strike Price for the Offered Currency Warrants; (6)
the reference bank or banks or other institution and time of day to be used to
determine the Spot Rate; (7) the date on which the right to exercise the
Offered Currency Warrants shall begin and the date on which such right shall
terminate; (8) if applicable, the minimum or maximum amount of Offered
Currency Warrants which may be exercised at any one time; (9) the place or
places at which payment of the Cash Settlement Value is to be made by the
Company; (10) whether the Offered Currency Warrants will be represented by
certificates or issued in book-entry form; (11) the method by which the
Offered Currency Warrants are to be exercised; (12) the Federal income tax
consequences and other special considerations, procedures and limitations
applicable to such Offered Currency Warrants; and (13) any other terms of the
Offered Currency Warrants, including risk factors specifically relating to the
Base Currency or Second Currency and Currency Warrants relating to such
currencies.
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DESCRIPTION OF STOCK-INDEX WARRANTS
The Company may issue Stock Index Warrants which, upon exercise at a
permitted time or times in the future, entitle any holder thereof to receive
an amount of cash determined by references to increases and/or decreases in
the level of a specified stock index. Stock-Index Warrants may be issued
independently or together with other Securities offered by any Prospectus
Supplement and may be attached to or separate from such other Securities. The
Stock-Index Warrants are to be issued under one or more warrant agreements
(each a "Stock-Index Warrant Agreement") to be entered into between the
Company and a bank or trust company, as stock-index warrant agent which will
be designated in the applicable Prospectus Supplement (the "Stock-Index
Warrant Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of Stock-Index Warrants. The Stock-Index Warrant Agent will
act solely as an agent of the Company in connection with the Stock-Index
Warrants and will not assume any obligation or relationship of agency or trust
for or with any holder or beneficial owners of Stock-Index Warrants. The
following summaries of certain provisions of the form of Stock-Index Warrant
Agreement and form of certificate, if any, representing the Stock-Index
Warrants (the "Stock-Index Warrant Certificates") do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Stock-Index Warrant Agreement and the Stock-
Index Warrant Certificates, respectively, including the definitions therein of
certain terms which Agreement and Certificate, if any, will be filed as an
exhibit to or incorporated by reference in the Registration Statement of which
this Prospectus forms a part.
The Company may issue Stock-Index Warrants either in the form of Stock-Index
Put Warrants entitling the holders thereof to receive from the Company the
Stock-Index Cash Settlement Value (as described in the applicable Prospectus
Supplement) in U.S. dollars, which amount will be determined by reference to
the amount, if any, by which the Stock-Index Exercise Price (as described in
the applicable Prospectus Supplement) exceeds the closing value of the Index
on the valuation date (the "Index Value") at the time of exercise, or in the
form of Stock-Index Call Warrants entitling the holders thereof to receive
from the Company the Stock-Index Cash Settlement Value in U.S. dollars, which
amount will be determined by reference to the amount, if any, by which the
Index Value at the time of exercise exceeds the Stock-Index Exercise Price.
The Prospectus Supplement for an issue of Stock-Index Warrants will set
forth the formula pursuant to which the Stock-Index Cash Settlement Value will
be determined. In addition, if so specified in the applicable Prospectus
Supplement, following the occurrence of a Market Disruption Event (as defined
therein), the Stock-Index Cash Settlement Value may be determined on a
different basis than under normal exercise of a Stock-Index Warrant.
Unless otherwise indicated in the Prospectus Supplement, a Stock-Index
Warrant will be settled only in cash and, accordingly, will not require or
entitle a holder thereof to sell, deliver, purchase or take delivery of any
shares of any underlying stock or any other securities. The holders will not
be entitled to any of the rights of the holders of any underlying stock.
If Stock-Index Warrants are offered, the Prospectus Supplement will describe
the terms of Stock-Index Warrants offered thereby, including the following:
(1) whether such Stock-Index Warrants are Stock-Index Put Warrants, Stock-
Index Call Warrants or both; (2) the aggregate amount of such Stock-Index
Warrants; (3) the offering price; (4) the stock index for such Stock-Index
Warrants, which may be based on one or more U.S. or foreign stocks or a
combination thereof and may be a preexisting U.S. or foreign stock index
compiled and published by a third party or an index based on one or more
underlying stock or stocks selected by the Company solely in connection with
the issuance of such Stock-Index Warrants, and certain information regarding
such stock index and the underlying stock or stocks; (5) the date on which the
right to exercise such Stock-Index Warrants commences and the date on which
such right expires (the "Stock-Index Warrant Expiration Date"); (6) the
procedures and conditions relating to exercise; (7) the circumstances, if any,
which will cause the Stock-Index Warrants to be deemed to be automatically
exercised; (8) the minimum number, if any, of Stock-Index Warrants to be
exercised at any one time other than upon automatic exercise and any other
restrictions on
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exercise; (9) the maximum number, if any, of such Stock-Index Warrants that
may, subject to the Company's election, be exercised by all owners (or by any
person or entity) on any day; (10) the method of providing for a substitute
index or otherwise determining the amount payable in connection with the
exercise of such Stock-Index Warrants if the stock index changes or ceases to
be made available by its publisher, which determination will be made by an
independent expert; (11) the national securities exchange on which the Stock-
Index Warrants will be listed, if any; (12) whether the Stock-Index Warrants
will be issued in certificated or book-entry form; (13) the place or places at
which payment of the Stock-Index Cash Settlement Value is to be made by the
Company; (14) information with respect to book-entry procedures, if any; (15)
the plan of distribution of such Stock-Index Warrants; (16) the identity of
the Stock-Index Warrant Agent; (17) any provisions permitting a holder of a
Stock-Index Warrant to condition a stock-index exercise notice on the absence
of certain specified changes in the Index Value after the Stock-Index Warrant
Exercise Date; and (18) any other terms of such Stock-Index Warrants,
including risk factors specifically relating to fluctuations in the applicable
stock index and possible illiquidity in the secondary market.
Prospective purchasers of Stock-Index Warrants should be aware that special
U.S. Federal income tax, accounting and other considerations may be applicable
to instruments such as Stock-Index Warrants. The Prospectus Supplement
relating to any issue of Stock-Index Warrants will describe such
considerations.
DESCRIPTION OF OTHER WARRANTS
The Company may issue Other Warrants, if permitted under applicable law, to
buy or sell debt securities of or guaranteed by the United States, to buy or
sell a commodity or a unit of a commodity index or to buy or sell some other
item or unit of an index other than indices covered by Stock-Index Warrants
(collectively, "Exercise Items"). Owners of Other Warrants will be entitled to
receive from the Company the cash settlement value in U.S. dollars of the
right to buy or sell the Exercise Items (the "Other Warrant Cash Settlement
Value"). An Owner of Other Warrants will receive a cash payment upon exercise
only if the Other Warrants have an Other Warrant Cash Settlement Value in
excess of zero at that time.
Other Warrants may be issued independently or together with other Securities
offered by any Prospectus Supplement and may be attached to or separate from
such other Securities. The Other Warrants are to be issued under one or more
other warrant agreements (the "Other Warrant Agreements") to be entered into
between the Company and a bank or trust company, as warrant agent which will
be designated in the applicable Prospectus Supplement (the "Other Warrant
Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of Other Warrants. The Other Warrant Agent will act solely as
an agent of the Company in connection with the Other Warrants and will not
assume any obligation or relationship of agency or trust for or with any
holder or beneficial owners of the Other Warrants. The following summaries of
certain provisions of the form of Other Warrant Agreement and form of
certificate, if any, representing the Other Warrants (the "Other Warrant
Certificates") do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the Other
Warrant Agreement and the Other Warrant Certificates, respectively, including
the definitions therein of certain terms which Agreement and Certificate, if
any, will be filed as an exhibit to or incorporated by reference in the
Registration Statement of which this Prospectus forms a part.
Unless otherwise indicated in the Prospectus Supplement, an Other Warrant
will be settled only in cash, in U.S. dollars, and accordingly, will not
require or entitle an owner thereof to sell, deliver, purchase or take
delivery of any Exercise Items.
If Other Warrants are offered, the applicable Prospectus Supplement will
describe the terms of such Other Warrants, including, where applicable, the
following: (1) the title and aggregate number of such Other Warrants; (2) the
offering price; (3) the Exercise Items that such Other Warrants represent the
right to buy or sell; (4) the procedures and conditions relating to exercise;
(5) the date on which the right to exercise the Other Warrants shall commence
and the date such right shall expire (the "Other Warrant Expiration Date");
(6) the method of
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determining the Other Warrant Cash Settlement Value; (7) whether such Other
Warrants will be issued in certificated or book-entry form; (8) whether such
Other Warrants will be listed on a national securities exchange; (9)
information with respect to book-entry procedures, if any; (10) the identity
of the Other Warrant Agent; and (11) any other terms of such Other Warrants,
including risk factors relating to significant fluctuations in the market for
the applicable Exercise Item, the potential illiquidity of the secondary
market and the risk that the Other Warrants may expire worthless.
Prospective purchasers of Other Warrants should be aware that special U.S.
Federal income tax, accounting and other considerations may be applicable to
instruments such as Other Warrants. The Prospectus Supplement relating to any
issue of Other Warrants will describe such considerations.
DESCRIPTION OF THE PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of
Preferred Stock offered by any Prospectus Supplement will be specified in the
applicable Prospectus Supplement. If so specified in the applicable Prospectus
Supplement, the terms of any series of Preferred Stock may differ from the
terms set forth below. The description of the terms of the Preferred Stock set
forth below and in any Prospectus Supplement does not purport to be complete
and is subject to and qualified in its entirety by reference to the
Certificate of Designation relating to the applicable series of Preferred
Stock, which Certificate will be filed as an exhibit to or incorporated by
reference in the Registration Statement of which this Prospectus forms a part.
GENERAL
Pursuant to the Company's Restated Certificate of Incorporation, as amended
(the "Certificate of Incorporation"), the Board of Directors of the Company
has the authority, without further stockholder action, to issue from time to
time a maximum of 10,000,000 shares of preferred stock, without par value, in
one or more series and for such consideration, as may be fixed from time to
time by the Board of Directors of the Company, and to fix before the issuance
of any shares of preferred stock of a particular series, the designation of
such series, the number of shares to comprise such series, the dividend rate
or rates payable with respect to the shares of such series, the redemption
price or prices, if any, and the terms and conditions of the redemption, the
voting rights, any sinking fund provisions for the redemption or purchase of
the shares of such series, the terms and conditions upon which the shares are
convertible, if they are convertible, and any other relative rights,
preferences and limitations pertaining to such series. As of December 1, 1995,
there were issued and outstanding 1,191,000 shares of the Company's Preferred
Stock with Cumulative and Adjustable Dividends, Series B ($100 stated value)
(the "Series B Preferred Stock"), 713,800 shares of the Company's Preferred
Stock with Cumulative and Adjustable Dividends, Series C ($100 stated value)
(the "Series C Preferred Stock"), 160,000 shares of the Company's 8.45%
Cumulative Preferred Stock, Series E ($625 stated value) (the "Series E
Preferred Stock"), and 40,000 shares of the Company's 5 3/4% Cumulative
Convertible Preferred Stock, Series B ($5,000 stated value) (the "Series B
Convertible Preferred Stock") (collectively, the "Existing Preferred Stock").
In addition, the Company has issued 6,000,000 preferred share purchase units
("Preferred Purchase Units") which may require the holder of which to
purchase, no later than 2023, the Company's 7 1/2% Cumulative Preferred Stock
(the 7 1/2% Preferred Stock"). See "Description of Existing Preferred Stock
and Preferred Purchase Units" herein.
As described under "Description of Depositary Shares" below, the Company
may, at its option, elect to offer depositary shares ("Depositary Shares")
evidenced by depositary receipts, each representing a fraction (to be
specified in the Prospectus Supplement relating to the particular series of
Preferred Stock) of a share of the particular series of the Preferred Stock
issued and deposited with a depositary, in lieu of offering full shares of
such series of the Preferred Stock.
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Under interpretations adopted by the Federal Reserve Board, if the holders
of Preferred Stock of any series become entitled to vote for the election of
directors because dividends on such series are in arrears as described under
"Voting Rights" below, such series may then be deemed a "class of voting
securities" and a holder of 25% or more of such series (or a holder of 5% or
more if it otherwise exercises a "controlling influence" over the Company) may
then be subject to regulation as a bank holding company in accordance with the
Bank Holding Company Act of 1956, as amended. In addition, at such time as
such series is deemed a class of voting securities, any other bank holding
company may be required to obtain the prior approval of the Federal Reserve
Board to acquire 5% or more of such series, and any person other than a bank
holding company may be required to obtain the prior approval of the Federal
Reserve Board to acquire 10% or more of such series.
The Preferred Stock shall have the dividend, liquidation, redemption, voting
and conversion rights set forth below unless otherwise specified in the
applicable Prospectus Supplement. Reference is made to the Prospectus
Supplement relating to the particular series of Preferred Stock offered
thereby for specific terms, including: (1) the designation, stated value and
liquidation preference of such Preferred Stock and the number of shares
offered; (2) the initial public offering price at which such shares will be
issued; (3) the dividend rate or rates (or method of calculation), the
dividend periods, the date on which dividends shall be payable and whether
such dividends shall be cumulative or noncumulative and, if cumulative, the
dates from which dividends shall commence to cumulate; (4) any redemption or
sinking fund provisions; (5) any conversion provisions; (6) whether the
Company has elected to offer Depositary Shares as described below under
"Description of Depositary Shares"; and (7) any additional dividend,
liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations and restrictions of such Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the applicable Prospectus Supplement, the shares
of each series of Preferred Stock will upon issuance rank on a parity in all
respects with the Company's Existing Preferred Stock, described below, and
each other then outstanding series of preferred stock of the Company. The
Preferred Stock will have no preemptive rights to subscribe for any additional
securities which may be issued by the Company. Unless otherwise specified in
the applicable Prospectus Supplement, First Chicago Trust Company of New York
will be the transfer agent and registrar for the Preferred Stock.
Because the Company is a holding company, its rights and the rights of
holders of its securities, including the holders of Preferred Stock, to
participate in the assets of any Company subsidiary upon the latter's
liquidation or recapitalization will be subject to the prior claims of such
subsidiary's creditors and preferred shareholders, except to the extent the
Company may itself be a creditor with recognized claims against such
subsidiary or a holder of preferred shares of such subsidiary.
DIVIDENDS
The holders of the Preferred Stock will be entitled to receive, when, as and
if declared by the Board of Directors of the Company, out of funds legally
available therefor, dividends at such rates and on such dates as will be
specified in the applicable Prospectus Supplement. Such rates may be fixed or
variable or both. If variable, the formula used for determining the dividend
rate for each dividend period will be specified in the applicable Prospectus
Supplement. Dividends will be payable to the holders of record as they appear
on the stock books of the Company (or, if applicable, the records of the
Depositary referred to below under "Description of Depositary Shares") on such
record dates as will be fixed by the Board of Directors of the Company.
Dividends may be paid in the form of cash, Preferred Stock (of the same or a
different series) or Common Stock of the Company, in each case as specified in
the applicable Prospectus Supplement.
Dividends on any series of Preferred Stock may be cumulative or
noncumulative, as specified in the applicable Prospectus Supplement. If the
Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any Preferred Stock for which dividends are
noncumulative ("Noncumulative Preferred Stock"), then the holders of such
Preferred Stock will have no right to receive a dividend in respect of the
dividend period relating to such dividend payment date, and the Company will
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such Preferred Stock are declared or paid on any future dividend
payment dates.
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The Company shall 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 Preferred Stock of any series unless (i) if
such Preferred Stock has a cumulative dividend ("Cumulative Preferred Stock"),
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 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 Company, or (ii) if such Preferred Stock is
Noncumulative Preferred Stock, full dividends for the then-current dividend
period on such Preferred Stock have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
such payment. When dividends are not paid in full upon Preferred Stock of any
series and any other shares of preferred stock of the Company ranking on a
parity as to dividends with such Preferred Stock, all dividends declared upon
such Preferred Stock and any other preferred shares of the Company ranking on
a parity as to dividends with such Preferred Stock shall be declared pro rata
so that the amount of dividends declared per share on such Preferred Stock and
such other shares shall in all cases bear to each other the same ratio that
the accrued dividends per share on such Preferred Stock (which shall not, if
such Preferred Stock is Noncumulative Preferred Stock, include any
accumulation in respect of unpaid dividends for prior dividend periods) and
such other preferred shares bear to each other. Except as set forth in the
preceding sentence, unless full dividends on the outstanding Cumulative
Preferred Stock of any series have been paid for all past dividend periods and
full dividends for the then-current dividend period on the outstanding
Noncumulative Preferred Stock of any series have been declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payment, no dividends (other than in Common Stock of the Company or other
shares of the Company ranking junior to such Preferred Stock as to dividends
and upon liquidation) shall be declared or paid or set aside for payment, nor
shall any other distribution be made on the Common Stock of the Company or on
any other shares of the Company ranking junior to or on a parity with such
Preferred Stock as to dividends or upon liquidation. Unless full dividends on
the Cumulative Preferred Stock of any series have been paid for all past
dividend periods and full dividends for the then-current dividend period on
the Noncumulative Preferred Stock of any series have been declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payment, no Common Stock or any other shares of the Company ranking junior to
or on a parity with such Preferred Stock as to dividends or upon liquidation
shall 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 Company or any subsidiary of the Company except by
conversion into or exchange for shares of the Company ranking junior to such
Preferred Stock as to dividends and upon liquidation.
REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or in part, at
the option of the Company, and may be subject to mandatory redemption pursuant
to a sinking fund or otherwise, in each case upon terms, at the times and at
the redemption prices specified in the applicable Prospectus Supplement and
subject to the rights of holders of other securities of the Company. Preferred
Stock redeemed by the Company will be restored to the status of authorized but
unissued preferred shares.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Stock is Noncumulative Preferred Stock,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in
cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Stock of any series is payable only from
the net proceeds of the issuance of capital stock of the Company, the terms of
such Preferred Stock may provide that, if no such capital stock shall have
been issued or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then due, such
Preferred Stock shall automatically and mandatorily be converted into shares
of the applicable capital stock of the Company pursuant to conversion
provisions specified in the applicable Prospectus Supplement.
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If fewer than all the outstanding shares of Preferred Stock of any series
are to be redeemed, the number of shares to be redeemed will be determined in
a manner designated by the Board of Directors of the Company and such shares
shall be redeemed pro rata from the holders of record of such shares in
proportion to the number of such shares held by such holders (with adjustments
to avoid redemption of fractional shares) or by lot or by any other method as
may be determined by the Board of Directors of the Company.
Notwithstanding the foregoing, if any dividends, including any accumulation,
on Cumulative Preferred Stock of any series are in arrears, no Preferred Stock
of such series shall be redeemed unless all outstanding Preferred Stock of
such series is simultaneously redeemed, and the Company shall not purchase or
otherwise acquire any Preferred Stock of such series; provided, however, that
the foregoing shall not prevent the purchase or acquisition of Preferred Stock
of such series pursuant to a purchase or exchange offer provided such offer is
made on the same terms to all holders of the Preferred Stock of such series.
Notice of redemption shall be given by mailing the same to each record
holder of the Preferred Stock to be redeemed, not less than 30 nor more than
60 days prior to the date fixed for redemption thereof, to the respective
addresses of such holders as the same shall appear on the stock books of the
Company. Each notice shall state: (i) the redemption date; (ii) the number of
shares and series of the Preferred Stock to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates for such Preferred Stock
are to be surrendered for payment of the redemption price; (v) that dividends
on the shares to be redeemed will cease to accrue on such redemption date; and
(vi) the date upon which the holder's conversion rights, if any, as to such
shares, shall terminate. If fewer than all the shares of Preferred Stock of
any series held by any holder are to be redeemed, the notice mailed to such
holder shall also specify the number of shares of Preferred Stock to be
redeemed from such holder.
If notice of redemption of any shares of Preferred Stock has been given,
from and after the redemption date for such shares (unless default shall be
made by the Company in providing money for the payment of the redemption price
of such shares), dividends on such shares shall cease to accrue and such
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as shareholders of the Company (except the right to receive
the redemption price) shall cease. Upon surrender in accordance with such
notice of the certificates representing any such shares (properly endorsed or
assigned for transfer, if the Board of Directors of the Company shall so
require and the notice shall so state), the redemption price set forth above
shall be paid out of the funds provided by the Company. If 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.
CONVERSION RIGHTS
The Prospectus Supplement relating to a series of the Preferred Stock that
is convertible will state the terms on which shares of such series are
convertible into the Company's Common Stock, or another series of Preferred
Stock.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of Preferred Stock shall be entitled to
receive out of the assets of the Company available for distribution to
shareholders, before any distribution of assets is made to holders of Common
Stock or any other class or series of shares ranking junior to such Preferred
Stock upon liquidation, liquidating distributions in the amount of the
liquidation preference of such Preferred Stock plus accrued and unpaid
dividends (which shall not, if such Preferred Stock is Noncumulative Preferred
Stock, include any accumulation in respect of unpaid dividends for prior
dividend periods). If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company the amounts payable with respect to
Preferred Stock of any series and any other shares of the Company ranking as
to any such distribution on a parity with such Preferred Stock are not paid in
full, the holders of such Preferred Stock and of such other shares will share
ratably in any such distribution of assets of the 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 Preferred Stock of any series will not be entitled to any
further participation in any distribution of assets by the Company.
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VOTING RIGHTS
Except as indicated below or in the applicable Prospectus Supplement, or
except as expressly required by applicable law, the holders of the Preferred
Stock will not be entitled to vote. In the event the Company issues full
shares of any series of Preferred Stock, each such share will be entitled to
one vote on matters on which holders of such series of the Preferred Stock are
entitled to vote. However, as more fully described under "Description of
Depositary Shares" below, if the Company elects to issue Depositary Shares
representing a fraction of a share of a series of Preferred Stock, each such
Depositary Share will, in effect, be entitled to such fraction of a vote,
rather than a full vote, per Depositary Share. Since each full share of any
series of Preferred Stock of the Company shall 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 Preferred Stock are entitled to vote as a single
class, shall 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 Preferred Stock.
If the equivalent of six quarterly dividends payable on any series of
Preferred Stock are in default, the number of directors of the Company will be
increased by two and the holders of all outstanding series of 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 percent of
the outstanding shares of Preferred Stock of any series, voting as a class,
will be required for any amendment to the Company's Certificate of
Incorporation (or any certificate supplemental thereto) that will adversely
affect the powers, preferences, privileges or rights of the Preferred Stock of
such series. The affirmative vote or consent of the holders of at least 66 2/3
percent of the outstanding shares of Preferred Stock of any series and any
other series of preferred shares of the Company ranking on a parity with the
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 Company ranking prior to the Preferred Stock of such series as to
dividends or upon liquidation, or the reclassification of any authorized stock
of the 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 Preferred Stock of any series, the Company may, by
resolution of its Board of Directors or as otherwise permitted by law, from
time to time alter or change the preferences, rights or powers of the
Preferred Stock of such series. The holders of the Preferred Stock of such
series shall 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 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 Preferred
Stock of any series) that rank junior to or on a parity with the 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 Company.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. In the event such
option is exercised, the Company will issue to the public receipts for
Depositary Shares, each of which will represent a fraction (to be set forth in
the Prospectus Supplement relating to a particular series of Preferred Stock)
of a share of a particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Depositary"). Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock
represented by such Depositary Share, to all the rights and preferences of the
Preferred Stock represented thereby (including dividend, voting, redemption,
conversion and liquidation rights).
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The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. Copies of the
forms of Deposit Agreement and Depositary Receipt will be filed as exhibits
to, or incorporated by reference in, the Registration Statement of which this
Prospectus is a part, and the following summary is qualified in its entirety
by reference to such exhibits.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts
but not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will
be exchangeable for definitive Depositary Receipts at the Company's expense.
Upon surrender of Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have previously been called
for redemption), the owner of the Depositary Shares evidenced thereby is
entitled to delivery at such office, to or upon his order, of the number of
whole shares of Preferred Stock and any money or other property represented by
such Depositary Shares. Partial shares of Preferred Stock will not be issued.
If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing a
number of whole shares of Preferred Stock to be withdrawn, the Depositary will
deliver to such holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares. Holders of shares of Preferred Stock
thus withdrawn will not thereafter be entitled to deposit such shares under
the Deposit Agreement or to receive Depositary Shares therefor. The Company
does not expect that there will be any public trading market for withdrawn
shares of Preferred Stock.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders. The Depository shall
distribute only such amount, however, as can be distributed without
attributing to any holder of Depositary Shares a fraction of one cent, and any
balance not so distributed shall be added to and treated as part of the next
sum received by the Depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of Preferred Stock held by the Depositary. The Depositary shall
mail notice of redemption not less than 30 nor more than 60 days prior to the
date fixed for redemption to the record holders of the Depositary Shares to be
so redeemed at their respective addresses appearing in the Depositary's books.
The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever the Company redeems shares of Preferred Stock
held by the Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares representing shares of Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to
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receive the moneys payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled upon
such redemption upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of the Preferred Stock
represented by such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the amount of the Preferred Stock represented
by such Depositary Shares in accordance with such instructions, and the
Company will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares
representing such Preferred Stock.
TAXATION
Owners of the Depositary Shares will be treated for Federal income tax
purposes as if they were owners of the series of Preferred Stock represented
by such Depositary Shares and, accordingly, will be entitled to take into
account for Federal income tax purposes income and deductions to which they
would be entitled if they were holders of such series of Preferred Stock. In
addition, (i) no gain or loss will be recognized for Federal income tax
purposes upon the withdrawal of Preferred Stock in exchange for Depositary
Shares as provided in the Deposit Agreement, (ii) the tax basis of each share
of Preferred Stock to an exchanging owner of Depositary Shares will, upon such
exchange, be the same as the aggregate tax basis of the Depositary Shares
exchanged therefor and (iii) the holding period for shares of the Preferred
Stock in the hands of an exchanging owner of Depositary Shares who held such
Depositary Shares as a capital asset at the time of the exchange thereof for
Preferred Stock will include the period during which such person owned such
Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which
materially and adversely alters the rights of the holders of Depositary Shares
will not be effective unless such amendment has been approved by the holders
of at least a majority of the Depositary Shares then outstanding. The Deposit
Agreement may be terminated by the Company or the Depositary only if (i) all
outstanding Depositary Shares have been redeemed or (ii) there has been a
final distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution
has been distributed to the holders of Depositary Receipts.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of
the Preferred Stock and any redemption of the Preferred Stock. Holders of
Depositary Receipts will pay other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred
Stock.
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Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and
the Depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares
or Preferred Stock unless satisfactory indemnity is furnished. They may rely
upon written advice of counsel or accountants, or information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Receipts
or other persons believed to be competent and on documents believed to be
genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
DESCRIPTION OF EXISTING PREFERRED STOCK AND PREFERRED PURCHASE UNITS
The outstanding Series B Preferred Stock and Series C Preferred Stock of the
Company were issued as of December 1, 1995 as part of the Merger in exchange
for two similar series of preferred stock of First Chicago outstanding at the
effective time of the Merger. The First Chicago preferred stock was originally
issued in February 1983, and February 1984, respectively. The dividend rate on
each series is adjusted quarterly, based on a formula that considers the
interest rates for selected short- and long-term U.S. Treasury securities
prevailing at the time the rate is set. The Company's Series B Convertible
Preferred Stock and Series E Preferred Stock, which also were issued on
December 1, 1995 in connection with the Merger, replace similar series of
preferred stock of First Chicago which were originally issued in March 1993,
and November 1992, respectively. The Series B Convertible Preferred Stock and
Series E Preferred Stock have fixed dividend rates. The Existing Preferred
Stock ranks prior to the Company's Common Stock, both as to dividends and upon
liquidation, but has no general voting rights (except as described under
"Description of the Preferred Stock--Voting Rights"). Each series of the
Existing Preferred Stock ranks pari passu with each other series of the
Existing Preferred Stock with respect to dividends and liquidation rights.
The Series B Preferred Stock is subject to a minimum and maximum annual
dividend rate of 6.00 percent and 12.00 percent, respectively. The annualized
dividend rate for the quarterly period ended February 29, 1996, is 6.0
percent. Shares of this series are redeemable, at the option of the Company,
at their stated value of $100 per share plus accrued and unpaid dividends.
Shares of this series are not convertible into other securities of the
Company.
The Series C Preferred Stock is subject to a minimum and maximum annual
dividend rate of 6.50 percent and 12.50 percent, respectively. The annualized
dividend rate for the quarterly period ended February 29, 1996, is 6.5
percent. Shares of this series are redeemable, at the option of the Company,
at their stated value of $100 per share plus accrued and unpaid dividends.
Shares of this series are not convertible into other securities of the
Company.
The Series E Preferred Stock is represented by depositary shares with each
depositary share representing a one-twenty-fifth interest in a share of Series
E Preferred Stock. The Series E Preferred Stock has an annual dividend rate
equal to $52.8125 ($2.1125 per depositary share), or 8.45 percent, which was
fixed at the date of issue. Shares of this series are redeemable, at the
option of the 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 are not convertible into other securities of the Company.
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The Series B Convertible Preferred Stock is represented by depositary shares
with each depositary share representing a one-hundredth interest in a share of
Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock
has an annual dividend rate equal to $287.50 ($2.875 per depositary share), or
5 3/4 percent, which was fixed at the date of issue. Shares of the Company's
Series B Convertible Preferred Stock may be converted into shares of the
Company's Common Stock at a conversion price of $29.6271 per share of Common
Stock (equivalent to a conversion rate of 1.6876 share of Common Stock for
each depositary share) at the option of the stockholder at any time. Resultant
fractional interests are paid in cash. The conversion rate is subject to
adjustment for certain stock dividends, subdivisions, splits and combinations,
certain distributions of assets and debt to holders of Common Stock, certain
reclassifications of Common Stock into other securities and certain
distributions of rights or warrants to purchase Common Stock at a price per
share less than the Common Stock's then market value. Shares of this series
are redeemable, at the option of the 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.
The shares of the outstanding Existing Preferred Stock (or with respect to
the Series E Preferred Stock and the Series B Convertible Preferred Stock, the
outstanding depositary shares representing such stock), are listed on the New
York Stock Exchange. First Chicago Trust Company of New York serves as
transfer agent, registrar and dividend disbursing agent for shares of the
Existing Preferred Stock and the depositary shares representing such stock.
The First National Bank of Chicago also serves as depositary for the shares of
Existing Preferred Stock represented by depositary shares.
In addition, on May 11, 1993, the Company issued 6,000,000 Preferred
Purchase Units each of which consisted of a 30-year subordinated debenture and
a purchase contract requiring the purchase by the holder thereof on May 10,
2023 (or earlier at the Company's election) of the Company's 7 1/2% Preferred
Stock at a purchase price of $25 per share. The Company may redeem any or all
of the Preferred Purchase Units at anytime after May 10, 1998, at par, and, as
a result, some or all of the 7 1/2% Preferred Stock may not be issued by the
Company. The 7 1/2% Preferred Stock would rank prior to the Company's Common
Stock, but would have no voting rights except if the Preferred Purchase Units
were in default or the Certificate of Incorporation was proposed to be amended
in a manner adverse to the holders of the 7 1/2% Preferred Stock. The 7 1/2%
Preferred Stock would rank pari passu with each other series of Existing
Preferred Stock with respect to dividends and liquidation rights. The 7 1/2%
Preferred Stock, if issued, would not be convertible into other securities of
the Company. The shares of preferred stock which could be issued pursuant to
the purchase contracts have been reserved by the Company on its stock records.
DESCRIPTION OF PREFERRED STOCK WARRANTS
The Company may issue Preferred Stock Warrants for the purchase of Preferred
Stock. Preferred Stock Warrants may be issued independently or together with
other Securities offered by any Prospectus Supplement and may be attached to
or separate from such other Securities. Each series of Preferred Stock
Warrants will be issued under one or more warrant agreements (each a
"Preferred Stock Warrant Agreement") to be entered into between the Company
and a bank or trust company, as preferred stock warrant agent which will be
designated in the applicable Prospectus Supplement (the "Preferred Stock
Warrant Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of Preferred Stock Warrants. The Preferred Stock Warrant
Agent will act solely as an agent of the Company in connection with the
Preferred Stock Warrants and will not assume any obligation or relationship of
agency or trust for or with any holders of Preferred Stock Warrant
Certificates or beneficial owners of Preferred Stock Warrants. The following
summaries of certain provisions of the form of Preferred Stock Warrant
Agreement and form of certificate representing the Preferred Stock Warrants
(the "Preferred Stock Warrant Certificates") do not purport to be complete and
are subject to and are qualified in their entirety by reference to, all the
provisions of the Preferred Stock Warrant Agreement and the Preferred Stock
Warrant Certificates which Agreement and Certificate will be filed as an
exhibit to or incorporated by reference in the Registration Statement of which
this Prospectus forms a part.
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GENERAL
If Preferred Stock Warrants are offered, the applicable Prospectus
Supplement will describe the terms of such Preferred Stock Warrants, including
the following, where applicable: (1) the offering price; (2) the designation,
aggregate number and terms of the series of Preferred Stock purchasable upon
exercise of such Preferred Stock Warrants and minimum number of Preferred
Stock Warrants that are exercisable; (3) the designation and terms of the
series of Preferred Stock with which such Preferred Stock Warrants are being
offered and the number of such Preferred Stock Warrants being offered with
each such Preferred Stock; (4) the date on and after which such Preferred
Stock Warrants and the related series of Preferred Stock will be transferable
separately; (5) the number and stated values of the series of Preferred Stock
purchasable upon exercise of each such Preferred Stock Warrant and the price
at which such number of shares of Preferred Stock of such series may be
purchased upon such exercise; (6) the date on which the right to exercise such
Preferred Stock Warrants shall commence and the date on which such right shall
expire (the "Preferred Stock Warrant Expiration Date"); (7) whether the
Preferred Stock Warrants represented by the Preferred Stock Warrant
Certificates will be issued in registered or bearer form; (8) information with
respect to book-entry procedures, if any; and (9) any other terms of such
Preferred Stock Warrants for the purchase of shares of Preferred Stock.
Preferred Stock Warrant Certificates may be exchanged for new Preferred
Stock Warrant Certificates of different denominations, may (if in registered
form) be presented for registration of transfer, and may be exercised at the
corporate trust office of the Preferred Stock Warrant Agent or any other
office indicated in the applicable Prospectus Supplement. Prior to the
exercise of any Preferred Stock Warrant, a holder thereof shall have no rights
of a holder of shares of the Preferred Stock purchasable upon such exercise,
including the right to receive payment of dividends, if any, on the underlying
Preferred Stock or the right to vote such underlying Preferred Stock.
Prospective purchasers of Preferred Stock Warrants should be aware that
special U.S. Federal income tax, accounting and other considerations may be
applicable to instruments such as Preferred Stock Warrants. The Prospectus
Supplement relating to any issue of Preferred Stock Warrants will describe
such considerations.
EXERCISE OF PREFERRED STOCK WARRANTS
Each Preferred Stock Warrant will entitle the holder thereof to purchase
such number of shares of Preferred Stock at such exercise price as shall be
set forth in, or calculable from, the Prospectus Supplement relating to the
offered Preferred Stock Warrants. After the close of business on the Preferred
Stock Warrant Expiration Date (or such later date to which such Preferred
Stock Warrant Expiration Date may be extended by the Company), unexercised
Preferred Stock Warrants will become void.
Preferred Stock Warrants may be exercised by delivery to the Preferred Stock
Warrant Agent of payment as provided in the applicable Prospectus Supplement
of the amount required to purchase the shares of Preferred Stock purchasable
upon such exercise together with certain information set forth on the reverse
side of the Preferred Stock Warrant Certificate. Preferred Stock Warrants will
be deemed to have been exercised upon receipt of the exercise price, subject
to the receipt, within five business days, of the Preferred Stock Warrant
Certificate evidencing such Preferred Stock Warrants. Upon receipt of such
payment and the Preferred Stock Warrant Certificate properly completed and
duly executed at the corporate trust office of the Preferred Stock Warrant
Agent or any other office indicated in the applicable Prospectus Supplement,
the Company will, as soon as practicable, issue and deliver the shares of
Preferred Stock purchasable upon such exercise. If fewer than all of the
Preferred Stock Warrants represented by such Preferred Stock Warrant
Certificate are exercised, a new Preferred Stock Warrant Certificate will be
issued for the remaining number of Preferred Stock Warrants.
MODIFICATIONS
The Preferred Stock Warrant Agreement and the terms of the Preferred Stock
Warrants may be amended by the Company and the Preferred Stock Warrant Agent,
without the consent of the holders, for the purpose of
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curing any ambiguity, or of curing, correcting or supplementing any defective
or inconsistent provision contained therein, or in any other manner which the
Company may deem necessary or desirable and which will not materially and
adversely affect the interests of the owners.
The Company and the Preferred Stock Warrant Agent also may modify or amend
the Preferred Stock Warrant Agreement and the terms of the Preferred Stock
Warrants, with the consent of the holders of not less than a majority in
number of the then outstanding unexercised Preferred Stock Warrants affected,
provided that no such modification or amendment that shortens the period of
time during which the Preferred Stock Warrants may be exercised, increases the
exercise price of such Preferred Stock Warrants or otherwise materially and
adversely affects the exercise rights of the holders of the Preferred Stock
Warrants or reduces the number of outstanding Preferred Stock Warrants the
consent of whose holders is required for modification or amendment of the
Preferred Stock Warrant Agreement or the terms of the Preferred Stock Warrants
may be made without the consent of the holders affected thereby.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Company, then the successor or assuming corporation shall succeed to and be
substituted for the Company in, and the Company will be relieved of any
further obligation under, the Preferred Stock Warrant Agreement or the
Preferred Stock Warrants.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants for the purchase of Common
Stock. Common Stock Warrants may be issued independently or together with
other Securities offered by any Prospectus Supplement and may be attached to
or separate from such Securities. Each series of Common Stock Warrants will be
issued under one or more warrant agreements (each a "Common Stock Warrant
Agreement") to be entered into between the Company and a bank or trust
company, as common stock warrant agent which will be designated in the
applicable Prospectus Supplement (the "Common Stock Warrant Agent"), all as
set forth in the Prospectus Supplement relating to the particular issue of
Common Stock Warrants. The Common Stock Warrant Agent will act solely as an
agent of the Company in connection with the Common Stock Warrants and will not
assume any obligation or relationship of agency or trust for or with any
holders or beneficial owners of Common Stock Warrants. The following summaries
of certain provisions of the form of Common Stock Warrant Agreement and
certificate representing Common Stock Warrants (the "Common Stock Warrant
Certificates") do not purport to be complete and are subject to and are
qualified in their entirety by reference to, all the provisions of the Common
Stock Warrant Agreement and the Common Stock Warrant Certificate which
Agreement and Certificate will be filed as an exhibit to or incorporated by
reference in the Registration Statement which this Prospectus forms a part of.
GENERAL
If Common Stock Warrants are offered, the related Prospectus Supplement will
describe the terms of such Common Stock Warrants, including the following,
where applicable: (1) the offering price; (2) the aggregate number of shares
of Common Stock purchasable upon exercise of such Common Stock Warrants and
minimum number of Common Stock Warrants that are exercisable; (3) the number
of shares of Common Stock with which such Common Stock Warrants are being
offered and the number of such Common Stock Warrants being offered with each
such share of Common Stock; (4) the date on and after which such Common Stock
Warrants and the related shares of Common Stock will be transferable
separately; (5) the number of shares of Common Stock purchasable upon exercise
of each such Common Stock Warrant and the price at which such number of shares
of Common Stock may be purchased upon such exercise; (6) the date on which the
right to exercise such Common Stock Warrants shall commence and the date on
which such right shall expire (the "Common Stock Warrant Expiration Date");
(7) whether the Common Stock Warrants represented by the Common Stock Warrant
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Certificates will be issued in registered or bearer form; (8) information with
respect to book-entry procedures, if any; and (9) any other terms of such
Common Stock Warrants for the purchase of shares of Common Stock which shall
not be inconsistent with the provisions of the Common Stock Warrant
Agreements.
Common Stock Warrant Certificates may be exchanged for new Common Stock
Warrant Certificates of different denominations, may (if in registered form)
be presented for registration of transfer, and may be exercised at the
corporate trust office of the Common Stock Warrant Agent or any other office
indicated in the applicable Prospectus Supplement. Prior to the exercise of
any Common Stock Warrants to purchase Common Stock, holders of such Common
Stock Warrants will not have any rights of holders of shares of the Common
Stock purchasable upon such exercise, including the right to receive payments
of dividends, if any, on the Common Stock purchasable upon such exercise or to
exercise any applicable right to vote.
Prospective purchasers of Common Stock Warrants should be aware that special
U.S. Federal income tax, accounting and other considerations may be applicable
to instruments such as Common Stock Warrants. The Prospectus Supplement
relating to any issue of Common Stock Warrants will describe such
considerations.
EXERCISE OF COMMON STOCK WARRANTS
Each Common Stock Warrant will entitle the holder thereof to purchase such
number of shares of Common Stock at such exercise price as shall be set forth
in, or calculable from, the Prospectus Supplement relating to the Common Stock
Warrants. After the close of business on the Common Stock Warrant Expiration
Date (or such later date to which such Common Stock Warrant Expiration Date
may be extended by the Company), unexercised Common Stock Warrants will become
void.
Common Stock Warrants may be exercised by delivery to the Common Stock
Warrant Agent of payment as provided in the applicable Prospectus Supplement
of the amount required to purchase the shares of Common Stock purchasable upon
such exercise together with certain information set forth on the reverse side
of the Common Stock Warrant Certificate. Common Stock Warrants will be deemed
to have been exercised upon receipt of the exercise price, subject to the
receipt, within five business days, of the Common Stock Warrant Certificate
evidencing such Common Stock Warrants. Upon receipt of such payment and the
Common Stock Warrant Certificate properly completed and duly executed at the
corporate trust office of the Common Stock Warrant Agent or any other office
indicated in the applicable Prospectus Supplement, the Company will, as soon
as practicable, issue and deliver the shares of Common Stock purchasable upon
such exercise. If fewer than all of the Common Stock Warrants represented by
such Common Stock Warrant Certificate are exercised, a new Common Stock
Warrant Certificate will be issued for the remaining amount of Common Stock
Warrants.
MODIFICATIONS
The Common Stock Warrant Agreement and the terms of the Common Stock
Warrants may be amended by the Company and the Common Stock Warrant Agent,
without the consent of the holders, for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective or inconsistent
provision contained therein, or in any other manner which the Company may deem
necessary or desirable and which will not materially and adversely affect the
interests of the owners.
The Company and the Common Stock Warrant Agent also may modify or amend the
Common Stock Warrant Agreement and the terms of the Common Stock Warrants,
with the consent of the holders of not less than a majority in number of the
then outstanding unexercised Common Stock Warrants affected, provided that no
such modification or amendment that shortens the period of time during which
the Common Stock Warrants may be exercised, increases the exercise price of
such Common Stock Warrants or otherwise materially and adversely affects the
exercise rights of the holders of the Common Stock Warrants or reduces the
number of outstanding Common Stock Warrants the consent of whose holders is
required for modification or amendment of the Common Stock Warrant Agreement
or the terms of the Common Stock Warrants may be made without the consent of
the holders affected thereby.
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COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by a
Common Stock Warrant, will be subject to adjustment in certain events,
including: (i) dividends (and other distributions) payable in the Common Stock
on any class of capital stock of the Company; (ii) subdivision, combinations
and reclassifications of Common Stock; (iii) the issuance to all holders of
Common Stock of certain rights or warrants entitling them to subscribe for or
purchase Common Stock, at less than the current market price (as defined in
the Common Stock Warrant Agreement for such series of Common Stock Warrants);
and (iv) the distribution to all holders of Common Stock of evidences of
indebtedness or assets of the Company (including securities, but excluding
those dividends and distributions referred to above and dividends and
distributions paid in cash out of surplus or retained earnings of the Company)
or rights or warrants (excluding those referred to above) of the Company,
subject to the limitation that all adjustments by reason of any of the
foregoing need not be made until they result in a cumulative change in the
exercise price of at least 1%.
In the event that the Company shall distribute or shall have distributed any
rights or warrants to acquire capital stock pursuant to clause (iv) of the
preceding paragraph ("Capital Stock Rights"), pursuant to which separate
certificates representing such Capital Stock Rights are distributed subsequent
to the initial distribution of such Capital Stock Rights (whether or not such
distribution shall have occurred prior to the date of the issuance of a series
of Common Stock Warrants), the subsequent distribution shall be deemed to be
the distribution of such Capital Stock Rights; provided, however, that the
Company may, in lieu of making any adjustment in the exercise price of, and
the number of shares of Common Stock covered by, a Common Stock Warrant upon a
distribution of separate certificates representing such Capital Stock Rights,
make proper provision so that each holder of such a Common Stock Warrant who
exercises such Common Stock Warrant (or any portion thereof) (a) on or before
the record date for such distribution of separate certificates shall be
entitled to receive upon such exercise shares of Common Stock issued with
Capital Stock Rights and (b) after such record date and prior to the
expiration, redemption or termination of such Capital Stock Rights shall be
entitled to receive upon such exercise, in addition to the shares of Common
Stock issuable upon such exercise, the same number of such Capital Stock
Rights as would a holder of the number of shares of Common Stock that such
Common Stock Warrant so exercised would have entitled the holder thereof to
acquire in accordance with the terms and provisions applicable to the Capital
Stock Rights if such Common Stock Warrant were exercised immediately prior to
the record date for such distribution. Common Stock owned by or held for the
account of the Company or any majority owned subsidiary shall not be deemed
outstanding for the purpose of any adjustment.
In the event the Company shall effect any capital reorganization or
reclassification of its shares 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 into which the Company is the
surviving corporation) or shall sell or transfer substantially all its assets
to any other corporation for a consideration consisting in whole or in part of
equity securities of such other corporation, the holders of the Common Stock
Warrants then outstanding will be entitled thereafter to exercise such Common
Stock Warrants to acquire the kind and amount of stock and other securities,
cash or property which they would have received in connection with such
transaction had such Common Stock Warrants been exercised immediately prior to
such transaction.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Company, then the successor or assuming corporation shall succeed to and be
substituted for the Company in, and the Company will be relieved of any
further obligation under, the Common Stock Warrant Agreement or the Common
Stock Warrants.
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DESCRIPTION OF THE COMPANY'S COMMON STOCK
GENERAL
The Company is authorized to issue 750,000,000 shares of Common Stock. As of
December 31, 1995, there were outstanding 315,241,109 shares of the Company's
Common Stock.
Holders of the Company's Common Stock are entitled to receive dividends
when, as and if declared by the Board of Directors out of any funds legally
available therefor, and are entitled upon liquidation, after claims of
creditors and preferences of the Company's preferred stock and any other
series of preferred stock hereafter authorized, to receive pro rata the net
assets of the Company.
The holders of the Common Stock are entitled to one vote for each share held
and are vested with all of the voting power except as the Board of Directors
of the Company has provided with respect to the outstanding shares of the
Company's preferred stock or may provide, in the future, with respect to any
other series of preferred stock which it may hereafter authorize.
The shares of Common Stock have non-cumulative voting rights, which means
that the holders of more than 50% of the shares of 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 Board of Directors of the Company at that
meeting.
The Company's Certificate of Incorporation contains specific provisions with
respect to the election of directors, which include the provision that the
Board of Directors of the Company 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 Certificate
of Incorporation 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 the Company
and an Interested Stockholder (as defined therein), the approving vote of the
holders of at least a majority of the voting power of all 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 the
Company's then outstanding voting stock. The provisions of the Certificate of
Incorporation also require that the Board of Directors will not approve a
proposal for a business combination or a tender offer until the Board of
Directors has evaluated the proposal in light of its effect on the
stockholders and employees of the Company and the communities served by the
Company. These provisions of the Certificate of Incorporation could be used to
make more difficult a change in control of the Company.
The holders of the Company's Common Stock do not have any preemptive rights
to subscribe for additional shares of capital stock of the Company. The
holders of Common Stock have no conversion rights, the Common Stock is not
subject to redemption by either the Company or a stockholder, and there is no
restriction on the purchase by the Company of shares of Common Stock except
for certain regulatory limits.
The Company's Common Stock is listed on the New York, Chicago and Pacific
Stock Exchanges. First Chicago Trust Company of New York is the transfer
agent, registrar and dividend disbursing agent for the Common Stock.
PLAN OF DISTRIBUTION
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from
time to time), at market prices prevailing at the time of sale, at
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prices related to such prevailing market prices or at negotiated prices. Each
Prospectus Supplement will describe the method of distribution of the
Securities offered therein.
The Company may sell Securities directly, through agents designated from
time to time, through underwriting syndicates led by one or more managing
underwriters or through one or more underwriters acting alone. Each Prospectus
Supplement will set forth the terms of the Securities to which such Prospectus
Supplement relates, including the name or names of any underwriters or agents
with whom the Company has entered into arrangements with respect to the sale
of such Securities, the public offering or purchase price of such Securities
and the net proceeds to the Company from such sale, any underwriting discounts
and other items constituting underwriters' compensation, any discounts and
commissions allowed or paid to dealers, if any, any commissions allowed or
paid to agents, and the securities exchange or exchanges, if any, on which
such Securities will be listed. Dealer trading may take place in certain of
the Securities, including Securities not listed on any securities exchange.
Securities may be purchased to be reoffered to the public through
underwriting syndicates led by one or more managing underwriters, or through
one or more underwriters acting alone. The underwriter or underwriters with
respect to each underwritten offering of Securities will be named in the
Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth
on the cover page of such Prospectus Supplement. Unless otherwise set forth in
the applicable Prospectus Supplement, the obligations of the underwriters to
purchase the Securities will be subject to certain conditions precedent and
each of the underwriters with respect to a sale of Securities will be
obligated to purchase all of its Securities if any are purchased. Any initial
public offering price and any discounts or concession allowed or reallowed or
paid to dealers may be changed from time to time.
Securities may be offered and sold by the Company through agents designated
by the Company from time to time. Any agent involved in the offer and sale of
any Securities will be named, and any commissions payable by the Company to
such agent will be set forth, in the Prospectus Supplement relating to such
offering. Unless otherwise indicated in such Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its
appointment.
Offers to purchase Securities may be solicited directly by the Company and
sales thereof may be made by the Company directly to institutional investors
or others who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale thereof. The terms of any such sales
will be described in the Prospectus Supplement relating thereto.
The anticipated place and time of delivery of Securities will be set forth
in the applicable Prospectus Supplement.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or agents to solicit offers by certain institutions to
purchase Securities from the Company pursuant to delayed delivery contracts
providing for payment and delivery at a future date. Institutions with which
such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved
by the Company. Unless otherwise set forth in the applicable Prospectus
Supplement, the obligations of any purchaser under any such contract will not
be subject to any conditions except that (i) the purchase of the Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject, and (ii) if the Securities
are also being sold to underwriters acting as principals for their own
account, the underwriters shall have purchased such Securities not sold for
delayed delivery. The underwriters and such other persons will not have any
responsibility in respect of the validity or performance of such contracts.
Any underwriter or agent participating in the distribution of the Securities
may be deemed to be an underwriter, as that term is defined in the Securities
Act, of the Securities so offered and sold and any discounts
37
<PAGE>
or commissions received by them from the Company and any profit realized by
them on the sale or resale of the Securities may be deemed to be underwriting
discounts and commissions under the Securities Act.
Underwriters and agents may be entitled, under agreements entered into with
the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such underwriters or agents may be
required to make in respect thereof. Certain of any such underwriters and
agents, including their associates, may be customers of, engage in
transactions with and perform services for, the Company and its subsidiaries
in the ordinary course of business.
First Chicago Capital Markets, Inc. ("FCCM"), an affiliate of the Company,
may from time to time act as an agent or underwriter in connection with the
sale of Securities to the extent permitted by applicable law. The
participation of FCCM in the offer and sale of the Securities will comply with
Schedule E of the By-laws of the National Association of Securities Dealers,
Inc. (the "NASD") regarding the offer and sale of securities of an affiliate.
No NASD member participating in offers and sales of securities will execute a
transaction in the Securities in a discretionary account without the prior
written specific approval of the member's customer.
This Prospectus and related Prospectus Supplements may be used by FCCM in
connection with offers and sales related to secondary market transactions in
Securities. FCCM, to the extent permitted by law, may act as principal or
agent in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of sale.
LEGAL OPINIONS
Certain legal matters relating to the Securities offered hereby will be
passed upon for the Company by its General Counsel and for any underwriters,
selling agents and certain other purchasers by Cravath, Swaine & Moore,
Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019. Cravath, Swaine
& Moore has represented and continues to represent the Company from time to
time in other matters.
EXPERTS
The consolidated financial statements of NBD incorporated in this Prospectus
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.
The supplemental consolidated financial statements of the Company appearing
in the Current Report on Form 8-K dated December 4, 1995 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.
38
<PAGE>
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH
THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR BY ANY OF THE UNDERWRITERS. NEITHER THE DE-
LIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HERE-
UNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SO-
LICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER IS NOT QUALIFIED TO DO SO
OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Incorporation of Certain Documents by Reference............................ S-2
Selected Financial Data.................................................... S-3
Recent Developments........................................................ S-4
Certain Terms of the Notes................................................. S-6
Underwriting............................................................... S-9
Legal Opinions............................................................. S-9
Experts.................................................................... S-10
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
First Chicago NBD Corporation.............................................. 3
Use of Proceeds............................................................ 8
Description of Debt Securities--General.................................... 9
Senior Securities.......................................................... 14
Subordinated Securities.................................................... 15
Description of Debt Warrants............................................... 19
Description of Currency Warrants........................................... 20
Description of Stock-Index Warrants........................................ 21
Description of Other Warrants.............................................. 22
Description of the Preferred Stock......................................... 23
Description of Depositary Shares........................................... 27
Description of Existing Preferred Stock and Preferred Purchase Units....... 30
Description of Preferred Stock Warrants.................................... 31
Description of Common Stock Warrants....................................... 33
Description of the Company's Common Stock.................................. 36
Plan of Distribution....................................................... 36
Legal Opinions............................................................. 38
Experts.................................................................... 38
</TABLE>
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$150,000,000
FIRST CHICAGO NBD
CORPORATION
6 1/8% SUBORDINATED NOTES
DUE FEBRUARY 15, 2006
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PROSPECTUS SUPPLEMENT
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FIRST CHICAGO CAPITAL MARKETS, INC.
SALOMON BROTHERS INC
LEHMAN BROTHERS
DATED FEBRUARY 13, 1996
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