<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 25, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TCF FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 6021 41-1591444
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>
801 MARQUETTE AVENUE, SUITE 302,
MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 661-6500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
GREGORY J. PULLES, VICE CHAIRMAN, GENERAL COUNSEL AND SECRETARY
TCF FINANCIAL CORPORATION
801 MARQUETTE AVENUE, SUITE 302
MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 661-6500
(Name, address, including zip code and telephone number, including
area code, of agent for service)
--------------------------
COPIES OF COMMUNICATIONS TO:
BRUCE J. PARKER, ESQ. THOMAS R. MAREK, ESQ.
KAPLAN, STRANGIS AND KAPLAN, P.A. OPPENHEIMER WOLFF & DONNELLY
5500 NORWEST CENTER 3400 PLAZA VII
90 SOUTH 7TH STREET 45 SOUTH 7TH STREET
MINNEAPOLIS, MINNESOTA 55402 MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 375-1138 TELEPHONE: (612) 344-9309
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
As soon as practicable after this Registration Statement becomes effective and
all other conditions to the proposed merger (the "Merger") of a wholly-owned
subsidiary of the Registrant with and into Winthrop Resources Corporation
("Winthrop") pursuant to the Agreement and Plan of Reorganization dated as of
February 28, 1997 attached as Appendix A to the enclosed Joint Proxy
Statement/Prospectus have been satisfied or waived.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: /X/
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common stock, par value $.01 per share
(1).................................... 7,050,000 Shares (2) $39.56(2) $278,475,000(2) $84,520(2)
</TABLE>
(1) Each share of the registrant's common stock includes one preferred share
purchase right issued pursuant to that certain Stockholder Rights Agreement
dated May 23, 1989, as amended, between TCF Financial Corporation ("TCF")
and Boston Equiserve L.P. ("Boston Equiserve").
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f). The amount to be registered is the maximum number
of shares which could be issued in connection with the Merger described
herein, assuming that on April 21, 1997 Winthrop had 8,600,300 shares
outstanding and options to purchase 439,500 shares outstanding. The proposed
maximum offering price of the registrant's common stock is based upon the
average of the high and low sale prices for such common stock on April 21,
1997 as reported by the New York Stock Exchange. The amount to be registered
is estimated based on the same assumptions.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TCF-Registration Trademark-
TCF FINANCIAL CORPORATION
801 MARQUETTE AVENUE, SUITE 302
MINNEAPOLIS, MN 55402
(612) 661-6500
, 1997
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders (the
"Special Meeting") of TCF Financial Corporation ("TCF" or "TCF Financial") which
will be held at Minnesota, on Tuesday, June 24, 1997, at
11:00 a.m. local time.
At the Special Meeting, stockholders will be asked to approve the Agreement
and Plan of Reorganization, dated February 28, 1997, and the exhibits thereto
(the "Merger Agreement"), the merger of a newly-formed, wholly-owned subsidiary
of TCF Financial with and into Winthrop Resources Corporation, a Minnesota
corporation ("Winthrop") with Winthrop being the surviving corporation (the
"Merger"), and the issuance of shares of TCF common stock in connection
therewith. As a result of the Merger, Winthrop will become a wholly-owned
subsidiary of TCF. TCF Financial will issue shares of its common stock to
holders of common stock of Winthrop, and will assume the obligation to issue
shares of its common stock to holders of Winthrop stock options upon exercise of
such options. After the Merger, TCF Financial intends to contribute Winthrop,
the surviving corporation of the Merger, to TCF National Bank Minnesota, its
wholly-owned national bank subsidiary. Winthrop, a financial services company
based in Minnetonka, Minnesota, leases computers, telecommunications equipment,
point-of-sale systems and other business-essential equipment to companies
throughout the United States.
Approval by the requisite vote of TCF stockholders is a condition to the
consummation of the Merger. Based on the total number of shares of Winthrop
common stock outstanding at May 19, 1997, the record date for the Special
Meeting, and the application of the exchange ratio of 0.7766 specified in the
Merger Agreement (the "Exchange Ratio"), approximately 6,679,000 new shares of
TCF common stock would be issued to stockholders of Winthrop in connection with
the Merger, representing approximately % of the total number of shares of
TCF common stock outstanding at May , 1997, after giving effect to such
issuance. An additional 341,316 shares of TCF common stock would be reserved for
issuance to option holders of Winthrop common stock in connection with TCF's
assumption of Winthrop's 1992 Stock Incentive Plan. The terms of the Merger,
including the method for determining the number of shares of TCF common stock to
be issued, as well as other important information relating to TCF Financial,
Winthrop and the combined operations after the Merger, are explained in detail
in the accompanying Joint Proxy Statement/Prospectus and we urge you to read it
carefully.
Please give this document your prompt attention. A proposal is included to
authorize adjournment of the meeting, if necessary, to obtain sufficient votes
for approval of the Merger. In order to avoid the expense of adjournment, I urge
you to return your proxy card as soon as possible.
<PAGE>
THE BOARD OF DIRECTORS OF TCF FINANCIAL HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE MERGER AND THE ISSUANCE OF SHARES OF TCF COMMON STOCK PROVIDED
FOR THEREIN, AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" BOTH OF THE
PROPOSALS ON THE ENCLOSED PROXY CARD: APPROVAL OF THE MERGER AGREEMENT, THE
MERGER AND THE ISSUANCE OF TCF COMMON STOCK IN CONNECTION THEREWITH; AND
APPROVAL OF ADJOURNMENT OF THE SPECIAL MEETING IF NECESSARY TO SOLICIT
ADDITIONAL PROXIES.
Your vote is important, regardless of the number of shares you own. On
behalf of the Board of Directors, I urge you to sign, date and return the
enclosed proxy card as soon as possible, even if you plan to attend the Special
Meeting. If you receive more than one proxy card, because you have multiple
accounts with TCF Financial common stock, please sign, date and return each
proxy card so that all your shares will be voted. This will not prevent you from
voting in person, but will assure that your vote is counted if you are unable to
attend the Special Meeting.
Sincerely,
[SIGNATURE]
William A. Cooper
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE>
TCF-Registration Trademark-
TCF FINANCIAL CORPORATION
801 MARQUETTE AVENUE, SUITE 302
MINNEAPOLIS, MN 55402
(612) 661-6500
------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 24, 1997
------------------------
TO THE STOCKHOLDERS OF TCF FINANCIAL CORPORATION:
A Special Meeting of the Stockholders of TCF Financial Corporation ("TCF" or
"TCF Financial") (the "TCF Special Meeting") will be held at
, Minnesota on Tuesday, June 24, 1997 commencing at 11:00 a.m. local time
to consider and vote upon the following proposals:
1. Approval and adoption of the Agreement and Plan of Reorganization, dated
February 28, 1997, and the exhibits thereto (the "Merger Agreement")
between TCF Financial and Winthrop Resources Corporation ("Winthrop"),
the merger of a newly-formed, wholly-owned subsidiary of TCF Financial
with and into Winthrop with Winthrop being the surviving corporation and
becoming a wholly-owned subsidiary of TCF pursuant to the Merger
Agreement (the "Merger"), and the issuance of up to 7,050,000 shares of
common stock of TCF Financial, par value $.01 per share (the "TCF Common
Stock"), and cash for fractional shares, to Winthrop stockholders and
holders of stock options in connection therewith. After the Merger, TCF
Financial intends to contribute Winthrop to TCF National Bank Minnesota,
one of its wholly-owned subsidiaries. Pursuant to the Merger Agreement,
each outstanding share of the common stock, par value $.01 per share, of
Winthrop ("Winthrop Common Stock") automatically would be converted into
and exchangeable for 0.7766 (the "Exchange Ratio") of a share of TCF
Common Stock, with cash paid in lieu of fractional shares. In addition,
as a result of the Merger, each outstanding option to purchase Winthrop
Common Stock would be assumed by TCF Financial at the effective time of
the Merger and would be converted into an option to acquire such number
of whole shares of TCF Common Stock as is equal to the product of the
Exchange Ratio and the number of shares of Winthrop Common Stock
remaining subject to the original option immediately prior to the
effective time of the Merger, at an exercise price per share equal to the
exercise price per share of Winthrop Common Stock under such option
immediately prior to the effective time of the Merger, divided by the
Exchange Ratio. The Merger Agreement is attached as Appendix A to the
accompanying Joint Proxy Statement/Prospectus and is incorporated by
reference herein;
2. To adjourn the TCF Special Meeting to solicit additional proxies, if
necessary; and
3. To transact such other business, if any, as may properly come before the
TCF Special Meeting or any adjournment or postponement thereof.
Only holders of record of TCF Common Stock at the close of business on May
19, 1997 are entitled to notice of and to vote at the TCF Special Meeting or any
adjournment or postponement thereof.
A list of TCF Financial stockholders entitled to vote at the TCF Special
Meeting will be available for examination, for any purpose germane to the TCF
Special Meeting, at TCF's executive offices located at 801 Marquette Avenue,
Suite 302, Minneapolis, Minnesota, during ordinary business hours for at least
ten days prior to the TCF Special Meeting and for the duration of the TCF
Special Meeting itself.
<PAGE>
Whether or not you plan to attend the TCF Special Meeting in person, please
fill in, sign and date the enclosed Proxy Card and mail it promptly. Should you
attend the TCF Special Meeting, you may revoke your proxy and vote in person. A
return envelope, which requires no postage if mailed in the United States, is
enclosed for your convenience.
Remember, if your shares are held in the name of a broker, only your broker
can vote your shares and only after receiving your instructions. Please contact
the person responsible for your account, with instructions to execute a proxy
card on your behalf.
THE BOARD OF DIRECTORS OF TCF FINANCIAL UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" BOTH PROPOSALS ON THE ENCLOSED PROXY CARD: APPROVAL OF THE MERGER
AGREEMENT, THE MERGER AND THE ISSUANCE OF TCF COMMON STOCK IN CONNECTION
THEREWITH; AND APPROVAL OF ADJOURNMENT OF THE SPECIAL MEETING IF NECESSARY TO
SOLICIT ADDITIONAL PROXIES.
If you have any questions or require assistance, please call Georgeson &
Co., which is assisting us in the solicitation of proxies, at (800) 223-2064.
By Order of the Board of Directors
[SIGNATURE]
William A. Cooper
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
WHETHER OR NOT YOU EXPECT TO ATTEND THE TCF SPECIAL MEETING, PLEASE SIGN THE
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. THE PROMPT RETURN OF PROXIES WILL
SAVE TCF FINANCIAL THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO
ASSURE A QUORUM. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
Minneapolis, Minnesota
May , 1997
<PAGE>
[LOGO]
WINTHROP RESOURCES CORPORATION
1015 OPUS CENTER, 9900 BREN ROAD EAST
MINNETONKA, MN 55343
(612) 936-0226
Dear Winthrop Stockholder:
I am pleased to invite you to attend a Special Meeting of Stockholders of
Winthrop Resources Corporation ("Winthrop") (the "Winthrop Special Meeting")
which will begin at 10:00 a.m. Minneapolis time, on Tuesday June 24, 1997 at the
.
At the Winthrop Special Meeting, you will be asked to approve the Agreement
and Plan of Reorganization dated February 28, 1997, and the exhibits thereto
(the "Merger Agreement") by and between Winthrop and TCF Financial Corporation
("TCF" or "TCF Financial") pursuant to which a newly-formed, wholly-owned
subsidiary of TCF will be merged with and into Winthrop, with Winthrop being the
surviving corporation and becoming a wholly-owned subsidiary of TCF (the
"Merger"). Upon completion of the Merger, TCF intends that Winthrop will become
a wholly-owned subsidiary of TCF National Bank Minnesota. If the proposed
Merger, described in the accompanying Joint Proxy Statement/Prospectus, becomes
effective, each outstanding share of Winthrop common stock automatically would
be converted into and exchangeable for 0.7766 (the "Exchange Ratio") of a share
of TCF common stock (with cash paid in lieu of fractional shares). Based on the
last reported sale price of TCF common stock on the New York Stock Exchange on
May , 1997, the Exchange Ratio would result in a per share purchase price
for Winthrop common stock of $ . If the Merger is completed, Winthrop
stockholders will no longer hold any interest in Winthrop other than through
their interest in shares of TCF common stock. Winthrop may terminate the Merger
Agreement and abandon the Merger if, among other things, the "Average TCF Stock
Price" is less than $42.30 per share. TCF may terminate the Merger Agreement and
abandon the Merger if, among other things, the "Average TCF Stock Price" is
greater than $51.70 per share. The "Average TCF Stock Price" is defined under
the Merger Agreement as the average of the daily closing sales prices of TCF
common stock for the 30 consecutive full trading days ending on the third
business day immediately prior to either the last date of either of the
stockholders meetings or the date on which the last regulatory approval has been
obtained and all required waiting periods have expired, whichever date is
closest to the effective time of the Merger. TCF common stock is traded on the
New York Stock Exchange under the symbol TCB.
The proposed Merger is subject, among other things, to approval by holders
of a majority of the outstanding shares of Winthrop common stock. The three
founding stockholders of Winthrop who are current directors and executive
officers of Winthrop and who collectively hold approximately 43.5% of the
outstanding shares of Winthrop common stock have already agreed to vote their
shares in favor of the Merger.
It is important that your shares are represented at the Winthrop Special
Meeting, whether or not you plan to attend. I urge you to cast your vote as soon
as possible. To cast a vote, simply complete, date, sign and return the proxy
card which is enclosed. A postage-paid envelope is enclosed for the return of
the proxy card. A proxy card which is signed but unmarked will be deemed as a
vote in favor of the Merger. An abstention or failure to vote will have the same
effect as a vote against the Merger. Although you may have voted by proxy, you
may attend the Winthrop Special Meeting and vote your shares in person. This
vote may be different from the way you voted in the proxy.
<PAGE>
I encourage you to carefully read the Notice of Special Meeting and Joint
Proxy Statement/Prospectus which accompany this letter as they contain more
information about the Merger Agreement, the Merger, and the parties to the
Merger.
Please hold onto your Winthrop stock certificates until you receive a letter
which explains how to exchange your shares of Winthrop common stock for shares
of TCF common stock. PLEASE DO NOT SEND IN YOUR WINTHROP STOCK CERTIFICATES AT
THIS TIME.
Winthrop's Board of Directors has received an opinion of Dain Bosworth
Incorporated, Winthrop's financial advisor, that as of February 26, 1997 and as
of the date of the accompanying Joint Proxy Statement/ Prospectus, the
consideration to be received in the Merger by the Winthrop common stockholders
is fair, from a financial point of view, to the stockholders of Winthrop. A copy
of this opinion is included as Appendix C to the Joint Proxy
Statement/Prospectus.
After careful consideration, the Winthrop Board of Directors, by unanimous
vote of all directors, has approved the terms of the Merger Agreement and the
Merger, and has concluded that the Merger Agreement and the Merger are in the
best interests of Winthrop and its stockholders.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" APPROVAL AND ADOPTION OF
THE MERGER AGREEMENT AND APPROVAL OF THE MERGER
On behalf of the Winthrop Board of Directors, I thank you for your continued
support and encourage you to vote "For" the Merger Agreement and the Merger.
Sincerely,
John L. Morgan
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
[LOGO]
WINTHROP RESOURCES CORPORATION
1015 OPUS CENTER, 9900 BREN ROAD EAST
MINNETONKA, MINNESOTA 55343
------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 24, 1997
------------------------
TO THE STOCKHOLDERS OF WINTHROP RESOURCES CORPORATION:
NOTICE IS HEREBY GIVEN that a Special Meeting (the "Winthrop Special
Meeting") of stockholders of the common stock, par value $.01 per share, of
Winthrop Resources Corporation ("Winthrop"), a Minnesota corporation, will be
held at 10:00 a.m., Minneapolis time, on Tuesday, June 24, 1997 at for the
purpose of considering and voting upon:
1. The approval and adoption of the Agreement and Plan of Reorganization
dated February 28, 1997 (the "Merger Agreement"), by and between Winthrop
and TCF Financial Corporation ("TCF"), including the transactions
contemplated by the Merger Agreement. Pursuant to the Merger Agreement,
among other things, a newly-formed, wholly-owned subsidiary of TCF will
merge with and into Winthrop, with Winthrop being the surviving
corporation and becoming a wholly-owned subsidiary of TCF (the "Merger").
After the Merger, Winthrop will become a wholly-owned subsidiary of TCF
National Bank Minnesota. Pursuant to the Merger Agreement, each
outstanding share of Winthrop common stock, par value $.01 per share
("Winthrop Common Stock"), automatically will be converted into and
exchangeable for 0.7766 (the "Exchange Ratio") of a share of TCF common
stock, par value $.01 per share (with cash paid in lieu of fractional
shares). The Merger Agreement and the transactions contemplated by the
Merger Agreement are more fully described in the Joint Proxy
Statement/Prospectus which accompanies this Notice of Special Meeting of
Stockholders. The Merger Agreement is attached as Appendix A to such
Joint Proxy Statement/Prospectus, and is incorporated by reference
herein.
2. Such other matters as may properly come before this Winthrop Special
Meeting or any adjournment or postponement thereof, including a motion to
adjourn to a later date to permit further solicitation of proxies if
necessary.
All Winthrop stockholders are invited to attend the Winthrop Special Meeting
in person. Only holders of record of Winthrop Common Stock at the close of
business on , 1997 are entitled to notice of, and to vote at, the
Winthrop Special Meeting. Whether or not you plan to attend the Winthrop Special
Meeting in person, please promptly complete, sign, date and return the enclosed
proxy card. A postage-paid envelope is enclosed for the return of the proxy
card. The proxy may be revoked at any time before it is voted. Although you may
have voted by proxy, you may attend the Winthrop Special Meeting and vote your
shares in person if you wish.
Under Minnesota law, stockholders of Winthrop Common Stock are eligible to
exercise dissenters' rights in connection with the proposed Merger, as described
in greater detail in the accompanying Joint Proxy Statement/Prospectus.
The accompanying Joint Proxy Statement/Prospectus and the exhibits thereto,
including the Merger Agreement, form a part of this Notice.
Remember, if your shares are held in the name of a broker, only your broker
can vote your shares and only after receiving your instructions. Please contact
the person responsible for your account with instructions to execute a proxy
card on your behalf.
<PAGE>
If the accompanying Proxy Card is properly executed and returned to Winthrop
in time to be voted at the Winthrop Special Meeting, and not revoked, the shares
represented thereby will be voted in accordance with the instructions marked
thereon. EXECUTED BUT UNMARKED PROXIES WILL BE VOTED FOR APPROVAL AND ADOPTION
OF THE MERGER AGREEMENT AND THE MERGER. The presence of a stockholder at the
Winthrop Special Meeting will not automatically revoke such stockholder's proxy.
A stockholder may, however, revoke a proxy at any time before the vote by filing
a written notice of revocation with, or by delivering a duly executed Proxy Card
bearing a later date to, Mr. Paul L. Gendler, General Counsel, Winthrop
Resources Corporation, 1015 Opus Center, 9900 Bren Road East, Minnetonka,
Minnesota 55343 or by attending the Winthrop Special Meeting and voting in
person.
By Order of the Board of Directors
Mark L. Wilson
SECRETARY
Minnetonka, Minnesota
, 1997
- --------------------------------------------------------------------------------
THE WINTHROP BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO APPROVE
AND ADOPT THE MERGER AGREEMENT AND TO APPROVE THE MERGER AND
"FOR" THE PROPOSAL TO ADJOURN THE MEETING, IF NECESSARY,
TO SOLICIT ADDITIONAL PROXIES.
PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY PROMPTLY,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
<PAGE>
TCF FINANCIAL CORPORATION
WINTHROP RESOURCES CORPORATION
JOINT PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS OF TCF FINANCIAL CORPORATION
TO BE HELD ON
JUNE 24, 1997
AND
SPECIAL MEETING OF STOCKHOLDERS OF WINTHROP RESOURCES CORPORATION
TO BE HELD ON
JUNE 24, 1997
------------------------
TCF FINANCIAL CORPORATION
PROSPECTUS
FOR
UP TO 7,050,000 SHARES OF COMMON STOCK
OF TCF FINANCIAL CORPORATION
TO BE ISSUED PURSUANT TO THE
AGREEMENT AND PLAN OF REORGANIZATION DATED FEBRUARY 28, 1997
BETWEEN
TCF FINANCIAL CORPORATION
AND
WINTHROP RESOURCES CORPORATION
------------------------
THE DATE OF THIS JOINT PROXY STATEMENT/PROSPECTUS IS MAY , 1997.
This Joint Proxy Statement/Prospectus is being furnished in connection with
the solicitation of proxies by the Board of Directors of TCF Financial
Corporation, a Delaware corporation ("TCF" or "TCF Financial") to be used at a
special meeting of its stockholders to be held on Tuesday, June 24, 1997 (the
"TCF Special Meeting"), and the solicitation of proxies by the Board of
Directors of Winthrop Resources Corporation, a Minnesota corporation
("Winthrop") to be used at a special meeting of its stockholders to be held on
Tuesday, June 24, 1997 (the "Winthrop Special Meeting"). The TCF Special Meeting
and the Winthrop Special Meeting are jointly referred to as the "Special
Meetings." At the TCF Special Meeting, TCF common stockholders will be asked to
consider and act upon: a proposal to approve the Agreement and Plan of
Reorganization dated February 28, 1997 by and between TCF and Winthrop, and the
exhibits thereto (the "Merger Agreement"), pursuant to which a newly-formed,
wholly-owned subsidiary of TCF will be merged with and into Winthrop, with
Winthrop being the surviving corporation and becoming a wholly-owned subsidiary
of TCF (the "Merger"), and pursuant to which TCF will issue shares of its common
stock, par value $.01 per share, including the associated preferred share
purchase rights described in "Description of TCF Capital Stock--TCF Common
Stock--Preferred Share Purchase Rights, ("TCF Common Stock"). At the Winthrop
Special Meeting, Winthrop common stockholders will be asked to
1
<PAGE>
consider and act upon a proposal to approve and adopt the Merger Agreement and
the Merger. After the Merger, TCF intends to contribute all outstanding capital
stock of Winthrop to TCF National Bank Minnesota ("TCF Minnesota"), one of its
wholly-owned subsidiaries. The Boards of Directors of TCF and Winthrop are also
soliciting their respective stockholders for authority to adjourn the respective
Special Meetings to solicit additional proxies, if necessary. A copy of the
Merger Agreement is attached as Appendix A to this Joint Proxy
Statement/Prospectus and incorporated by reference herein.
In accordance with the terms of the Merger Agreement, upon approval of the
Merger Agreement by the stockholders of TCF and Winthrop, the receipt of all
requisite regulatory approvals, the expiration of the applicable waiting periods
and the satisfaction or waiver of all other conditions, the Merger will occur.
In connection with the Merger, each share of common stock of Winthrop, par value
$.01 per share ("Winthrop Common Stock"), outstanding immediately prior to
consummation of the Merger (other than dissenters' shares and shares held by TCF
or any subsidiary thereof except for shares held in a fiduciary capacity or in
satisfaction of a debt) shall be automatically converted into and exchangeable
for 0.7766 (the "Exchange Ratio") of a share of TCF Common Stock. No fractional
shares of TCF Common Stock will be issued and cash will be paid in lieu thereof.
Upon consummation of the Merger, TCF will also assume the obligation to issue
TCF Common Stock upon the exercise of outstanding employee and director options
(the "Options") under Winthrop's 1992 Stock Incentive Plan (the "Winthrop Stock
Option Plan"), and TCF will become a co-obligor of the outstanding 9.50% senior
notes of Winthrop due 2003 (the "Winthrop Senior Notes"), subject to approval by
Winthrop Senior Note holders of certain modifications to the indenture pursuant
to which the Winthrop Senior Notes were issued. See "The Merger--Interests of
Certain Persons in the Merger." The outstanding shares of TCF Common Stock are,
and it is a condition to consummation of the Merger that the shares of TCF
Common Stock to be issued in the Merger will be (subject to official notice of
issuance), listed on the New York Stock Exchange (the "NYSE") under the symbol
"TCB". The last reported sale price of TCF Common Stock on the NYSE composite
tape on May , 1997 was $ per share. Based on the last reported sale
price, the Exchange Ratio would result in a per share purchase price for the
Winthrop Common Stock of $ .
BECAUSE THE EXCHANGE RATIO IS FIXED, A CHANGE IN THE MARKET PRICE OF TCF
COMMON STOCK BEFORE THE MERGER WILL AFFECT THE VALUE OF THE TCF COMMON STOCK TO
BE RECEIVED IN THE MERGER.
Consummation of the Merger is conditioned upon, among other things,
satisfaction of certain conditions precedent, including the receipt of all
required stockholder and regulatory approvals. Because of the uncertainty of the
timing of the satisfaction of the conditions precedent and receipt of regulatory
approvals, the Merger may not be consummated for a substantial period of time
after any receipt of approvals by the stockholders of TCF and Winthrop. See "The
Merger--Regulatory Approvals."
Piper Jaffray Inc. ("Piper Jaffray") has rendered its opinion dated the date
of this Joint Proxy Statement/Prospectus, updating its opinion dated February
25, 1997, to the Board of Directors of TCF that, as of such dates, the
consideration to be paid by TCF in the Merger is fair, from a financial point of
view, to the stockholders of TCF. See "The Merger--Opinion of TCF Financial
Advisor."
Dain Bosworth Incorporated ("Dain Bosworth") has rendered its opinion dated
the date of this Joint Proxy Statement/Prospectus, updating its oral opinion
provided on February 26, 1997, to the Board of Directors of Winthrop that, as of
such dates, the consideration to be received by stockholders of Winthrop is
fair, from a financial point of view, to the stockholders of Winthrop. See "The
Merger--Opinion of Winthrop Financial Advisor."
THE BOARD OF DIRECTORS OF TCF UNANIMOUSLY RECOMMENDS THAT HOLDERS OF TCF
COMMON STOCK VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT, THE MERGER AND
ISSUANCE OF SHARES OF TCF COMMON STOCK IN CONNECTION THEREWITH. THE BOARD OF
DIRECTORS OF WINTHROP UNANIMOUSLY RECOMMENDS THAT HOLDERS OF
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WINTHROP COMMON STOCK VOTE "FOR" APPROVAL AND ADOPTION OF THE MERGER AGREEMENT
AND APPROVAL OF THE MERGER.
This Joint Proxy Statement/Prospectus is part of a Registration Statement on
Form S-4 pursuant to the Securities Act of 1933, as amended, to register up to
7,050,000 shares of TCF Common Stock to be issued in connection with the Merger
and the assumption of the Options upon consummation of the Merger. The Exchange
Ratio, and the determination of the maximum number of shares of TCF Common Stock
to be issued as a result of the Merger, are explained herein.
This Joint Proxy Statement/Prospectus serves as a proxy statement for each
of TCF and Winthrop in connection with their respective Special Meetings and as
the Prospectus of TCF with respect to the shares of TCF Common Stock to be
issued in connection with the Merger and the Options of Winthrop to be assumed
by TCF upon consummation of the Merger. All information in this Joint Proxy
Statement/ Prospectus regarding TCF and its affiliates has been furnished by
TCF, and all information herein regarding Winthrop and its affiliates has been
furnished by Winthrop.
Winthrop stock certificates should not be sent or returned until after
receipt of a letter of transmittal to be provided to Winthrop stockholders upon
consummation of the Merger.
------------------------
THE SECURITIES TO BE ISSUED IN THE MERGER HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR ANY OTHER GOVERNMENTAL AGENCY, NOR HAS THE COMMISSION, ANY STATE
SECURITIES COMMISSION OR OTHER AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS JOINT PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE ABOVE MATTERS ARE DISCUSSED IN DETAIL IN THIS JOINT PROXY STATEMENT/
PROSPECTUS. THE PROPOSED MERGER IS A COMPLEX TRANSACTION. STOCKHOLDERS OF TCF
AND WINTHROP ARE STRONGLY URGED TO READ AND CONSIDER CAREFULLY THIS JOINT PROXY
STATEMENT/PROSPECTUS IN ITS ENTIRETY.
------------------------
This Joint Proxy Statement/Prospectus and the accompanying Notices and Proxy
Cards for the respective Special Meetings are first being mailed to stockholders
of TCF and Winthrop on or about May , 1997.
AVAILABLE INFORMATION
TCF has filed with the Securities and Exchange Commission (the "Commission")
a Registration Statement on Form S-4 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
shares of TCF Common Stock which may be issued in connection with the Merger
described herein, and the Options to be assumed by TCF in connection with the
Merger. As permitted by the rules and regulations of the Commission, this Joint
Proxy Statement/Prospectus omits certain information, exhibits and undertakings
contained in the Registration Statement. For further information, reference is
made to the Registration Statement, including all amendments to the Registration
Statement, and all the exhibits and schedules filed as part of the Registration
Statement. Statements contained herein concerning provisions of documents are
necessarily summaries of the documents and each statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission. The Registration Statement can be inspected and copied at prescribed
rates at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's Regional Offices at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center,
New York, New York 10048. The Registration Statement can be accessed over the
Commission's web site located at http:// www.sec.gov.
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TCF and Winthrop are currently subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, file reports, proxy and information statements and other
information with the Commission. Copies of such TCF materials may be obtained at
prescribed rates from the Commission. The TCF Common Stock is listed for
quotation on the NYSE. The Winthrop Common Stock is quoted on the Nasdaq
National Market System. Consequently, reports, proxy and information statements
and other information concerning TCF can also be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005 and concerning Winthrop at the
offices of the Nasdaq National Market System, 1735 K Street N.W., Washington,
D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Joint Proxy Statement/Prospectus incorporates documents by reference
which are not presented herein or delivered herewith. The following documents
filed by TCF (File No. 0-16431) and by Winthrop (File No. 0-20123) with the
Commission pursuant to the Exchange Act and the rules and regulations of the
Commission are incorporated herein by reference:
(a) TCF's (i) Annual Report on Form 10-K for the year ended December 31,
1996; and (ii) Current Reports on Form 8-K dated January 27, 1997, February
19, 1997, March 5, 1997, March 21, 1997 and April 7, 1997; and
(b) Winthrop's (i) Annual Report on Form 10-K for the year ended
December 31, 1996; and (ii) Current Reports on Form 8-K dated January 19,
1996 and March 7, 1997; (iv) Current Report on Form 8-K/A dated March 29,
1996; (v) Registration Statement on Form 8-A dated April 23, 1992; and (vi)
any amendment or report filed for the purpose of updating such description
of Winthrop Common Stock filed subsequent to the date of this Joint Proxy
Statement/Prospectus and prior to the termination of the offering described
herein; and
(c) All other documents filed by either TCF or Winthrop pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent to the
date of this Joint Proxy Statement/Prospectus and prior to the Special
Meetings.
In addition, TCF has also entered into an agreement and plan of
reorganization dated March 16, 1997 (the "Standard Merger Agreement") with
Standard Financial, Inc., a Delaware corporation ("Standard"), which owns all of
the outstanding capital stock of Standard Federal Bank for savings, a federal
savings bank ("Standard Bank"), pursuant to which TCF has agreed to acquire
Standard for approximately $419 million, subject to certain adjustments, in a
combination of stock and cash. Certain financial information of Standard is
incorporated by reference from exhibits to TCF's registration statement on file
with the Commission. See "Recent Developments--Standard." 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 Joint
Proxy Statement/Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Joint Proxy Statement/Prospectus.
THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. ALL OF SUCH DOCUMENTS WITH
RESPECT TO TCF ARE AVAILABLE UPON WRITTEN OR ORAL REQUEST FROM MR. GREGORY J.
PULLES, SECRETARY, TCF FINANCIAL CORPORATION, 801 MARQUETTE AVENUE, SUITE 302,
MINNEAPOLIS, MINNESOTA 55402; TELEPHONE NUMBER (612) 661-6500. ALL OF SUCH
DOCUMENTS WITH RESPECT TO WINTHROP ARE AVAILABLE UPON WRITTEN OR ORAL REQUEST
FROM MR. GARY W. ANDERSON, VICE PRESIDENT, WINTHROP RESOURCES CORPORATION, 1015
OPUS CENTER, 9900 BREN ROAD EAST, MINNETONKA, MINNESOTA, 55343; TELEPHONE NUMBER
(616) 936-0226. COPIES WILL BE FURNISHED (WITHOUT EXHIBITS UNLESS THE EXHIBITS
HAVE BEEN SPECIFICALLY INCORPORATED BY REFERENCE) FREE OF CHARGE. IN ORDER TO
ENSURE TIMELY DELIVERY OF SUCH DOCUMENTS PRIOR TO THE SPECIAL MEETINGS, ANY
REQUEST SHOULD BE MADE BEFORE JUNE 13, 1997.
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TABLE OF CONTENTS
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<S> <C>
AVAILABLE INFORMATION...................................................................................... 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................................................ 4
SUMMARY.................................................................................................... 7
COMPARATIVE MARKET PRICE DATA.............................................................................. 15
COMPARATIVE UNAUDITED PER-SHARE DATA....................................................................... 17
SELECTED HISTORICAL AND UNAUDITED PRO FORMA
COMBINED FINANCIAL DATA.............................................................................. 19
INFORMATION CONCERNING THE TCF SPECIAL MEETING............................................................. 25
INFORMATION CONCERNING THE WINTHROP SPECIAL MEETING........................................................ 26
EXPENSES................................................................................................... 29
THE MERGER................................................................................................. 30
General.................................................................................................. 30
Background of and Reasons for the Merger................................................................. 30
Opinion of TCF Financial Advisor......................................................................... 35
Opinion of Winthrop Financial Advisor.................................................................... 40
Effects of the Merger.................................................................................... 43
The Exchange Ratio....................................................................................... 44
Conditions to the Merger................................................................................. 46
Regulatory Approvals..................................................................................... 48
Certain Covenants........................................................................................ 49
Limitation on Negotiations............................................................................... 49
Termination and Amendment................................................................................ 49
Termination Fees......................................................................................... 50
Business Pending the Merger.............................................................................. 51
Interests of Certain Persons in the Merger............................................................... 53
Resale Considerations With Respect to the TCF Common Stock............................................... 54
Certain Federal Income Tax Consequences.................................................................. 55
Accounting Treatment of the Merger....................................................................... 56
Dissenters' Rights--Winthrop............................................................................. 56
Expenses of the Merger................................................................................... 59
Stockholder and Affiliate Letter Agreements.............................................................. 59
DESCRIPTION OF TCF CAPITAL STOCK........................................................................... 60
DESCRIPTION OF WINTHROP SECURITIES......................................................................... 63
COMPARISON OF THE RIGHTS OF STOCKHOLDERS................................................................... 64
RECENT DEVELOPMENTS........................................................................................ 73
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION......................................................... 75
ADJOURNMENT OF SPECIAL MEETINGS............................................................................ 83
LEGAL OPINIONS............................................................................................. 84
EXPERTS.................................................................................................... 84
OTHER MATTERS.............................................................................................. 84
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TABLE OF CONTENTS (CONTINUED)
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<S> <C> <C>
APPENDIX A: Agreement and Plan of Reorganization dated as of February 28, 1997, between TCF
Financial Corporation and Winthrop Resources Corporation, including the related Form
of Stockholder Agreement attached as Exhibit A thereto, the Articles of Merger
attached as Exhibit B thereto and the Forms of Affiliate Letters attached as Exhibits
C and D thereto...................................................................... A
APPENDIX B: Opinion of Piper Jaffray Inc........................................................... B
APPENDIX C: Opinion of Dain Bosworth Incorporated.................................................. C
APPENDIX D: Sections 302A.471 and .473 of MBCA (Dissenters' Rights applicable to Winthrop
Stockholders)........................................................................ D
</TABLE>
------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS JOINT PROXY STATEMENT/PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY TCF OR WINTHROP. THIS JOINT PROXY STATEMENT/PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE
SECURITIES OFFERED BY THIS JOINT PROXY STATEMENT/PROSPECTUS, OR THE SOLICITATION
OF A PROXY, IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER,
SOLICITATION OF AN OFFER OR PROXY SOLICITATION. NEITHER THE DELIVERY OF THIS
JOINT PROXY STATEMENT/ PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES OFFERED
PURSUANT TO THIS JOINT PROXY STATEMENT/PROSPECTUS SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF TCF OR WINTHROP OR ANY OF
THEIR RESPECTIVE SUBSIDIARIES SINCE THE DATE OF THIS JOINT PROXY
STATEMENT/PROSPECTUS.
------------------------
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SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS JOINT PROXY STATEMENT/ PROSPECTUS AND IS NOT INTENDED TO BE A COMPLETE
STATEMENT OF THE MATTERS DESCRIBED HEREIN. REFERENCE IS MADE TO, AND THIS
SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION CONTAINED
ELSEWHERE IN THIS JOINT PROXY STATEMENT/PROSPECTUS AND IN THE APPENDICES
ATTACHED HERETO, INCLUDING THE MERGER AGREEMENT, A COPY OF WHICH IS ATTACHED
HERETO AS APPENDIX A. UNLESS OTHERWISE DEFINED, CAPITALIZED TERMS USED IN THIS
SUMMARY HAVE THE RESPECTIVE MEANINGS ASCRIBED TO THEM ELSEWHERE IN THIS JOINT
PROXY STATEMENT/PROSPECTUS.
ALL INFORMATION CONTAINED IN THIS JOINT PROXY STATEMENT/PROSPECTUS RELATING
TO TCF HAS BEEN PROVIDED BY TCF, AND ALL INFORMATION CONTAINED HEREIN RELATING
TO WINTHROP HAS BEEN PROVIDED BY WINTHROP.
THE SPECIAL MEETINGS
TCF SPECIAL MEETING. The TCF Special Meeting will be held at the
Minneapolis, Minnesota, on Tuesday, June 24, 1997 at 11:00 a.m.,
local time. Only the holders of record of the outstanding shares of TCF Common
Stock at the close of business on May 19, 1997 (the "TCF Record Date") will be
entitled to notice of and to vote at the TCF Special Meeting. At the TCF Record
Date, shares of TCF Common Stock were outstanding and entitled to vote.
At the TCF Special Meeting, TCF stockholders will be asked to consider and
vote upon: (i) a proposal to approve the Merger Agreement, the Merger and the
issuance of shares of TCF Common Stock in connection therewith; and (ii) a
proposal to adjourn the TCF Special Meeting if necessary to solicit additional
proxies. Because the number of shares of TCF Common Stock to be issued or
reserved for issuance in connection with the Merger will exceed 20% of the
number of shares of TCF Common Stock outstanding prior to the signing of the
Merger Agreement, approval by holders of TCF Common Stock of the issuance of TCF
Common Stock pursuant to the Merger Agreement is required under the rules of the
NYSE. Under NYSE rules, the proposed issuance of TCF Common Stock pursuant to
the Merger Agreement must be approved by a majority of the votes cast at the TCF
Special Meeting, provided that the total votes cast on the proposal represents
over 50% of the outstanding shares of TCF Common Stock. If holders of TCF Common
Stock do not vote to approve such issuance, the Merger will not be consummated.
TCF is not a constituent corporation to the Merger and, therefore, approval by
TCF's stockholders is not required under the Delaware General Corporation Law
(the "DGCL") or the TCF Restated Certificate of Incorporation (the "TCF
Certificate") or the TCF Bylaws, as amended (the "TCF Bylaws"). See "Information
Concerning the TCF Special Meeting".
As of the TCF Record Date, the directors and executive officers of TCF and
their affiliates beneficially owned in the aggregate shares, or %, of
the issued and outstanding TCF Common Stock, excluding shares subject to
options. Each of TCF's directors and executive officers has signed agreements
(the "Affiliate Letters" or the "Affiliate Letter Agreements") under which they
will not sell their shares of TCF Common Stock during the period starting 30
days before the Merger and expiring upon the publication by TCF of results from
30 days of post-merger combined operations of TCF and Winthrop. See "The
Merger--Stockholder and Affiliate Letter Agreements."
WINTHROP SPECIAL MEETING. The Winthrop Special Meeting will be held at the
Minneapolis, Minnesota, on Tuesday, June 24, 1997 at 10:00
a.m., local time. Only the stockholders of record of the outstanding shares of
Winthrop Common Stock at the close of business on (the "Winthrop
Record Date") will be entitled to notice of and to vote at the Winthrop Special
Meeting. At the Winthrop Record Date, shares of Winthrop Common Stock were
outstanding and entitled to vote.
At the Winthrop Special Meeting, Winthrop stockholders will be asked to
consider and vote upon: (i) a proposal to approve the Merger Agreement, the
Merger and the transactions contemplated thereby;
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and (ii) such other matters as may properly come before the Winthrop Special
Meeting or any adjournment or postponement thereof, including a motion to
adjourn to a later date to permit further solicitation of proxies if necessary.
The affirmative vote of a majority of the outstanding shares of Winthrop Common
Stock, voted in person or by proxy, is required to approve the Merger Agreement,
the Merger and the transactions contemplated thereby. Assuming a quorum is
present, the affirmative vote of the holders of a majority of the outstanding
shares of Winthrop Common Stock, voting in person or by proxy, is required to
approve the proposal to adjourn the Winthrop Special Meeting, if necessary. See
"Information Concerning the Winthrop Special Meeting."
As of the Winthrop Record Date, the directors and executive officers of
Winthrop and their affiliates beneficially owned in the aggregate 3,992,483
shares, or 46.4%, of the issued and outstanding Winthrop Common Stock, excluding
shares subject to options and shares that may be deemed beneficially owned
because a director or officer serves as a fiduciary. Each of the three largest
stockholders of Winthrop, John L. Morgan, Kirk A. MacKenzie and Jack A. Norqual
(who are also the President, Executive Vice President and Treasurer, and Senior
Vice President, respectively, of Winthrop, as well as members of its board of
directors) (collectively, the "Winthrop Founders") has entered into a separate
agreement with TCF which, subject to certain exceptions, requires, among other
things, that each of them will vote all shares of Winthrop Common Stock which
such Winthrop Founder has the right to vote in favor of the Merger Agreement and
the transactions contemplated thereby, and will refrain from transferring any of
their shares of Winthrop Common Stock until the earlier of the date of the
Winthrop Special Meeting or termination of the Merger Agreement. The Winthrop
Founders and certain other directors and executive officers of Winthrop have
signed letters (the "Affiliate Letters" or the "Affiliate Letter Agreements")
restricting their rights to sell: (i) shares of TCF Common Stock issued to such
person pursuant to the Merger except in compliance with Rule 145 under the
Securities Act, in a transaction that is otherwise exempt from the registration
requirements under the Securities Act or in an offering registered under the
Securities Act, and (ii) for the period starting 30 days before the effective
date of the Merger and until such time as financial results covering at least 30
days of post-Merger combined operations of TCF and Winthrop have been published
by TCF, shares of TCF Common Stock and Winthrop Common Stock held by such
person. See "The Merger--Stockholder and Affiliate Letter Agreements."
THE PARTIES TO THE MERGER
TCF. TCF is a Delaware corporation and a bank holding company under the
Bank Holding Company Act, as amended (the "BHCA"). TCF's direct and indirect
wholly-owned banking subsidiaries are TCF Minnesota, TCF National Bank Wisconsin
("TCF Wisconsin"), TCF National Bank Illinois ("TCF Illinois"), Great Lakes
National Bank Michigan ("Great Lakes Michigan"), Great Lakes National Bank Ohio
("Great Lakes Ohio") and TCF National Bank Colorado ("TCF Colorado"),
(collectively, TCF Minnesota, TCF Wisconsin, TCF Illinois, Great Lakes Michigan,
Great Lakes Ohio and TCF Colorado are called the "TCF Banks"). TCF Minnesota
currently conducts business through 75 branch offices in Minnesota. TCF
Wisconsin currently conducts business through 27 branch offices in Wisconsin.
TCF Illinois currently conducts business through 35 branch offices in Illinois.
Great Lakes Michigan currently conducts business through 56 branch offices in
Michigan. Great Lakes Ohio currently conducts business through 8 branches in
Ohio. TCF Colorado expects to conduct business through six branches in Colorado
starting on or about July 1, 1997. In addition, a consumer finance company
subsidiary of TCF Minnesota, TCF Financial Services, Inc., conducts business
through 61 offices in sixteen states. TCF Financial signed a definitive
agreement on March 16, 1997 to acquire Standard, and its wholly-owned subsidiary
Standard Bank, headquartered in Chicago, Illinois. Standard had total assets of
$2.4 billion and Standard Bank had 14 full-service branches in Illinois at
December 31, 1996. TCF agreed to acquire Standard for approximately $419
million, subject to certain adjustments, in a combination of stock and cash. The
Merger is not contingent upon TCF's acquisition of Standard. See "Recent
Developments-- Standard." The deposits of the TCF Banks are insured to the
maximum extent provided by law, by the Savings Association Insurance Fund
("SAIF") or the Bank Insurance Fund ("BIF"), both of which are
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administered by the Federal Deposit Insurance Corporation ("FDIC"). The
principal business of the TCF Banks consists of attracting deposits from the
general public and investing such deposits, together with other funds, in
consumer loans, residential real estate loans, commercial real estate loans,
commercial business loans and mortgage-backed and investment securities. TCF's
executive offices are located at 801 Marquette Avenue, Suite 302, Minneapolis,
Minnesota 55402, and its telephone number is (612) 661-6500. At December 31,
1996, TCF had total assets of $7.1 billion, total liabilities of $6.5 billion
and stockholders' equity of $549.5 million. For further information concerning
TCF, see the TCF documents incorporated by reference herein as described under
"Incorporation of Certain Documents by Reference."
WINTHROP. Winthrop is engaged in leasing high-technology and
business-essential equipment to businesses throughout the United States.
Winthrop's operations are currently conducted through its principal office in
Minnetonka, Minnesota and six other offices in the United States.
Since its founding in 1982, Winthrop's focus has been primarily on leasing
high-technology equipment, including computers, telecommunications equipment,
point-of-sale systems and other technology-based equipment to large
organizations (generally, corporations with revenues of $50 million or more).
These lease transactions, which are retained in Winthrop's portfolio, range from
$250,000 to $20 million and generally have terms from two to five years. This is
Winthrop's "Value Added" Lease product.
Winthrop also offers Small Ticket Lease and Wholesale Lease products. Lease
transactions in the small ticket area typically are for less than $250,000 and
have lease terms of between two and five years. Small Ticket Leases are
primarily generated for Winthrop's lease portfolio by Winthrop sales
representatives. The Wholesale Lease is primarily associated with transactions
which are originated by unrelated lease brokers. The Wholesale Lease is
generally funded by outside sources and does not become part of Winthrop's lease
portfolio.
Winthrop also markets the Enterprise Lease, which combines the Value Added
Lease and Small Ticket Lease products. This product is designed to meet the
needs of large corporations that have influence over multiple business entities,
such as franchisor-franchisee relationships. The Enterprise Lease integrates the
Value Added Lease and the Small Ticket Lease for organizations in need of
enterprise-wide equipment and system solutions.
At December 31, 1996, Winthrop had total assets of $350.1 million and total
stockholders' equity of $81.2 million.
For additional information about Winthrop and its business, see the Winthrop
documents incorporated by reference herein as described under "Incorporation of
Certain Documents by Reference."
Winthrop is a Minnesota corporation and was founded in 1982. Winthrop's
corporate offices are located at 1015 Opus Center, 9900 Bren Road East,
Minnetonka, Minnesota 55343 and its telephone number is (612) 936-0226.
TERMS OF THE MERGER
In accordance with the terms of the Merger Agreement, a newly-formed,
wholly-owned subsidiary of TCF will be merged with and into Winthrop, with
Winthrop as the surviving corporation in the Merger (the "Surviving
Corporation"). As a result of the Merger, Winthrop will become a wholly-owned
subsidiary of TCF. The name of the Surviving Corporation will remain Winthrop
Resources Corporation. Following completion of the Merger, TCF intends to
contribute the Surviving Corporation to TCF Minnesota such that it will be
operated after the Merger as a direct, wholly-owned subsidiary of TCF Minnesota.
At the effective time of the Merger (the "Effective Time"), all of the
issued and outstanding shares of Winthrop Common Stock (other than dissenters'
shares and shares held by TCF or any subsidiary thereof, other than shares held
in a fiduciary capacity or in satisfaction of debt) will be automatically
converted into and exchangeable for 0.7766 of a share of TCF Common Stock
(including the associated preferred share
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purchase rights described in "Description of TCF Capital Stock--TCF Common
Stock--Preferred Share Purchase Rights"), plus cash in lieu of fractional
shares.
Based on 8,600,300 shares of Winthrop Common Stock outstanding on May 19,
1997, TCF would have issued approximately 6,679,000 shares of TCF Common Stock
for all of the outstanding shares of Winthrop Common Stock then outstanding and
an additional 341,316 shares of TCF Common Stock would be reserved for issuance
after the Merger upon the exercise of the Options assumed by TCF Financial.
Under such circumstances, immediately after the Effective Time, former Winthrop
stockholders would hold approximately % of the outstanding shares of TCF
Common Stock, calculated on the assumption that all outstanding options on TCF
Common Stock are exercised, as of May , 1997.
No fractional shares of TCF Common Stock will be issued in the Merger to
holders of Winthrop Common Stock. Each stockholder of Winthrop Common Stock who
otherwise would have been entitled to a fraction of a share of TCF Common Stock
will receive in lieu thereof, at the time of surrender of the certificate or
certificates representing such holder's shares of Winthrop Common Stock, an
amount of cash (without interest) determined by multiplying the fractional share
interest to which such holder would otherwise be entitled by the closing sales
price of TCF Common Stock on the NYSE on the effective date of the Merger.
The Merger Agreement also provides that upon consummation of the Merger, the
Winthrop Stock Option Plan, and all Options thereunder which are outstanding at
such time (whether or not then exercisable), will be assumed by TCF in
accordance with the terms of the Winthrop Stock Option Plan. See "The
Merger--The Exchange Ratio--Treatment of Stock Options Outstanding Under the
Winthrop Stock Option Plan."
In addition to the shares to be issued by TCF Financial to Winthrop
stockholders and to holders of Options to purchase Winthrop Common Stock, the
Merger Agreement contemplates an additional offering by TCF of up to 800,000
shares of TCF Common Stock in order to qualify the Merger as a pooling of
interests. TCF has filed a separate registration statement on Form S-3 with
respect to these shares, the sale of which will close prior to the Effective
Time.
OPINION OF TCF FINANCIAL ADVISOR; OPINION OF WINTHROP FINANCIAL ADVISOR
TCF. The Board of Directors of TCF has received written opinions from Piper
Jaffray Inc. ("Piper Jaffray"), dated February 25, 1997 and as of the date of
this Joint Proxy Statement/Prospectus, to the effect that, as of the dates of
the opinions, based on and subject to the assumptions, factors and limitations
set forth therein, the consideration proposed to be paid by TCF in the Merger
pursuant to the Merger Agreement is fair to the stockholders of TCF from a
financial point of view. See "The Merger--Opinion of TCF Financial Advisor" for
a further description of the opinions of Piper Jaffray and of the fees payable
to Piper Jaffray by TCF. A copy of the fairness opinion of Piper Jaffray dated
as of the date of this Joint Proxy Statement/Prospectus is attached hereto as
Appendix B and should be read in its entirety with respect to the assumptions
made and other matters considered and limitations set forth therein.
WINTHROP. Dain Bosworth Incorporated ("Dain Bosworth"), Winthrop's
financial advisor, rendered an oral opinion to the Board of Directors of
Winthrop on February 26, 1997 and a written opinion to the Board dated as of the
date of this Joint Proxy Statement/Prospectus to the effect that, as of the
dates of the opinions, the consideration to be received in the Merger by the
holders of the Winthrop Common Stock is fair, from a financial point of view, to
the holders of Winthrop Common Stock. See "The Merger-- Opinion of Winthrop
Financial Advisor" for a further description of the opinions of Dain Bosworth
and of the fees payable to Dain Bosworth by Winthrop. A copy of the fairness
opinion of Dain Bosworth dated as of the date of this Joint Proxy
Statement/Prospectus is attached hereto as Appendix C and should be read in its
entirety with respect to the assumptions made and other matters considered and
limitations set forth therein.
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DISSENTERS' RIGHTS
Stockholders of Winthrop have the right to receive, in lieu of the
consideration provided in the Merger, the fair market value of their shares of
Winthrop Common Stock as determined pursuant to the Minnesota Business
Corporations Act, Chapter 302A of the Minnesota Statutes (the "MBCA"). Any
Winthrop stockholders who wish to assert dissenters' rights must notify Winthrop
of their intent to do so before the vote on June 24, 1997, the scheduled date of
the Winthrop Special Meeting. Holders of shares of TCF Common Stock will not
have dissenters' rights. See "The Merger--Dissenters' Rights--Winthrop."
RECOMMENDATIONS OF THE BOARDS OF DIRECTORS OF TCF AND WINTHROP
The Board of Directors of TCF has determined that the Merger is in the best
interests of the TCF stockholders and, accordingly, has unanimously approved the
Merger Agreement, the Merger and the issuance of shares of TCF Common Stock
provided for therein. THE BOARD OF DIRECTORS OF TCF UNANIMOUSLY RECOMMENDS THAT
TCF STOCKHOLDERS VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT, THE MERGER AND THE
ISSUANCE OF TCF COMMON STOCK IN CONNECTION THEREWITH. SEE "THE
MERGER--BACKGROUND OF AND REASONS FOR THE MERGER."
The Board of Directors of Winthrop has determined that the Merger is in the
best interests of the Winthrop stockholders and, accordingly, has unanimously
approved the Merger Agreement and the Merger. THE BOARD OF DIRECTORS OF WINTHROP
UNANIMOUSLY RECOMMENDS THAT WINTHROP STOCKHOLDERS VOTE "FOR" APPROVAL AND
ADOPTION OF THE MERGER AGREEMENT AND APPROVAL OF THE MERGER. SEE "THE
MERGER--BACKGROUND OF AND REASONS FOR THE MERGER."
STOCKHOLDER AND AFFILIATE LETTER AGREEMENTS
In conjunction with the Merger Agreement, TCF has entered into a voting
agreement with each of the Winthrop Founders, who hold in the aggregate 43.5% of
the outstanding shares of Winthrop Common Stock as of May , 1997, the form of
which is included as Exhibit A to the Merger Agreement attached hereto as
Appendix A (the "Stockholder Agreements"). Under the Stockholder Agreements each
Winthrop Founder agrees, among other things, to vote all of his shares of
Winthrop Common Stock at the Winthrop Special Meeting in favor of the Merger
Agreement and to not transfer those shares prior to the earlier of the date of
the Winthrop Special Meeting or termination of the Merger Agreement. The
Winthrop Founders and the other executive officers and directors of Winthrop
have also signed agreements under which they have agreed not to sell: (i) shares
of TCF Common Stock issued to such person pursuant to the Merger except in
compliance with Rule 145 under the Securities Act, in a transaction that is
otherwise exempt from the registration requirements under the Securities Act or
in an offering registered under the Securities Act; and (ii) for the period
starting 30 days before the effective date of the Merger and until such time as
financial results covering at least 30 days of post-Merger combined operations
of TCF and Winthrop have been published by TCF, shares of TCF Common Stock and
Winthrop Common Stock held by such person.
The directors and executive officers of TCF have signed Affiliate Letters
dated February 28, 1997 (a form of which is attached as Exhibit D of Appendix A
to this Joint Proxy Statement/Prospectus) which provide, among other things,
that they will refrain from selling their shares of TCF Common Stock and shares
of Winthrop Common Stock for the period starting 30 days before the effective
date of the Merger until such time as financial results covering at least 30
days of post-Merger combined operations of TCF and Winthrop have been published
by TCF.
EFFECTIVE TIME AND EFFECTIVE DATE OF THE MERGER
The Merger shall become effective upon filing of the Articles of Merger with
the Secretary of State of Minnesota, which is the Effective Time of the Merger.
Such filing will occur only after the receipt of all
11
<PAGE>
requisite regulatory approvals, approval by the requisite vote of TCF's and
Winthrop's respective stockholders and the satisfaction or waiver of all other
conditions to the Merger. The date of the filing of the Articles of Merger is
the "Effective Date." See "The Merger--The Exchange Ratio--Effective Time of the
Merger."
CONDITIONS TO THE MERGER; WAIVER AND AMENDMENT
Consummation of the Merger is subject to various conditions, including,
without limitation, obtaining the requisite TCF stockholder approval of the
Merger Agreement, the Merger and the issuance of TCF Common Stock in connection
therewith, and requisite Winthrop stockholder approval and adoption of the
Merger Agreement and approval of the Merger; receipt of all necessary regulatory
approvals pertaining to the Merger, including approval of the Merger by the
Federal Reserve Board ("FRB") and notification to the Office of Comptroller of
the Currency ("OCC") concerning the contribution of Winthrop to TCF Minnesota,
completion of a supplemental offering by TCF of up to 800,000 shares of TCF
Common Stock, if necessary, in order to allow the Merger to be accounted for as
a pooling of interests; and certain other closing conditions. An application for
approval of the Merger has been filed by TCF with the FRB pursuant to Section 4
of the BHCA and Regulation Y and notification of the Merger and of the intended
contribution of Winthrop to TCF Minnesota has been provided to the OCC. There
can be no assurance that all requisite regulatory approvals will be obtained by
TCF promptly or at all. If the Merger is not consummated on or before August 1,
1997, either TCF or Winthrop may terminate the Merger Agreement but neither is
required to do so. See "The Merger--Conditions to the Merger" and "The Merger--
Regulatory Approvals."
Substantially all of the conditions to consummation of the Merger (except
for required stockholder and regulatory approvals) may be waived at any time by
the party for whose benefit they were created, and the Merger Agreement may be
amended at any time by written agreement of the parties. See "The
Merger--Termination and Amendment."
LIMITATION ON NEGOTIATIONS OF THIRD-PARTY ACQUISITION PROPOSALS
The Merger Agreement includes a "no solicitation" provision that prohibits
Winthrop from soliciting or encouraging submission of third-party acquisition
proposals, but permits Winthrop to negotiate with and furnish non-public
information to third parties if Winthrop's Board of Directors determines, after
consultation with Winthrop's legal counsel, that there is a reasonable
likelihood that it has a fiduciary duty to do so. See "The Merger--Limitation on
Negotiations."
TERMINATION
The Merger Agreement may be terminated, either before or after approval by
TCF's and Winthrop's stockholders, under certain circumstances, including: (i)
by either TCF or Winthrop if the conditions of such party's obligation to
consummate the Merger are not satisfied; (ii) by either TCF or Winthrop if the
stockholders of each do not approve the Merger; (iii) by Winthrop if the average
of the daily closing sales prices of TCF Common Stock as reported on the NYSE by
the Wall Street Journal for a 30-day period of consecutive full trading days
(the "Average TCF Stock Price") ending on the third business day before either
(a) the scheduled date for the TCF and Winthrop Special Meetings or (b) the last
regulatory approval has been obtained and the waiting period has expired,
whichever is closest to the Effective Date (the "Determination Date") is less
than $42.30 per share; (iv) by TCF if the Average TCF Stock Price on the
Determination Date is more than $51.70 per share; (v) by Winthrop if its Board
of Directors exercises its "fiduciary out" to terminate the Merger Agreement;
(vi) by TCF if a person commences a bona fide tender offer for 25% or more of
the outstanding Winthrop Common Stock and the Winthrop Board of Directors has
withdrawn or materially adversely modified its recommendation of the Merger;
(vii) by either TCF or Winthrop if there is a willful breach of the
representations, warranties, covenants or other obligations under the Merger
Agreement by the other party; (viii) by either TCF or Winthrop if the Merger has
not occurred by August 1, 1997; (ix) by the mutual written agreement of the
parties; or (x) by
12
<PAGE>
either TCF or Winthrop if the other party amends or supplements its warranties
and representations under the Merger Agreement in a manner that makes the
representation or warranty materially inaccurate and, after notice and an
opportunity to cure, the information in the amendment or supplement indicates
that the party has suffered a "material adverse effect." See "The
Merger--Termination and Amendment." Under certain circumstances of termination,
a termination fee ranging from $1 million to $12.5 million may be payable to TCF
by Winthrop depending on the circumstances of such termination. Under certain
circumstances of termination, a termination fee of $1 million may be payable by
TCF to Winthrop. See "The Merger--Termination Fees."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Merger is intended to qualify as a tax-free reorganization under Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"). Therefore,
no gain or loss will be recognized by TCF or Winthrop as a result of the Merger.
A Winthrop stockholder who receives TCF Common Stock in exchange for Winthrop
Common Stock will not recognize any gain or loss as a result of the Merger,
except that gain or loss will be recognized with respect to any cash received by
a holder of Winthrop Common Stock in lieu of any fractional share of TCF Common
Stock. The income tax basis of the TCF Common Stock received generally will
equal the income tax basis of the Winthrop Common Stock surrendered, and the
holding period of the TCF Common Stock received generally will include the
holding period of the Winthrop Common Stock surrendered. See "The
Merger--Certain Federal Income Tax Consequences." EACH WINTHROP STOCKHOLDER
SHOULD CONSULT THEIR OWN TAX ADVISOR CONCERNING THE FEDERAL AND ANY APPLICABLE
FOREIGN, STATE, OR LOCAL INCOME TAX CONSEQUENCES OF THE MERGER.
ACCOUNTING TREATMENT OF THE MERGER
It is a condition to consummation of the Merger that the Merger be accounted
for as a pooling-of-interests for accounting and financial reporting purposes.
See "The Merger--Accounting Treatment of the Merger" and "The Merger--Conditions
to the Merger."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Some members of Winthrop's Board of Directors and management may be deemed
to have certain interests in the Merger in addition to their interests as
stockholders of Winthrop generally. The Merger Agreement contains provisions
which require TCF to elect one member of the current Board of Directors of
Winthrop (currently it is intended that this will be John L. Morgan) as a
director of TCF. The Merger Agreement provides that Winthrop will amend existing
employment contracts with each of the Winthrop Founders to assure their
continuing services with Winthrop for a minimum of three years following the
Merger, and that Winthrop will amend its existing employment contract with a
fourth executive, Robert P. Murphy, in certain respects. The Merger Agreement
provides for indemnification of Winthrop's directors, officers, employees and
agents for claims against them arising out of or in connection with activities
prior to the Effective Time and requires the Surviving Corporation to maintain
in effect, for a period of three years after the Effective Time, directors' and
officers' liability insurance comparable to that maintained by Winthrop as of
the date of the Merger Agreement for acts or omissions prior to the Merger. In
addition, the Stockholder Agreements with each of the Winthrop Founders provide
certain indemnification rights to them. The directors of the Surviving
Corporation will include certain persons designated by TCF who were directors of
Winthrop immediately prior to the Effective Time. See "The Merger--Effects of
the Merger-- Effect on Employees of Winthrop."
REGULATORY APPROVALS
TCF must obtain approval for the acquisition of Winthrop from the FRB
pursuant to Section 4 of the BHCA and Regulation Y. TCF filed an application
with the FRB on April , 1997 and is awaiting its approval. TCF has also
notified the OCC in writing of the intended contribution of Winthrop to TCF
Minnesota, as a result of which Winthrop would become an "operating subsidiary"
of TCF Minnesota.
13
<PAGE>
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act"), certain acquisition transactions, including the Merger, may not be
consummated unless certain information has been furnished to the Federal Trade
Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice (the "Antitrust Division") and certain waiting period
requirements have been satisfied. Due in part to their significant individual
ownership of Winthrop Common Stock, the Winthrop Founders, as acquiring persons
of TCF Common Stock, and TCF, furnished such information and the requisite
waiting period expired on May , 1997. TCF's information was furnished in
connection with its filing of an application for approval of the Merger with the
FRB under Section 4 of the BHCA. See "The Merger--Regulatory Approvals" and "The
Merger--Conditions to the Merger."
EXCHANGE OF WINTHROP STOCK CERTIFICATES
Promptly following the Merger, Boston Equiserve L.P. ("Boston Equiserve"),
the exchange agent for the Merger (the "Exchange Agent"), will send a notice and
transmittal form, with instructions, to each holder of record of Winthrop Common
Stock at the Effective Time of the Merger advising such holder of the
effectiveness of the Merger and of the procedure for surrendering to the
Exchange Agent certificates formerly evidencing Winthrop Common Stock in
exchange for new certificates evidencing newly issued TCF Common Stock. WINTHROP
STOCKHOLDERS SHOULD NOT SEND IN THEIR COMMON STOCK CERTIFICATES UNTIL THEY
RECEIVE THE NOTICE AND TRANSMITTAL FORM FROM THE EXCHANGE AGENT.
RESALE OF TCF COMMON STOCK
The shares of TCF Common Stock issuable to stockholders of Winthrop upon
consummation of the Merger may be traded freely by those stockholders who are
not "affiliates" of Winthrop or TCF. Winthrop has agreed to obtain signed
representations from each stockholder of Winthrop who may reasonably be deemed
an "affiliate" of Winthrop (as such term is used in Rule 145 under the
Securities Act) to the effect that such person will not transfer or dispose of:
(i) shares of TCF Common Stock issued to such person pursuant to the Merger,
except in compliance with Rule 145 under the Securities Act, in a transaction
that is otherwise exempt from the registration requirements under the Securities
Act or in an offering registered under the Securities Act; and (ii) for the
30-day period prior to the Effective Time of the Merger, the shares of Winthrop
Common Stock held by such person and, until such time as financial results
covering at least 30 days of post-Merger combined operations of TCF and Winthrop
have been published by TCF, the shares of TCF Common Stock issued to such person
pursuant to the Merger. See "The Merger--Resale Considerations With Respect to
the TCF Common Stock" and "The Merger-- Accounting Treatment of the Merger." In
addition, TCF has agreed to use its best efforts to obtain signed
representations from TCF affiliates to the effect that they will not dispose of
TCF Common Stock and rights to acquire such TCF Common Stock during the time
periods described in clause (ii) above.
DIFFERENCES IN RIGHTS OF STOCKHOLDERS
Upon consummation of the Merger, holders of Winthrop Common Stock will
become holders of TCF Common Stock. As a result, their rights as stockholders,
which are now governed by Minnesota corporate law and Winthrop's Restated
Articles of Incorporation (the "Winthrop Articles") and Restated Bylaws (the
"Winthrop Bylaws"), will be governed by Delaware corporate law and TCF's
Certificate and Bylaws. Because of certain differences between Minnesota and
Delaware law, and because of differences in the provisions of Winthrop's
Articles and Bylaws and TCF's Certificate and Bylaws, the current rights of
Winthrop stockholders will change after the Merger. For a discussion of various
differences between the rights of stockholders of Winthrop and the rights of
stockholders of TCF, see "Comparison of the Rights of Stockholders."
14
<PAGE>
COMPARATIVE MARKET PRICE DATA
TCF Common Stock is listed on the NYSE under the symbol "TCB" and Winthrop
Common Stock is quoted on the Nasdaq National Market System under the symbol
"WINR." The following table sets forth the high and low prices per share of TCF
Common Stock as reported on the NYSE and of Winthrop Common Stock as reported by
the Nasdaq National Market System for the periods indicated:
<TABLE>
<CAPTION>
WINTHROP COMMON STOCK
TCF COMMON STOCK
---------------------- ----------------------
<S> <C> <C> <C> <C>
HIGH LOW HIGH LOW
---------- ---------- ---------- ----------
1997:
Second Quarter (through April 14, 1997)........................ $ 41.2500 $ 37.5000 $ 30.5000 $ 27.7500
First Quarter.................................................. 47.5000 39.0000 35.7500 26.7500
1996:
Fourth Quarter................................................. 45.3750 37.5000 31.5000 26.2500
Third Quarter.................................................. 38.6250 31.1250 27.2500 18.5000
Second Quarter................................................. 37.7500 32.0000 23.0000 18.2500
First Quarter.................................................. 38.0000 29.6250 18.5000 15.4688
1995:
Fourth Quarter................................................. 33.3750 28.5000 18.5000 16.0000
Third Quarter.................................................. 29.8750 23.5000 18.2500 13.2500
Second Quarter................................................. 24.0625 21.2500 14.5000 11.2500
First Quarter.................................................. 21.6250 18.5625 12.0000 10.2500
</TABLE>
The following table sets forth the closing market price per share of TCF
Common Stock, the last reported sale price per share of Winthrop Common Stock
and the equivalent per-share price of Winthrop Common Stock giving effect to the
Merger at February 13, 1997, the last day preceding the public announcement that
TCF and Winthrop had signed a non-binding letter of intent (the "Letter of
Intent"), February 27, 1997, the last day preceding the public announcement that
TCF and Winthrop had entered into the Merger Agreement, and at April 14, 1997.
The price of Winthrop Common Stock does not include adjustment for retail
mark-ups, mark-downs or commissions. The equivalent per-share price of Winthrop
Common Stock at February 13, 1997 represents the closing market price of a share
of TCF Common Stock on such date ($47.125) multiplied by 0.7766, the Exchange
Ratio. The equivalent per-share price of Winthrop Common Stock at February 27,
1997 represents the closing market price of a share of TCF Common Stock on such
date ($45.50) multiplied by 0.7766, the Exchange Ratio. The equivalent per-share
price of Winthrop Common Stock at April 14, 1997 represents the closing market
price of a share of TCF Common Stock on such date ($39.125) multiplied by
0.7766, the Exchange Ratio. See "The Merger--The Exchange Ratio."
<TABLE>
<CAPTION>
WINTHROP
TCF WINTHROP EQUIVALENT
COMMON COMMON PER-SHARE
STOCK STOCK PRICE
--------- ----------- -----------
<S> <C> <C> <C>
Market Value Per Share at:
February 13, 1997......................................... $ 47.125 $ 34.000 $ 36.597
February 27, 1997......................................... 45.500 33.125 35.335
April 14, 1997............................................ 39.125 29.500 30.384
</TABLE>
Winthrop stockholders are advised to obtain current market quotations for
TCF Common Stock. No assurance can be given concerning the market price of TCF
Common Stock before or after the Effective Time. The market price for TCF Common
Stock may fluctuate between the date of this Joint Proxy
15
<PAGE>
Statement/Prospectus and the Effective Time. The Exchange Ratio is fixed at
0.7766. There can be no assurance that holders of Winthrop Common Stock will
receive $36.597 (or any other specific amount) in market value of shares of TCF
Common Stock exchanged for the shares of Winthrop Common Stock which they own
because the market price of TCF Common Stock at the time of the Merger may be
less than $47.125 per share and is subject to changes thereafter. Because the
Exchange Ratio is fixed, it will not compensate for changes in the market value
of TCF Common Stock.
BECAUSE THE EXCHANGE RATIO IS FIXED, A CHANGE IN THE MARKET PRICE OF TCF
COMMON STOCK BEFORE THE MERGER WILL AFFECT THE VALUE OF THE TCF COMMON STOCK TO
BE RECEIVED IN THE MERGER.
The Merger Agreement may be terminated by Winthrop if the Average TCF Stock
Price on the Determination Date is less than $42.30 per share and by TCF if the
Average TCF Stock Price on the Determination Date is more than $51.70 per share.
Market prices shown in the foregoing tables are as of the date indicated and do
not represent the Average TCF Stock Price which is used in determining the
parties' termination rights. See "The Merger--Termination and Amendment." Even
if either of these conditions occurs, there can be no assurance that TCF or
Winthrop will exercise its right to terminate the Merger Agreement and therefore
the Merger may still occur. Neither TCF nor Winthrop has made any determination
whether to terminate the Merger Agreement should these events occur. For a
discussion of the Exchange Ratio and the termination provisions, see "The
Merger--The Exchange Ratio" and "The Merger--Termination and Amendment."
Upon consummation of the Merger, Winthrop Common Stock will be cancelled
and, as a result, will no longer be quoted on The Nasdaq National Market System
after the Effective Time.
16
<PAGE>
COMPARATIVE UNAUDITED PER-SHARE DATA
The following table presents selected comparative unaudited per-share data
for TCF Common Stock on a historical and a pro forma combined basis and for
Winthrop Common Stock on a historical and a pro forma equivalent basis giving
effect to the Merger using the pooling-of-interests method of accounting. For a
description of the pooling-of-interests method of accounting with respect to the
Merger and the related effects on the historical financial statements of TCF,
see "The Merger--Accounting Treatment of the Merger." The information is derived
from the consolidated financial statements of each of TCF and Winthrop and the
Unaudited Pro Forma Combined Financial Information. The consolidated financial
statements of each of TCF and Winthrop are incorporated by reference into this
Joint Proxy Statement/ Prospectus. The Unaudited Pro Forma Combined Financial
Information appears elsewhere herein. This information should be read in
conjunction with such historical and pro forma financial statements and the
related notes thereto. See "Incorporation of Certain Documents by Reference" and
"Unaudited Pro Forma Combined Financial Information."
TCF's and Winthrop's fiscal years end December 31. The per-share data
included within is not necessarily indicative of the results of future
operations of the combined entity or the actual results that would have been
achieved had the Merger been consummated prior to the dates or periods
indicated.
<TABLE>
<CAPTION>
TCF WINTHROP
COMMON STOCK COMMON STOCK
------------------------- ------------------------
<S> <C> <C> <C> <C>
PRO FORMA PRO FORMA
HISTORICAL COMBINED HISTORICAL EQUIVALENT
------------ ----------- ----------- -----------
Book Value Per Common Share (1):
December 31, 1996.............................................. $ 15.81 $ 15.22 $ 9.44 $ 11.82
December 31, 1995.............................................. 14.82 13.96 6.94 10.84
December 31, 1994.............................................. 13.44 12.48 5.68 9.69
December 31, 1993.............................................. 12.10 11.14 4.65 8.65
December 31, 1992.............................................. 11.03 10.04 3.47 7.80
Cash Dividends Declared Per Common Share (2):
Year Ended:
December 31, 1996............................................ .71875 .71875 .16000 .55818
December 31, 1995............................................ .59375 .59375 .12000 .46111
December 31, 1994............................................ .50000 .50000 .08000 .38830
December 31, 1993............................................ .34375 .34375 .06000 .26696
December 31, 1992............................................ .23750 .23750 .02000 .18444
Income Before Extraordinary Items and Cumulative Effect of Change
in Accounting Principle Per Common Share (3):
Year Ended:
December 31, 1996............................................ 2.42(4) 2.39 1.76 1.86
December 31, 1995............................................ 1.71(5) 1.73 1.46 1.34
December 31, 1994............................................ 1.95 1.88 1.16 1.46
December 31, 1993............................................ 1.53(6) 1.49 .98 1.16
December 31, 1992............................................ 1.51 1.42 .70 1.10
</TABLE>
17
<PAGE>
NOTES TO COMPARATIVE UNAUDITED PER-SHARE DATA
(1) The pro forma combined book values per share of TCF Common Stock represent
the historical combined common stockholders' equity for TCF and Winthrop
divided by total pro forma common shares of the combined entity, reflecting
the Exchange Ratio of 0.7766. The pro forma equivalent book values per share
of Winthrop Common Stock represent the pro forma combined book value per
share amounts multiplied by the Exchange Ratio of 0.7766. See "The
Merger--The Exchange Ratio."
(2) The pro forma combined cash dividends declared per common share assume no
changes in the historical cash dividends declared per share of TCF Common
Stock. The pro forma equivalent cash dividends declared per share of
Winthrop Common Stock represent the cash dividends declared on one share of
TCF Common Stock multiplied by the Exchange Ratio of 0.7766. See "The
Merger-- The Exchange Ratio."
(3) The pro forma combined income before extraordinary items and cumulative
effect of change in accounting principle per common share (based on the
weighted average number of common and common equivalent shares outstanding)
is based upon the combined historical income before extraordinary items and
cumulative effect of change in accounting principle for TCF and Winthrop
divided by the average pro forma common shares of the combined entity. The
pro forma equivalent income before extraordinary items and cumulative effect
of change in accounting principle per share of Winthrop Common Stock
represents the pro forma combined income before extraordinary items and
cumulative effect of change in accounting principle per share multiplied by
the Exchange Ratio of 0.7766. See "The Merger--The Exchange Ratio."
(4) Amount reflects an after-tax one-time special assessment of $21.7 million
from the FDIC to recapitalize the SAIF under federal legislation enacted on
September 30, 1996. Excluding the one-time special assessment, income before
extraordinary items and cumulative effect of change in accounting principle
per common share would have been $3.04 for the year ended December 31, 1996.
(5) Amount reflects after-tax merger-related charges of $32.8 million related to
TCF's 1995 acquisition of Great Lakes Bancorp, A Federal Savings Bank
("Great Lakes"). Excluding such charges, income before extraordinary items
and cumulative effect of change in accounting principle per common share
would have been $2.60 for the year ended December 31, 1995.
(6) Amount reflects after-tax merger-related charges of $7.9 million related to
TCF's 1993 acquisition of Republic Capital Group, Inc. ("RCG"). Excluding
such charges, income before extraordinary items and cumulative effect of
change in accounting principle per common share would have been $1.77 for
the year ended December 31, 1993.
18
<PAGE>
SELECTED HISTORICAL AND UNAUDITED PRO FORMA
COMBINED FINANCIAL DATA
The following tables set forth certain selected historical consolidated
financial information for each of TCF and Winthrop, and certain selected
unaudited pro forma combined financial information giving effect to the Merger
using the pooling-of-interests method of accounting. For a description of the
pooling-of-interests method of accounting with respect to the Merger and the
related effects on the historical financial statements of TCF, see "The
Merger--Accounting Treatment of the Merger."
TCF's and Winthrop's fiscal years end December 31. The financial data
included in the Selected Historical Financial Data as of or for the five years
ended December 31, 1996 for TCF and Winthrop is derived from the audited
consolidated financial statements of each of TCF and Winthrop, including the
related notes thereto. Certain historical information of Winthrop has been
reclassified to conform to TCF's financial statement presentation. The
respective consolidated financial statements of TCF and Winthrop are
incorporated by reference into this Joint Proxy Statement/Prospectus. This
information should be read in conjunction with such financial statements and in
conjunction with the Unaudited Pro Forma Combined Financial Information,
including the notes thereto, appearing elsewhere in this Joint Proxy
Statement/Prospectus. See "Incorporation of Certain Documents by Reference" and
"Unaudited Pro Forma Combined Financial Information."
The Pro Forma Combined Consolidated Operating Data does not reflect the
direct transaction costs of: (i) the Merger; (ii) obtaining the anticipated
approval of a Supplemental Indenture from the holders of the Winthrop Senior
Notes; or (iii) the anticipated public offering of up to 800,000 shares of TCF
Common Stock expected to close prior to the Effective Date. The Pro Forma
Combined Consolidated Operating Data and Consolidated Financial Condition Data
do not reflect the effects of the anticipated additional offering of up to
800,000 shares of TCF Common Stock in order to qualify the Merger as a pooling
of interests and anticipated issuance of approximately 400,000 shares of TCF
Common Stock in connection with the conversion of Great Lakes Michigan's 7 1/4%
Convertible Subordinated Debentures due 2011. See "Summary--Terms of the
Merger."
The significant accounting and reporting policies of TCF and Winthrop differ
in minor respects and no effect has been given to such differences in this
Selected Historical and Unaudited Pro Forma Combined Financial Data. The
Selected Unaudited Pro Forma Combined Financial Data included herein is not
necessarily indicative of the results of future operations of the combined
entity or the actual results that would have been achieved had the Merger been
consummated prior to the periods indicated.
19
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
<TABLE>
<CAPTION>
AT OR FOR THE
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
------------ ------------- --------- -------------- ---------
CONSOLIDATED OPERATING DATA:
Interest income............................. $ 582,861 $ 607,690 $ 552,482 $ 558,645 $ 630,442
Interest expense............................ 242,721 288,492 273,330 297,449 383,170
------------ ------------- --------- -------------- ---------
Net interest income....................... 340,140 319,198 279,152 261,196 247,272
Provision for credit losses................. 19,820 15,212(2) 10,802 35,118(6) 40,663
------------ ------------- --------- -------------- ---------
Net interest income after provision for
credit losses........................... 320,320 303,986 268,350 226,078 206,609
Non-interest income......................... 157,797 112,776(3) 125,219 139,005 125,524
Non-interest expense........................ 341,070(1) 317,333(4) 276,984 272,958(7) 264,239
------------ ------------- --------- -------------- ---------
Income before income tax expense and
extraordinary items..................... 137,047 99,429 116,585 92,125 67,894
Income tax expense.......................... 51,384 37,778 46,402 36,797 15,906
------------ ------------- --------- -------------- ---------
Income before extraordinary items......... 85,663 61,651 70,183 55,328 51,988
Extraordinary items, net.................... -- (963)(5) -- (157) 339
------------ ------------- --------- -------------- ---------
Net income................................ 85,663 60,688 70,183 55,171 52,327
Dividends on preferred stock................ -- 678 2,710 2,769 2,911
------------ ------------- --------- -------------- ---------
Net income available to common
shareholders............................ $ 85,663 $ 60,010 $ 67,473 $ 52,402 $ 49,416
------------ ------------- --------- -------------- ---------
------------ ------------- --------- -------------- ---------
Per Common Share (8):
Income before extraordinary items......... $ 2.42(9) $ 1.71 (10 $ 1.95 $ 1.53(11) $ 1.51
Extraordinary items....................... -- (.03)(10) -- -- .01
------------ ------------- --------- -------------- ---------
Net income.............................. $ 2.42(9) $ 1.68 (10 $ 1.95 $ 1.53(11) $ 1.52
------------ ------------- --------- -------------- ---------
------------ ------------- --------- -------------- ---------
Dividends declared........................ $ .71875 $ .59375 $ .50 $ .34375 $ .2375
------------ ------------- --------- -------------- ---------
------------ ------------- --------- -------------- ---------
Average common and common equivalent shares
outstanding (000's)....................... 35,342 35,686 34,527 34,150 32,571
------------ ------------- --------- -------------- ---------
------------ ------------- --------- -------------- ---------
CONSOLIDATED FINANCIAL CONDITION DATA:
Total assets................................ $7,090,862 $7,239,911 $7,845,588 $7,630,654 $7,774,537
Investments (12)............................ 442,103 64,345 283,104 299,432 356,918
Securities available for sale............... 999,554 1,201,490 138,430 10,003 399,006
Loans held for sale......................... 203,869 242,413 201,511 444,780 308,651
Mortgage-backed securities held to
maturity.................................. -- -- 1,601,200 1,751,916 1,670,164
Loans....................................... 4,995,962 5,277,101 5,118,381 4,665,567 4,516,982
Goodwill.................................... 9,897 11,503 13,355 14,549 16,446
Deposits.................................... 4,977,630 5,191,552 5,399,718 5,695,928 5,683,130
Federal Home Loan Bank advances............. 1,141,040 893,587 1,354,663 945,492 1,018,725
Other borrowings............................ 352,778 547,857 530,332 467,875 599,900
Stockholders' equity........................ 549,506 527,675 475,469 428,065 375,495
Tangible net worth.......................... 539,609 516,172 462,114 413,516 359,049
Book value per common share................. 15.81 14.82 13.44 12.10 11.03
Tangible book value per common share........ 15.53 14.50 13.04 11.67 10.51
KEY RATIOS:
Net interest margin......................... 5.26% 4.61% 3.96% 3.69% 3.43%
Return on average assets.................... 1.24 .82 .93 .73 .68
Return on average realized common equity.... 16.13 12.70 15.94 13.95 15.67
Average total equity to average assets...... 7.70 6.59 5.95 5.28 4.39
Common dividend payout ratio................ 29.70 35.34 25.64 22.47 15.63
</TABLE>
20
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
WINTHROP RESOURCES CORPORATION
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
<TABLE>
<CAPTION>
AT OR FOR THE
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
CONSOLIDATED OPERATING DATA:
Interest income...................................... $ 30,024 $ 23,508 $ 16,382 $ 13,555 $ 11,547
Interest expense..................................... 15,595 13,614 10,091 8,618 9,028
---------- ---------- ---------- ---------- ----------
Net interest income................................ 14,429 9,894 6,291 4,937 2,519
Provision for credit losses.......................... 1,426 842 109 2,381 388
---------- ---------- ---------- ---------- ----------
Net interest income after provision for credit
losses........................................... 13,003 9,052 6,182 2,556 2,131
Non-interest income.................................. 23,815 19,777 18,096 21,595 18,876
Non-interest expense................................. 12,457 9,569 8,676 11,385 13,065
---------- ---------- ---------- ---------- ----------
Income before income tax expense and cumulative
effect........................................... 24,361 19,260 15,602 12,766 7,942
Income tax expense................................... 9,647 7,704 6,241 5,106 3,177
---------- ---------- ---------- ---------- ----------
Income before cumulative effect.................... 14,714 11,556 9,361 7,660 4,765
Cumulative effect of change in accounting
principle.......................................... -- -- -- -- 289
---------- ---------- ---------- ---------- ----------
Net income....................................... $ 14,714 $ 11,556 $ 9,361 $ 7,660 $ 5,054
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Per Common Share:
Income before cumulative effect.................... $ 1.76 $ 1.46 $ 1.16 $ .98 $ .70
Cumulative effect.................................. -- -- -- -- .04
---------- ---------- ---------- ---------- ----------
Net income....................................... $ 1.76 $ 1.46 $ 1.16 $ .98 $ .74
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Dividends declared................................... $ .16 $ .12 $ .08 $ .06 $ .02
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Average common and common equivalent shares
outstanding (000's)................................ 8,369 7,912 8,047 7,808 6,822
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
CONSOLIDATED FINANCIAL CONDITION DATA:
Total assets......................................... $ 350,110 $ 267,945 $ 226,711 $ 178,991 $ 139,877
Investments (12)..................................... 14,092 11,061 8,333 8,052 2,000
Securities available for sale........................ 32 35 312 70 732
Lease financings..................................... 296,958 239,247 194,379 159,602 107,935
Goodwill............................................. 5,534 66 -- -- --
Discounted lease rentals (13)........................ 185,604 178,457 153,793 119,837 91,262
Other borrowings..................................... 28,750 -- -- -- --
Stockholders' equity................................. 81,181 54,724 45,317 37,423 25,303
Tangible net worth................................... 75,647 54,658 45,317 37,423 25,303
Book value per common share.......................... 9.44 6.94 5.68 4.65 3.47
Tangible book value per common share................. 8.80 6.93 5.68 4.65 3.47
KEY RATIOS:
Net interest margin.................................. 5.39% 4.57% 3.63% 3.68% 2.35%
Return on average assets............................. 4.87 4.79 4.88 4.92 3.82
Return on average realized common equity............. 21.80 23.04 22.78 23.71 24.83
Average total equity to average assets............... 22.36 20.80 21.40 20.77 15.38
Common dividend payout ratio......................... 9.09 8.22 6.90 6.12 2.70
</TABLE>
21
<PAGE>
NOTES TO SELECTED HISTORICAL FINANCIAL DATA
(1) Amount reflects a one-time special assessment of $34.8 million from the
FDIC to recapitalize the SAIF.
(2) Amount reflects $5 million in merger-related provisions associated with
TCF's acquisition of Great Lakes.
(3) Amount reflects a loss of $21.3 million on merger-related asset sales
associated with TCF's acquisition of Great Lakes.
(4) Amount reflects $21.7 million in merger-related expenses and $4.4 million
in cancellation costs on the early termination of interest-rate exchange
contracts associated with TCF's acquisition of Great Lakes.
(5) Represents the prepayment of Federal Home Loan Bank ("FHLB") advances at a
pretax loss of $1.5 million, net of a $578,000 tax benefit, associated with
TCF's acquisition of Great Lakes.
(6) Amount reflects $7 million in merger-related provisions associated with
TCF's acquisition of RCG.
(7) Amount reflects $700,000 in merger-related provisions for real estate
losses and $5.5 million in merger-related expenses associated with TCF's
acquisition of RCG.
(8) Amounts are after preferred stock dividends.
(9) Amounts reflect an after-tax one-time special assessment of $21.7 million
from the FDIC to recapitalize the SAIF. Excluding the one-time special
assessment, net income per common share would have been $3.04 for the year
ended December 31, 1996.
(10) Amounts reflect after-tax merger-related charges of $32.8 million
associated with TCF's acquisition of Great Lakes. Excluding such charges,
net income per common share would have been $2.60 for the year ended
December 31, 1995.
(11) Amounts reflect after-tax merger-related charges of $7.9 million associated
with TCF's acquisition of RCG. Excluding such charges, net income per common
share would have been $1.77 for the year ended December 31, 1993.
(12) Includes interest-bearing deposits with banks, federal funds sold, U.S.
Government and other marketable securities held to maturity, securities
purchased under resale agreements and FHLB stock.
(13) Discounted lease rentals include $185.3 million, $177.2 million, $145.8
million, $111.3 million and $76.8 million of non-recourse debt and $316,000,
$1.3 million, $8 million, $8.5 million and $14.5 million of recourse debt at
December 31, 1996, 1995, 1994, 1993 and 1992, respectively.
22
<PAGE>
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
WINTHROP RESOURCES CORPORATION
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
<TABLE>
<CAPTION>
AT OR FOR THE
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
CONSOLIDATED OPERATING DATA:
Interest income.................................. $ 612,885 $ 631,198 $ 568,864 $ 572,200 $ 641,989
Interest expense................................. 258,316 302,106 283,421 306,067 392,198
----------- ----------- ----------- ----------- -----------
Net interest income............................ 354,569 329,092 285,443 266,133 249,791
Provision for credit losses...................... 21,246 16,054 10,911 37,499 41,051
----------- ----------- ----------- ----------- -----------
Net interest income after provision for credit
losses....................................... 333,323 313,038 274,532 228,634 208,740
Non-interest income.............................. 181,612 132,553 143,315 160,600 144,400
Non-interest expense............................. 353,527 326,902 285,660 284,343 277,304
----------- ----------- ----------- ----------- -----------
Income before income tax expense and
extraordinary items.......................... 161,408 118,689 132,187 104,891 75,836
Income tax expense............................... 61,031 45,482 52,643 41,903 19,083
----------- ----------- ----------- ----------- -----------
Income before extraordinary items.............. $ 100,377 $ 73,207 $ 79,544 $ 62,988 $ 56,753
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Per Common Share (1):
Income before extraordinary items.............. $ 2.39 $ 1.73 $ 1.88 $ 1.49 $ 1.42
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Dividends declared............................. $ .71875 $ .59375 $ .50 $ .34375 $ .2375
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Average common and common equivalent shares
outstanding (000's)............................ 41,926 41,965 40,891 40,296 37,869
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
CONSOLIDATED FINANCIAL CONDITION DATA:
Total assets..................................... $ 7,440,972 $ 7,507,856 $ 8,072,299 $ 7,809,645 $ 7,914,414
Investments (2).................................. 456,195 75,406 291,437 307,484 358,918
Securities available for sale.................... 999,586 1,201,525 138,742 10,073 399,738
Loans held for sale.............................. 203,869 242,413 201,511 444,780 308,651
Mortgage-backed securities held to maturity...... -- -- 1,601,200 1,751,916 1,670,164
Loans............................................ 4,995,962 5,277,101 5,118,381 4,665,567 4,516,982
Lease financings................................. 296,958 239,247 194,379 159,602 107,935
Goodwill......................................... 15,431 11,569 13,355 14,549 16,446
Deposits......................................... 4,977,630 5,191,552 5,399,718 5,695,928 5,683,130
Federal Home Loan Bank advances.................. 1,141,040 893,587 1,354,663 945,492 1,018,725
Discounted lease rentals......................... 185,604 178,457 153,793 119,837 91,262
Other borrowings................................. 381,528 547,857 530,332 467,875 599,900
Stockholders' equity............................. 630,687 582,399 520,786 465,488 400,798
Tangible net worth............................... 615,256 570,830 507,431 450,939 384,352
Book value per common share...................... 15.22 13.96 12.48 11.14 10.04
Tangible book value per common share............. 14.85 13.68 12.14 10.77 9.60
KEY RATIOS:
Net interest margin.............................. 5.27% 4.61% 3.95% 3.69% 3.41%
Return on average assets......................... 1.39 .95 1.03 .81 .72
Return on average realized common equity......... 16.77 13.69 16.55 14.72 16.14
Average total equity to average assets........... 8.31 7.04 6.33 5.59 4.58
Common dividend payout ratio..................... 30.07 34.72 26.60 23.07 16.61
</TABLE>
23
<PAGE>
NOTES TO SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
(1) Amounts are after preferred stock dividends.
(2) Includes interest-bearing deposits with banks, federal funds sold, U.S.
Government and other marketable securities held to maturity, securities
purchased under resale agreements and FHLB stock.
24
<PAGE>
INFORMATION CONCERNING THE TCF SPECIAL MEETING
This Joint Proxy Statement/Prospectus is being furnished to TCF stockholders
in connection with the solicitation of proxies by the Board of Directors of TCF
for use at the TCF Special Meeting to be held on June 24, 1997, and at any
adjournments or postponements thereof.
The principal executive offices of TCF are located at 801 Marquette Avenue,
Suite 302, Minneapolis, Minnesota 55402 and its telephone number is (612)
661-6500.
SPECIAL MEETING OF TCF STOCKHOLDERS
The TCF Special Meeting will be held on Tuesday, June 24, 1997, commencing
at 11:00 a.m., local time, at .
PURPOSE OF MEETING. The purpose of the TCF Special Meeting is to consider
and vote upon: (i) a proposal to approve the Merger Agreement, the Merger and
the issuance of shares of TCF Common Stock in connection therewith; (ii) a
proposal to adjourn the TCF Special Meeting to solicit additional proxies, if
necessary; and (iii) such other business as may properly come before the TCF
Special Meeting and any adjournments or postponements thereof.
SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE. The close of business
on May 19, 1997 has been fixed by the Board of Directors of TCF as the TCF
Record Date for the determination of holders of TCF Common Stock entitled to
notice of and to vote at the TCF Special Meeting and any adjournments or
postponements thereof. At the close of business on the TCF Record Date, there
were shares of TCF Common Stock outstanding and entitled to vote, held by
approximately holders of record. Each share of TCF Common Stock
entitles the holder thereof to one vote on each matter to be submitted to TCF
stockholders at the TCF Special Meeting.
VOTE REQUIRED. A quorum, consisting of a majority of the voting power of
the issued and outstanding stock of TCF entitled to vote at the TCF Special
Meeting, must be present in person or by proxy before any action may be taken at
the TCF Special Meeting. Abstentions and broker non-votes (i.e., proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owners or other persons as to certain proposals on which
such beneficial owners or persons are entitled to vote their shares but with
respect to which the brokers or nominees have no discretionary power to vote
without such instructions) will be treated as shares present at the TCF Special
Meeting for purposes of determining the presence of a quorum. Because the number
of shares of TCF Common Stock to be issued or reserved for issuance in
connection with the Merger will exceed 20% of the number of shares of TCF Common
Stock outstanding prior to the signing of the Merger Agreement, approval by
holders of TCF Common Stock of the issuance of TCF Common Stock pursuant to the
Merger Agreement is required under the rules of the NYSE. Under NYSE rules, the
proposed issuance of TCF Common Stock pursuant to the Merger Agreement must be
approved by a majority of the votes cast at the TCF Special Meeting, provided
that the total votes cast on the proposal represents over 50% of the outstanding
shares of TCF Common Stock. If holders of TCF Common Stock do not vote to
approve such issuance, the Merger will not be consummated. TCF is not a
constituent corporation to the Merger and, therefore, approval by TCF's
stockholders is not required under DGCL, the TCF Certificate or the TCF Bylaws.
The votes may be made in person or by proxy. Abstentions and broker non-votes
will have the same effect as votes against approval of the Merger Agreement.
Assuming a quorum is present, the affirmative vote of a majority of the shares
of TCF Common Stock voting in person or by proxy is required to adopt the
proposal to adjourn the TCF Special Meeting to solicit additional proxies, if
necessary.
As of the TCF Record Date, the directors and executive officers of TCF and
their affiliates in the aggregate beneficially owned and are entitled to vote
shares, or %, of the outstanding shares of TCF Common Stock
(exclusive of shares of TCF Common Stock which may be acquired upon the exercise
of outstanding stock options). The directors and executive officers of TCF have
signed an Affiliate
25
<PAGE>
Letter dated February 28, 1997 (a form of which is attached as Exhibit D of
Appendix A to this Joint Proxy Statement/Prospectus) which provides, among other
things, that they will refrain from selling their shares of TCF Common Stock and
shares of Winthrop Common Stock for the 30-day period prior to the Effective
Time, until such time as financial results covering at least 30 days of
post-Merger combined operations of TCF and Winthrop have been published by TCF.
As of the TCF Record Date, neither Winthrop nor any of the directors and
executive officers of Winthrop beneficially owned any outstanding shares of TCF
Common Stock or had sole or shared voting power over any shares of TCF Common
Stock.
VOTING; SOLICITATION AND REVOCATION OF PROXIES. A proxy card for use at the
TCF Special Meeting accompanies this Joint Proxy Statement/Prospectus and is
solicited by the Board of Directors of TCF. Any TCF stockholder executing a
proxy may revoke it at any time before it is voted by filing with the Secretary
of TCF, at the address of TCF set forth on the Notice of Special Meeting of
Stockholders, written notice of such revocation by executing a later-dated proxy
or by attending the TCF Special Meeting and giving notice of such revocation in
person. Attendance at the TCF Special Meeting will not, in and of itself,
constitute revocation of a proxy.
The trustee of the TCF Employees Stock Ownership Plan--401(k), currently
First Trust N.A., votes the shares of TCF Common Stock held by the plan in
accordance with its fiduciary duties and the procedures set forth in the plan.
The plan provides that participants have the right to direct the trustee how to
vote shares of TCF Common Stock allocated to their accounts. The plan also
provides that a committee consisting of the members of the Personnel/Affirmative
Action Committee of the Board of Directors of TCF Financial directs the trustee
with respect to voting of any shares for which participants do not furnish
directions and of shares that are not allocated on or before the TCF Record Date
for the meeting.
Each properly executed proxy returned to TCF (and not revoked) will be voted
in accordance with the instructions indicated thereon. IF NO INSTRUCTIONS ARE
INDICATED, EACH EXECUTED PROXY WILL BE VOTED "FOR" APPROVAL OF THE MERGER
AGREEMENT AND THE MERGER AND THE ISSUANCE OF TCF COMMON STOCK PROVIDED FOR IN
CONNECTION THEREWITH, AND "FOR" ADJOURNMENT OF THE TCF SPECIAL MEETING TO
SOLICIT ADDITIONAL PROXIES, IF NECESSARY. While the Board of Directors of TCF
knows of no other matters to be presented at the TCF Special Meeting, if any
other matter properly comes before the meeting or any adjournment thereof, all
properly executed proxies returned to TCF will be voted on any such matter in
accordance with the best judgment of the proxy holders.
BENEFICIAL OWNERSHIP OF TCF COMMON STOCK. This information is incorporated
by reference from TCF's Annual Report on Form 10-K for the year ended December
31, 1996. See "Incorporation of Certain Documents by Reference."
INFORMATION CONCERNING THE WINTHROP SPECIAL MEETING
This Joint Proxy Statement/Prospectus is being furnished to Winthrop
stockholders in connection with the solicitation of proxies by the Board of
Directors of Winthrop for use at the Winthrop Special Meeting to be held on June
24, 1997, and at any adjournments or postponements thereof. The principal
executive offices of Winthrop are located at 1015 Opus Center, 9900 Bren Road
East, Minnetonka, Minnesota 55343 and its telephone number is (612) 936-0226.
WINTHROP STOCKHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES WITH THEIR
PROXY CARDS.
26
<PAGE>
SPECIAL MEETING OF WINTHROP STOCKHOLDERS
The Winthrop Special Meeting will be held on Tuesday, June 24, 1997,
commencing at 10:00 a.m. local time, at the .
PURPOSE OF MEETING. The purpose of the Winthrop Special Meeting is to
consider and vote upon: (i) a proposal to approve and adopt the Merger Agreement
and to approve the Merger; and (ii) such other matters as may properly come
before the Winthrop Special Meeting or any adjournment or postponement thereof,
including a motion to adjourn to a later date to permit further solicitation of
proxies if necessary .
SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE. The close of business
on May , 1997 has been fixed by the Board of Directors of Winthrop as the
Winthrop Record Date for the determination of stockholders of Winthrop Common
Stock entitled to notice of and to vote at the Winthrop Special Meeting and any
adjournments or postponements thereof. At the close of business on the Winthrop
Record Date there were 8,600,300 shares of Winthrop Common Stock outstanding and
entitled to vote, held by approximately 105 holders of record. Each share of
Winthrop Common Stock entitles the stockholder thereof to one vote on each
matter to be submitted to Winthrop stockholders at the Winthrop Special Meeting.
VOTE REQUIRED. The affirmative vote of a majority of the outstanding shares
of Winthrop Common Stock is required to approve the Merger Agreement and the
transactions contemplated thereby. Assuming a quorum is present, the affirmative
vote of a majority of the Winthrop Common Stock voting in person or by proxy is
required to adopt the proposal to adjourn the Winthrop Special Meeting to
solicit additional proxies, if necessary. A majority of the outstanding shares
of Winthrop Common Stock entitled to vote, represented in person or by proxy,
will constitute a quorum at the Winthrop Special Meeting. Proxies marked as
abstaining will be treated as present for purposes of determining a quorum at
the Winthrop Special Meeting, but will not be counted as voting on any matter as
to which abstention is indicated. Proxies returned by brokers as "non-votes" on
behalf of shares held in street name will not be treated as present for purposes
of determining a quorum for the Winthrop Special Meeting unless they are voted
by the broker on at least one matter. Such non-voted shares will not be counted
as voting on any matter as to which a non-vote is indicated on the broker's
proxy. Abstentions and broker non-votes will have the same effect as votes
against approval of the Merger Agreement. Abstentions and broker non-votes will
have no effect on the adjournment proposal.
As of the Winthrop Record Date, the directors and executive officers of
Winthrop in the aggregate beneficially owned and are entitled to vote 3,992,483
shares or 46.4% of the outstanding Winthrop Common Stock (exclusive of shares of
Winthrop Common Stock that may be acquired upon the exercise of Options and
shares of Winthrop Common Stock that may be deemed beneficially owned because a
director or officer serves as a fiduciary). Each of the Winthrop Founders has
signed a Stockholder Agreement pursuant to which each has agreed, among other
things, to vote his shares of Winthrop Common Stock in favor of the Merger and
the Merger Agreement and to not transfer his shares of Winthrop Common Stock
until the earlier of the date of the Winthrop Special Meeting or termination of
the Merger Agreement. The Winthrop Founders and the other directors and
executive officers of Winthrop have signed an Affiliate Letter Agreement dated
February 28, 1997 (a form of which is attached as Exhibit C of Appendix A to
this Joint Proxy Statement/Prospectus), which provides that they have agreed not
to sell: (i) shares of TCF Common Stock issued to such person pursuant to the
Merger except in compliance with Rule 145 under the Securities Act, in a
transaction that is otherwise exempt from the registration requirements under
the Securities Act or in an offering registered under the Securities Act, and
(ii) for the period starting 30 days before the Effective Date and until such
time as financial results covering at least 30 days of post-Merger combined
operations of TCF and Winthrop have been published by TCF, shares of TCF Common
Stock and Winthrop Common Stock held by such person.
27
<PAGE>
As of the Winthrop Record Date, neither TCF and its subsidiaries, nor any of
the directors and executive officers of TCF and their affiliates, beneficially
owned any outstanding shares of Winthrop Common Stock. As of that date, TCF and
its subsidiaries, acting as fiduciaries, custodians or agents, did not have sole
or shared voting power over any shares of Winthrop Common Stock.
VOTING; SOLICITATION AND REVOCATION OF PROXIES. A proxy card for use at the
Winthrop Special Meeting accompanies this Joint Proxy Statement/Prospectus and
is solicited by the Board of Directors of Winthrop. Any Winthrop stockholder
executing a proxy may revoke it at any time before it is voted by filing with
the General Counsel of Winthrop, at the address of Winthrop set forth on the
Notice of Winthrop Special Meeting, written notice of such revocation, by
executing a later-dated proxy, or by attending the Winthrop Special Meeting and
giving notice of such revocation in person. Attendance at the Winthrop Special
Meeting will not, in and of itself, constitute revocation of a proxy. Each
properly executed proxy returned to Winthrop (and not revoked) will be voted in
accordance with the instructions thereon. IF NO INSTRUCTIONS ARE INDICATED, EACH
PROPERLY EXECUTED PROXY WILL BE VOTED "FOR" APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT AND APPROVAL OF THE MERGER, AND "FOR" ADJOURNMENT OF THE WINTHROP
SPECIAL MEETING TO SOLICIT ADDITIONAL PROXIES, IF NECESSARY. While the Board of
Directors of Winthrop knows of no other matters to be presented to the Winthrop
Special Meeting, if any other matter properly comes before the meeting or any
adjournment or postponement thereof, all properly executed proxies returned to
Winthrop will be voted on any such matter in accordance with the best judgment
of the proxy holders.
BENEFICIAL OWNERSHIP OF WINTHROP COMMON STOCK. This information is
incorporated by reference from Winthrop's Annual Report on Form 10-K for the
year ended December 31, 1996. See "Incorporation of Certain Documents by
Reference."
28
<PAGE>
EXPENSES
The Merger Agreement provides that each party will bear the costs incurred
by that party, but that TCF and Winthrop will each pay one-half of the filing
fees incurred in connection with the HSR Act filings related to the Merger and
TCF will bear the expense of preparing a supplement to the Indenture governing
the Winthrop Senior Notes and obtaining approval of noteholders thereto.
TCF and Winthrop will bear the expenses of printing and mailing this Joint
Proxy Statement/ Prospectus, the accompanying proxies and all other expenses
incurred in connection with the solicitation of proxies from TCF and Winthrop
stockholders on behalf of the TCF Board of Directors and the Winthrop Board of
Directors, respectively. TCF has retained Georgeson & Co. to assist in the
solicitation of proxies for its special stockholder meeting. Georgeson will
receive fees of approximately $6,000, plus reimbursement for reasonable
expenses. In addition to solicitation by mail, directors, officers and employees
of TCF and Winthrop, who will not be specifically compensated for such services,
may solicit proxies from the stockholders of TCF and stockholders of Winthrop,
respectively, personally or by telephone, telegram or other forms of
communication. TCF will also pay the standard charges and expenses of brokerage
houses, voting trustees, banks, associations and other custodians, nominees and
fiduciaries, who are record holders of TCF Common Stock, not beneficially owned
by them, for forwarding such materials to and obtaining proxies from the
beneficial owners of TCF Common Stock entitled to vote at the TCF Special
Meeting. Winthrop will also pay the standard charges and expenses of brokerage
houses, voting trustees, banks, associations and other custodians, nominees and
fiduciaries, who are record holders of Winthrop Common Stock, not beneficially
owned by them, for forwarding such materials to and obtaining proxies from the
beneficial owners of Winthrop Common Stock entitled to vote at the Winthrop
Special Meeting.
29
<PAGE>
THE MERGER
The following description of the material terms of the Merger does not
purport to be complete and is qualified in its entirety by reference to the
Merger Agreement and the Stockholder Agreements, copies of which are attached to
this Joint Proxy Statement/Prospectus as Appendix A and Exhibit A thereto,
respectively. All stockholders of TCF and stockholders of Winthrop are urged to
read such documents and the other Appendices hereto carefully.
GENERAL
Each of the Boards of Directors of TCF and Winthrop has determined that the
combination of TCF and Winthrop is desirable and in the best interests of TCF's
and Winthrop's respective stockholders and have unanimously approved the Merger
Agreement and the Merger. The Merger will be accomplished through the merger of
a newly-formed and wholly-owned subsidiary of TCF with and into Winthrop, with
Winthrop to be the Surviving Corporation. After the Merger, TCF intends to
contribute to TCF Minnesota all the outstanding capital stock of Winthrop, such
that after the Merger Winthrop will be operated as a wholly-owned subsidiary of
TCF Minnesota. THE BOARD OF DIRECTORS OF TCF UNANIMOUSLY RECOMMENDS THAT TCF
STOCKHOLDERS VOTE "FOR" THE APPROVAL OF THE MERGER AGREEMENT, THE MERGER AND THE
ISSUANCE OF TCF COMMON STOCK IN CONNECTION THEREWITH. THE BOARD OF DIRECTORS OF
WINTHROP UNANIMOUSLY RECOMMENDS THAT WINTHROP STOCKHOLDERS VOTE "FOR" APPROVAL
AND ADOPTION OF THE MERGER AGREEMENT AND APPROVAL OF THE MERGER.
Upon consummation of the Merger, each share of Winthrop Common Stock
outstanding at the Effective Time will be automatically converted into and
exchangeable for 0.7766 of a share of TCF Common Stock, see "The Merger--The
Exchange Ratio." Upon consummation of the Merger, each Option will entitle the
holder, upon exercise, to receive that number of shares of TCF Common Stock
equal to the number of shares of Winthrop Common Stock to which the Option
applied before the Merger, multiplied by the Exchange Ratio. The Options will be
exercisable in full and will have an exercise price equal to the original
exercise price of the Option, divided by the Exchange Ratio. See "The Merger--
Interests of Certain Persons in the Merger."
BACKGROUND OF AND REASONS FOR THE MERGER
BACKGROUND FOR TCF. Completion of a public offering of common stock and
capital notes in early 1992 enabled TCF to make a significant capital
contribution to its primary subsidiary, TCF Minnesota, which in turn enabled TCF
Minnesota (and the other TCF Banks) to qualify as "well-capitalized" under
regulations of the Office of Thrift Supervision (the "OTS") . Following the
achievement of this level of capitalization, which facilitates certain
regulatory approval requirements for acquisitions, TCF formed a committee of
senior executives to determine the location, size, asset quality requirements
and other characteristics of institutions that might be suitable acquisition
opportunities for TCF. Effective April 21, 1993 TCF acquired Republic Capital
Group, Inc. ("RCG") whose principal assets consisted of all of the capital stock
of Republic Capital Bank, F.S.B. (now TCF Wisconsin) and Peerless Federal
Savings Bank (now TCF Illinois), both federally chartered savings institutions,
which had 24 branch offices located in central and eastern Wisconsin and six
branch offices located in northeastern Illinois, respectively. In August 1993,
TCF entered the Michigan market with the acquisition of $220.8 million in
deposits and 15 branch offices of First Federal Savings and Loan Association,
Pontiac, Michigan from the Resolution Trust Corporation. Both acquisitions
represented strategic geographic expansions of TCF's business. Effective
February 8, 1995, TCF acquired Great Lakes Bancorp, A Federal Savings Bank with
$1.6 billion in deposits and $2.8 billion in assets. Effective January 16, 1997,
TCF acquired the stock of BOC Financial Corporation, an indirect holding company
for Bank of Chicago, s.b., an Illinois state-chartered savings bank with three
primary retail branches in the Chicago area and $168 million in deposits.
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In December 1996, William A. Cooper, Chairman of TCF Financial, attended a
general investor informational presentation on Winthrop (this presentation
included only publicly-available information about Winthrop available to
investors generally) and developed an interest in exploring the possibility of a
combination of Winthrop with TCF. At his request, Gregory J. Pulles, Vice
Chairman of TCF in charge of mergers and acquisitions, initiated contact with
Winthrop and there followed a series of discussions, meetings and exchanges of
information between Winthrop and TCF during the months of January and February
1997. The TCF Stockholder Relations Committee reviewed the Winthrop transaction
at a special meeting on January 20, 1997 and in a telephone conference call on
February 3, 1997. TCF conducted an on-site and off-site due diligence review of
Winthrop's operations in the second and third weeks of February. On February 13,
1997 the parties commenced negotiation of the terms for a transaction and on
February 14, 1997 the parties reached agreement on an exchange ratio of 0.7766.
The Letter of Intent was signed on February 14, 1997; it included the 0.7766
Exchange Ratio and was subject to certain conditions, including negotiation and
execution of a definitive merger agreement, approval by both boards of directors
and necessary stockholder approvals. The parties issued a press release
announcing the signing of the Letter of Intent on February 14, 1997. Winthrop
conducted a due diligence review of TCF from February 19 through February 28,
1997. The TCF Stockholder Relations Committee reviewed the transaction and its
terms in more detail at a special meeting on February 24, 1997. At the
conclusion of the February 24 meeting, the Committee unanimously approved
proceeding with the transaction. The Board of Directors of TCF reviewed the
transaction and unanimously approved the Merger Agreement, the Merger and the
issuance of shares (subject to stockholder approval) pursuant to the Merger
Agreement, as well as related matters, at a special board meeting held on
February 25, 1997. Winthrop's Board of Directors approved the Merger Agreement
at a special meeting held on February 26, 1997 and the Merger Agreement was
signed on February 28, 1997. See "--Reasons of TCF for the Merger;
Recommendation of TCF Board of Directors."
BACKGROUND FOR WINTHROP. The past several years have been a period of
significant consolidation in the financial services and leasing industry. On
December 31, 1996, Gregory J. Pulles, the General Counsel, Vice Chairman and
Secretary of TCF, contacted John L. Morgan, the President and Chief Executive
Officer of Winthrop, to discuss whether there was potential common interest in
exploring a business combination. Mr. Morgan indicated an interest in pursuing
preliminary discussions with TCF and on January 6, 1997, members of Winthrop's
senior executive management met with members of TCF's senior executive
management. Mr. Morgan and William A. Cooper, Chairman of the TCF Board of
Directors, attended and participated in this meeting. During the week of January
6, 1997, members of TCF and Winthrop's senior executive management, including
Mr. Cooper and Mr. Morgan, decided to have a second meeting, and on January 14,
1997, they met at TCF's offices to further discuss mutual business interests. At
this meeting, the executives discussed the economic aspects of Winthrop's
business and various other business, financial and legal issues surrounding a
possible business combination, including operations and information technology
issues, retention of management and employees, and benefit plans. Following this
meeting, Mr. Morgan advised members of Winthrop's Board of Directors to keep the
directors informed about the discussions with TCF.
A special meeting of the Board of Directors of Winthrop was held on January
17, 1997 to consider the question of whether to remain independent and implement
its own business plan or to proceed with the discussions surrounding a potential
merger with TCF. At this meeting, members of Winthrop's senior executive
management, together with its legal advisors, reviewed with the Winthrop Board
of Directors, among other things, the background of a possible transaction with
TCF, and the strategic advantages and disadvantages that could result from a
combination with TCF. The Winthrop Board of Directors authorized senior
management to proceed with further discussions with TCF as to the possibility of
a transaction.
During the ten-day period beginning January 20, 1997 and ending January 30,
1997, Mr. Morgan and other members of TCF senior executive management had a
number of telephone conversations and on
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January 30, 1997, TCF senior executive management, including Mr. Cooper, met
with senior executive management of Winthrop at the offices of Winthrop. This
meeting focused on the Winthrop organization and its business. Mr. Morgan and
the Executive Vice President/Chief Financial Officer of Winthrop, Kirk A.
MacKenzie, gave a presentation on the organizational and business aspects of
Winthrop, and answered numerous questions related to the same. The following
day, January 31, 1997, Mr. Morgan received a telephone call from Mr. Pulles who
indicated that TCF would like to proceed further with a possible acquisition or
merger and with its due diligence investigation. On February 4, 1997, TCF signed
a confidentiality agreement with Winthrop.
On February 6, 1997, Messrs. Morgan and Cooper, along with their respective
legal counsel, and Mr. MacKenzie, met at the offices of TCF to discuss the
proposed business combination, and the strategic benefits to both companies and
their stockholders if an acquisition could be consummated. At this meeting, Mr.
Cooper indicated that TCF might be willing to undertake a stock-for-stock merger
with Winthrop. It was also agreed at this meeting that TCF would commence its
due diligence review of Winthrop on February 10, 1997. From February 10, 1997
through February 24, 1997, TCF conducted a due diligence review of Winthrop.
On February 12, 1997, Mr. Cooper presented to the Winthrop Board of
Directors, members of Winthrop senior executive management and legal advisors
for Winthrop, the TCF investor presentation (publicly-available information
about TCF generally presented to investors). Following Mr. Cooper's
presentation, he departed and the Winthrop Board of Directors then held a
special meeting. At this meeting, the Winthrop Board and members of Winthrop's
senior management, together with its legal advisors, discussed TCF's interest
and the desirability of retaining a financial advisor. Additionally, the Board
of Directors and its legal advisors reviewed the duties and responsibilities of
Winthrop's directors under relevant corporate law and regulatory requirements.
After the discussions, the Board authorized senior management of Winthrop to
proceed with discussions with TCF and to engage a financial advisor to assist
the Winthrop Board of Directors and management with the proposed TCF/Winthrop
business combination. Later that same day, Mr. Morgan contacted a representative
of Dain Bosworth to discuss the possible business combination and possible
engagement of Dain Bosworth as Winthrop's financial advisor.
On February 13, 1997, Winthrop and TCF, with their respective legal,
financial, tax and accounting advisors, commenced their negotiations of a
definitive merger agreement. Additionally, that morning, Mr. Morgan and Mr.
Cooper met and had detailed discussions about the structure and pricing of a
potential business combination. Following the meeting with Mr. Cooper, Mr.
Morgan had telephone conversations with the other Winthrop directors whom he
advised and consulted with respect to the discussions with Mr. Cooper and
whether a letter of intent should be pursued. The general consensus of the
Winthrop directors was that it was in the best interests of the Winthrop
stockholders to enter into a non-binding letter of intent with TCF.
On the morning of February 14, 1997, Winthrop's senior executive management
and legal advisors met with representatives of Dain Bosworth. At this meeting,
Dain Bosworth and Winthrop discussed the structure of a potential business
combination, various pricing mechanisms, and other possible terms for a
combination. Winthrop then retained Dain Bosworth as its financial advisor in
connection with the proposed transaction. Dain Bosworth was requested to analyze
the transaction and advise the Winthrop Board of Directors concerning the
fairness of the proposed transaction at a special meeting of the Board to take
place on February 26, 1997. Following the meeting with Dain Bosworth, based on
the advice of Winthrop's legal and financial advisors at the meeting, Mr. Morgan
telephoned Mr. Cooper to finalize discussions regarding pricing of the proposed
business combination. Contingent on the results of due diligence by each of the
parties, negotiation of a mutually acceptable definitive agreement, approval by
their respective Boards of Directors, stockholder approval and regulatory
approval, on behalf of their respective companies Mr. Morgan and Mr. Cooper
agreed to a stock-for-stock merger using a fixed exchange ratio of 0.7766 of a
share of TCF Common Stock for each share of Winthrop Common Stock. The Letter of
Intent was executed shortly after 10:00 a.m. on February 14, 1997 and a joint
press release
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was issued. The Letter of Intent stated that the contemplated transaction was
subject to approval by the Boards of Directors of TCF and Winthrop, as well as
regulatory approvals. Subsequently, from February 19, 1997 through February 28,
1997, Winthrop, through certain of its executive officers and counsel, and with
the assistance from representatives of Dain Bosworth, conducted its due
diligence review of TCF.
On February 26, 1997, the Winthrop Board of Directors held a special meeting
to consider the Merger Agreement and the Merger, and the transactions and
agreements contemplated thereby. All members of Winthrop's Board of Directors
were present at the meeting as well as members of Winthrop's senior executive
management and its legal and financial advisors. Together, this group reviewed
with the Winthrop Board of Directors, among other things, the negotiations with
TCF, the background of the proposed transaction, the potential benefits of the
transaction, including the strategic rationale for the transactions, the status
of Winthrop's due diligence investigation of TCF and of TCF's due diligence
investigation of Winthrop, a summary of Dain Bosworth's financial and valuation
analyses of the transaction, the potential impact of a merger on Winthrop's
business, finances and stockholders and the terms of the definitive Merger
Agreement and Stockholder Agreements. At the conclusion of the meeting, Dain
Bosworth delivered its oral opinion that, as of that date, the consideration to
be received by holders of Winthrop Common Stock would be fair to such
stockholders from a financial point of view. After these presentations, the
Winthrop Board of Directors, by unanimous vote, approved the Merger Agreement,
the Merger and the transactions contemplated thereby.
In the afternoon of February 28, 1997, representatives of TCF and Winthrop
signed the Merger Agreement.
REASONS OF TCF FOR THE MERGER; RECOMMENDATION OF TCF BOARD OF DIRECTORS
The terms of the Merger Agreement, including the consideration to be paid to
Winthrop's stockholders, were the result of arm's-length negotiations between
the representatives of TCF and Winthrop. Among the factors considered by the
Board of Directors of TCF in deciding to approve and recommend the terms of the
Merger were:
(i) The consideration to be paid to Winthrop's stockholders in relation
to the market value, book value, earnings per share and dividend rates of
the TCF Common Stock and the Winthrop Common Stock.
(ii) Information concerning the financial condition, results of
operations, capital levels, asset quality and prospects of TCF and Winthrop.
(iii) The short-term and long-term impact the Merger will have on TCF's
anticipated consolidated results of operations, including anticipated
reduced cost of funds available to Winthrop as a result of being funded, at
least in part, by TCF Minnesota.
(iv) The general structure of the transaction and the compatibility of
management and business philosophy.
(v) The improvement of the franchise value of TCF to its stockholders
through the enhanced network and products and services.
(vi) The likelihood of receiving the requisite regulatory approvals in a
timely manner.
(vii) The general tax-free nature of the Merger to the stockholders of
Winthrop.
(viii) The ability of the combined enterprise to compete in relevant
banking and non-banking markets.
(ix) Industry and economic conditions, including trends in the
consolidation of the financial services industry.
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(x) The impact of the Merger on the depositors, employees, customers of
and communities served by TCF and Winthrop through expanded products and
services.
(xi) The opinion of TCF's financial advisor as to the fairness, from a
financial point of view, of the consideration to be paid to Winthrop's
stockholders. See "--Opinion of TCF Financial Advisor."
The Board of TCF also considered the termination fee provisions of the
Merger Agreement, which was a necessary inducement to TCF to enter into the
Merger Agreement. See "The Merger--Termination Fees." In making its
determination to approve the Merger Agreement, the Board of Directors of TCF did
not ascribe relative weights to the factors which it considered. However, after
consideration of the foregoing factors the Board concluded that the Merger
offers TCF access to high yielding assets (Winthrop's lease portfolio), a means
to diversify its high yielding products, and a synergy through access by
Winthrop to TCF Minnesota's lower cost of funds.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF TCF UNANIMOUSLY
RECOMMENDS THAT TCF STOCKHOLDERS VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT,
THE MERGER AND THE ISSUANCE OF TCF COMMON STOCK IN CONNECTION THEREWITH.
REASONS OF WINTHROP FOR THE MERGER; RECOMMENDATION OF WINTHROP BOARD OF
DIRECTORS
The Winthrop Board of Directors has unanimously determined that the Merger
and the Merger Agreement, including the Exchange Ratio, are fair to, and in the
best interest of, Winthrop and its stockholders. In the course of reaching its
determination, the Winthrop Board of Directors consulted with senior management
and Winthrop's legal counsel with respect to the legal duties of the Board,
regulatory matters, the Merger and the Merger Agreement and issues related
thereto, and with its financial advisor with respect to the financial aspects
and fairness, from a financial point of view, of the transaction and the
fairness of the consideration to be received by Winthrop stockholders. Prior to
approving the Merger, the Winthrop Board of Directors received information
regarding the Merger, and it analyzed and considered, without assigning any
relative or specific weight to any one factor, the following:
(i) Winthrop's positive future business, operations and financial
position and prospects as a part of TCF, compared with Winthrop's business,
results of operations, financial position and prospects were it to remain
independent. The Board of Directors concluded that merging with TCF would
provide Winthrop with a significantly greater capital base at lower cost.
(ii) Compatibility of Winthrop and TCF management philosophies and
style. The Board of Directors considered the management teams of both TCF
and Winthrop and their compatibility. The Board of Directors concluded that
TCF's and Winthrop's management philosophies and style are quite compatible;
(iii) Compatibility of Winthrop's and TCF's respective plans for growth
and expansion. The Winthrop Board of Directors also considered TCF's
strategic focus, and concluded that TCF's business and operating strategies,
and its desire to expand both its banking and non-banking businesses, were
compatible with Winthrop's business and operating strategies.
(iv) The complementary nature of Winthrop's and TCF's product lines. The
Winthrop Board of Directors considered the product lines of Winthrop and TCF
and concluded that the complementary nature of such products may enhance
Winthrop's competitive position.
(v) Dain Bosworth's opinion as to the fairness to Winthrop's
stockholders from a financial point of view (See "--Opinion of Winthrop
Financial Advisor").
(vi) The opportunity for Winthrop's stockholders to participate, as
holders of TCF Common Stock, in the anticipated growth of a combined
enterprise.
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(vii) The tax structure of the transaction. The Winthrop Board of
Directors concluded that the tax structure of the transaction is favorable
to the stockholders of Winthrop, allowing them to become stockholders in the
combined enterprise on a tax-free basis.
(viii) The terms and conditions of the Merger Agreement. The Winthrop
Board of Directors also considered the structure of the Merger and concluded
that the terms and conditions of the Merger Agreement, including Winthrop's
right to entertain other bona fide offers, are reasonable and fair to
Winthrop's stockholders. See "--Limitation on Negotiations" and
"--Termination Fees."
(ix) The impact of the Merger on its employees, customers and
communities. The Winthrop Board of Directors concluded that the Merger was
in the best interest of these constituents.
(x) The Winthrop Board of Directors also considered the level of TCF's
interest in consummating the Merger, and that the benefits of the proposed
Merger with TCF, coupled with the ability of Winthrop's Board to exercise
its fiduciary duties if a credible superior offer were to be made,
outweighed the potential benefits to Winthrop of foregoing the opportunity
with TCF in order either to seek other partners or remain independent.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF WINTHROP
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF WINTHROP COMMON STOCK VOTE "FOR" THE
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND APPROVAL OF THE MERGER.
CERTAIN FORWARD-LOOKING STATEMENTS
Certain statements under "Reasons of TCF for the Merger; Recommendation of
TCF Board of Directors" and "Reasons of Winthrop for the Merger; Recommendation
of Winthrop Board of Directors" including statements concerning plans,
objectives and future events or performance, constitute "forward-looking
statements" within the meaning of the Securities Act and the Exchange Act and
are intended to be subject to the safe harbors created thereby. Actual results
of the combined entities may differ materially from those contemplated by such
forward-looking statements.
OPINION OF TCF FINANCIAL ADVISOR
Piper Jaffray was retained by TCF pursuant to an engagement letter dated
February 18, 1997 to render its opinion to the TCF Board regarding the fairness,
from a financial point of view, to TCF stockholders of the consideration
proposed to be paid by TCF to Winthrop stockholders in the Merger and to assist
TCF's management and Board of Directors in analyzing the proposed Merger and the
proposed Exchange Ratio.
Piper Jaffray is an investment banking firm engaged, among other things, in
the valuation of businesses and their securities in connection with mergers and
acquisitions, underwriting and secondary distributions of securities, private
placements and valuations for estate, corporation and other purposes. Piper
Jaffray was selected to prepare a fairness opinion based on its experience and
expertise in transactions similar to the Merger and its reputation in the
financial services and investment banking industries in general and the
midwestern thrift industry in particular. Except as set forth above and with
respect to rendering advice to TCF concerning certain aspects of the Winthrop
Senior Notes, Piper Jaffray has not otherwise acted as financial advisor to TCF
or the TCF Board in connection with the Merger and did not participate in the
discussions or negotiations with respect to the Merger. Piper Jaffray has acted
as a manager or co-manager of underwritings of TCF and Winthrop securities and
provided other investment banking services for TCF in the past and may continue
to do so for TCF in the future. In the ordinary course of its business, Piper
Jaffray actively trades TCF Common Stock and Winthrop Common Stock and Winthrop
Senior Notes for its own account and for the accounts of its customers, and,
therefore, may from time to time hold a long or short position in such
securities. Piper Jaffray also provides research coverage
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for TCF and Winthrop. Luella G. Goldberg, a director of TCF, is also a director
of several closed-end investment companies currently managed by Piper Capital
Management Incorporated, an affiliate of Piper Jaffray.
Piper Jaffray delivered to the TCF Board of Directors on February 25, 1997,
its oral opinion (subsequently confirmed by a written opinion dated as of the
same date) to the effect that, as of the date of the opinion and based on and
subject to the assumptions, factors and limitations as set forth in the opinion
and as described below, the consideration proposed to be paid by TCF pursuant to
the Merger Agreement was fair, from a financial point of view, to the
stockholders of TCF. Such opinion was subsequently reaffirmed by issuance to the
TCF Board of a Piper Jaffray opinion dated the date of this Joint Proxy
Statement/Prospectus. Those opinions are herein collectively referred to as the
"Piper Opinion." A copy of the Piper opinion letter dated the date of this Joint
Proxy Statement/Prospectus is attached to this Joint Proxy Statement/Prospectus
as Appendix B and is incorporated herein by reference. The February 25, 1997
opinion is substantially identical to the Piper opinion attached hereto.
While Piper Jaffray rendered its opinion and provided certain analyses to
the TCF Board, Piper Jaffray was not requested to and did not make any
recommendation to the TCF Board as to the form or amount of the consideration to
be exchanged by TCF in the Merger, which was determined through negotiations
between Winthrop and TCF. The Piper Opinion, which was delivered for use and
considered by the TCF Board, is directed only to the fairness to TCF
stockholders, from a financial point of view, of the proposed consideration to
be paid by TCF in connection with the Merger, does not address the value of a
share of TCF Common Stock, does not address TCF's underlying business decision
to participate in the Merger and does not constitute a recommendation to any TCF
stockholder as to how such stockholder should vote with respect to the Merger.
Piper Jaffray does not admit that it is an expert within the meaning of the term
"expert" as used in the Securities Act and the rules and regulations promulgated
thereunder, or that its opinions constitute a report or valuation within the
meaning of Section 11 of the Securities Act and the rules and regulations
promulgated thereunder.
Piper Jaffray was not advised by TCF, Winthrop or their respective legal
counsel concerning the probable outcome of, or estimated damages which might
arise from, any pending or threatened litigation, possible unasserted claims or
other contingent liabilities, to which TCF or Winthrop or their affiliates was a
party or may be subject and undertook no analysis independent thereof.
Accordingly, the Piper Opinion made no assumption concerning, and therefore did
not consider, the possible assertion of claims, outcomes or damages arising out
of any such matters.
THE SUMMARY OF THE PIPER OPINION SET FORTH BELOW IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE PIPER OPINION. TCF STOCKHOLDERS
ARE URGED TO READ THE PIPER OPINION IN ITS ENTIRETY FOR A COMPLETE DESCRIPTION
OF THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITS OF THE REVIEW UNDERTAKEN.
THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITS OF THE REVIEW UNDERTAKEN
CONTAINED IN THE PIPER OPINION LETTER DATED THE DATE OF THIS JOINT PROXY
STATEMENT/PROSPECTUS ARE SUBSTANTIALLY THE SAME AS THOSE CONTAINED IN THE
OPINION LETTER DATED FEBRUARY 25, 1997.
In arriving at the Piper Opinion, Piper Jaffray reviewed, analyzed and
relied upon material bearing upon the financial and operating condition and
prospects of TCF and Winthrop and material prepared in connection with the
Merger, and considered such financial and other factors as it deemed appropriate
under the circumstances, including, among other things, the following: (i) the
Merger Agreement; (ii) information relative to the business, financial condition
and operations of TCF and Winthrop furnished by management of TCF and Winthrop,
respectively; (iii) certain internal financial planning information of Winthrop
furnished by management of Winthrop and certain proforma internal financial
planning information for Winthrop and TCF furnished by management of TCF; (iv)
certain financial and securities data of TCF; (v) to the extent publicly
available, the financial terms of certain merger and acquisition transactions
deemed relevant; (vi) publicly available information relative to TCF and
Winthrop; and (vii) certain financial and securities data of Winthrop and
companies deemed similar to Winthrop or
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representative of the business sector in which Winthrop operates. In addition,
Piper Jaffray engaged in discussions with members of management of Winthrop and
TCF concerning the respective financial condition, current operating results and
business outlook of Winthrop and TCF, including the prospects for the combined
companies and any potential operating efficiencies and synergies which may arise
from the Merger.
For purposes of the Piper Opinion, Piper Jaffray relied upon and assumed the
accuracy, completeness and fairness of the financial and other information made
available to it and did not attempt to independently verify such information.
Piper Jaffray relied upon the assurances of TCF and Winthrop management that the
information provided by TCF and Winthrop had a reasonable basis and, with
respect to financial planning data and other business outlook information,
reflected the best available estimates, and that they were not aware of any
information or fact that would make the information provided to Piper Jaffray
incomplete or misleading. Piper Jaffray relied, without independent
verification, on the assessments by management of TCF of the amount and timing
of potential cost savings, nonrecurring acquisition costs and other synergies
realizable as a result of the Merger and assumed that the Merger would be
accounted for as a pooling of interests under generally accepted accounting
principles. In arriving at the Piper Opinion, Piper Jaffray did not perform, nor
was it furnished, any appraisal or valuation of specific assets or liabilities
of TCF or Winthrop and expressed no opinion regarding the liquidation value of
any entity. No limitations were imposed by TCF on the scope of Piper Jaffray's
investigation or the procedures to be followed in rendering its opinion. Piper
Jaffray expressed no opinion as to the price at which shares of TCF Common Stock
or Winthrop Common Stock may trade at any future time. The Piper Opinion is
based upon information available to Piper Jaffray, and the facts and
circumstances as they existed and were subject to evaluation on the respective
dates of the Piper Opinion. Events occurring after such dates could materially
affect the assumptions used in preparing the Piper Opinion.
Piper Jaffray performed certain financial and comparative analyses,
including those summarized below, which it discussed with the TCF Board on
February 25, 1997. In delivering the Piper Opinion to the TCF Board on February
25, 1997, Piper Jaffray prepared and delivered to the TCF Board certain written
materials containing various analyses and other information relevant to the
Piper Opinion. Piper Jaffray confirmed the appropriateness of its reliance on
the described analyses in connection with its opinion dated the date of this
Joint Proxy Statement/Prospectus by performing procedures to update certain of
such analyses and reviewing the assumptions on which such analyses were based
and the factors considered in connection therewith. The analyses referred to
below were made in connection with rendering the Piper Opinion.
SELECTED MARKET INFORMATION. Piper Jaffray reviewed certain stock trading
characteristics of TCF Common Stock and Winthrop Common Stock, including stock
price and volume comparisons for periods ending February 21, 1997. Piper Jaffray
also analyzed the per share purchase price and aggregate transaction value based
on the Exchange Ratio and other terms set forth in the Merger Agreement.
PRO FORMA ANALYSIS. Piper Jaffray analyzed the hypothetical pro forma
effects of the Merger on TCF's earnings per share for the years ending December
31, 1997, 1998 and 1999. In this analysis, TCF's internal projected pre-Merger
earnings per share were compared to the internal projected post-Merger earnings
per share reflecting the addition of Winthrop's earnings and projected synergies
as well as certain other pro forma changes. This analysis was based on internal
projections for Winthrop provided by Winthrop's management and reviewed by TCF's
management. The projected earnings per share for the combined entities were then
compared to TCF's projected earnings over the same periods on a stand alone
basis. Based on an Exchange Ratio of 0.7766 of a share of TCF Common Stock for
each share of Winthrop Common Stock, this analysis indicated that the Merger
could be modestly dilutive to TCF projected earnings per share in 1997 and 1998
and would have a negligible effect on TCF projected earnings per share in 1999.
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CONTRIBUTION ANALYSIS. Piper Jaffray analyzed the hypothetical pro forma
contribution of each of TCF and Winthrop to the combined company for the year
ended December 31, 1996 and the years ending December 31, 1997 through 2000. For
these periods, Piper Jaffray analyzed Winthrop's expected contribution, with and
without expected synergies from the Merger, to the pro forma net income, total
assets and book value of the combined entity and the post-Merger equity interest
to be held by Winthrop's stockholders. This analysis shows that Winthrop would
have contributed 14.7%, 4.7% and 12.9% to combined net income, total assets and
book value, respectively, in fiscal 1996. In fiscal 2000, taking into account
the expected synergies in connection with the Merger, the Winthrop contribution
increases to 19.1%, 9.8% and 14.9% of combined net income, total assets and book
value, respectively. Without such expected synergies, the Winthrop contribution
would be 16.2%, 9.8% and 14.9% of combined net income, total assets and book
value, respectively, in fiscal 2000. Assuming an Exchange Ratio of 0.7766 of a
share of TCF Common Stock for each share of Winthrop Common Stock, Winthrop
stockholders will account for approximately 16.2% of the combined companies'
equity on a fully diluted basis.
DISCOUNTED IMPLIED DIVIDEND ANALYSIS. Using a discounted implied dividend
analysis, Piper Jaffray calculated a range of theoretical per share values for
Winthrop based on the net present value of: (i) Winthrop's implied annual
dividend income, subject to a constraint of maintaining a minimum ratio of
equity to assets of 6%; and (ii) a terminal value for Winthrop in 2001
calculated based upon a multiple of net income. The projected financial data for
Winthrop for 1997 through 2001 utilized by Piper Jaffray in this analysis was
prepared by Winthrop management and reviewed by TCF management. Piper Jaffray
calculated the range of net present values per share for Winthrop based on a
range of discount rates of 14% to 18% and a range of terminal value multiples of
forecasted 2001 earnings of 10.0x to 14.0x. This analysis yielded a range of
estimated present values per share for Winthrop of approximately $36.05 to
$52.75 taking into account the expected synergies relating to the Merger and
approximately $30.71 to $44.55 without such synergies.
COMPARABLE MERGER AND ACQUISITION ANALYSIS. Piper Jaffray reviewed selected
transactions involving acquired companies deemed comparable to Winthrop that
have been completed from January 1, 1994 to the present and whereby the target
was 100% acquired. This analysis was based on publicly available information
obtained from Commission filings, public company disclosures, press releases,
industry and popular press reports, data bases and other sources. This search
yielded eight comparable transactions. Based on its analysis of the comparable
transactions, Piper Jaffray derived the mean, median and ranges of various
operating and valuation ratios for the comparable transaction group and compared
such ratios to Winthrop's comparable ratios. The comparable transaction group's
mean and median net margin ratios of 17.2% and 18.2%, and range of 3.1% to
28.4%, were compared with Winthrop's ratio of 19.2%; the mean and median return
on ending equity of 14.6% and 16.1%, and range of 7.7% to 21.0%, were compared
with Winthrop's return of 18.1%; the mean and median three-year net income
growth rate of 26.4% and 18.7%, and range of 2.0% to 70.3%, were compared with
Winthrop's growth rate of 24.3%; the mean and median total debt to capital
ratios of 70.1% and 70.0%, and range of 24.4% to 93.4%, were compared with
Winthrop's ratio of 72.5%; the mean and median equity value to latest twelve
month net income multiples of 17.8x and 16.0x, and range of 9.5x to 33.6x, were
compared with Winthrop's multiple of 21.8x; the mean and median equity value
multiple to growth rate of 67.3% and 64.3%, and range of 21.3% to 119.1%, were
compared with Winthrop's ratio of 89.8%; the mean and median multiples of
company value to revenues of 6.0x and 6.2x, and range of 2.3x to 9.9x, were
compared with Winthrop's multiple of 7.0x; and the mean and median equity value
to book value multiples of 3.2x and 2.8x, and range of 1.3x to 6.4x, were
compared with Winthrop's multiple of 4.0x.
PREMIUM ANALYSIS. Piper Jaffray reviewed publicly available information for
selected completed transactions from January 1, 1994 to present involving
publicly traded specialty finance companies. Piper Jaffray selected eight
transactions which were deemed comparable. Based on its review of the comparable
transactions, Piper Jaffray derived the mean, median and range of premiums paid
in the comparable transactions and compared them to the premium to be paid to
Winthrop's stockholders. The comparable
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transaction group's mean and median premiums of 31.3% and 34.3% above the
trading price on the day prior to announcement, and range of 4.5% to 72.5%, were
compared to a 5.9% premium to be paid to Winthrop's stockholders; the mean and
median premiums of 37.8% and 30.0% above the trading price one week prior to the
announcement, and range of 6.6% to 82.3%, were compared to an 18.1% premium to
be paid to Winthrop's stockholders; and the mean and median premiums of 43.6%
and 45.7% above the trading price four weeks prior to the announcement, and
range of 12.5% to 69.4%, were compared to the 21.1% premium to be paid to
Winthrop's stockholders.
COMPARABLE PUBLIC COMPANY ANALYSIS. Piper Jaffray reviewed information
relating to six publicly traded companies involved in commercial finance. Share
pricing for the publicly traded companies in the public market reflects the
value of a minority interest and does not reflect a control premium. Based on
its review, Piper Jaffray derived mean and median net margins of 11.8% and
11.2%, and a range of 4.8% to 22.8% (compared to a 19.2% net margin for
Winthrop); mean and median historical net income growth percentages of 28.7% and
33.7%, and a range of 2.8% to 46.9% (compared to 24.3% growth percentage for
Winthrop); mean and median projected earnings per share growth of 15.9% and
15.7%, and a range of 10.0% to 23.3% (compared to projected earnings per share
growth of 21.8% for Winthrop); mean and median total debt to capital ratios of
80.6% and 81.9%, and a range of 72.1% to 87.6% (compared to a debt to capital
ratio of 72.5% for Winthrop) and mean and median return on ending equity ratios
of 12.2% and 12.2%, and a range of 9.6% to 14.3% (compared to an 18.1% ratio for
Winthrop). Piper Jaffray also derived mean and median price to calendar 1996
earnings multiples of 17.1x and 15.7x, and a range of 15.4x to 21.6x (compared
to a multiple of 21.8x for Winthrop); mean and median price to estimated
calendar 1997 earnings multiples of 13.9x and 13.4x, and a range of 11.7x to
16.1x (compared to a multiple of 16.9x for Winthrop); mean and median price
earnings multiples to historical net income growth ratios of 70.4% and 50.5%,
and a range of 33.5% to 163.8% (compared to a ratio of 89.8% for Winthrop); mean
and median price earnings multiples to forward net income growth ratios of
112.7% and 109.2%, and a range of 85.3% to 154.1% (compared to a ratio of 100.2%
for Winthrop); mean and median company value to latest twelve month revenue
multiples of 6.4x and 5.9x, and a range of 2.4x to 11.2x (compared to a 7.0x
multiple for Winthrop); and mean and median equity value to book value multiples
of 2.1x and 1.9x, and a range of 1.4x to 3.2x (compared to a 4.0x multiple for
Winthrop).
In reaching its conclusions as to the fairness to the TCF stockholders of
the consideration to be paid by TCF in the Merger and in its presentation to the
TCF Board of Directors, Piper Jaffray did not rely on any single analysis or
factor described above, assign relative weights to the analyses or factors
considered by it, or make any conclusions as to how the results of any given
analysis, taken alone, supported its fairness opinion. The preparation of a
fairness opinion is a complex process and not necessarily susceptible to partial
analyses or summary description. Piper Jaffray believes that its analyses must
be considered as a whole and that selecting portions of its analyses and of the
factors considered by it, without considering all factors and analyses, would
create a misleading view of the process underlying the Piper Opinion. The
analyses of Piper Jaffray are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable than suggested
by such analyses. Analyses relating to the value of companies do not purport to
be appraisals or valuations or necessarily reflect the price at which companies
may actually be sold. No company or transaction used in any comparable analysis
as a comparison is identical to TCF, Winthrop or the Merger. Accordingly, an
analysis of the results is not mathematical; rather it involves complex
considerations and judgments concerning, among other things, differences in
financial and operating characteristics of the comparable companies and other
factors that could affect the public trading value of such companies.
For acting as financial advisor to TCF in connection with the Merger, TCF
has agreed to pay Piper Jaffray fees aggregating $300,000, $200,000 of which has
been paid and $100,000 of which is due because of Piper's issuance of an updated
opinion as of the date of this Joint Proxy Statement/Prospectus. TCF has also
agreed to pay the reasonable out-of-pocket expenses of Piper Jaffray, not to
exceed $25,000 without TCF's approval, and to indemnify Piper Jaffray against
certain liabilities incurred (including liabilities
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under the federal securities laws) in connection with the engagement of Piper
Jaffray by TCF. The fees payable to Piper Jaffray are not contingent upon
consummation of the Merger.
OPINION OF WINTHROP FINANCIAL ADVISOR
The Merger Agreement provides that a newly-formed subsidiary of TCF will be
merged into and with Winthrop, with Winthrop as the Surviving Corporation, after
which TCF will contribute all of the outstanding capital stock of Winthrop to
TCF Minnesota. Stockholders of Winthrop Common Stock will be entitled to receive
0.7766 of a share of TCF Common Stock for each share of Winthrop Common Stock
they own, and receive cash in lieu of fractional shares they would otherwise
receive.
Winthrop retained Dain Bosworth on February 14, 1997 to act as its financial
advisor in connection with a possible merger of Winthrop and TCF Financial, and
to provide an opinion to the Board of Directors of Winthrop as to the fairness,
from a financial point of view, of the consideration to be received by
stockholders of Winthrop in connection with the Merger. While Dain Bosworth
acted as Winthrop's financial advisor and provided certain analyses to
Winthrop's Board, Dain Bosworth was not requested to and did not make any
recommendation to the Winthrop Board of Directors as to the form or amount of
consideration in connection with the Merger. See "--Background of and Reasons
for the Merger."
Dain Bosworth has delivered to the Winthrop Board its written opinion, dated
the date of this Joint Proxy Statement/Prospectus, to the effect that, as of the
date of its opinion, the consideration to be received in the Merger by the
holders of Winthrop Common Stock is fair to such stockholders from a financial
point of view. This opinion confirmed an opinion that had been delivered orally
to the Winthrop Board on February 26, 1997. A copy of the written opinion of
Dain Bosworth is attached as Appendix C to this Joint Proxy Statement/Prospectus
and is incorporated herein by reference. The summary of the opinion of Dain
Bosworth set forth in this Joint Proxy Statement/Prospectus is qualified in its
entirety by reference to the full text of such opinion.
No limitations were imposed on Dain Bosworth with respect to the scope of
investigation, except that Dain Bosworth was not asked to solicit, and did not
solicit, proposals from other parties regarding a merger or acquisition of
Winthrop. Dain Bosworth's opinion does not address Winthrop's underlying
business decision to proceed with the Merger. As set forth in its opinion, Dain
Bosworth relied on, and did not independently verify, the accuracy and
completeness of the financial and other information furnished to it by Winthrop.
Dain Bosworth did not make an independent evaluation or appraisal of the assets
and liabilities of Winthrop or TCF, and does not express any opinion regarding
the liquidation value of either entity or the regulatory compliance of TCF.
Winthrop stockholders are urged to read Dain Bosworth's opinion in its entirety
for a summary description of the procedures followed, the factors considered and
the assumptions made by Dain Bosworth in rendering its opinion.
In connection with its opinion, Dain Bosworth, among other things: (i)
reviewed certain publicly available information regarding Winthrop and TCF; (ii)
reviewed certain business and financial information about Winthrop, including
financial forecasts that had been prepared and provided by the management of
Winthrop; (iii) made further inquiries regarding the financial forecasts for
Winthrop on a stand-alone basis; (iv) reviewed certain publicly available
documents filed by Winthrop and TCF with the Commission pursuant to the Exchange
Act; (v) reviewed certain confidential financial, operating and other
information supplied to it by Winthrop and TCF; (vi) visited the corporate
offices of Winthrop and TCF and made inquiries of management regarding the past
and current business operations, financial condition, and future prospects of
each company; (vii) reviewed the Merger Agreement and selected other documents
related to the Merger; (viii) held discussions with the senior management of
both companies to understand their respective reasons for completing the Merger;
(ix) analyzed the historical reported market prices and trading activity of the
common stock of both companies; (x) compared financial and stock market
information on Winthrop and TCF to similar information for certain publicly
traded companies in the financial services industry; (xi) to the extent publicly
available, reviewed the financial
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terms of selected relevant mergers and acquisitions; (xii) analyzed the general
economic outlook for companies in the financial services industry; and (xiii)
performed other studies and analyses considered appropriate by Dain Bosworth.
In conducting the review and in performing the analyses described below,
Dain Bosworth did not attribute any particular weight to any information or
analysis considered by it, but rather made qualitative judgments as to the
significance and relevance of each factor and analysis. Accordingly, Dain
Bosworth believes that the information reviewed and the analyses conducted must
be considered as a whole and that considering any portion of such information or
analyses, without considering all of such information and analyses, could create
a misleading or incomplete view of the process underlying its opinion.
In delivering its oral opinion to Winthrop's Board on February 26, 1997,
Dain Bosworth prepared and delivered to Winthrop's Board and its legal counsel
certain written materials containing a summary of various analyses and
information that Dain Bosworth considered to be material to its opinion. The
following is a summary of certain of these materials:
ANALYSIS OF SELECTED PUBLICLY TRADED COMPANIES. Dain Bosworth compared
Winthrop's financial information and recent prices of Winthrop Common Stock to
similar information for selected publicly traded leasing companies including:
Amplicon, Inc., Comdisco Inc., DVI Inc., Financial Federal Corporation, The
Finova Group Inc., Leasing Solutions Inc., ElectroRent Corporation, Rockford
Industries Inc., and TransLeasing International (the "Comparable Companies").
Dain Bosworth calculated valuation ratios based on published stock prices
for each of the Comparable Companies. The valuation ratios were based upon
several variables, including earnings for the latest twelve months ("LTM"),
earnings per share ("EPS") estimated for the current and next calendar years,
book value, and investment in leases. The estimates of EPS for the Comparable
Companies and Winthrop were based upon consensus earnings estimates obtained
from an independent reporting system that monitors estimates prepared by
research analysts from various investment firms.
Dain Bosworth compared the historical performance and expectations for the
Comparable Companies with the performance and management's expectations for
future profitability of Winthrop. Given Winthrop's historical financial
performance, Dain Bosworth concluded that Winthrop's valuation ratios should be
in the upper end of the range of valuation ratios for the Comparable Companies;
accordingly, Dain Bosworth computed the same valuation ratios for Winthrop
Common Stock based on (i) the closing sale price for Winthrop Common Stock on
February 7, 1997, five trading days prior to the announcement of the non-binding
Letter of Intent, and (ii) the consideration to be provided in the Merger based
on the closing price for TCF Common Stock on February 25, 1997, and compared
such ratios to the valuation ratios for the Comparable Companies. The following
table summarizes the results of this analysis:
<TABLE>
<CAPTION>
MULTIPLE FOR WINTHROP
COMMON STOCK BASED UPON:
--------------------------------
<S> <C> <C> <C>
MEDIAN FOR CLOSING PRICE
COMPARABLE FEBRUARY 7, MERGER
COMPANIES 1997 CONSIDERATION
--------------- --------------- ---------------
Valuation Variable:
Price / LTM EPS...................................................... 15.2x 17.3x 20.6x
Price / Calendar 1997 EPS estimate................................... 13.8 14.5 17.2
Price / Calendar 1998 EPS estimate................................... 12.0 12.2 14.5
Price / Book value................................................... 2.20 3.23 3.84
Enterprise value / Investment in leases.............................. 1.31 1.42 1.57
</TABLE>
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ANALYSIS OF SELECTED MERGER AND ACQUISITION TRANSACTIONS. Dain Bosworth
reviewed and summarized the terms of selected merger and acquisition
transactions it deemed to be relevant, including nine acquisitions of leasing
companies. Dain Bosworth concentrated on transactions that were announced after
January 1, 1996, and those for which relevant financial data was available.
For purposes of evaluating the Merger, valuation multiples were calculated
for each of the acquisitions based upon several variables, including net income,
book value, and investment in leases. These valuation multiples were then
compared to the valuation multiples implied in the Merger. The following table
summarizes the results of Dain Bosworth's analysis of selected merger and
acquisition transactions:
<TABLE>
<CAPTION>
VALUATION RATIO
-------------------------------------------
ENT. VALUE TO
PRICE TO PRICE TO INVESTMENT
NET INCOME BOOK VALUE IN LEASES
------------- ------------- -------------
<S> <C> <C> <C>
Selected acquisitions (median)............. 19.7x 1.78x 1.06x
Implied in the Merger...................... 20.6 3.84 1.57
</TABLE>
In addition to the valuation analyses described above, Dain Bosworth
performed an analysis of the premiums paid to prevailing market prices in the
comparable acquisitions. These premiums were then compared to the premiums
implied in the Merger. The following table summarizes the results of Dain
Bosworth's analysis of premiums paid:
<TABLE>
<CAPTION>
PREMIUM PAID TO PRICE
-------------------------------------
1 MONTH 1 WEEK 1 DAY
PRIOR TO PRIOR TO PRIOR TO
ANNC. ANNC. ANNC.
----------- ----------- -----------
<S> <C> <C> <C>
Selected acquisitions (median)..................... 42.3% 23.5% 31.2%
Implied in the Merger.............................. 21.7% 18.7% 5.0%
</TABLE>
DISCOUNTED CASH FLOW ANALYSIS. Dain Bosworth performed a discounted cash
flow analysis using financial projections through the year 2001 that was
prepared and provided by management of Winthrop. Dain Bosworth calculated ranges
of present values for Winthrop Common Stock using discount rates ranging from
13.0% to 19.0%. These discount rates were applied to projected dividends and
terminal values over various assumed holding periods. The terminal values were
estimated by using multiples ranging from 10.0 to 20.0 times estimated earnings
for each year. This range of multiples for estimated earnings was based upon
Winthrop's range of historical price/earnings multiples. Based on this analysis,
the computed range for the present value of Winthrop Common Stock was $19 to $50
per share.
PRO FORMA DILUTION ANALYSIS. Dain Bosworth analyzed certain projected
income statement data for Winthrop and TCF for calendar years 1997 and 1998 on a
pro forma combined basis. The pro forma combined projections were based upon the
stand-alone projections for both Winthrop and TCF, as well as certain synergy
and expense reduction assumptions. Winthrop's projections were supplied by
Winthrop management. Projections for TCF were based on published research
estimates and were discussed with TCF management. Based upon this analysis, Dain
Bosworth estimated that the Merger would result in dilution to earnings per
share of TCF Common Stock in 1997 and 1998 of approximately 3.7% and 1.1%,
respectively.
Dain Bosworth did not assign any particular weight to the individual
analyses described above, which represent a summary of the material analyses
performed by Dain Bosworth. Dain Bosworth's determination regarding the fairness
of the Merger is not based on a mathematical model but rather upon the entire
body of information obtained from such analyses and qualitative factors. In
connection with its opinion dated as of the date of this Joint Proxy
Statement/Prospectus, Dain Bosworth performed procedures to update certain of
its analyses conducted in connection with the February 26, 1997 opinion and
reviewed the assumptions on which such analyses were based and the factors
considered in connection therewith.
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For its services as financial advisor and for rendering its opinion to the
Winthrop Board of Directors in connection with the transaction contemplated by
the Merger Agreement, Winthrop has paid Dain Bosworth $300,000 and has also
agreed to pay Dain Bosworth an estimated $100,000 upon consummation of the
Merger for its role as financial advisor. In addition, Winthrop has agreed to
reimburse Dain Bosworth for its reasonable out-of-pocket expenses and to
indemnify Dain Bosworth against certain expenses and liabilities arising in
connection with its engagement, including liabilities under the Securities Act
and the Exchange Act.
Dain Bosworth was selected by Winthrop on the basis of its experience in
valuing securities in connection with mergers and acquisitions, knowledge of
Winthrop, and expertise in transactions in the financial services industry. Dain
Bosworth is a nationally recognized investment banking firm and is regularly
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, secondary distributions of
listed and unlisted securities, private placements and valuations for estate,
corporate and other purposes. In the past, Dain Bosworth has provided investment
banking services to Winthrop and TCF and has received customary fees for the
rendering of such services. Dain Bosworth has from time to time issued research
reports and recommendations on Winthrop Common Stock and TCF Common Stock. In
the course of its trading activities, Dain Bosworth may, from time to time, have
a long or short position in, and buy and sell securities of, Winthrop and TCF.
EFFECTS OF THE MERGER
EFFECT ON HOLDERS OF WINTHROP'S COMMON STOCK AND OPTIONS. Upon consummation
of the Merger, (i) holders of Winthrop Common Stock shall be entitled to receive
a number of shares of TCF Common Stock in consideration for their shares of
Winthrop Common Stock based upon the Exchange Ratio and thereupon shall cease to
be stockholders of Winthrop, (ii) TCF shall assume the Winthrop Stock Option
Plan and all outstanding Options thereunder and, as a result, in accordance with
the terms of the Winthrop Stock Option Plan, holders of such Options shall be
entitled, upon exercise, to the number of shares of TCF Common Stock which such
Option holder would have been entitled to receive in the Merger if the Option
was exercised immediately prior to the Effective Time with the option exercise
price adjusted to reflect the Exchange Ratio. See "The Exchange Ratio--Treatment
of Stock Options Outstanding under the Winthrop Stock Option Plan."
EFFECT ON WINTHROP. Upon consummation of the Merger, the separate existence
and corporate organization of Winthrop will continue and it will retain its
name. As the Surviving Corporation of the Merger, Winthrop will retain all the
rights and property of Winthrop and will succeed to all of the rights and
property, if any, of the TCF subsidiary which will be merged into it. In
connection with the intended contribution of Winthrop to TCF Minnesota, Winthrop
may be required to dividend certain "low quality" assets, as defined pursuant to
Section 23A of the Federal Reserve Act, to TCF Financial and/or Winthrop may
elect to dividend certain additional assets to TCF Financial. The shares of
Winthrop will become 100% owned by TCF as a result of the Merger. Subject to
regulatory approval, TCF will contribute all of the stock of Winthrop to TCF
Minnesota after the Merger, such that Winthrop will be operated after the Merger
as a direct, wholly-owned subsidiary of TCF Minnesota. The members of the Board
of Directors of the Surviving Corporation at the Effective Time will be the
following individuals: John L. Morgan, Kirk A. MacKenzie, Jack A. Norqual,
William A. Cooper, Thomas A. Cusick, Lynn A. Nagorske, Ronald J. Palmer, and
Gregory J. Pulles. All other members of the current Board of Directors of
Winthrop will resign as of the Effective Time.
EFFECT ON EMPLOYEES OF WINTHROP. The officers of Winthrop will be unchanged
by the Merger, although their continuing service with Winthrop after the Merger
will be subject to the discretion and judgment of the new Board of Directors of
Winthrop. Upon consummation of the Merger, all employees of Winthrop will remain
employees of Winthrop, the Surviving Corporation. Following consummation of the
Merger, the Board of Winthrop may retain such of the employees of the Surviving
Corporation and its
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subsidiaries as it may decide in its sole discretion. Each employee of Winthrop
who remains an employee of the Surviving Corporation or its subsidiaries after
the Merger will be entitled to continue to participate in all employee plans
maintained by their employer prior to the Merger unless and until such plans are
merged, amended or discontinued. The Merger Agreement reflects the parties'
intention that Winthrop will retain its employee plans in effect for the benefit
of employees of Winthrop. Winthrop and TCF each reserves full authority to
amend, terminate, discontinue or otherwise revise their employee plans and/or to
adopt new plans from time to time subject solely to the discretion of their
respective Boards of Directors.
EFFECT ON WINTHROP SENIOR NOTE HOLDERS. The Senior Notes of Winthrop shall
continue to be an obligation of Winthrop as the Surviving Corporation after the
Merger. The Merger Agreement provides that TCF and/or Winthrop may solicit, at
TCF's expense, the consent of the Winthrop Senior Note holders to amend or
eliminate certain covenants contained in the indenture relating to the Winthrop
Senior Notes, and that TCF will become a co-obligor of the Winthrop Senior
Notes, subject to approval by the Winthrop Senior Note holders of certain
modifications to the indenture under which the Notes were issued.
THE EXCHANGE RATIO
GENERAL. The Merger Agreement provides that at the Effective Time, all of
the issued and outstanding shares of Winthrop Common Stock (other than
dissenters' shares or shares held by TCF or any subsidiary thereof other than
shares held in a fiduciary capacity or in satisfaction of a debt) will be
cancelled and converted into the number of shares of TCF Common Stock (including
the associated preferred share purchase rights described in "Description of TCF
Capital Stock--TCF Common Stock-- Preferred Share Purchase Rights") determined
by multiplying the number of shares of such Winthrop Common Stock by the
Exchange Ratio, plus cash in lieu of any fractional shares of TCF Common Stock.
There can be no assurance that stockholders of Winthrop Common Stock will
receive a stated value in shares of TCF Common Stock for their shares of
Winthrop Common Stock because the market price of TCF Common Stock at the time
of the Merger may be less than it is currently and is subject to changes
thereafter. Winthrop's stockholders are urged to obtain current quotations for
shares of TCF Common Stock. See "Comparative Market Price Data." In the event
the Average TCF Stock Price is less than $42.30 per share on the Determination
Date, Winthrop may terminate the Merger Agreement. TCF may terminate the Merger
Agreement if the Average TCF Stock Price on the Determination Date is more than
$51.70 per share. Even if one of these conditions occurs, there can be no
assurance that TCF or Winthrop will exercise their right to terminate the Merger
Agreement; accordingly, even if one of these conditions occurs, the Merger may
still be consummated. Neither TCF nor Winthrop has made any determination
whether to terminate the Merger Agreement should these events occur.
Based on 8,600,300 shares of Winthrop Common Stock outstanding on May 19,
1997, TCF would have issued approximately 6,679,000 shares of TCF Common Stock
for all of the outstanding shares of Winthrop Common Stock at the Effective Time
of the Merger. Under such circumstances, immediately after the Effective Time
former Winthrop stockholders would hold approximately % of the outstanding
shares of TCF Common Stock on a fully diluted basis as of May 19, 1997. The
Merger Agreement also provides that upon consummation of the Merger, the
Winthrop Stock Option Plan, and all Options thereunder which are outstanding at
such time (whether or not then exercisable), will be assumed by TCF in
accordance with the terms of the Winthrop Stock Option Plan. The Merger
Agreement further provides that upon exercise of an Option, holders will be
entitled to receive the number of shares of TCF Common Stock they would have
received pursuant to the Merger if the Option had been exercised immediately
prior to the Merger at an exercise price per share equal to the aggregate amount
that would have been paid upon exercise divided by the number of shares of TCF
Common Stock that would have been purchased. Based upon Options to purchase
439,500 shares outstanding on December 31, 1996, if the Merger had occurred on
May 19, 1997 and all Option holders exercised their Options, TCF would have
issued 341,316 additional shares of TCF Common Stock upon the exercise of those
Options.
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EFFECTIVE TIME OF THE MERGER. The Merger will be effective upon the filing
of the Articles of Merger with the Secretary of State of Minnesota. This filing
will occur only after the receipt of all requisite regulatory approvals, the
approval of the Merger Agreement and the Merger by the requisite vote of
Winthrop's stockholders, the approval of the Merger Agreement and Merger and the
issuance of TCF Common Stock pursuant thereto by the requisite vote of TCF
stockholders, and the satisfaction or waiver of all other conditions to the
Merger.
NO FRACTIONAL SHARES OF TCF COMMON STOCK TO BE ISSUED. No fractional shares
of TCF Common Stock will be issued in the Merger to Winthrop stockholders. Each
holder of Winthrop Common Stock who otherwise would have been entitled to a
fraction of a share of TCF Common Stock shall receive in lieu thereof, at the
time of surrender of the certificate or certificates representing such holders'
shares of Winthrop Common Stock, an amount of cash (without interest) determined
by multiplying the fractional share interest to which such holder would
otherwise be entitled by the closing price of TCF Common Stock on the Effective
Date.
MANNER OF EXCHANGING WINTHROP COMMON STOCK CERTIFICATES. As soon as
practicable after the Effective Time, each record holder of Winthrop Common
Stock immediately prior to the Effective Time will be advised of the
consummation of the Merger by letter accompanied by a letter of transmittal and
instructions advising such holders of the terms of the exchange and the
procedure for surrendering the certificate or certificates representing shares
of Winthrop Common Stock to an exchange agent duly appointed by TCF (the
"Exchange Agent"). CERTIFICATES FOR SHARES OF WINTHROP COMMON STOCK SHOULD NOT
BE FORWARDED TO THE EXCHANGE AGENT UNTIL AFTER RECEIPT OF THE RESPECTIVE LETTER
OF TRANSMITTAL FORM AND INSTRUCTIONS FROM THE EXCHANGE AGENT.
Until such surrender for shares of TCF Common Stock, the certificates for
shares of Winthrop Common Stock will represent ownership of the number of shares
of TCF Common Stock into which such shares were converted in the Merger, and the
holders will be entitled to all rights and privileges of holders of TCF Common
Stock, except that holders of certificates for Winthrop Common Stock will not be
entitled to receive dividends or any other distributions declared by TCF until
such certificates are so surrendered. Following surrender of the certificates
for Winthrop Common Stock and in accordance with the terms of the Merger
Agreement, the holders of newly-issued TCF Common Stock and certificates will be
paid, without interest, any dividends or other distributions with respect to
such shares of TCF Common Stock for any dividend record date which is after the
Effective Time (less any taxes that may have been imposed thereon).
After the Effective Time, holders of unsurrendered Winthrop Common Stock
certificates shall be entitled to vote at any meeting of TCF stockholders at
which holders of TCF Common Stock are eligible to vote, regardless of whether
such holders have exchanged their certificates. Any certificate representing
shares of TCF Common Stock to be issued in a name other than that in which the
certificate surrendered is registered must be properly endorsed and otherwise in
proper form for transfer, and the holder requesting such exchange must pay to
the Exchange Agent in advance any transfer or other taxes in connection
therewith, if applicable.
After the Effective Time, there will be no further transfers on the records
of Winthrop of the certificates and, if such certificates are presented to TCF
for transfer, they will be cancelled against delivery of certificates for shares
of TCF Common Stock.
LOST CERTIFICATES. Any Winthrop stockholder who has lost, misplaced or
destroyed a certificate for any of his or her shares of Winthrop Common Stock
should immediately call Paul L. Gendler, General Counsel of Winthrop at (612)
912-5382 for information regarding the procedures to be followed for replacing
the lost certificate. Until a replacement certificate is obtained, the Winthrop
stockholder will be unable to properly submit the letter of transmittal.
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TREATMENT OF STOCK OPTIONS OUTSTANDING UNDER THE WINTHROP STOCK OPTION
PLAN. Upon consummation of the Merger, TCF will assume the Winthrop Stock
Option Plan and all outstanding Options to purchase Winthrop Common Stock
granted pursuant to the Winthrop Stock Option Plan. Pursuant to the terms of
such plan, holders of such Options will be entitled, upon exercise, to receive
the number of shares of TCF Common Stock which such Option holder would have
been entitled to receive in the Merger if the Option was exercised immediately
prior to the Effective Time. The exercise price per share of TCF Common Stock
will be equal to the exercise price of the Option divided by the Exchange Ratio.
Thus, an Option for 5,000 shares of Winthrop Common Stock at an exercise price
of $9.75 per share would be converted into a right to receive 3,883 shares of
TCF Common Stock (5,000 shares multiplied by the Exchange Ratio) at an exercise
price of $12.555 per share of TCF Common Stock ($9.75 divided by the Exchange
Ratio). Under the Merger Agreement, Winthrop has agreed that the committee which
administers the Winthrop Stock Option Plan will not exercise its discretion to
permit holders of Winthrop Stock Options to receive a cash payment, in lieu of
stock, under that Plan.
CONDITIONS TO THE MERGER
Approval and adoption of the Merger Agreement and approval of the Merger by
the requisite vote of stockholders of Winthrop and of the Merger Agreement, and
Merger and the issuance of the shares of TCF Common Stock pursuant thereto by
the requisite vote of stockholders of TCF is a condition to consummation of the
Merger. Additional conditions to consummation of the Merger are set forth in the
Merger Agreement, a copy of which is attached to this Joint Proxy
Statement/Prospectus as Appendix A. Stockholders of Winthrop and stockholders of
TCF are encouraged to read the Merger Agreement in its entirety.
The Merger Agreement provides that consummation of the transactions
contemplated by the Merger Agreement is subject to the satisfaction of certain
conditions, or the waiver of such conditions by the party entitled to do so, at
or before the Effective Time. Each of the parties' obligations under the Merger
Agreement is subject to the following conditions: (i) all necessary regulatory
approvals of any governmental authority required to consummate the transactions
(including TCF's contribution of Winthrop to TCF Minnesota) contemplated by the
Merger Agreement shall have been received and all notice periods and waiting
periods with respect thereto shall have expired without any objections by any
applicable governmental authorities; (ii) no injunction or other order entered
by a state or federal court of competent jurisdiction shall have been issued and
remain in effect which would prohibit or make illegal the consummation of the
transactions contemplated by the Merger Agreement; (iii) there shall have been
no law, statute, rule or regulation, domestic or foreign, enacted or promulgated
which would prohibit or make illegal the consummation of the transactions
contemplated by the Merger Agreement; (iv) the Registration Statement (and the
Form S-3 registration statement for the registration by TCF of a supplemental
offering required to permit the Merger to be accounted for as a pooling of
interests) shall have been declared effective and shall not be subject to a stop
order of the Commission; if the offer and sale of TCF Common Stock in the Merger
pursuant to the Merger Agreement is required to be registered under the
securities laws of any state, the Registration Statement shall not be subject to
a stop order of the securities commission in such state; and TCF will have
completed the sale of shares of TCF Common Stock, if any, required to be sold
under the Form S-3 registration statement in order for the Merger to be
accounted for as a pooling of interests; (v) TCF and Winthrop shall have
received an opinion of KPMG Peat Marwick LLP covering certain tax matters (see
"--Certain Federal Income Tax Consequences"); and (vi) TCF Common Stock to be
issued to holders of Winthrop Common Stock or issuable upon the exercise of the
Options shall have been approved for listing on the NYSE subject to official
notice of issuance.
In addition to the foregoing conditions, TCF's obligations under the Merger
Agreement are conditioned upon (i) the accuracy in all material respects as of
both the date of the Merger Agreement and as of the Effective Time of the
representations and warranties of Winthrop set forth in the Merger Agreement,
except as to any representation or warranty which specifically relates to an
earlier date and except as
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otherwise contemplated by the Merger Agreement; (ii) the performance by Winthrop
in all material respects of each obligation and agreement and compliance by
Winthrop with each covenant to be performed or complied with or by it under the
Merger Agreement at or prior to the Effective Time; (iii) the receipt of certain
certificates from specified officers of Winthrop with respect to compliance with
certain of the conditions set forth in the Merger Agreement; (iv) the receipt of
certain legal opinions from Winthrop's legal counsel; (v) the approval of the
Merger Agreement, the Merger and the issuance of TCF Common Stock in connection
therewith, by the affirmative vote of holders of the percentage of TCF Common
Stock required for such approval under the TCF Certificate and the TCF Bylaws,
the DGCL and/or the rules of the NYSE; (vi) the receipt by TCF of the letters
relating to the sale of Winthrop or TCF Common Stock, during certain periods
before and after the Effective Time from all executive officers and directors of
Winthrop and all stockholders who are affiliates of Winthrop (the "Affiliate
Letters"); (vii) no event having occurred which, in the reasonable opinion of
TCF and concurred with by KPMG Peat Marwick LLP, would prevent the Merger from
being accounted for as a pooling-of-interests, and the receipt by TCF from KPMG
Peat Marwick LLP of an opinion that the Merger will qualify as a pooling-of-
interests for accounting purposes; (viii) no action or proceeding before any
court or governmental authority or agency, domestic or foreign, being
threatened, instituted or pending (A) challenging or seeking to make illegal, or
to delay or otherwise directly or indirectly to restrain or prohibit, the
consummation of the transactions contemplated by the Merger Agreement or seeking
to obtain material damages in connection with the transactions contemplated
thereby, (B) seeking to prohibit direct or indirect ownership or operation by
TCF of all or a material portion of the business or assets of Winthrop or any of
its subsidiaries or of TCF or any of its subsidiaries, or to compel TCF or any
of its subsidiaries or Winthrop to dispose of all or a material portion of the
business or assets of TCF or any of its subsidiaries or of Winthrop or any of
its subsidiaries, as a result of the transactions contemplated by the Merger
Agreement, or (C) seeking to require direct or indirect divestiture by TCF of
any material portion of its business or assets or of Winthrop's business or
assets; (ix) no action being taken, or any statute, rule, regulation, judgment,
order or injunction being proposed, enacted, entered, enforced, promulgated,
issued or deemed applicable to the transactions contemplated by the Merger
Agreement by any federal, state or other court, government or governmental
authority or agency, which could reasonably be expected to result, directly or
indirectly, in any of the consequences referred to in clause (viii) of this
paragraph; (x) since February 28, 1997, Winthrop not suffering or experiencing a
material adverse effect (as defined in the Merger Agreement); (xi) the receipt
by TCF, within five days prior to mailing the Joint Proxy Statement/ Prospectus
to the stockholders of TCF, of an opinion from Piper Jaffray (or another
investment banking firm reasonably acceptable to TCF) to the effect that the
Merger is fair from a financial point of view to the holders of TCF Common
Stock; (xii) the receipt by TCF of signed Stockholder Agreements from and
execution and delivery to TCF by the Winthrop Founders and Mr. Murphy of the
employment contract amendments provided for pursuant to the Merger Agreement;
and (xiii) dissenters' shares in the merger not exceeding 10% of the outstanding
shares of Winthrop Common Stock on the Effective Date. Any of the foregoing
conditions may be waived by TCF.
In addition to the conditions set forth above, Winthrop's obligation to
consummate the Merger is subject to satisfaction of the following conditions,
among others: (i) the accuracy in all material respects as of both the date of
the Merger Agreement and as of the Effective Time of the representations and
warranties of TCF set forth in the Merger Agreement, except as to any
representation or warranty which specifically relates to an earlier date and
except as otherwise contemplated by the Merger Agreement; (ii) the performance
by TCF in all material respects of each obligation and agreement and compliance
by TCF with each covenant to be performed or complied with or by it under the
Merger Agreement at or prior to the Effective Time; (iii) the receipt of certain
certificates from specified officers of TCF with respect to compliance with
certain of the conditions set forth in the Merger Agreement; (iv) the receipt of
certain legal opinions from Gregory J. Pulles, TCF's General Counsel; (v) the
approval of the Merger Agreement and the transactions contemplated thereby by
the affirmative vote of the holders of the percentage of Winthrop Common Stock
required for such approval under the provisions of the Winthrop
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Articles and Bylaws and the MBCA; (vi) since February 28, 1997, TCF not
suffering or experiencing a material adverse effect (as defined in the Merger
Agreement); (vii) the receipt by Winthrop, within five days prior to mailing
this Joint Proxy Statement/Prospectus to the stockholders of Winthrop, of a
written opinion in a form reasonably acceptable to Winthrop from Dain Bosworth
(or another investment banking firm reasonably acceptable to Winthrop) to the
effect that the consideration to be delivered in the Merger is fair from a
financial point of view to the holders of Winthrop Common Stock; and (viii) the
receipt by Winthrop of the letters relating to the sale of Winthrop or TCF
Common Stock, during certain periods before and after the Effective Time, from
all executive officers and directors of TCF and all holders of TCF Common Stock
who are affiliates of TCF. Any of the foregoing conditions may be waived by
Winthrop.
REGULATORY APPROVALS
Under the Merger Agreement, the obligations of both TCF and Winthrop to
consummate the Merger are conditioned upon the receipt of all required
regulatory approvals and the lapse of all required regulatory waiting periods.
There can be no assurance that any applicable regulatory authority will approve
or take other required action with respect to the Merger or as to the date of
such regulatory approval or other action. TCF and Winthrop are not aware of any
governmental approvals or actions that are required in order to consummate the
Merger except as described below. Should such other approval or action be
required, it is presently contemplated that TCF and Winthrop would seek such
approval or action. There can be no assurance as to whether or when any such
other approval or action, if required, could be obtained, or that such approval
or action, if obtained, would not delay the consummation of the Merger and would
not be conditioned in a manner that would cause TCF to abandon the Merger. In
the event the Merger is not consummated on or before August 1, 1997, the Merger
Agreement may be terminated by either TCF or Winthrop. See "--Termination and
Amendment."
In order to consummate the Merger, TCF must provide notice to and obtain
prior approval from the FRB under the BHCA and pursuant to the terms of
Regulation Y for the acquisition of a non-banking subsidiary and related
matters. TCF has provided such notice to the FRB on April , 1997. TCF must
also provide notice to the OCC concerning the ownership by TCF Minnesota of
Winthrop as an operating subsidiary. TCF provided the requisite notice to the
OCC on March 31, 1997. There can be no assurance that the FRB and the OCC will
approve the Merger or the contribution of Winthrop to TCF Minnesota or of the
timing of such approvals. Other applications that may be required under state
securities laws have been filed with the appropriate regulatory authorities. The
Merger will not be consummated unless and until all requisite regulatory
approvals are obtained. In addition, the Merger cannot be consummated prior to
the expiration of a fifteen-day waiting period following the date on which the
FRB approves the Merger.
In approving the Merger and the contribution of Winthrop to TCF Minnesota
under the BHCA, the FRB will consider the effect of the Merger on the regulatory
capital of TCF and TCF Minnesota, the effect on operations, and how
closely-related the business activities of Winthrop are to those authorized for
banks and bank holding companies. In accepting notice of Winthrop as an
operating subsidiary of TCF Minnesota and related actions, the OCC may consider
the effect of the Merger (and the subsequent contribution of Winthrop to TCF
Minnesota) on the safety and soundness of TCF Minnesota, the planned operating
relationships between Winthrop and TCF Minnesota and the transfer of Winthrop by
TCF to TCF Minnesota.
HSR ACT. Under the HSR Act, certain acquisition transactions, including the
Merger, may not be consummated unless certain information has been furnished to
the FTC and the Antitrust Division, and certain waiting period requirements have
been satisfied. Due in part to their significant individual ownership of
Winthrop Common Stock, the Winthrop Founders, as acquiring persons of TCF Common
Stock, and TCF, furnished such information and the requisite waiting period
expired on May , 1997. TCF's information was furnished in connection with its
filing of an application for approval of the Merger with the FRB under Section 4
of the BHCA.
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CERTAIN COVENANTS
Pursuant to the Merger Agreement, TCF and Winthrop have each agreed to take
certain actions between the date of the Merger Agreement and the Effective Time,
including the "--Limitation on Negotiations" set forth below. Stockholders of
TCF and Winthrop should consult the Merger Agreement, attached as Appendix A
hereto, to review these covenants in full.
TCF's covenants include, but are not limited to, the obligation to obtain
signed copies of all Affiliate Letters provided for under the Merger Agreement,
to register and complete a public offering of shares of TCF Common Stock in
order to allow the Merger to qualify as a pooling-of-interests and to obtain
issuance of a letter from KPMG Peat Marwick LLP that the Merger qualifies for
pooling-of-interests accounting treatment.
Winthrop's covenants include, but are not limited to, the obligation to
obtain signed copies of all Affiliate Letters and employment contract amendments
provided for under the Merger Agreement, and to obtain issuance of a letter from
KPMG Peat Marwick LLP, if required, that the Merger qualifies for
pooling-of-interests accounting treatment.
LIMITATION ON NEGOTIATIONS
The Merger Agreement provides that Winthrop will not, and will use its best
efforts to cause its officers, directors, employees, agents and affiliates not
to, directly or indirectly, solicit, authorize, initiate or encourage submission
of, any proposal, offer, tender offer or exchange offer from any person or
entity (including any of its or their officers or employees) relating to any
liquidation, dissolution, recapitalization, merger, consolidation or acquisition
or purchase of all or a material portion of the assets or deposits of, or any
equity interest in Winthrop or other similar transaction or business combination
involving Winthrop (the "Acquisition Proposal"). Unless the Board of Directors
of Winthrop shall have determined, after consultation with its legal counsel,
that there is a reasonable likelihood that the Board of Directors has a
fiduciary duty to do so, the Merger Agreement provides that Winthrop will not
(i) participate in any negotiations in connection with or in furtherance of any
of the foregoing or (ii) permit any person other than TCF and its
representatives to have any access to the facilities of, or furnish to any
person other than TCF and its representatives any non-public information with
respect to, Winthrop in connection with or in furtherance of any of the
foregoing. Winthrop is also required to notify TCF if any such proposal or
offer, or any inquiry from or contact with any person with respect thereto, is
made, and to provide TCF with such information regarding such proposal, offer,
inquiry or contact as TCF may request.
TERMINATION AND AMENDMENT
The Merger Agreement may be terminated at any time on or prior to the
Effective Time by: (i) mutual consent of TCF and Winthrop approved by a vote of
a majority of the members of their respective entire Boards of Directors; (ii)
either TCF or Winthrop, if any of the conditions to such party's obligation to
consummate the transactions contemplated in the Merger Agreement have become
impossible to satisfy; (iii) either TCF or Winthrop, if the Merger Agreement is
not duly approved by the stockholders of each of TCF or Winthrop: (iv) either
TCF or Winthrop if the Effective Time is not on or before August 1, 1997 (unless
the failure to consummate the Merger by such date shall be due to the action or
failure to act of the party seeking to terminate the Merger Agreement in breach
of such party's obligations thereunder); (v) Winthrop if the Average TCF Stock
Price on the Determination Date is less than $42.30 per share; (vi) TCF if the
Average TCF Stock Price on the Determination Date is greater than $51.70 per
share; (vii) Winthrop if any person (other than TCF or any affiliate of TCF)
shall have commenced a bona fide tender offer for all outstanding shares of
Winthrop Common Stock or any person shall have made a bona fide written offer
involving a merger or consolidation of Winthrop or the acquisition of all or
substantially all of its assets or capital stock, and Winthrop's Board of
Directors determines, in its good faith judgement, after consultation with
Winthrop's independent financial advisors,
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that such offer is more favorable to Winthrop's stockholders when compared to
the Merger and that such Board's failure to recommend such offer or accept such
proposal would likely result in a breach of the directors' fiduciary or legal
duties subject to the expiration of five business days after written notice of
any such offer or proposal has been delivered to TCF (the "Fiduciary
Termination"); (viii) TCF if, after February 28, 1997, any person shall have
commenced a bona fide tender offer or exchange offer to acquire at least 25% of
the then outstanding shares of Winthrop Common Stock, and thereafter the Board
of Directors of Winthrop shall have withdrawn, or materially adversely modified
or changed its recommendation of the Merger Agreement or the Merger (the "Tender
Offer Termination"); (ix) either TCF or Winthrop, if the other party commits a
willful breach which is not cured within ten days after receipt by the breaching
party of written demand for cure by the non-breaching party (a "Willful Breach
Termination"); or (x) TCF or Winthrop, within 20 days after receipt of a
supplement or amendment to the disclosure schedules included with the Merger
Agreement, if such supplement or amendment, together with any other supplements
or amendments to the disclosure schedules previously provided to the
non-disclosing party, indicate that the disclosing party has suffered or is
reasonably likely to suffer a material adverse effect which either has not or
cannot be cured within 30 days after disclosure to the receiving party. Any
party desiring to terminate the Merger Agreement is required to give written
notice of such termination and the reasons therefor to the other party.
To the extent permitted under applicable law, the Merger Agreement may be
amended or supplemented at any time by written agreement of the parties whether
before or after the Special Meetings. Such amendment or supplement may be made
without further approval of TCF's and Winthrop's respective stockholders.
TERMINATION FEES
The Merger Agreement provides that either Winthrop or TCF shall pay the
other a termination fee if the Merger Agreement is terminated in certain events.
Winthrop shall pay TCF the sum of $12.5 million if the Merger Agreement is
terminated by Winthrop pursuant to the Fiduciary Termination. See "--Limitations
on Negotiations." Winthrop shall pay TCF the sum of $1 million in the event
termination results from any of the following: (i) termination is by Winthrop as
a result of failure to obtain approval for the Merger by its own stockholders or
failure to obtain the required fairness opinion; (ii) termination is by TCF as a
result of failure of Winthrop's officers to certify, to their best knowledge,
that Winthrop's representations are true and correct, except where the failure
to be true and correct would not have, or would not reasonably be expected to
have, a material adverse effect on Winthrop, that all covenants of Winthrop
under the Merger Agreement have been materially complied with, and that the
resolutions of the Winthrop Board approving the Merger have not been modified or
rescinded; or (iii) termination is by TCF if there is a Tender Offer Termination
or a Willful Breach Termination. If the Merger Agreement is terminated for any
of the reasons set forth in the preceding sentence, an additional payment of
$11.5 million will be made from Winthrop to TCF if (i) Winthrop receives an
Acquisition Proposal during the period after February 28, 1997 and before the
Merger Agreement is terminated and (ii) Winthrop enters into a definitive merger
acquisition agreement with that third party (or its affiliate) within twelve
months after the Merger Agreement is terminated.
Under the Merger Agreement, TCF has agreed to pay Winthrop a termination fee
of $1.0 million if the Merger Agreement is terminated: (i) by Winthrop due to
the failure of TCF's officers to certify, to their best knowledge, that TCF's
representations are true and correct except where a failure to be true and
correct would not have, or would not reasonably be expected to have a material
adverse effect on TCF, that all covenants of TCF under the Merger Agreement have
been materially complied with, and that the resolutions of the TCF Board
approving the Merger and issuance of shares have not been modified or rescinded;
(ii) by TCF due to the failure of TCF to obtain a fairness opinion; (iii) by TCF
if the Merger Agreement is not approved by stockholders of TCF or Winthrop; (iv)
by Winthrop if there is a Willful
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Breach Termination; or (v) by Winthrop if the Board of Directors of TCF fails to
recommend approval of the Merger Agreement, or withdraws or adversely modifies
its recommendation of the Merger Agreement.
The termination payments provided for in the Merger Agreement, if accepted
by the party to whom they are payable, are in lieu of any other damages or
remedies the party may otherwise have. If the party entitled to a termination
payment does not accept it, the Merger Agreement provides for injunctive relief
and for specific enforcement of the terms of the Merger Agreement and for the
payment of consequential and incidental damages, in the case of a willful
breach.
BUSINESS PENDING THE MERGER
The Merger Agreement provides that from the date of the Merger Agreement to
the Effective Time of the Merger, except as otherwise permitted by the Merger
Agreement or agreed to by TCF, the business of Winthrop will be conducted only
in the ordinary course, on an arms'-length basis and in accordance in all
material respects with past practices and applicable laws, rules and regulations
and with prudent leasing practices. In addition, the Merger Agreement provides
that during such period, except as otherwise permitted by the Merger Agreement
or agreed to by TCF, Winthrop shall not, directly or indirectly:
(i) (A) amend or propose to amend its Articles or Bylaws; (B) issue or sell
any of its equity securities, securities convertible into or exchangeable for
its equity securities, warrants, options or other rights to acquire its equity
securities, or any bonds or other securities, except pursuant to the exercise of
Options outstanding as of February 28, 1997; (C) redeem, purchase, acquire or
offer to acquire, directly or indirectly, any shares of Winthrop capital stock
or other securities of Winthrop, except pursuant to the agreements, arrangements
or commitments disclosed in the Merger Agreement; (D) split, combine or
reclassify any outstanding shares of Winthrop capital stock or declare, set
aside or pay any dividend or other distribution payable in cash, stock, property
or otherwise with respect to shares of capital stock of Winthrop except the
regular quarterly cash dividends on Winthrop Common Stock not to exceed $.05 per
share subject to declaration by the Winthrop Board of Directors payable on or
about July 1, 1997 to stockholders of record as of June 15, 1997; (E) borrow any
amount or incur or become subject to any material liability, except borrowings
and liabilities incurred in the ordinary course of business; (F) discharge or
satisfy any material lien or encumbrance on the properties or assets of Winthrop
or pay any material liability, except in the ordinary course of business; (G)
sell, assign, transfer, mortgage, pledge or subject to any lien or other
encumbrance any of its assets with an aggregate market value in excess of
$100,000, except (1) in the ordinary course of business; (2) liens and
encumbrances for current property taxes not yet due and payable; and (3) liens
and encumbrances which do not materially affect the value of, or interfere with
the current use or ability to convey, the property subject thereto or affected
thereby; (H) cancel any material lease, debt or claims or waive any rights of
material value, except in the ordinary course of business or upon payment in
full; (I) acquire (by merger, exchange, consolidation, acquisition of stock or
assets or otherwise) any corporation, partnership, joint venture or other
business organization or division or material assets thereof, or assets or
deposits that are material to Winthrop, except in exchange for debt previously
contracted; (J) other than as disclosed on a Schedule to the Merger Agreement,
make any single or group of related capital expenditures or commitments therefor
in excess of $100,000 (other than pursuant to binding commitments existing on
February 28, 1997 and other than expenditures necessary to maintain assets in
good repair) or enter into any lease or group of leases as lessee with the same
party which involves aggregate lease payments payable of more than $100,000 for
any individual lease or involves more than $100,000 for any group of leases with
the same party in the aggregate; (K) other than as disclosed on a Schedule to
the Merger Agreement, commit to enter into any lease or contemporaneously enter
into a group of lease schedules with the same party which involves aggregate
monthly lease charges (as defined in such lease or lease schedules) payable
during the term of the lease of more than $10 million without the prior
consultation with TCF's Chief Financial Officer; (L) enter into or propose to
enter into, or modify or propose to modify, any agreement, arrangement, or
understanding with respect to any of the matters set forth in this clause (i)
except in the ordinary course of business; (M) without prior
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consultation with TCF, purchase or otherwise acquire any investments, direct or
indirect, in any derivative securities other than occasional overnight
investments of excess cash; or (N) without prior consultation with TCF, enter
into any interest rate swap, floor and option agreements or other similar
interest rate management agreements;
(ii) enter into, modify or terminate any employment, severance or similar
agreements or arrangements with, or grant any bonuses, wage, salary or
compensation increases, or severance or termination pay to, or promote, any
director, officer, employee, group of employees or consultant or hire any
employee with an annual salary over $100,000, other than (A) in the ordinary
course of business and in a manner consistent with past practices or (B) as
contemplated in the Merger Agreement, and promptly notify TCF of any termination
or resignation of any officer or key employee of Winthrop;
(iii) adopt or amend any profit sharing, stock option, pension, retirement,
deferred compensation, or other employee benefit plan, trust, fund, contract or
arrangement for the benefit or welfare of any employees, except as required by
law or grant any stock option except as described on a Schedule to the Merger
Agreement;
(iv) fail to use reasonable efforts to cause its current insurance policies
not to be canceled or terminated or any of the coverage thereunder to lapse,
unless simultaneously with such termination, cancellation or lapse, replacement
policies providing coverage substantially equal to the coverage under the
canceled, terminated or lapsed policies are in full force and effect;
(v) enter into any settlement or similar agreement with respect to, or take
any other significant action with respect to the conduct of, any action, suit,
proceeding, order or investigation which is required to be disclosed in a
Schedule to the Merger Agreement or to which Winthrop becomes a party after
February 28, 1997 which is required to be disclosed in a Schedule to the Merger
Agreement, without prior consultation with TCF's General Counsel;
(vi) fail to use commercially reasonable efforts to preserve intact in all
material respects the business organization and the goodwill of Winthrop and to
keep available the services of its officers and employees as a group and
preserve intact material agreements, or to establish a committee of senior
management personnel which will confer on a regular and frequent basis with a
committee of senior management personnel of TCF, as reasonably requested by TCF,
to report on operational matters and the general status of ongoing operations
and to plan for the operations of the Surviving Corporation upon consummation of
the Merger;
(vii) take any significant action with respect to any of the leases
inconsistent with Winthrop's past practices or then current prudent practices,
materially alter its leasing portfolio or, without prior consultation with TCF,
voluntarily take any action that will have or can reasonably be expected to have
a material adverse effect on the leases or licenses of Winthrop;
(viii) with respect to real properties leased by Winthrop and any material
personal property leased or licensed by Winthrop for its use, renew, exercise an
option to extend, cancel or surrender any such lease or license or allow it to
lapse, without prior consultation with TCF; or
(ix) agree to any action prohibited by the foregoing.
Notwithstanding the forgoing, Winthrop can take any otherwise prohibited
action if it is expressly required to do so by law and Winthrop promptly informs
TCF of the action.
In addition, under the terms of the Merger Agreement, TCF has also agreed
not to take certain actions without the prior written consent of Winthrop,
including, among other things, the following: (i) issue or sell any equity
securities, securities convertible into or exchangeable for its equity
securities, warrants, options or other rights to acquire its equity securities,
or any bonds or other securities except (A) pursuant to the exercise of options
or warrants or the conversion of convertible securities set forth on a Schedule
to the Merger Agreement and pursuant to the exercise of options granted pursuant
to clause
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(C) below; (B) issuances of TCF Common Stock to satisfy the employer matching
obligation under TCF's 401(k) Plan for the participants in such plan who elect
to invest in TCF Common Stock; (C) grants of options and restricted stock under
the TCF Financial 1995 Incentive Stock Program in the ordinary course of
business; (D) pursuant to TCF's dividend reinvestment plan; or (E) issuance of
shares of TCF Common Stock to satisfy the "tainted shares" requirement to have
the Merger treated as a pooling of interests for accounting purposes; (ii)
redeem, purchase, acquire or offer to acquire, directly or indirectly, any
shares of capital stock of TCF or other securities of TCF, except pursuant to an
agreement arrangement or commitment identified on a Schedule to the Merger
Agreement and except with respect to the redemption of redeemable debt,
including but not limited to, outstanding convertible debentures; (iii) split,
combine or reclassify any outstanding shares of capital stock of TCF or declare,
set aside, make or pay any dividend or distribution (whether in cash, stock, or
property or otherwise) with respect to shares of TCF capital stock other than
regular quarterly cash dividends which are not in excess of $.32 per share; (iv)
borrow any amount or incur or become subject to any material liability, except
borrowings and liabilities incurred in the ordinary course of business or
borrowing to redeem outstanding debentures; (v) amend the TCF Certificate or
Bylaws (or those of a TCF subsidiary) in a manner which would adversely affect
in any manner the terms of the TCF Common Stock or the ability of TCF to
consummate the transactions contemplated by the Merger Agreement in a timely
manner; (vi) make any acquisition (including acquisitions of branch offices and
related deposit liabilities), or cause a TCF subsidiary to, or take any other
action that individually or in the aggregate would adversely affect the ability
of TCF or its wholly-owned subsidiaries to consummate the transactions
contemplated by the Merger Agreement in a timely manner; or (vii) agree to do
any of the foregoing things.
TCF has entered into a definitive agreement to acquire Standard. TCF and
Winthrop have agreed that the foregoing restrictions on actions by TCF do not
apply to TCF's acquisition of Standard pursuant to the terms of the Standard
Merger Agreement as currently in effect. See "Recent Developments-- Standard."
Furthermore, TCF and Winthrop have agreed to provide the other party and its
representatives with such financial data and other information with respect to
its business and properties as such party shall from time to time reasonably
request. Each party will cause all non-public financial and business information
obtained by it from the other to be treated confidentially. If the Merger is not
consummated, each party will return to the other all non-public financial
statements, documents and other materials previously furnished by such party.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of the Winthrop Board of Directors and management may be
deemed to have certain interests in the Merger in addition to their interests as
stockholders of Winthrop generally. The Merger Agreement provides that, as of
the Effective Time, TCF will elect one member of the current Board of Directors
of Winthrop, currently expected to be John L. Morgan, who is the President of
Winthrop, as a director of TCF. Mr. Morgan, or any current Winthrop director who
serves on the Board of TCF, will not receive any fees for services rendered as a
TCF director at any time that he or such person is also employed by Winthrop or
any TCF affiliate. The directors of Winthrop as the Surviving Corporation will
include the Winthrop Founders. These members of the Board of Directors of the
Surviving Corporation will not receive any fees for services rendered as
directors during any time that they are also employees of Winthrop or any TCF
affiliate.
Winthrop has existing employment agreements (the "Employment Agreements")
with four senior officers of Winthrop: the three Winthrop Founders and Mr.
Robert P. Murphy. The Employment Agreements are for terms of two years each and
renew automatically for additional two-year terms at the end of the initial
two-year term unless either party elects not to renew. The Employment Agreements
are terminable at will by either party on 75-days' advance notice and provide
for one year of severance compensation in the event of a termination of
employment without cause or a termination by the executive
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for "good reason." "Good reason" is defined to include forced diminution of
status or responsibilities or forced relocation of office by more than 20 miles,
unless it is part of a general office relocation. In the event of termination of
employment without cause of these executives after the Merger by TCF (or in the
event of their departure for "good reason"), the executives would be paid their
base salary of their usual rate, plus any applicable bonuses, for a one year
period following the date of termination. The Employment Agreements contain
certain non-competition covenants which are in effect for a period of two years
after a termination of employment, except in the case of Mr. Murphy, whose
non-competition covenant is in effect for a period of one year following
termination of employment.
In connection with the Merger Agreement, each of the Winthrop Founders has
agreed to execute amendments to the Employment Agreements to be effective upon
the Effective Date and pursuant to which the following changes would be made:
(i) the terms of the Employment Agreements would be extended to three years each
starting January 1, 1997; (ii) at the end of the three-year term, on January 1,
2000, the employment term would automatically be extended by one year each year
unless either the executive or Winthrop provided notice that the Employment
Agreement would not be renewed no later than June 1 of the year preceding the
expiration of the term; (iii) the executive agrees for three years after
termination of employment not to solicit any employees or former employees of
Winthrop; (iv) the executive shall no longer have the right to terminate the
Employment Agreement in the absence of a "good reason", and "good reason" is
redefined to include only the failure by Winthrop to pay amounts due under the
Employment Agreement as amended; (v) Winthrop shall retain the authority to
terminate the employment of the executive without cause; and (vi) in the event
of termination of the executive's employment without cause or for "good reason",
the executive will receive his base salary and bonus due under the Employment
Agreement to the end of its term (subject to reduction by the "Committee" under
the Agreement in the event the executive is determined in good faith by the
Committee to be in violation of his non-competition, non-solicitation,
confidentiality or other ongoing obligations under the Employment Agreement). In
addition, Mr. Murphy has agreed to execute an amendment to his Employment
Agreement which provides that any increases in base salary and bonus under his
Agreement after December 31, 1998 will be the subject of good faith negotiation
and will be consistent with prior practices between Mr. Murphy and Winthrop and
that negotiations concerning such increases will commence no later than
September 1, 1998 and conclude no later than October 15, 1998. Amendments to the
Employment Agreements providing as described above will be executed by the
Winthrop Founders and Mr. Murphy and delivered to TCF prior to the Effective
Time. Promptly after the Effective Time the Employment Agreements will be signed
by Winthrop and executed copies will be delivered to the Winthrop Founders and
Mr. Murphy.
The Merger Agreement also provides that from and after the Effective Time,
TCF will indemnify Winthrop's directors, officers, employees and agents from and
against any and all claims arising out of or in connection with activities in
such capacity prior to the Effective Time to the fullest extent permitted under
the TCF Certificate and Bylaws and applicable Delaware law. In addition, TCF has
agreed to cause the Surviving Corporation to maintain in effect, for a period of
three years after the Effective Time, directors' and officers' liability
insurance comparable to that maintained by Winthrop as of the date of the Merger
Agreement for acts or omissions prior to the Merger. Certain of Winthrop
employee benefit plans provide for indemnification and/or liability insurance
coverage for any individual serving as a fiduciary with respect to such plans.
Such indemnification or liability insurance will be continued by TCF.
In addition to the foregoing, each of the Winthrop Founders has entered into
certain Stockholder Agreements pursuant to which he is provided with certain
rights of indemnification and other rights. See "--Stockholder and Affiliate
Letter Agreements."
RESALE CONSIDERATIONS WITH RESPECT TO THE TCF COMMON STOCK
The shares of TCF Common Stock to be issued to stockholders of Winthrop upon
consummation of the Merger have been registered under the Securities Act and
will be freely transferable by those
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stockholders who are not deemed to be "affiliates" of Winthrop or TCF, as that
term is defined in the rules and regulations under the Securities Act.
Shares of TCF Common Stock received by those stockholders of Winthrop who
are deemed to be "affiliates" of Winthrop at the time of the Winthrop Special
Meeting may be resold without registration under the Securities Act only as
permitted by Rule 145 under the Securities Act or as otherwise permitted under
the Securities Act.
In addition, pursuant to the Merger Agreement, and in order to ensure that
the Merger will be accounted for under the pooling-of-interests method under
generally accepted accounting principles, each affiliate of Winthrop and TCF,
including the respective directors and executive officers of Winthrop and TCF,
have submitted a letter to TCF and Winthrop agreeing not to sell, pledge,
transfer or otherwise dispose of the shares of TCF Common Stock or Winthrop
Common Stock owned during the period commencing 30 business days prior to the
Effective Time and continuing to the date on which at least 30 days of
post-Merger combined operations of TCF and Winthrop have been published either
by issuance of a quarterly earnings report on Form 10-Q or other public issuance
(such as a press release) which includes such information. Winthrop's transfer
agent has been given an appropriate stop transfer order with respect to shares
of Winthrop Common Stock owned by affiliates of Winthrop or TCF. TCF's transfer
agent has been given an appropriate stop transfer order with respect to shares
of TCF Common Stock owned by affiliates of Winthrop or TCF. For information
concerning additional resale restrictions which are applicable to the directors
of both TCF and Winthrop until the TCF Special Meeting and Winthrop Special
Meeting, see "--Stockholder and Affiliate Letter Agreements."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Merger is intended to be a tax-free reorganization under Section 368(a)
of the Code. The following summary covers only the principal terms of the
opinion KPMG Peat Marwick LLP will give to TCF and Winthrop and is qualified in
its entirety by the full text of the opinion, including certain facts,
representations, and assumptions described therein. This summary should not be
relied upon without first consulting the full text of the opinion, which has
been filed as an exhibit to this Joint Proxy Statement/ Prospectus. The summary
does not discuss all potentially relevant federal income tax matters or
consequences to any stockholders subject to special treatment.
The Merger will constitute a reorganization as defined in Sections
368(a)(1)(A) and 368 (a)(2)(E) of the Code. TCF and Winthrop will each be a
"party to a reorganization" within the meaning of Section 368(b) of the Code. In
general, no gain or loss will be recognized by TCF or Winthrop as a result of
the Merger. No gain or loss will be recognized by stockholders of Winthrop upon
the exchange of their Winthrop Common Stock solely for shares of TCF Common
Stock pursuant to the Merger (except in connection with the receipt of cash in
lieu of any fractional shares). The basis of the TCF Common Stock to be received
by a Winthrop stockholder receiving solely TCF Common Stock (including any
fractional share interest to which they may be entitled) will be the same as his
or her basis in the Winthrop Common Stock surrendered in exchange therefor. The
holding period of the shares of TCF Common Stock to be received by a Winthrop
stockholder receiving solely TCF Common Stock (including any fractional share
interest to which they may be entitled) will include the period during which
such Winthrop stockholder held the Winthrop Common Stock surrendered in exchange
therefor, provided the surrendered Winthrop Common Stock was held by such
stockholder as a capital asset on the date of the Merger.
Stockholders of Winthrop will receive cash in lieu of fractional shares of
TCF Common Stock and such fractional share interests will be treated as if the
stockholders actually received the fractional shares from TCF and then TCF
redeemed them for cash. Such cash payments will be treated by the former
Winthrop stockholders as having been received as full payment in exchange for
the fractional share interests so redeemed. Gain or loss will be realized and
recognized by each such Winthrop stockholder equal to the difference between the
amount of cash received for the fractional share and the tax basis of
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the fractional share interest. If the fractional share is a capital asset in the
hands of a Winthrop stockholder, then the gain or loss recognized will
constitute a capital gain or loss.
No income, gain or loss shall be recognized by TCF Financial, Winthrop or
the Winthrop Stockholders if, as intended, Winthrop, as the Surviving
Corporation following the Merger, is contributed to TCF Minnesota.
The opinion of KPMG Peat Marwick LLP is based on certain stated facts and
representations of TCF and Winthrop which have not been independently verified
by KPMG Peat Marwick LLP. Further, such opinion is based on relevant provisions
of the Code, the regulations thereunder, and judicial and administrative
interpretations thereof, all of which are subject to change by subsequent
legislative, regulatory, administrative or judicial decisions.
The opinion of KPMG Peat Marwick LLP represents an expression of KPMG Peat
Marwick LLP's professional judgment regarding the subject matter of the opinion
and, unlike a private letter ruling issued by the Internal Revenue Service, is
not binding upon the Internal Revenue Service and has no official status of any
kind; no assurance or guarantee can be given that the Internal Revenue Service
will not take a position contrary to any opinion expressed by KPMG Peat Marwick
LLP or that, if the Internal Revenue Service took such a position, it would not
be sustained by the courts.
THE PRECEDING DISCUSSION SUMMARIZES FOR GENERAL INFORMATION PURPOSES THE
MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO WINTHROP STOCKHOLDERS.
THE TAX CONSEQUENCES TO ANY PARTICULAR STOCKHOLDER MAY DEPEND ON THE
STOCKHOLDER'S INDIVIDUAL CIRCUMSTANCES. EACH WINTHROP STOCKHOLDER IS URGED TO
CONSULT WITH A TAX ADVISOR IN ORDER TO DETERMINE THE SPECIFIC TAX CONSEQUENCES
TO THE STOCKHOLDER AS A RESULT OF THE MERGER, INCLUDING FEDERAL, FOREIGN, STATE,
AND LOCAL TAX CONSEQUENCES. THIS DISCUSSION DOES NOT INCLUDE THE TAX
CONSEQUENCES THAT MAY RESULT FROM ANY FOREIGN, STATE, LOCAL, OR OTHER TAX LAW.
ACCOUNTING TREATMENT OF THE MERGER
Consummation of the Merger is conditioned upon the Merger being accounted
for as a pooling of interests and the receipt, if required, by TCF of an opinion
to such effect from KPMG Peat Marwick LLP, TCF's independent public accountants.
Under the pooling-of-interests method of accounting, the historical cost basis
of the assets and liabilities of TCF and Winthrop will be carried forward at
their previously recorded amounts, and the stockholders' equity accounts of TCF
and Winthrop will be combined on TCF's consolidated balance sheet. Revenues and
expenses will be restated retroactively to reflect the consolidated operations
of TCF and Winthrop as if the Merger had taken place prior to the periods
covered by such financial statements.
For information concerning certain restrictions on the transferability of
Winthrop Common Stock and TCF Common Stock owned by affiliates of Winthrop or
TCF in order to, among other things, ensure pooling-of-interests accounting
treatment, see "--Resale Considerations With Respect to the TCF Common Stock."
DISSENTERS' RIGHTS--WINTHROP
The following discussion is not a complete statement of the law applicable
to Winthrop pertaining to dissenters' rights under the MBCA and is qualified in
its entirety by reference to the full text of Sections 302A.471 and 302A.473 of
the MBCA attached to this Joint Proxy Statement/Prospectus as Appendix D. Any
stockholder of Winthrop who wishes to exercise such dissenters' rights or who
wishes to preserve his or her right to do so should review the following
discussion and Appendix D carefully because failure to timely and properly
comply with the procedures specified will result in the loss of dissenters'
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rights under the MBCA. TCF stockholders are not entitled to dissenters' rights
in connection with the Merger.
PROCEDURE TO PRESERVE DISSENTERS' RIGHTS. Under Minnesota law, any Winthrop
stockholder who follows the procedures set forth in Section 302A.473 of the MBCA
will be entitled to receive payment in cash of the "fair value" of such
stockholder's shares.
Under Section 302A.473 of the MBCA, if a corporation calls a stockholder
meeting at which a plan of merger to which such corporation is a party is to be
voted upon, the notice of the meeting must inform each stockholder of the right
to dissent and must include a copy of Section 302A.471 and Section 302A.473 of
the MBCA and a brief description of the procedure to be followed under such
sections. This Joint Proxy Statement/Prospectus constitutes such notice to the
stockholders of Winthrop and the applicable statutory provisions of the MBCA are
attached to this Proxy Statement/Prospectus as Appendix D.
The Merger Agreement must be approved by the holders of a majority of the
outstanding shares of Winthrop Common Stock. A stockholder who wishes to
exercise dissenters' rights must file with Winthrop before the vote on the
Merger Agreement a written notice of intent to demand the fair value of the
shares owned by such dissenting stockholder and must not vote his shares in
favor of the Merger Agreement.
As used in this Section regarding dissenters' rights, the "fair value" of
dissenting shares means the value of the shares of the corporation immediately
before the Effective Date of the Merger.
After the proposed Merger Agreement has been approved by the stockholders of
Winthrop, Winthrop must send a written notice to its stockholders who have not
voted their shares in favor of the Merger Agreement and who have filed with
Winthrop, before the vote on the Merger Agreement, a written notice of intent to
demand the fair value of the shares owned by such stockholder. The notice from
Winthrop must contain:
(1) The address to which a demand for payment and stock certificates
must be sent in order to obtain payment and the date by which they must be
received;
(2) A form to be used to certify the date on which the stockholder, or
the beneficial owner on whose behalf the stockholder dissents, acquired the
shares or an interest in them and to demand payment; and
(3) A copy of Sections 302A.471 and 302A.473 and a brief description of
the procedures to be followed under such sections.
In order to receive the fair value of the dissenting shares, a dissenting
stockholder must demand payment and deposit his shares with Winthrop within 30
days after the notice was given, but the dissenter retains all other rights of a
stockholder until the Merger takes effect.
A Winthrop stockholder may not assert dissenters' rights as to less than all
of the shares of Winthrop Common Stock registered in the name of such
stockholder, unless the stockholder dissents with respect to all the shares that
are beneficially owned by another person but registered in the name of the
stockholder and discloses the name and address of each beneficial owner on whose
behalf the stockholder dissents. In that event, the rights of the dissenter will
be determined as if the shares as to which the stockholder has dissented and the
other shares were registered in the names of different stockholders.
A beneficial owner of shares who is not the stockholder may assert
dissenters' rights with respect to shares held on behalf of such beneficial
owner, and will be treated as a dissenting stockholder under the terms of
Sections 302A.471 and 302A.473, if the beneficial owner submits written consent
of the stockholder holding such beneficial owner's shares to Winthrop at the
time of or before the assertion of dissenters' rights.
PROCEDURES FOLLOWING AN ASSERTION OF DISSENTERS' RIGHTS. After the Merger
takes effect, or after Winthrop receives a valid demand for payment, whichever
is later, Winthrop must remit to each dissenting stockholder who has not voted
his shares in favor of the Merger Agreement and has filed with Winthrop
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before the vote on the Merger Agreement a written notice of intent to demand the
fair value of the shares owned by such stockholder, the amount Winthrop
estimates to be the fair value of the shares, plus interest ("interest"
commences five days after the effective date of the Merger up to and including
the date of payment, calculated at a rate provided under Minnesota law for
interest on verdicts and judgments), accompanied by:
(1) Winthrop's balance sheet and statement of income for a fiscal year
ending not more than 16 months before the effective date of the Merger,
together with the latest available interim financial statements;
(2) An estimate by Winthrop of the fair value of the shares and a brief
description of the method used to reach the estimate; and
(3) A copy of Sections 302A.471 and 302A.473, and a brief description of
the procedure to be followed in demanding supplemental payment.
Winthrop may withhold the above-described remittance from a person who was
not a stockholder on the date the Merger was first announced to the public or
who is dissenting on behalf of a person who was not beneficial owner on that
date. If the dissenter has not voted his shares in favor of the Merger Agreement
and has filed with Winthrop before the vote on the Merger Agreement a written
notice of intent to demand the fair value of the shares owned by such
stockholder, Winthrop must forward to the dissenter the materials described in
the preceding paragraph, a statement of reason for withholding the remittance,
and an offer to pay to the dissenter the amount listed in the materials if the
dissenter agrees to accept that amount in full satisfaction. The dissenter may
decline the offer and demand payment of the dissenter's own estimate of the fair
value of the shares, plus interest, by written notice to Winthrop. Failure to do
so entitles the dissenter only to the amount offered. If the dissenter makes
demand, the procedures, costs, fees and expenses described below for petitioning
the court shall apply.
If Winthrop fails to remit payment within 60 days of the deposit of
certificates, it must return all deposited certificates and cancel all transfer
restrictions. However, Winthrop may require deposit at a later time and again
give notice that contains:
(1) The address to which a demand for payment; and share certificates
must be sent in order to obtain payment and the date by which they must be
received;
(2) A form to be used to certify the date on which the stockholder, or
the beneficial owner on whose behalf the stockholder dissents, acquired the
shares or an interest in them and the demand payment; and
(3) A copy of Sections 302A.471 and 302A.473 and a brief description of
the procedures to be followed under such sections.
If a dissenter believes that the amount remitted by Winthrop is less than
the fair value of the shares plus interest, the dissenter may give written
notice to Winthrop of the dissenter's own estimate of the fair value of shares,
plus interest, within 30 days after Winthrop mails the remittance, and demand
payment of the difference (a "Demand"). Otherwise, a dissenter is entitled only
to the amount remitted by Winthrop.
If Winthrop receives a Demand, it must, within 60 days after receiving the
Demand, either pay to the dissenter the amount demanded or agreed to by the
dissenter after discussion with Winthrop or file in court a petition requesting
that the court determine the fair value of the shares, plus interest. The
petition must be filed in Hennepin County, Minnesota. The petition must name as
parties all dissenters who made a Demand for payment and who have not reached
agreement with Winthrop. The jurisdiction of the court is plenary and exclusive.
The court may appoint appraisers, with powers and authorities the court deems
proper, to receive evidence on and recommend the amount of the fair value of the
shares. The court must determine whether the stockholder or stockholders in
question have fully complied with the requirements of Section 302A.473, and must
determine the fair value of the Winthrop shares, taking into account any and all
factors the court finds relevant, computed by any method or combination of
methods that the court,
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in its discretion, sees fit to use, whether or not used by Winthrop or by a
dissenter. The fair value of the shares as determined by the court is binding on
all dissenting stockholders, wherever located. A dissenter is entitled to
judgment for the amount by which the fair value of the shares as determined by
the court, plus interest, exceeds the amount, if any, remitted by Winthrop, but
shall not be liable to Winthrop for the amount, if any, by which the amount, if
any, remitted to the dissenter exceeds the fair value of the shares as
determined by the court, plus interest.
The court must determine the costs and expenses of any appraisers in a
proceeding under the preceding paragraph, including the reasonable expenses and
compensation of any appraisers appointed by the court, and must assess those
costs and expenses against Winthrop, except that the court may assess part or
all of those costs and expenses against a dissenter whose Demand is found to be
arbitrary, vexatious, or not in good faith.
If the court finds that Winthrop has failed to comply substantially with
Section 302A.473, the court may assess all fees and expenses of any experts or
attorneys as the court deems equitable. These fees and expenses may also be
assessed against a person who has acted arbitrarily, vexatiously, or not in good
faith in bringing the proceeding, and may be awarded to a party injured by those
actions. The court may award, in its discretion, fees and expenses to any
attorney for the dissenters out of the amount awarded to the dissenters, if any.
EXPENSES OF THE MERGER
The Merger Agreement provides that TCF and Winthrop shall each bear and pay
all costs and expenses incurred by it in connection with the Merger Agreement
and the transactions contemplated thereby except that TCF and Winthrop will each
pay one-half of all filing fees in connection with HSR Act filings and TCF will
bear the cost of any indenture supplement governing the Winthrop Senior Notes.
STOCKHOLDER AND AFFILIATE LETTER AGREEMENTS
The following description of the Stockholder Agreements and Affiliate Letter
Agreements does not purport to be complete and is qualified in its entirety by
reference to the Agreements themselves which are attached as Exhibits A, C and D
of Appendix A to this Joint Proxy Statement/Prospectus.
In conjunction with the Merger Agreement, TCF has entered into certain
Stockholder Agreements with the Winthrop Founders, the form of which is attached
as Appendix A to the Merger Agreement. Under the Stockholder Agreements, each
Winthrop Founder has agreed among other things: (i) to vote all of his shares of
Winthrop Common Stock at the Winthrop Special Meeting in favor of the Merger
Agreement; (ii) not to sell, pledge, transfer or otherwise dispose of those
shares prior to the Winthrop Special Meeting; (iii) not to directly or
indirectly encourage or solicit or hold discussions or negotiations with, or
provide any information to, any person, entity or group (other than TCF or an
affiliate of TCF) concerning any merger, sale of substantial assets or
liabilities not in the ordinary course of business, sale of shares of capital
stock or similar transactions involving Winthrop or any subsidiary of Winthrop;
provided that nothing will be deemed to affect the ability of the Winthrop
Founder to fulfill his fiduciary duties as a director or officer of Winthrop;
(iv) consistent with their fiduciary duties as an officer or director of
Winthrop to use their reasonable good faith efforts to take or cause to be taken
all action, and to do or cause to be done all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the agreements contemplated by the Merger Agreement; and (v) to execute and
deliver Affiliate Letter Agreements. The Winthrop Founders are relieved of these
obligations if the Merger Agreement terminates prior to the Winthrop
stockholders' vote on the Merger Agreement. Under the Stockholder Agreement TCF
agrees to register the shares of a Winthrop Founder, if required, for any of the
Winthrop Founders to sell their shares (after the no sale period for pooling
purposes has expired). TCF will further indemnify the Winthrop Founders against
any claims based on untrue statements or omissions or alleged omission to state
a material fact required to be stated therein or to make the statements not
misleading in connection with the registration and sale of the shares of TCF
Common
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Stock of the Winthrop Founders, including costs of defense and reasonable legal
fees. The Winthrop Founders will indemnify TCF against any claims arising out of
materially misleading statements, omissions or alleged omissions if the
information was furnished in writing to TCF by or on behalf of the Winthrop
Founder.
In conjunction with the Merger Agreement, TCF has also entered into
Affiliate Letter Agreements dated as of February 28, 1997 with each of the
directors, executive officers and stockholders of Winthrop (the "Winthrop
Affiliates") who may reasonably be deemed to be "affiliates" for purposes of
Rule 145 of the Securities Act, and Winthrop has entered into Affiliate Letter
Agreements dated as of February 28, 1997 with each of the "affiliates" of TCF.
Pursuant to such Affiliate Letters, copies of the form of which are attached to
this Joint Proxy Statement/Prospectus as Exhibits C and D, respectively, to the
Merger Agreement which is Appendix A, such persons have agreed, among other
things, not to sell, pledge, transfer or otherwise dispose of their shares of
Winthrop Common Stock or TCF Common Stock during the period beginning 30
business days prior to the Effective Date and continuing to the date on which
financial results covering at least 30 days of combined operations of TCF and
Winthrop have been published. The Winthrop Affiliates also acknowledged that
they may transfer the TCF Common Stock received in the Merger only: (i) if sold
in compliance with paragraph (c) and (d) of Rule 145; or (ii) pursuant to
another exemption under the Securities Act. These agreements are intended to
assist in qualifying the Merger for pooling-of-interests accounting treatment.
DESCRIPTION OF TCF CAPITAL STOCK
GENERAL
TCF is authorized to issue 170,000,000 shares of capital stock, par value
$.01 per share, consisting of 140,000,000 shares of TCF Common Stock and
30,000,000 shares of preferred stock. As of the TCF Record Date, there were
issued and outstanding shares of TCF Common Stock, and shares of Series A
Junior Participating Preferred Stock were reserved for issuance upon the
exercise of certain preferred share purchase rights (the "Rights") described
below.
TCF COMMON STOCK
GENERAL. TCF common stockholders have no preemptive rights. The outstanding
shares of TCF Common Stock are, and the TCF Common Stock offered hereby will be,
fully paid and nonassessable. Each outstanding share of TCF Common Stock also
includes, and each share offered hereby will include, one Right.
VOTING. TCF common stockholders are entitled to one vote for each share
held on each matter submitted to a vote of the holders of TCF Common Stock.
Cumulative voting for the election of directors is not permitted.
DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS. Subject to the preferential
dividend rights of any issued and outstanding preferred stock, TCF's common
stockholders are entitled to receive dividends as and when declared by the Board
of Directors of TCF. Under Delaware corporate law, TCF may declare and pay
dividends out of surplus, or if there is no surplus, out of net profits for the
fiscal year in which the dividend is declared and/or the preceding year. No
dividends may be declared, however, if the capital of TCF has been diminished by
depreciation, losses or otherwise to an amount less than the aggregate amount of
capital represented by any issued and outstanding stock having a preference on
distribution.
If TCF were liquidated, the holders of TCF Common Stock would be entitled to
receive, pro rata, all assets available for distribution to them after full
satisfaction of TCF's liabilities and any required payments applicable to the
preferred stock then outstanding.
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TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for the TCF
Common Stock is Boston Equiserve, Boston, Massachusetts.
PREFERRED SHARE PURCHASE RIGHTS. On May 23, 1989, the Board of Directors of
TCF declared a dividend of one Right for each outstanding share of TCF Common
Stock. The dividend was paid on June 9, 1989 to the holders of record of TCF
Common Stock on that date. Holders of shares of TCF Common Stock issued
subsequent to that date receive one Right with each such share issued. The
Rights are transferred with and only with the shares of TCF Common Stock until
they become exercisable. The Rights become exercisable only under certain
circumstances described below. The Rights are designed to ensure that holders of
TCF Common Stock receive fair and equal treatment in the event of any proposed
takeover of TCF and to discourage certain abusive takeover techniques. They are
also intended to enable holders of TCF Common Stock to realize the long-term
value of their investment in TCF. While not preventing a takeover, the Rights
are designed to encourage any person seeking to acquire TCF to negotiate with
the Board of Directors of TCF. The Rights may have the effect of discouraging,
but are not intended to deter, takeover proposals.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of TCF, including the right to vote or receive dividends. Upon
becoming exercisable, each Right entitles the registered holder to purchase from
TCF one-hundredth of a share of Series A Junior Participating Preferred Stock
("Series A Junior Preferred Stock") of TCF at a price (the "Purchase Price") of
$180 per one one-hundredth of a share of Series A Junior Preferred Stock,
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between TCF and Boston Equiserve as
rights agent. The Purchase Price payable, and the number of shares of Series A
Junior Preferred Stock or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time to prevent dilution
upon the occurrence of certain events specified in the Rights Agreement.
The Rights will become exercisable only if a person or group acquires or
announces an offer to acquire 15% or more of the outstanding shares of TCF
Common Stock. The Rights have certain additional features that will be triggered
upon the occurrence of any one of certain specified events:
(i) In the event that any person or group becomes the beneficial owner
of 15% or more of the outstanding shares of TCF Common Stock, subject to
certain exceptions for shares owned by TCF, a subsidiary or an employee
benefit plan or issued directly by TCF, proper provision shall be made so
that each holder of a Right, other than any person or group beneficially
owning 15% or more of the outstanding TCF Common Stock (whose Rights will
thereafter be void), will thereafter have the right to receive upon exercise
that number of shares of TCF Common Stock having a market value of two times
the exercise price of the Right (or, at the option of TCF, an equivalent
number of one one-hundredths of a share of Series A Junior Preferred Stock).
(ii) In the event that TCF is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or
earnings power is sold, proper provision will be made so that each holder of
a Right will thereafter have the right to receive, upon the exercise thereof
at the then-current exercise price of the Right, that number of shares of
common stock of the acquiring company which at the time of such transaction
will have a market value of two times the exercise price of the Right.
(iii) At any time after the acquisition by a person or group of
beneficial owners of 15% or more of the outstanding shares of TCF Common
Stock and prior to the acquisition by such person or group of 50% or more of
the outstanding TCF Common Stock, the Board of Directors of TCF may exchange
the Rights (other than Rights owned by such person or group which have
become void), in whole or in part, at an exchange ratio of one share of TCF
Common Stock, or one one-hundredth of a share of Series A Junior Preferred
Stock (or of a share of a class or series of TCF's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
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At any time prior to the acquisition by a person or group of beneficial
ownership of 15% or more of the outstanding TCF Common Stock, a majority of
TCF's directors prior to the time of such an acquisition may vote to redeem the
Rights in whole, but not in part, at a price of $.01 per right. The redemption
of the Rights may be made effective at such time on such basis and with such
conditions as such directors in their sole discretion may establish. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
redemption price.
The terms of the Rights may be amended by the Board of Directors of TCF
without the consent of the holders of the Rights, including an amendment to
lower the 15% triggering thresholds described above to not less than the greater
of (i) any percentage greater than the largest percentage of the outstanding
Common Stock then known to TCF to be beneficially owned by any person or group
of affiliated or associated persons and (ii) 10%, except that from and after
such time as any person or group acquires 15% or more of the outstanding TCF
Common Stock, no such amendment may adversely effect the interests of the
holders of the Rights.
The Rights will expire on June 9, 1999, unless extended or earlier redeemed
by TCF.
PREFERRED STOCK
GENERAL
Pursuant to the TCF Certificate, there are authorized 30,000,000 shares of
preferred stock, par value $.01 per share, and the Board of Directors of TCF has
the authority, without further stockholder action, to issue from time to time
one or more series of preferred stock with such terms and for such consideration
as the TCF Board of Directors may determine. The TCF Board of Directors is
authorized to fix the dividend rights and terms, conversion rights, voting
rights, redemption rights and terms, liquidation preferences, sinking funds and
any other rights, preferences, privileges and restrictions applicable to each
such series of preferred stock.
The issuance of preferred stock, while providing flexibility in connection
with possible acquisitions and other corporate purposes, could, among other
things, adversely affect the voting power and other rights of the holders of TCF
Common Stock and under certain circumstances have the effect of delaying or
preventing a change in control of TCF.
SERIES A JUNIOR PREFERRED STOCK
The Board of Directors of TCF has established a series of preferred stock,
designated Series A Junior Preferred Stock, issuable upon the exercise of Rights
issued to holders of the TCF Common Stock. There are currently shares of
Series A Junior Preferred Stock reserved for issuance upon the exercise of the
Rights. See "--TCF Common Stock--Preferred Share Purchase Rights" and
"Comparison of the Rights of Stockholders." Series A Junior Preferred Stock
ranks junior to all other series of preferred stock that might be created and is
not redeemable. Each Series A Junior Preferred Stock share is, subject to the
rights of senior securities of TCF, entitled to a minimum preferential quarterly
dividend payment of $1.00 per share, however, each such share is limited to an
aggregate dividend of 100 times the dividend declared per share of TCF Common
Stock. In the event of liquidation, the holders of the Series A Junior Preferred
Stock, upon issuance, are entitled to a minimum preferential liquidation payment
of $100 per share but such payment is limited to an aggregate payment of 100
times the payment made per share of TCF Common Stock. Each Series A Junior
Preferred Stock share, upon issuance, will have 100 votes, voting together with
the TCF Common Stock. Finally, in the event of any merger, consolidation or
other transaction in which TCF Common Stock is exchanged, each Series A Junior
Preferred Stock share will be entitled to receive 100 times the amount received
per share of TCF Common Stock. These rights are protected by customary
antidilution provisions.
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ANTITAKEOVER EFFECTS OF PROVISIONS OF TCF'S CERTIFICATE OF INCORPORATION AND
BYLAWS
Certain provisions of the TCF Certificate and the TCF Bylaws could
discourage potential takeover attempts and could delay or prevent a change in
control of TCF. See "Comparison of the Rights of Stockholders."
DESCRIPTION OF WINTHROP SECURITIES
The authorized capital stock of Winthrop consists of 15,000,000 shares of
common stock, par value $.01 per share (the "Winthrop Common Stock"), and
2,000,000 shares of preferred stock, par value $.01 per share (the "Winthrop
Preferred Stock").
COMMON STOCK
As of May , 1997, there were 8,600,300 shares of Winthrop Common Stock
issued and outstanding. All outstanding shares of Winthrop Common Stock are
fully paid and nonassessable. The stockholders of Winthrop Common Stock are
entitled to one vote for each share held on the record date on all matters voted
upon by stockholders and may not use cumulative voting for the election of
directors. Subject to the rights of the stockholders of any future series of
shares of Winthrop Preferred Stock, each share of outstanding Winthrop Common
Stock is entitled to participate equally in any distribution of net assets made
to the stockholders in liquidation, dissolution or winding up of Winthrop and is
entitled to participate equally in dividends and other distributions if, as and
when declared by its Board of Directors. There are no redemption, sinking fund,
conversion or preemptive rights with respect to the shares of Winthrop Common
Stock. All shares of Winthrop Common Stock have equal rights and preferences.
The Winthrop Common Stock is described more fully in Winthrop's Registration
Statement on Form 8-A, dated April 23, 1992, including any amendment or report
filed for the purpose of updating such description filed subsequent to the date
of this Joint Proxy Statement/Prospectus and prior to the termination of the
offering described herein.
The transfer agent and registrar for the shares of Winthrop Common Stock is
Norwest Bank Minnesota, National Association.
PREFERRED STOCK
None of Winthrop's 2,000,000 authorized shares of Winthrop Preferred Stock
has been issued or authorized by the Winthrop Board of Directors for issuance.
Under the MBCA and Winthrop's Restated Articles of Incorporation, no action by
Winthrop's stockholders is necessary, and only action of the Board of Directors
is required, to establish and designate one or more series of Winthrop Preferred
Stock and to authorize the issuance of shares of any such series. The Winthrop
Board of Directors is empowered to set the terms of each such series (including
terms with respect to redemption, sinking fund, dividend, liquidation,
preemptive, conversion and voting rights and preferences). Accordingly, the
Winthrop Board of Directors, without stockholder approval, may issue shares of
Winthrop Preferred Stock in one or more series with terms that could adversely
affect the voting power and other rights of holders of the Winthrop Common
Stock.
The authorization or issuance of one or more series of Winthrop's Preferred
Stock may have the effect of discouraging an attempt, through acquisition of a
substantial number of shares of Winthrop Common Stock, to acquire control of
Winthrop with a view to effecting a merger, sale or exchange of assets or a
similar transaction. The anti-takeover effects of any such series of Winthrop
Preferred Stock may deny stockholders the receipt of a premium on their Winthrop
Common Stock and may also have a depressive effect on the market price of the
Winthrop Common Stock.
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WINTHROP SENIOR NOTES
As of March 31, 1997, Winthrop had outstanding $28,750,000 aggregate
principal amount of Winthrop Senior Notes. The Winthrop Senior Notes are
unsecured and senior to all other unsecured obligations of Winthrop. The
Winthrop Senior Notes provide that, beginning on June 24, 2001, Winthrop may
redeem the Winthrop Senior Notes, in whole or in part, upon not less than 30 nor
more than 60 days prior written notice at par plus accrued interest to the date
fixed for redemption. The Winthrop Senior Notes are subject to an Indenture
dated July 1, 1996 between Winthrop and Norwest Bank Minnesota, National
Association, as Trustee, (the "Indenture"), which Indenture sets forth certain
restrictive covenants applying to Winthrop which limit, among other things: (1)
the amount of funded recourse debt; (2) the declaration of cash dividends and
acquisition of capital stock of Winthrop; (3) Winthrop's ability to consolidate
or merge where Winthrop is not the surviving corporation unless such other
entity assumes Winthrop's obligations under the Indenture; (4) the ranking of
future funded recourse debt senior to the Winthrop Senior Notes; (5) the
restriction of subsidiary dividends; and (6) transactions with affiliates. At
March 31, 1997, Winthrop was in compliance with all covenants.
TCF will become a co-obligor with respect to the Winthrop Senior Notes,
subject to approval by the Winthrop Senior Note holders of certain modifications
to the Indenture.
COMPARISON OF THE RIGHTS OF STOCKHOLDERS
GENERAL
As a result of the Merger, holders of Winthrop Common Stock, whose rights
are presently governed by the MBCA and the Winthrop Articles and Bylaws, will
become stockholders of TCF, a Delaware corporation. Accordingly, their rights
will be governed by the DGCL, the TCF Certificate and the TCF Bylaws. Certain
differences in the rights of stockholders arise from distinctions between the
MBCA and the DGCL and the Winthrop Articles and Winthrop Bylaws as compared to
the TCF Certificate and TCF Bylaws. The following is a brief description of
those differences. The discussion herein is not intended to be a complete
statement of the differences but rather summarizes the more significant
differences affecting the rights of such stockholders and certain important
similarities. The following summary is qualified in its entirety by reference to
the MBCA, the DGCL, the Winthrop Articles and Winthrop Bylaws and the TCF
Certificate and TCF Bylaws.
Each Winthrop stockholder should carefully consider these differences,
including but not limited to provisions of the TCF Certificate and TCF Bylaws
that may have an anti-takeover effect, in connection with the decision to vote
for or against the adoption and approval of the Merger Agreement.
AUTHORIZED CAPITAL STOCK
The Winthrop Articles authorize the issuance of up to 15,000,000 shares of
Winthrop Common Stock, par value $.01 per share, of which 8,600,300 shares were
issued and outstanding as of the Winthrop Record Date, and up to 2,000,000
shares of Winthrop Preferred Stock, par value $.01 per share, of which none were
issued and outstanding as of the Winthrop Record Date. See "Description of
Winthrop Capital Stock--Preferred Stock."
The TCF Certificate authorizes the issuance of up to 140,000,000 shares of
TCF Common Stock, par value $.01 per share, of which shares were issued
and outstanding as of the TCF Record Date, and up to 30,000,000 shares of
preferred stock, par value $.01 per share, of which no shares were issued and
outstanding as of the TCF Record Date. The TCF preferred stock is issuable in
series, each series having such rights and preferences as TCF's Board of
Directors may fix and determine by resolution. Although TCF does not currently
contemplate taking such action, it is possible that additional shares of TCF
Common Stock or TCF preferred stock would be issued for the purpose of making an
acquisition by an
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unwanted suitor of a controlling interest in TCF more difficult, time consuming
or costly or to otherwise discourage an attempt to acquire control of TCF.
The MBCA does not allow treasury shares. Under the DGCL, TCF may hold
treasury shares. Treasury shares under Delaware Law may be held, sold, lent,
pledged or exchanged by TCF. Such shares, however, are not outstanding shares
and therefore do not receive any dividends and do not have voting rights.
AMENDMENT OF GOVERNING INSTRUMENTS
Under the MBCA and the Winthrop Articles, amendments to the Winthrop
Articles require the affirmative vote of the holders of a majority of the shares
entitled to vote on the amendment. Prior to submitting the resolution for a
stockholder vote, the resolution must be approved by a majority of directors
present at a meeting where the resolution is considered, unless the resolution
is proposed by a stockholder or stockholders holding three percent or more of
the voting power of the outstanding shares entitled to vote. Stockholders shall
take action by the affirmative vote of the holders of the greater of (a) a
majority of the shares present and entitled to vote on an item of business, or
(b) a majority of the voting power of the minimum number of shares that would
constitute a quorum for the transaction of business at the meeting.
Under the MBCA and the Winthrop Bylaws, the power to adopt, amend or repeal
the Winthrop Bylaws is vested in the board and is subject to the power of the
stockholders to adopt, amend or repeal bylaws adopted, amended, or repealed by
the board. The board shall not, without stockholder approval, amend, or repeal a
bylaw fixing a quorum for meetings of stockholders, prescribing procedures for
removing directors or filling vacancies in the board, or fixing the number of
directors or their classifications, qualifications, or terms of office, but may
adopt or amend a bylaw to increase the number of directors. A stockholder or
stockholders holding three percent or more of the voting power of the shares
entitled to vote may propose a resolution for action by the stockholders to
adopt, amend, or repeal bylaws adopted, amended or repealed by the board. The
Winthrop Bylaws may be amended by a majority vote of the full Board of
Directors, or by a majority vote of the votes cast by the stockholders of
Winthrop at any legal meeting, except that amendments to the provisions of the
Winthrop Bylaws inconsistent with or modifying or permitting circumvention of
the provisions of the Winthrop Articles governing (i) directors and (ii) certain
business combinations, may be adopted only if the amendment is first proposed by
the Board of Directors of Winthrop, upon the affirmative vote of at least
two-thirds of the directors, and is thereafter approved by the holders of at
least 75% of the outstanding shares of capital stock of Winthrop entitled to
vote generally in the election of directors, voting as a single class; provided
however, that this 75% vote will not be required for any amendment recommended
to the stockholders by the affirmative vote of not less than 75% of the
directors.
The DGCL generally provides that the affirmative vote of a majority of a
corporation's outstanding voting shares is required to amend its certificate of
incorporation, unless the certificate of incorporation requires a greater vote.
The TCF Certificate of Incorporation provides that, except for provisions
relating to: (i) more than ten percent (10%) acquisitions of TCF equity
securities; (ii) the Board of Directors; (iii) certain business combinations;
(iv) actions by written consent; (v) special meetings of stockholders; (vi)
amendment of the TCF Bylaws; (vii) limitation of liability of directors; (viii)
indemnification of directors and officers; and (ix) the article that relates to
amendments in the TCF Certificate of Incorporation, the TCF Certificate may be
amended by the affirmative vote of the holders of a majority of TCF's
outstanding voting shares.
Pursuant to the TCF Certificate, certain provisions, including many of the
"anti-takeover" provisions referred to under the "Description of TCF Capital
Stock" in the TCF Certificate may not be altered, amended or repealed without
the affirmative vote of at least a majority of the Board of Directors of TCF or
the affirmative vote of at least 80% of the total votes eligible to be cast by
stockholders.
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CLASSIFIED BOARD AND CUMULATIVE VOTING
The MBCA requires that a corporation shall have at least one director and
permits the board of directors to be divided into classes without regard to the
size of the board of directors. The Winthrop Bylaws require that its Board of
Directors shall consist of three directors. The Winthrop Board of Directors is
not classified. In addition, the Winthrop Articles prohibit cumulative voting
for the election of directors.
The DGCL requires that a corporation shall have at least one director. The
number of directors shall be fixed by, or in the manner provided in, the bylaws,
unless the certificate of incorporation fixes the number of directors. The TCF
Certificate provides for its Board of Directors to consist of seven (7) to
twenty-five (25) members divided into three classes of as nearly equal size as
possible. Within such limits, the exact number of directors shall be fixed from
time to time pursuant to a resolution adopted by a majority of the "Continuing
Directors," which is defined in the TCF Certificate. The terms of the directors
are staggered such that the terms of approximately one-third of the directors
expire at each annual election of directors. TCF's Certificate does not permit
cumulative voting.
REMOVAL OF DIRECTORS AND VACANCIES
Under the MBCA, any director may be removed by the board at any time, with
or without cause, if the director was named, by the board, to fill a vacancy,
the stockholders have not elected directors in the interval between the time of
the appointment to fill a vacancy and the time of the removal of such director,
and a majority of the remaining directors affirmatively vote for the removal of
such director. Stockholders may remove directors at any time, with or without
cause, by an affirmative vote of the stockholders. Under the MBCA, unless the
articles or bylaws provide otherwise, (i) a vacancy on a corporation's board of
directors may be filled by the vote of a majority of directors then in office,
although less than a quorum, (ii) a newly created directorship resulting from an
increase in the number of directors may be filled by the board, and (iii) any
director so elected pursuant to (i) or (ii) above shall hold office only until a
qualified successor is elected at the next regular or special meeting of
stockholders. The Winthrop Bylaws follow these provisions.
Under the TCF Certificate, any director may be removed for cause by the
holders of at least a majority of the outstanding voting shares and which vote
may only be taken at a meeting of stockholders (and not by written consent).
Cause for removal shall be deemed to exist only if the director whose removal is
proposed has been convicted of a felony by a court of competent jurisdiction to
be liable for gross negligence or misconduct in the performance of such
director's duty to the corporation and such adjudication is no longer subject to
direct appeal. Vacancies in TCF's Board of Directors, including vacancies
created by newly created directorships resulting from an increase in the number
of directors, shall be filled by TCF's Board of Directors, acting by a vote of
at least a majority of the directors then in office, even if less than a quorum,
and any director so chosen shall serve for the remainder of the term of the
class of directors in which the vacancy occurred. Vacancies on the TCF Board
resulting from the death, resignation or removal of a director may be filled by
the affirmative vote of a majority of the Continuing Directors, or if there are
no Continuing Directors, by the affirmative vote of a majority of directors then
in office, even though less than a quorum.
LIMITATION OF DIRECTOR LIABILITY
Both the MBCA and DGCL allow a corporation to include in its charter a
provision that eliminates or limits the ability of the corporation and its
stockholders to recover monetary damages from a director for a breach of
fiduciary duty, except for (a) any breach of the director's duty of loyalty, (b)
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (c) distributions that are illegal under applicable
law or (d) any transaction from which the director derived an improper personal
benefit. Both the TCF Certificate and the Winthrop Articles include such a
provision.
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INDEMNIFICATION
The MBCA requires indemnification for all directors, officers and employees
if such person (a) acted in good faith, (b) reasonably believed that such
conduct was in or not opposed to the corporation's best interests, and (c) in
the case of any criminal proceeding, had no reasonable cause to believe such
conduct was unlawful, and the person being indemnified received no improper
personal benefit and has not been indemnified from another source. The Winthrop
Bylaws require Winthrop to indemnify its directors, officers and employees to
the fullest extent permissible under the MBCA.
The TCF Certificate and TCF Bylaws provide that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit, or proceeding, whether civil, criminal, administrative or
investigative (hereinafter, a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was a
director or officer of TCF or a subsidiary thereof, or is or was serving at the
request of TCF, as a director, officer, partner, member or trustee of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, shall be indemnified
and held harmless by TCF to the fullest extent authorized by the DGCL against
all expense, liability, and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties, and amounts paid in settlement) reasonably
incurred or suffered by such person in connection therewith; provided, however,
that such indemnification does not extend to an indemnitee in connection with a
proceeding (or portion thereof) initiated by such indemnitee unless such
proceeding was authorized by the TCF Board of Directors.
Under the DGCL as currently in effect, other than in actions brought by or
in the right of TCF, such indemnification would apply if it was determined in
the specific case that the proposed indemnitee acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
TCF and, with respect to any criminal proceeding, if he had no reasonable cause
to believe that his conduct was unlawful. In actions brought by or in the right
of TCF, such indemnification would probably be limited to reasonable expenses
(including attorneys' fees), and would apply if it were determined in the
specific case that the proposed indemnitee acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of TCF,
except that no indemnification may be made with respect to any claim, issue or
matter as to which such person is adjudged liable to TCF unless, and only to the
extent that, a court determines upon application that, in view of all the
circumstances of the case, the proposed indemnitee is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper. To the extent
that any director, officer, employee or agent of TCF has been successful on the
merits or otherwise in defense of any proceeding, he must be indemnified against
reasonable expenses incurred by him in connection therewith.
The TCF Certificate and TCF Bylaws provide that the right of such directors
and officers to indemnification includes the right to advancement by TCF of
expenses incurred in defending any such proceeding in advance of its final
disposition upon delivery to TCF of an undertaking by such indemnitee to repay
any amount so advanced if it is ultimately determined by final judicial decision
that the proposed indemnitee is not entitled to be indemnified for such
expenses.
The TCF Certificate further provides that TCF may, to the extent authorized
from time to time by TCF's Board of Directors, grant rights to indemnification,
and to the advancement of expenses, to any person who is or was an employee or
agent of TCF or a subsidiary thereof or is or was serving at the request of TCF
as an employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans.
The TCF Certificate provides that a director of TCF, to the maximum extent
now or hereafter permitted by the DGCL or any successor provision or provisions,
will have no personal liability to TCF or its stockholders for monetary damages
for breach of fiduciary duty as a director, except (i) for any breach of the
director's duty of loyalty to TCF or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) for the payment of certain unlawful
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dividends and the making of certain stock purchases or redemptions, or (iv) for
any transaction from which the director derived an improper personal benefit.
The Winthrop Articles do not contain such a liability limitation provision for
its directors.
For information concerning TCF's indemnification of directors, officers,
employees and agents of Winthrop for claims arising out of or in connection with
activities in such capacity prior to the Effective Time, see "The
Merger--Interests of Certain Persons in the Merger."
SPECIAL MEETINGS OF STOCKHOLDERS
Pursuant to the MBCA and the Winthrop Bylaws, special meetings of
stockholders of Winthrop may be called for any purpose at any time by the chief
executive officer, the chief financial officer, two or more directors or a
stockholder or stockholders holding ten percent or more of the voting power of
all shares entitled to vote, except that a special meeting for the purpose of
considering a business combination, including any action to change or otherwise
affect the composition of the board of directors for that purpose, must be
called by 25 percent or more of the voting power of all shares entitled to vote.
Under the DGCL and the TCF Certificate, special meetings of stockholders of
TCF may be called only by the Continuing Directors of TCF. As a result,
stockholders and non-Continuing Directors of TCF do not have any right to call
special meetings of stockholders or to require TCF's Board of Directors to call
such meetings.
ACTIONS BY STOCKHOLDERS WITHOUT A MEETING
Under the MBCA, an action required or permitted to be taken at a meeting of
the stockholders may be taken without a meeting by written action signed by all
of the stockholders entitled to vote on that action.
The TCF Certificate provides that, except for removal of a director, any
action required to be taken or which may be taken at any annual or special
meeting of stockholders may be taken without a meeting if a consent in writing,
setting forth the action so taken, is given by the holders of all outstanding
shares entitled to vote thereon.
STOCKHOLDER NOMINATIONS AND PROPOSALS
The Winthrop Bylaws do not specifically provide for stockholder nominations
of persons for election to the Board of Directors or to make proposals, except
proposals to amend the Bylaws (see section entitled "Amendment of Governing
Instruments").
The TCF Bylaws provide that all nominations for election to the Board of
Directors, other than those made by, or at the direction of, a majority of
Continuing Directors, be made by a stockholder who has complied with the notice
provisions set forth in the TCF Bylaws. The TCF Bylaws require that any director
nominations made by a stockholder be delivered to or mailed and received at the
principal executive offices of TCF not less than 60 days nor more than 90 days
prior to the date of the scheduled annual meeting, provided, however, that if
less than 70 days notice of the date of the scheduled annual meeting is given,
notice by the stockholder, to be timely, must be so delivered or received not
later than the close of business on the tenth day following the day on which
such notice of the date of the scheduled annual meeting was mailed or given.
Each such notice shall include, among other things: (i) as to each person whom
the stockholder proposes to nominate for election as a director (A) the name,
age, business address and residence address of such person, (B) the principal
occupation or employment of such person, (C) the class and number of shares of
TCF Common Stock which are beneficially owned by such person on the
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date of such stockholder notice, and (D) any other information relating to such
person that would be required to be disclosed pursuant to Schedule 13D under the
Exchange Act in connection with the acquisition of shares, and pursuant to
Regulation 14A under the Exchange Act in connection with the solicitation of
proxies with respect to nominees for election as directors, including, but not
limited to, information required to be disclosed by Items 4(b) and 6 of Schedule
14A under the Exchange Act and information which would be required to be filed
on Schedule 14B under the Exchange Act with the Commission; and (ii) as to the
stockholder giving the notice (A) the name and address, as they appear on TCF's
books, of such stockholder and any other stockholders known by such stockholder
to be supporting such nominees and (B) the class and number of shares of TCF
Common Stock which are beneficially owned by such stockholder on the date of
such stockholder notice and, to the extent known, by any other stockholders
known by such stockholder to be supporting such nominees on the date of such
stockholder notice. The presiding officer of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedures.
The TCF Bylaws also provide that only such business as shall have been
properly brought before an annual meeting of stockholders shall be conducted at
the annual meeting. To be properly brought before an annual meeting, business
must be specified in the notice of the meeting (or any supplement thereto) given
by, or at the direction of, a majority of the Continuing Directors, otherwise
properly brought before the meeting by or at the direction of the Board of
Directors, or otherwise properly brought before the meeting by a stockholder.
For business to be properly brought before an annual meeting by a stockholder,
notice must be delivered to or mailed to the Secretary and received at the
principal executive offices of TCF not less than 60 days nor more than 90 days
prior to the scheduled annual meeting; provided, however, that if less than 70
days notice of the date of the scheduled annual meeting is given, notice by the
stockholder, to be timely, must be so delivered or received not later than the
close of business on the tenth day following the day on which such notice of the
date of the scheduled annual meeting was mailed or given.
The TCF Bylaws also require that the notice must contain certain information
in order to be considered. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting: (i) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting; (ii) the name and address, as they appear on TCF's books, of the
stockholder proposing such business and any other stockholders known by such
stockholder to be supporting such proposal; (iii) the class and number of shares
of TCF Common Stock which are beneficially owned by the stockholder on the date
of such stockholder notice and, to the extent known, by any other stockholders
known by such stockholder to be supporting such proposal on the date of such
stockholder notice; and (iv) any financial or other interest of the stockholder
in such proposal. The presiding officer of the meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting in accordance with the TCF Bylaws, and if he should
so determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
MERGERS, SHARE EXCHANGES, SALES OF ASSETS, BUSINESS COMBINATIONS WITH CERTAIN
PERSONS AND ACQUISITIONS OF SHARES
The MBCA generally requires the affirmative vote of the holders of a
majority of the voting power of all shares entitled to vote for approval of
mergers and consolidations or the sale or exchange of all or substantially all
of a corporation's assets. Under the MBCA, stockholder approval is not required
for a merger or consolidation if the articles of incorporation will not be
amended in the transaction, if stockholders will, before the transaction,
continue to hold the same number of shares with identical rights in the
transaction, and if the number of shares issuable with voting power and the
number of participating shares (i.e., shares that entitle the holder to
participate without limitation in distributions) immediately after the
transaction, plus those issuable upon conversion or exercise of other securities
or obligations
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issued in the transaction, will not exceed by more than 20% the number of shares
with voting power and the numbers of participating shares, as the case may be,
immediately before the transaction.
The DGCL requires the approval of the Board of Directors and the holders of
a majority of the outstanding TCF Common Stock entitled to vote thereon for
mergers or consolidations, and for sales, leases or exchanges of substantially
all of TCF's property and assets. The DGCL does not provide explicitly for share
exchanges. The DGCL permits TCF to merge with another corporation without
obtaining the approval of TCF's stockholders if: (i) TCF is the surviving
corporation of the merger; (ii) the merger agreement does not amend the TCF
Certificate; (iii) each share of TCF Common Stock outstanding immediately prior
to the effective date of the merger is to be an identical outstanding or
treasury share of TCF Common Stock after the merger; and (iv) any authorized but
unissued shares or treasury shares of TCF Common Stock to be issued or delivered
under the plan of merger plus those initially issuable upon conversion of any
other securities or obligations to be issued or delivered under such plan do not
exceed 20% of the shares of TCF Common Stock outstanding immediately prior to
the effective date of the merger.
The MBCA contains provisions intended to protect stockholders from
individuals or companies attempting a takeover of a corporation in certain
circumstances. The Minnesota control share acquisition statute establishes
various disclosure and stockholder approval requirements to be met by
individuals or companies attempting a takeover. Delaware has no comparable
provision. The Minnesota statute applies to an "issuing public corporation." An
"issuing public corporation" is one which is incorporated under or governed by
the MBCA and has at least fifty (50) stockholders. Winthrop is subject to the
statute; TCF, because it is a Delaware corporation, is not subject to the
statute.
The Minnesota statute requires disinterested stockholder approval for any
acquisition of shares of an "issuing public corporation" which results in the
"acquiring person" owning more than a designated percentage of the outstanding
shares of such corporation. Stockholders which exceed certain share ownership
thresholds whose shares are acquired without stockholder approval lose their
voting rights and are subject to certain redemption privileges of the
corporation. Such shares regain their voting rights only if the acquiring person
discloses certain information to the corporation and such voting rights are
granted by the stockholders at a special or annual meeting of the stockholders.
The Minnesota control share acquisition statute applies unless the "issuing
public corporation" opts out of the statute in its articles of incorporation or
bylaws. Winthrop has not opted out of such provisions. Control share
acquisitions, do not include, among other things:
(i) mergers or consolidations if the issuing public corporation is a
party to the transaction;
(ii) an acquisition from the issuing public corporation; and
(iii) an acquisition subsequent to January 1, 1991, pursuant to an offer
to purchase for cash pursuant to a tender offer all shares of the voting
stock of the issuing public corporation which has been approved by a
majority vote of the members of a committee comprised of the disinterested
members of the board of the issuing public corporation formed before the
commencement of, or the public announcement of the intent to commence, the
tender offer and pursuant to acquisitions which the acquiring person will
become the owner of over 50 percent (50%) of the voting stock of the issuing
public corporation outstanding at the time of the transaction.
TCF is subject to the provisions of Section 203 of the DGCL ("Section 203")
which prohibits a "business combination" (defined in Section 203 as generally
including mergers, sales and leases of assets, issuances of securities, and
similar transactions) by TCF or a subsidiary with an "interested stockholder"
(defined in Section 203 as generally the beneficial owner of 15% or more of a
corporation's outstanding voting stock) within three years after the person or
entity becomes an interested stockholder, unless (i) prior to the person or
entity becoming an interested stockholder, the business combination or the
transaction pursuant to which such person or entity became an interested
stockholder shall have been
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approved by TCF's Board of Directors, (ii) upon consummation of the transaction
in which he became an interested stockholder, the interested stockholder holds
at least 85% of the TCF Common Stock outstanding at the time the transaction
commenced (excluding shares held by persons who are both officers and directors
and shares held by certain employee benefit plans), or (iii) following the
transaction in which such person became an interested stockholder, the business
combination is approved by TCF's Board of Directors and by the holders of at
least two-thirds of the outstanding TCF Common Stock, excluding shares owned by
the interested stockholder. The restrictions imposed on interested stockholders
under Section 203 do not apply under certain limited circumstances set forth
therein, including certain business combinations proposed by an interested
stockholder following the announcement or notification of certain extraordinary
transactions involving the corporation and a person who had not been an
interested stockholder during the previous three years or who became an
interested stockholder with the approval of a majority of the corporation's
directors.
Section 203 provides that during such three-year period, the corporation may
not merge or consolidate with an interested stockholder or any affiliate or
associate thereof, and also may not engage in certain other transactions with an
interested stockholder or any affiliate or associate thereof, including, without
limitation, (i) any merger or consolidation of the corporation or a direct or
indirect majority-owned subsidiary of the corporation with (A) the interested
stockholder, or (B) with any other corporation if the merger or consolidation is
caused by the interested stockholder and as a result of such merger or
consolidation the above limitations of Section 203 are not applicable to the
surviving corporation; (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (except proportionately as a stockholder of the
corporation) to or with the interested stockholder of assets having an aggregate
market value equal to 10% or more of the aggregate market value of all assets of
the corporation determined on a consolidated basis or the aggregate market value
of all the outstanding stock of a corporation; (iii) any transaction which
results in the issuance or transfer by the corporation or by any majority owned
subsidiary thereof of any stock of the corporation of such subsidiary to the
interested stockholder, except, among other things, pursuant to a transaction
which effects a pro rata distribution to all stockholders of the corporation;
(iv) any transaction involving the corporation or any majority owned subsidiary
thereof which has the effect of increasing the proportionate share of the stock
of any class or series, or securities convertible into the stock of any class or
series, of the corporation or any such subsidiary which is owned by the
interested stockholder (except, among other things, as a result of immaterial
changes due to fractional share adjustments); or (v) any receipt by the
interested stockholder of the benefit (except proportionately as a stockholder
of such corporation) of any loans, advances, guarantees, pledges or other
financial benefits provided by or through the corporation.
The TCF Certificate contains a "fair price" provision which provides that,
subject to certain exceptions, a "business combination" (which is defined to
include a merger, reorganization, sale or transfer of all or substantially all
of TCF's assets or a liquidation or dissolution of TCF having an aggregate fair
market value of $10,000,000 or more) involving TCF and a "related person"
(defined as a person who, together with any affiliate or associate, beneficially
owns more than 10% of the outstanding TCF Common Stock), must be approved by
holders of at least 80% of the outstanding shares entitled to vote thereon,
excluding all shares of TCF Common Stock beneficially owned or controlled by a
related person, unless (i) a majority of the Continuing Directors approves the
transaction, (ii) the business combination is solely between TCF and a direct or
indirect subsidiary of TCF, or (iii) certain price and other procedural
conditions are satisfied.
The Merger is not a "business combination" as defined in Section 203 or the
fair price provisions of the DGCL and, therefore, neither the provision of
Section 203 nor the "fair price" provisions are applicable to the transaction
contemplated by the Merger Agreement.
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ANTI-GREENMAIL PROVISIONS
The MBCA contains a provision which limits the ability of a corporation to
pay greenmail. Pursuant to the statue, a publicly held corporation is prohibited
from purchasing or agreeing to purchase any shares from a person (or two or more
persons who act as a partnership, limited partnership, syndicate, or other group
pursuant to any written or oral agreement, arrangement, relationship,
understanding, or otherwise for the purpose of acquiring, owning or voting
shares of the publicly held corporation) who beneficially owns more than five
percent (5%) of the voting power of the corporation if the shares had been
beneficially owned by that person for less than two years, and if the purchase
price would exceed the market value of those shares. However, such a purchase
would not violate the statute if the purchase is approved at a meeting of the
stockholders by a majority of the voting power of all shares entitled to vote or
if the corporation's offer is at least of equal value per share and is made to
all holders of any class or series into which the securities may be converted.
There is no provision of the DGCL which is analogous to the MBCA with
respect to greenmail and the TCF Certificate does not contain an anti-greenmail
provision.
STOCKHOLDER RIGHTS PLAN
On May 23, 1989, the Board of Directors of TCF declared a dividend
distribution of one Right for each outstanding share of TCF Common Stock. For
discussion of the Rights, see "Description of TCF Capital Stock--TCF Common
Stock--Preferred Share Purchase Rights" and "Description of TCF Capital
Stock--Preferred Stock--Series A Junior Preferred Stock." Winthrop has not
adopted a stockholder rights plan.
DISSENTERS' RIGHTS OF APPRAISAL
Under the MBCA and DGCL, stockholders have the right, under certain
circumstances, to dissent from certain corporation transactions, principally
mergers and consolidations, by demanding payment in cash for their shares equal
to the fair value (excluding, under the DGCL, any appreciation or depreciation
as a consequence or in expectation of the transaction), as determined by the
corporation or by an independent appraiser appointed by a court in an action
timely brought by the dissenters. Under the MBCA, Winthrop stockholders would
have dissenters' rights if Winthrop amends its articles in such a way that
materially and adversely affects the rights or preferences of the shares of the
dissenting stockholder, enters into a sale, lease, transfer, or other
disposition of all of substantially all of the property and assets of the
corporation, a plan of merger, a plan of exchange or any other action taken
pursuant to a stockholder vote if the articles, the bylaws or a resolution
approved by the board directs that dissenting stockholders may obtain payment
their shares. For a discussion of Winthrop stockholders' dissenters' rights of
appraisal in connection with the Merger, see "The Merger--Dissenters'
Rights--Winthrop--Procedure to Preserve Dissenters' Rights" herein.
Under the DGCL, no dissenters' rights exist for shares of stock of a
constituent corporation in a merger or consolidation that are either listed on a
national securities exchange or held of record by more than 2,000 stockholders.
However, dissenters' rights will exist if the stockholders receive anything
other than: (i) shares of stock of the corporation surviving or resulting from
such merger or consolidation; (ii) shares of stock of any other corporation
which at the effective date of the merger or consolidation will be either listed
on a national securities exchange or held of record by more than 2,000
stockholders; (iii) cash in lieu of fractional shares of the corporation
described in the foregoing clause (i) and (ii); or (iv) any combination of
clause (i), (ii) or (iii). The TCF Certificate does not provide for any
dissenters' rights in addition to those provided by the DGCL. TCF stockholders
will not have any dissenters' rights of appraisal in connection with the Merger.
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STOCKHOLDER'S RIGHT TO EXAMINE BOOKS AND RECORDS
The MBCA provides that any stockholder or group of stockholders of a
publicly held corporation have the right, upon written demand stating the
purpose, to examine and copy the corporation's share register and other
corporate records upon demonstrating a proper purpose. The DGCL provides that a
stockholder of a Delaware corporation may inspect books and records of the
corporation upon written demand under oath stating the purpose of the
inspection, if such purpose is reasonably related to such person's interest as a
stockholder.
PAYMENT OF DIVIDENDS
Under the MBCA, Winthrop may declare a dividend to its stockholders if the
board determines that Winthrop will be able to pay its debts in the ordinary
course of business after making the distribution and the board does not know
before the dividend is made that the determination was or has become erroneous.
A dividend may be made to the holders of a class or series of shares only if all
amounts payable to the holders of shares having a preference for the payment are
paid and the distribution does not reduce the remaining net assets of Winthrop
below the aggregate preferential amount payable in the event of liquidation to
the holders of shares having preferential rights, unless the distribution is
made to those stockholders in the order and to the extent of their respective
priorities.
TCF is not subject to advance notice requirements and regulatory limitations
relating to the payment of dividends or making other forms of capital
distributions. Dividends from the TCF Banks to TCF, however, are subject to
potential restrictions under the administration of the OCC. The DGCL provides
that, subject to any restrictions in the corporation's certificate of
incorporation, dividends may be declared from the corporation's surplus or, if
there is no surplus, from its net profits for the fiscal year in which the
dividend is declared and the preceding fiscal year. However, if the
corporation's capital (generally defined in the DGCL as the sum of the aggregate
par value of all shares of the corporation's capital stock, where all such
shares have a par value and the board of directors has not established a higher
level of capital) has been diminished to an amount less than the aggregate
amount of the capital represented by the issued and outstanding stock of all
classes having a preference upon the distribution of assets, dividends may not
be declared and paid out of such net profits until the deficiency in such
capital has been repaired.
DISSOLUTION
Under the DGCL, voluntary dissolution of a corporation requires the adoption
of a resolution by a majority of the members of the board of directors and the
affirmative vote of the holders of a majority of the outstanding shares entitled
to vote thereon. Under Minnesota law, voluntary dissolution may be approved by
the affirmative vote of the holders of a majority of the voting power of all
shares entitled to vote.
RECENT DEVELOPMENTS
BOC FINANCIAL. On January 16, 1997, TCF Illinois acquired the stock of BOC
Financial Corporation ("BOC") and its wholly-owned indirect subsidiary, Bank of
Chicago, s.b., an Illinois state-chartered savings bank ("Bank of Chicago").
Effective April 7, 1997, Bank of Chicago was merged with and into TCF Illinois,
with TCF Illinois as the resulting institution. The acquisition of BOC and
subsequent merger are not considered to be material events for purposes of the
Unaudited Pro Forma Combined Financial Information presented elsewhere herein.
STANDARD. TCF Financial signed a definitive agreement dated as of March 16,
1997 to acquire Standard and its wholly-owned subsidiary, Standard Bank,
headquartered in Chicago, Illinois. Standard had total assets of $2.4 billion
and Standard Bank had 14 branches at December 31, 1996. Standard's Annual Report
on Form 10-K for the year ended December 31, 1996 is hereby incorporated by
reference
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to Exhibit 13 to this Registration Statement, on file with the Commission. The
financial information contained on those reports is summarized in "Unaudited Pro
Forma Combined Financial Information."
Under the agreement with Standard, pursuant to the steps of reorganization
described therein, the assets and liabilities of Standard will be transferred
to, and Standard Bank will be merged with, TCF Illinois. On May , 1997,
Standard had outstanding shares of its common stock and options to acquire
shares of its common stock. Pursuant to the Standard Merger Agreement, the
Standard acquisition will be structured as a cash election merger in which
Standard stockholders will have the right to choose either cash or TCF Common
Stock, or a combination of the two. Between 40 percent and 60 percent of the
estimated purchase price of $419 million will be paid in shares of TCF Common
Stock with the remainder paid in cash. The Standard acquistion will be accounted
for by the purchase method of accounting. Consummation of the acquisition is
subject to regulatory approval and certain other conditions and is expected to
occur by October 31, 1997. The Merger is not contingent upon the closing of
TCF's acquisition of Standard. Subject to satisfaction or waiver of the
conditions in the Merger Agreement, the Merger of a wholly-owned subsidiary of
TCF with and into Winthrop may occur before the Standard acquisition is
completed by TCF. However, there can be no assurance that the Standard
acquisition will be consummated because the transaction is subject to various
conditions, including requisite regulatory approvals and clearances, and rights
of termination, including the right of Standard to terminate if the average
trading price of TCF Common Stock is below $37.50 per share during a specified
period of time. It is also possible that the Standard acquisition could close
before consummation of the Merger.
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UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The Merger Agreement provides that at the Effective Time all of the issued
and outstanding shares of Winthrop Common Stock (other than shares held by TCF
or any subsidiary thereof, other than shares held in a fiduciary capacity or in
satisfaction of debt) will be cancelled and converted into the number of shares
of TCF Common Stock determined by multiplying the number of shares of such
Winthrop Common Stock by 0.7766, the Exchange Ratio. The Merger Agreement may be
terminated by Winthrop if the Average TCF Stock Price is less than $42.30 per
share and by TCF if the Average TCF Stock Price is more than $51.70 per share.
The following Unaudited Pro Forma Combined Financial Information has been
prepared using the Exchange Ratio of 0.7766. See "The Merger--The Exchange
Ratio." The following Unaudited Pro Forma Combined Financial Information
reflects the Merger and the acquisition of Standard, including the issuance of
4,945,000 shares of TCF Common Stock to Standard stockholders using the April
15, 1997 30-trading-day average TCF Common Stock price of $42.40. See "Recent
Developments."
The following Unaudited Pro Forma Combined Statement of Financial Condition
as of December 31, 1996 combines the historical consolidated statements of
financial condition of TCF, Winthrop and Standard as if the Merger and the
acquisition of Standard had been effective on December 31, 1996, after giving
effect to certain pro forma adjustments described in the accompanying notes.
The following Unaudited Pro Forma Combined Statements of Operations for the
year ended December 31, 1996 is presented as if the Merger had been effective
January 1, 1994 and the acquisition of Standard had been effective January 1,
1996, after giving effect to certain pro forma adjustments described in the
accompanying notes. TCF's, Winthrop's and Standard's fiscal years end December
31. The following Unaudited Pro Forma Combined Statements of Operations for the
two years ended December 31, 1995 and 1994 are presented as if the Merger had
been effective January 1, 1994.
The Unaudited Pro Forma Combined Financial Information and notes thereto
reflect the application of the pooling-of-interests method of accounting for the
acquisition of Winthrop. Under this method of accounting, the recorded assets,
liabilities, income and expenses of TCF and Winthrop are combined and recorded
at their historical cost-based amounts, except as noted below and in the notes
thereto. Certain historical information of Winthrop has been reclassified to
conform to TCF's financial statement presentation.
The Unaudited Pro Forma Combined Financial Information and notes thereto
reflect the application of the purchase method of accounting for the acquisition
of Standard. Under this method of accounting, the assets acquired and
liabilities assumed from Standard are recorded at their fair market values. The
amount of the purchase price in excess of the fair market value of the tangible
and identifiable intangible assets acquired less the liabilities assumed is
recorded as goodwill. Certain historical information of Standard has been
reclassified to conform to TCF's financial statement presentation.
The Unaudited Pro Forma Combined Financial Information does not reflect the
effects of the anticipated additional offering of up to 800,000 shares of TCF
Common Stock in order to qualify the Merger as a pooling of interests and
anticipated issuance of approximately 400,000 shares of TCF Common Stock in
connection with the conversion of Great Lakes Michigan's 7 1/4% Convertible
Subordinated Debentures due 2011. See "Summary--Terms of the Merger."
The significant accounting and reporting policies of TCF, Winthrop and
Standard differ in minor respects and no effect has been given to such
differences in this Unaudited Pro Forma Combined Financial Information. The
Unaudited Pro Forma Combined Financial Information included herein is not
necessarily indicative of the consolidated financial position or results of
future operations of the combined entity or the actual results that would have
been achieved had the acquisitions of Winthrop and Standard been consummated
prior to the periods indicated. The Unaudited Pro Forma Combined Financial
Information
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should be read in conjunction with and are qualified in their entirety by the
separate historical consolidated financial statements and notes thereto of TCF,
Winthrop and Standard, which are incorporated by reference herein. See
"Incorporation of Certain Documents by Reference."
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TCF FINANCIAL CORPORATION AND SUBSIDIARIES
WINTHROP RESOURCES CORPORATION
STANDARD FINANCIAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL CONDITION
AT DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
------------------------ -------------------------
ASSETS TCF WINTHROP ADJUSTMENTS COMBINED STANDARD ADJUSTMENTS COMBINED
---------- -------- ----------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and due from banks................... $ 238,670 $(2,224 ) $ -- $ 236,446 $ 17,464 $ -- $ 253,910
Interest-bearing deposits with banks...... 372,132 14,092 -- 386,224 25,834 -- 412,058
U.S. Government and other marketable
securities held to maturity............. 3,910 -- -- 3,910 -- -- 3,910
Federal Home Loan Bank stock, at cost..... 66,061 -- -- 66,061 20,500 -- 86,561
Securities available for sale............. 999,554 32 -- 999,586 804,944 (200,000)(2) 1,604,530
Loans held for sale....................... 203,869 -- -- 203,869 18,918 -- 222,787
Loans and lease financings:
Total loans............................. 4,995,962 -- -- 4,995,962 1,473,529 (6,509)(3) 6,462,982
Total lease financings.................. -- 296,958 -- 296,958 -- -- 296,958
---------- -------- ----------- ---------- ---------- ------------ ----------
Total loans and lease financings...... 4,995,962 296,958 -- 5,292,920 1,473,529 (6,509) 6,759,940
Allowance for loan and lease losses... (70,749) (1,116 ) -- (71,865) (6,988) -- (78,853)
---------- -------- ----------- ---------- ---------- ------------ ----------
Net loans and lease financings...... 4,925,213 295,842 -- 5,221,055 1,466,541 (6,509) 6,681,087
Premises and equipment.................... 128,743 1,042 -- 129,785 27,267 (1,630)(4) 155,422
Real estate............................... 15,771 -- -- 15,771 70 -- 15,841
Accrued interest receivable............... 42,173 -- -- 42,173 15,015 -- 57,188
Goodwill.................................. 9,897 5,534 -- 15,431 432 155,689(5) 171,552
Deposit base intangibles.................. 10,843 -- -- 10,843 -- 17,333(6) 28,176
Mortgage servicing rights................. 17,360 -- -- 17,360 543 81(3) 17,984
Other assets.............................. 56,666 35,792 -- 92,458 7,693 -- 100,151
---------- -------- ----------- ---------- ---------- ------------ ----------
$7,090,862 $350,110 $ -- $7,440,972 $2,405,221 $ (35,036) $9,811,157
---------- -------- ----------- ---------- ---------- ------------ ----------
---------- -------- ----------- ---------- ---------- ------------ ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Total deposits............................ $4,977,630 $ -- $ -- $4,977,630 $1,718,782 $ 6,496(3) $6,702,908
---------- -------- ----------- ---------- ---------- ------------ ----------
Securities sold under repurchase
agreements.............................. 293,732 -- -- 293,732 -- -- 293,732
Federal Home Loan Bank advances........... 1,141,040 -- -- 1,141,040 385,000 (2,745)(3) 1,523,295
Discounted lease rentals.................. -- 185,604 -- 185,604 -- -- 185,604
Subordinated debt......................... 13,397 28,750 -- 42,147 -- -- 42,147
Collateralized obligations................ 40,505 -- -- 40,505 -- -- 40,505
Other borrowings.......................... 5,144 -- -- 5,144 -- 580(7) 5,724
---------- -------- ----------- ---------- ---------- ------------ ----------
Total borrowings........................ 1,493,818 214,354 -- 1,708,172 385,000 (2,165) 2,091,007
Accrued expenses and other liabilities.... 69,908 54,575 -- 124,483 33,361 19,043(8) 176,887
---------- -------- ----------- ---------- ---------- ------------ ----------
Total liabilities....................... 6,541,356 268,929 -- 6,810,285 2,137,143 23,374 8,970,802
---------- -------- ----------- ---------- ---------- ------------ ----------
Stockholders' equity:
Preferred stock......................... -- -- -- -- -- -- --
Common stock............................ 359 86 (19)(1) 426 191 (142)(9) 475
Additional paid-in capital.............. 251,536 23,191 19(1) 274,746 189,459 20,160(9) 484,365
Unamortized deferred compensation....... (7,693) -- -- (7,693) (3,745) 3,745(9) (7,693)
Retained earnings, subject to certain
restrictions.......................... 344,205 57,904 -- 402,109 130,437 (130,437)(9) 402,109
Loans to Executive Deferred Compensation
Plan.................................. (68) -- -- (68) -- -- (68)
Unrealized gain on securities available
for sale.............................. 2,376 -- -- 2,376 2,431 (2,431)(9) 2,376
Employee Stock Ownership Plan shares.... -- -- -- -- (9,610) 9,610(10) --
Treasury stock, at cost................. (41,209) -- -- (41,209) (41,085) 41,085(9) (41,209)
---------- -------- ----------- ---------- ---------- ------------ ----------
Total stockholders' equity............ 549,506 81,181 -- 630,687 268,078 (58,410) 840,355
---------- -------- ----------- ---------- ---------- ------------ ----------
$7,090,862 $350,110 $ -- $7,440,972 $2,405,221 $ (35,036) $9,811,157
---------- -------- ----------- ---------- ---------- ------------ ----------
---------- -------- ----------- ---------- ---------- ------------ ----------
</TABLE>
77
<PAGE>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
WINTHROP RESOURCES CORPORATION
STANDARD FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF
FINANCIAL CONDITION
Pursuant to the Merger Agreement and Standard purchase agreement, and
consistent with generally accepted accounting principles ("GAAP"), TCF expects
that certain pooling-of-interest and purchase accounting adjustments relating to
Winthrop and Standard, respectively, will be recorded. The purchase accounting
adjustments are preliminary estimates and are subject to revision as economic
conditions change or as more information becomes available. The following notes
further explain the adjustments.
(1) Represents the adjustment to reflect the par value of TCF Common Stock to
be issued in connection with the Merger, with a related adjustment to
additional paid-in capital.
(2) Represents the planned sale of $200 million of securities available for
sale in connection with the acquisition of Standard.
(3) Represent the mark-to-market adjustments to reflect the fair market value
of the Standard assets acquired and liabilities assumed under the purchase
method of accounting.
(4) Represents the write-off of certain Standard fixed assets and duplicative
data processing hardware and software.
(5) Represents the excess of the purchase price paid for Standard over the fair
market value of the tangible and identifiable intangible assets acquired and
liabilities assumed under the purchase method of accounting, less Standard's
pre-existing goodwill. Goodwill is assumed to amortize on a straight-line
basis over 25 years.
(6) Represents identifiable deposit base intangibles ("DBI") relating to
Standard's deposits. The DBI will be amortized using an accelerated method.
(7) Represents the planned increase in TCF's short-term borrowings to fund the
acquisition of Standard, net of proceeds from the planned sale of securities
available for sale and the planned repayment of the loan to the Standard
Employee Stock Ownership Plan and Trust ("ESOP").
(8) Represents accruals for other merger related costs such as data processing
contract termination costs, investment banking fees, severance and other
anticipated reorganization and consolidation costs.
(9) Represents the elimination of Standard's stockholders' equity under the
purchase method of accounting and the issuance of approximately 4.9 million
shares of TCF Common Stock.
(10) Represents the repayment of the loan to the ESOP and the allocation of the
remaining unallocated ESOP shares to the plan participants.
78
<PAGE>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
WINTHROP RESOURCES CORPORATION
STANDARD FINANCIAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
--------------------------
TCF WINTHROP ADJUSTMENTS COMBINED STANDARD
--------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Interest income:
Loans.................................... $ 486,140 $ -- $ -- $ 486,140 $ 93,554
Lease financings......................... -- 29,914 -- 29,914 --
Loans held for sale...................... 17,080 -- -- 17,080 469
Securities available for sale............ 75,303 1 -- 75,304 61,265
Investments.............................. 4,338 109 -- 4,447 2,208
--------- ----------- ------ ----------- -----------
Total interest income.................. 582,861 30,024 -- 612,885 157,496
--------- ----------- ------ ----------- -----------
Interest expense:
Deposits................................. 171,375 -- -- 171,375 73,955
Borrowings............................... 71,346 15,595 -- 86,941 19,980
--------- ----------- ------ ----------- -----------
Total interest expense................. 242,721 15,595 -- 258,316 93,935
--------- ----------- ------ ----------- -----------
Net interest income.................. 340,140 14,429 -- 354,569 63,561
Provision for credit losses................ 19,820 1,426 -- 21,246 2,500
--------- ----------- ------ ----------- -----------
Net interest income after provision for
credit losses.......................... 320,320 13,003 -- 333,323 61,061
--------- ----------- ------ ----------- -----------
Non-interest income:
Fee and service charge revenues.......... 100,422 -- -- 100,422 3,825
ATM network revenues..................... 11,480 -- -- 11,480 535
Title insurance revenues................. 13,492 -- -- 13,492 --
Commissions on sales of annuities........ 9,134 -- -- 9,134 271
Leasing revenues......................... -- 23,814 -- 23,814 --
Gain on sale of loans held for sale...... 5,038 -- -- 5,038 1,386
Gain on sale of securities available for
sale................................... 85 1 -- 86 1,578
Gain on sale of loans.................... 5,443 -- -- 5,443 --
Gain on sale of branches................. 2,747 -- -- 2,747 --
Other.................................... 9,956 -- -- 9,956 1,285
--------- ----------- ------ ----------- -----------
Total non-interest income.............. 157,797 23,815 -- 181,612 8,880
--------- ----------- ------ ----------- -----------
Non-interest expense:
Compensation and employee benefits....... 151,745 5,809 -- 157,554 20,629
Occupancy and equipment.................. 51,136 822 -- 51,958 8,728
Advertising and promotions............... 16,711 303 -- 17,014 1,745
Federal deposit insurance premiums and
assessments............................ 12,019 -- -- 12,019 4,328
Amortization of goodwill and other
intangibles............................ 3,167 564 -- 3,731 135
Provision for real estate losses......... 433 -- -- 433 --
FDIC special assessment.................. 34,803 -- -- 34,803 9,577
Other.................................... 71,056 4,959 -- 76,015 6,823
--------- ----------- ------ ----------- -----------
Total non-interest expense............. 341,070 12,457 -- 353,527 51,965
--------- ----------- ------ ----------- -----------
Income before income tax expense and
extraordinary item................. 137,047 24,361 -- 161,408 17,976
Income tax expense......................... 51,384 9,647 -- 61,031 6,064
--------- ----------- ------ ----------- -----------
Income before extraordinary item......... $ 85,663 $ 14,714 $ -- $ 100,377 $ 11,912
--------- ----------- ------ ----------- -----------
--------- ----------- ------ ----------- -----------
Per common share (6)(7):
Income before extraordinary item:
Primary................................ $ 2.42 $ 1.76 $ 2.39 $ .76
--------- ----------- ----------- -----------
--------- ----------- ----------- -----------
Fully diluted.......................... $ 2.40 $ 1.76 $ 2.38 $ .75
--------- ----------- ----------- -----------
--------- ----------- ----------- -----------
Weighted average shares outstanding
(000's):
Primary................................ 35,342 8,369 41,926 15,635
--------- ----------- ----------- -----------
--------- ----------- ----------- -----------
Fully diluted.......................... 35,773 8,375 42,364 15,882
--------- ----------- ----------- -----------
--------- ----------- ----------- -----------
<CAPTION>
PRO FORMA
--------------------------
ADJUSTMENTS COMBINED
------------ -----------
<S> <C> <C>
Interest income:
Loans....................................$ 1,286(1) $ 580,980
Lease financings......................... -- 29,914
Loans held for sale...................... -- 17,549
Securities available for sale............ (15,000)(2) 121,569
Investments.............................. -- 6,655
------------ -----------
Total interest income.................. (13,714) 756,667
------------ -----------
Interest expense:
Deposits................................. (5,197)(1) 240,133
Borrowings............................... 478(3) 107,399
------------ -----------
Total interest expense................. (4,719) 347,532
------------ -----------
Net interest income.................. (8,995) 409,135
Provision for credit losses................ -- 23,746
------------ -----------
Net interest income after provision for
credit losses.......................... (8,995) 385,389
------------ -----------
Non-interest income:
Fee and service charge revenues.......... -- 104,247
ATM network revenues..................... -- 12,015
Title insurance revenues................. -- 13,492
Commissions on sales of annuities........ -- 9,405
Leasing revenues......................... -- 23,814
Gain on sale of loans held for sale...... -- 6,424
Gain on sale of securities available for
sale................................... -- 1,664
Gain on sale of loans.................... -- 5,443
Gain on sale of branches................. -- 2,747
Other.................................... -- 11,241
------------ -----------
Total non-interest income.............. -- 190,492
------------ -----------
Non-interest expense:
Compensation and employee benefits....... -- 178,183
Occupancy and equipment.................. (675)(4) 60,011
Advertising and promotions............... -- 18,759
Federal deposit insurance premiums and
assessments............................ -- 16,347
Amortization of goodwill and other
intangibles............................ 9,365(5) 13,231
Provision for real estate losses......... -- 433
FDIC special assessment.................. -- 44,380
Other.................................... -- 82,838
------------ -----------
Total non-interest expense............. 8,690 414,182
------------ -----------
Income before income tax expense and
extraordinary item................. (17,685) 161,699
Income tax expense......................... (4,576) 62,519
------------ -----------
Income before extraordinary item.........$ (13,109) $ 99,180
------------ -----------
------------ -----------
Per common share (6)(7):
Income before extraordinary item:
Primary................................ $ 2.12
-----------
-----------
Fully diluted.......................... $ 2.10
-----------
-----------
Weighted average shares outstanding
(000's):
Primary................................ 46,871
-----------
-----------
Fully diluted.......................... 47,309
-----------
-----------
</TABLE>
79
<PAGE>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
WINTHROP RESOURCES CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
--------------------------
TCF WINTHROP ADJUSTMENTS COMBINED
--------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
Interest income:
Loans............................................................ $ 488,433 $ -- $ -- $ 488,433
Lease financings................................................. -- 23,330 -- 23,330
Loans held for sale.............................................. 18,253 -- -- 18,253
Securities available for sale.................................... 4,021 34 -- 4,055
Investments...................................................... 5,946 144 -- 6,090
Mortgage-backed securities held to maturity...................... 91,037 -- -- 91,037
--------- ----------- ------ -----------
Total interest income.......................................... 607,690 23,508 -- 631,198
--------- ----------- ------ -----------
Interest expense:
Deposits......................................................... 193,244 -- -- 193,244
Borrowings....................................................... 95,248 13,614 -- 108,862
--------- ----------- ------ -----------
Total interest expense......................................... 288,492 13,614 -- 302,106
--------- ----------- ------ -----------
Net interest income.......................................... 319,198 9,894 -- 329,092
Provision for credit losses........................................ 15,212 842 -- 16,054
--------- ----------- ------ -----------
Net interest income after provision for credit losses.......... 303,986 9,052 -- 313,038
--------- ----------- ------ -----------
Non-interest income:
Fee and service charge revenues.................................. 89,712 -- -- 89,712
ATM network revenues............................................. 10,568 -- -- 10,568
Title insurance revenues......................................... 11,509 -- -- 11,509
Commissions on sales of annuities................................ 8,557 -- -- 8,557
Leasing revenues................................................. -- 19,739 -- 19,739
Gain on sale of loans held for sale.............................. 3,735 -- -- 3,735
Gain (loss) on sale of securities available for sale............. (190) 38 -- (152)
Loss on sale of mortgage-backed securities....................... (21,037) -- -- (21,037)
Gain on sale of loan servicing................................... 1,535 -- -- 1,535
Gain on sale of branches......................................... 1,103 -- -- 1,103
Other............................................................ 7,284 -- -- 7,284
--------- ----------- ------ -----------
Total non-interest income...................................... 112,776 19,777 -- 132,553
--------- ----------- ------ -----------
Non-interest expense:
Compensation and employee benefits............................... 139,548 4,274 -- 143,822
Occupancy and equipment.......................................... 50,554 399 -- 50,953
Advertising and promotions....................................... 16,651 156 -- 16,807
Federal deposit insurance premiums and assessments............... 13,540 -- -- 13,540
Amortization of goodwill and other intangibles................... 3,163 -- -- 3,163
Provision for real estate losses................................. 1,804 -- -- 1,804
Merger-related expenses.......................................... 21,733 -- -- 21,733
Cancellation cost on early termination of interest-rate exchange
contracts...................................................... 4,423 -- -- 4,423
Other............................................................ 65,917 4,740 -- 70,657
--------- ----------- ------ -----------
Total non-interest expense..................................... 317,333 9,569 -- 326,902
--------- ----------- ------ -----------
Income before income tax expense and extraordinary item...... 99,429 19,260 -- 118,689
Income tax expense................................................. 37,778 7,704 -- 45,482
--------- ----------- ------ -----------
Income before extraordinary item................................. $ 61,651 $ 11,556 $ -- $ 73,207
--------- ----------- ------ -----------
--------- ----------- ------ -----------
Per common share (6)(8):
Income before extraordinary item:
Primary........................................................ $ 1.71 $ 1.46 $ 1.73
--------- ----------- -----------
--------- ----------- -----------
Fully diluted.................................................. $ 1.70 $ 1.46 $ 1.71
--------- ----------- -----------
--------- ----------- -----------
Weighted average shares outstanding (000's):
Primary........................................................ 35,686 7,912 41,965
--------- ----------- -----------
--------- ----------- -----------
Fully diluted.................................................. 36,260 7,912 42,545
--------- ----------- -----------
--------- ----------- -----------
</TABLE>
80
<PAGE>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
WINTHROP RESOURCES CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
----------------------------
TCF WINTHROP ADJUSTMENTS COMBINED
--------- ----------- --------------- -----------
<S> <C> <C> <C> <C>
Interest income:
Loans............................................................ $ 403,095 $ -- $ -- $ 403,095
Lease financings................................................. -- 16,201 -- 16,201
Loans held for sale.............................................. 16,917 -- -- 16,917
Securities available for sale.................................... 13,325 18 -- 13,343
Investments...................................................... 10,476 163 -- 10,639
Mortgage-backed securities held to maturity...................... 108,669 -- -- 108,669
--------- ----------- --- -----------
Total interest income.......................................... 552,482 16,382 -- 568,864
--------- ----------- --- -----------
Interest expense:
Deposits......................................................... 183,179 -- -- 183,179
Borrowings....................................................... 90,151 10,091 -- 100,242
--------- ----------- --- -----------
Total interest expense......................................... 273,330 10,091 -- 283,421
--------- ----------- --- -----------
Net interest income........................................ 279,152 6,291 -- 285,443
Provision for credit losses........................................ 10,802 109 -- 10,911
--------- ----------- --- -----------
Net interest income after provision for credit losses.......... 268,350 6,182 -- 274,532
--------- ----------- --- -----------
Non-interest income:
Fee and service charge revenues.................................. 83,744 -- -- 83,744
ATM network revenues............................................. 8,988 -- -- 8,988
Title insurance revenues......................................... 10,274 -- -- 10,274
Commissions on sales of annuities................................ 11,310 -- -- 11,310
Leasing revenues................................................. -- 18,096 -- 18,096
Gain on sale of loans held for sale.............................. 2,124 -- -- 2,124
Gain on sale of securities available for sale.................... 981 -- -- 981
Gain on sale of loan servicing................................... 2,353 -- -- 2,353
Other............................................................ 5,445 -- -- 5,445
--------- ----------- --- -----------
Total non-interest income...................................... 125,219 18,096 -- 143,315
--------- ----------- --- -----------
Non-interest expense:
Compensation and employee benefits............................... 129,794 4,646 -- 134,440
Occupancy and equipment.......................................... 48,217 324 -- 48,541
Advertising and promotions....................................... 14,119 183 -- 14,302
Federal deposit insurance premiums and assessments............... 14,779 -- -- 14,779
Amortization of goodwill and other intangibles................... 3,282 -- -- 3,282
Provision for real estate losses................................. 4,022 -- -- 4,022
Other............................................................ 62,771 3,523 -- 66,294
--------- ----------- --- -----------
Total non-interest expense..................................... 276,984 8,676 -- 285,660
--------- ----------- --- -----------
Income before income tax expense and extraordinary item...... 116,585 15,602 -- 132,187
Income tax expense................................................. 46,402 6,241 -- 52,643
--------- ----------- --- -----------
Income before extraordinary item................................. $ 70,183 $ 9,361 $ -- $ 79,544
--------- ----------- --- -----------
--------- ----------- --- -----------
Per common share (6)(8):
Income before extraordinary item:
Primary........................................................ $ 1.95 $ 1.16 $ 1.88
--------- ----------- -----------
--------- ----------- -----------
Fully diluted.................................................. $ 1.92 $ 1.16 $ 1.85
--------- ----------- -----------
--------- ----------- -----------
Weighted average shares outstanding (000's):
Primary........................................................ 34,527 8,047 40,891
--------- ----------- -----------
--------- ----------- -----------
Fully diluted.................................................. 35,347 8,047 41,716
--------- ----------- -----------
--------- ----------- -----------
</TABLE>
81
<PAGE>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
WINTHROP RESOURCES CORPORATION
STANDARD FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
Pursuant to the Merger Agreement and the Standard purchase agreement, and
consistent with GAAP, TCF expects that certain adjustments will be recorded,
primarily to accrue for specific, identified costs related to the acquisition of
Standard. The amounts of the merger-related costs are preliminary estimates and
are subject to revision as economic conditions change or as more information
becomes available. TCF does not expect to record any merger-related charges
relating to the Merger.
TCF expects to achieve operating cost savings primarily through reductions
in staff and the consolidation of certain functions such as data processing,
investments and other back office operations at Standard. The operating cost
savings are expected to be achieved in various amounts at various times during
the years subsequent to the acquisition of Standard and not ratably over, or at
the beginning or end of, such periods. No adjustment has been reflected in the
Unaudited Pro Forma Combined Statement of Operations for the year ended December
31, 1996 for the anticipated cost savings.
(1) Represents amortization of the Standard mark-to-market adjustments under
the purchase method of accounting.
(2) Represents foregone interest income resulting from the planned sale of $200
million of securities available for sale.
(3) Represents amortization of the Standard mark-to-market adjustments, and the
net interest cost of funding the acquisition of Standard.
(4) Represents the reduction in occupancy and equipment expenses resulting from
the write-off of certain Standard fixed assets and duplicative data
processing hardware and software.
(5) Represents amortization of the Standard goodwill and deposit base
intangibles balances.
(6) The pro forma combined per common share data for TCF and Winthrop has been
computed based on the combined historical income before extraordinary item
and on the combined historical weighted average common and common equivalent
shares outstanding. For purposes of this calculation, Winthrop's weighted
average common and common equivalent shares outstanding were multiplied by
0.7766, the Exchange Ratio.
(7) The pro forma combined per common share data for TCF, Winthrop and Standard
has been computed based on the pro forma combined historical income before
extraordinary item and on the combined historical weighted average common
and common equivalent shares outstanding for TCF and Winthrop, and the
assumed issuance of an additional 4.9 million shares of TCF Common Stock
with respect to the acquisition of Standard. For purposes of this
calculation, Winthrop's weighted average common and common equivalent shares
outstanding were multiplied by 0.7766, the Exchange Ratio.
(8) Amounts are after preferred stock dividends.
82
<PAGE>
ADJOURNMENT OF SPECIAL MEETINGS
Each proxy solicited hereby by TCF or Winthrop requests authority to vote
for an adjournment of the TCF Special Meeting, in the case of TCF, or the
Winthrop Special Meeting, in the case of Winthrop, if an adjournment of such
respective meeting is deemed to be necessary. TCF may seek an adjournment of the
TCF Special Meeting and Winthrop may seek an adjournment of the Winthrop Special
Meeting, in each case for not more than 29 days, in order to enable each such
party to solicit additional votes in favor of the Merger Agreement and the
transactions contemplated thereby (the "Merger Proposal") in the event that the
Merger Proposal has not received the requisite vote of stockholders at each such
meeting and has not received the negative votes of a majority of the outstanding
TCF Common Stock or one-third of the outstanding Winthrop Common Stock. If TCF
or Winthrop desires to adjourn their respective meeting with respect to the
Merger Proposal, such party will request a motion that the meeting be adjourned
for up to 29 days with respect to such proposal (and solely with respect to the
Merger Proposal, provided that a quorum is present at such meeting), and no vote
will be taken on the Merger Proposal at the originally scheduled meeting. Each
proxy solicited hereby, if properly signed and returned to TCF or Winthrop (as
applicable) and not revoked prior to its use, will be voted on any motion for
adjournment in accordance with the instructions contained therein. If no
contrary instructions are given, each proxy received will be voted in favor of
any motion to adjourn the respective meeting. Unless revoked prior to its use,
any proxy solicited for the TCF Special Meeting or the Winthrop Special Meeting
will continue to be valid for any adjournment of such meeting, and will be voted
in accordance with instructions contained therein, and if no contrary
instructions are given, for the applicable proposal.
Any adjournment will permit TCF and/or Winthrop to solicit additional
proxies and will permit a greater expression of the stockholders' views with
respect to the Merger Proposal. Such an adjournment would be disadvantageous to
stockholders who are against the Merger Proposal, because an adjournment will
give TCF and/or Winthrop additional time to solicit favorable votes and thus
increase the chances of approving the Merger Proposal.
If a quorum is not present at the TCF Special Meeting and/or the Winthrop
Special Meeting, no proposal will be acted upon and the respective boards of
directors of TCF and Winthrop will adjourn their respective meeting to a later
date in order to solicit additional proxies on each of the proposals being
submitted to stockholders.
An adjournment for up to 29 days will not require either the setting of a
new record date or notice of the adjourned meeting as in the case of an original
meeting. Neither TCF nor Winthrop has any reason to believe that an adjournment
of the TCF Special Meeting and/or the Winthrop Special Meeting will be necessary
at this time.
BECAUSE THE BOARD OF DIRECTORS OF TCF RECOMMENDS THAT ITS STOCKHOLDERS VOTE
"FOR" THE MERGER PROPOSAL, THE BOARD OF DIRECTORS OF TCF RECOMMENDS THAT
STOCKHOLDERS ALSO VOTE "FOR" THE POSSIBLE ADJOURNMENT OF THE TCF SPECIAL
MEETING. BECAUSE THE BOARD OF DIRECTORS OF WINTHROP RECOMMENDS THAT ITS
STOCKHOLDERS VOTE "FOR" THE MERGER PROPOSAL, THE BOARD OF DIRECTORS OF WINTHROP
RECOMMENDS THAT STOCKHOLDERS ALSO VOTE "FOR" THE POSSIBLE ADJOURNMENT OF THE
WINTHROP SPECIAL MEETING. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF
THE TCF COMMON STOCK REPRESENTED IN PERSON OR BY PROXY AT THE TCF SPECIAL
MEETING WILL BE REQUIRED TO APPROVE A MOTION TO ADJOURN THE TCF SPECIAL MEETING
ON THE MERGER PROPOSAL. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE
WINTHROP COMMON STOCK REPRESENTED IN PERSON OR BY PROXY AT THE WINTHROP SPECIAL
MEETING WILL BE REQUIRED TO APPROVE A MOTION TO ADJOURN THE WINTHROP SPECIAL
MEETING ON THE MERGER PROPOSAL.
83
<PAGE>
LEGAL OPINIONS
The validity of the TCF Common Stock offered hereby and certain other
matters will be passed upon for TCF by Kaplan, Strangis and Kaplan, P.A.,
Minneapolis, Minnesota. Mr. Strangis, a director of TCF, is a member of Kaplan,
Strangis and Kaplan, P.A. Certain legal matters in connection with the Merger
will be passed upon for Winthrop by Oppenheimer Wolff & Donnelly, Minneapolis,
Minnesota.
EXPERTS
The discussions included under "The Merger--Certain Federal Income Tax
Consequences" were prepared for TCF by KPMG Peat Marwick LLP, independent
certified public accountants, and have been included herein upon the authority
of said firm as experts in tax accounting.
The consolidated financial statements of TCF as of December 31, 1996 and
1995, and for each of the years in the three-year period ended December 31,
1996, have been incorporated by reference in this Joint Proxy
Statement/Prospectus in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Winthrop as of December 31, 1996
and 1995, and for each of the years in the three-year period ended December 31,
1996, have been incorporated by reference in this Joint Proxy
Statement/Prospectus in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Standard incorporated by reference
in Standard's Annual Report on Form 10-K for the year ended December 31, 1996
and incorporated by reference in this Joint Proxy Statement, which is referred
to and made a part of this Prospectus and Registration Statement, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon incorporated by reference therein and incorporated by reference herein.
Such consolidated financial statements are incorporated by reference herein in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
OTHER MATTERS
The Boards of Directors of TCF and Winthrop are not aware of any business to
come before the Special Meetings other than those matters described in this
Joint Proxy Statement/Prospectus. However, if any other matter should properly
come before the Special Meetings, it is intended that holders of the proxies
solicited hereby will act in accordance with their best judgment.
84
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
TCF FINANCIAL CORPORATION
AND
WINTHROP RESOURCES CORPORATION
FEBRUARY 28, 1997
[incorporated by reference to Exhibit 2.1
to TCF Financial Corporation's Current Report
on Form 8-K dated March 5, 1997,
File No. 0-16431 (filed March 5, 1997)]
<PAGE>
APPENDIX B
February 25, 1997
Board of Directors
TCF Financial Corporation
801 Marquette Avenue
Suite 302
Minneapolis, MN 55402
Members of the Board:
This letter relates to the proposed transaction (the "Transaction") pursuant
to that certain Agreement and Plan of Reorganization (the "Agreement") by and
between TCF Financial Corporation ("TCF" or the "Buyer") and Winthrop Resources
Corporation ("Winthrop"), a Minnesota Corporation, pursuant to which a
subsidiary of TCF will be merged with and into Winthrop in the Transaction, and
Winthrop will become a wholly owned subsidiary of TCF. Pursuant to the
Transaction, as more fully described in the Agreement, shares of common stock,
par value $.01 per share, of Winthrop ("Winthrop Common Stock") will be
converted into the right to receive common stock, par value $.01 per share, of
TCF ("TCF Common Stock") at the rate of 0.7766 of one share of TCF Common Stock
for each share of Winthrop Common Stock (plus cash in lieu of fractional
shares). You have requested our opinion as to the fairness, from a financial
point of view, to TCF stockholders, of the consideration to be paid in the
Transaction (the "Merger Consideration").
Piper Jaffray Inc. ("Piper Jaffray"), as a customary part of its investment
banking business, is engaged in the valuation of businesses and their securities
in connection with mergers and acquisitions, underwritings and secondary
distributions of securities, private placements, and valuations for estate,
corporate and other purposes. Piper Jaffray makes a market in the Common Stock
of TCF and Winthrop and also provides research coverage for TCF and Winthrop.
Piper Jaffray has acted as a manager of underwritings of TCF and Winthrop
securities and provided other investment banking services for TCF in the past
and may continue to do so in the future. For our services in rendering this
opinion, TCF will pay us a fee and indemnify us against certain liabilities.
In arriving at our opinion, we have undertaken such reviews, analyses and
inquiries as we deemed necessary and appropriate under the circumstances. Among
other things, we have:
1. Reviewed a draft dated February 18, 1997 of the Agreement.
2. Reviewed the Reports on Form 10-K for TCF for the three fiscal years
ended December 31, 1995, December 31, 1994, and December 31, 1993.
3. Reviewed the Reports on Form 10-Q for TCF for the three quarters ended
September 30,1996, June 30, 1996 and March 31, 1996.
4. Reviewed the audited financial statements of Winthrop for the fiscal
years ending December 31, 1995, December 31, 1994 and December 31, 1993.
5. Reviewed the Reports on Form 10-Q for Winthrop for the three quarters
ended September 30, 1996, June 30, 1996 and March 31, 1996.
6. Reviewed unaudited internal financial statements for TCF for the year
ended December 31, 1996.
7. Reviewed unaudited internal financial statements of Winthrop for the
year ended December 31, 1996.
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TCF Financial Corporation
February 25, 1997
Page 2
8. Reviewed financial forecasts for TCF for the periods ending December 31,
1997 through 2000 furnished by TCF's management.
9. Reviewed financial forecasts for Winthrop for the periods ending
December 31, 1997 through 2001 furnished by Winthrop's management.
10. Conducted discussions with certain members of management of TCF. Topics
discussed included, but were not limited to, the background and rationale
of the proposed Merger, certain termination provisions being negotiated
by TCF management with respect to the Merger, the financial condition,
operating performance, and the balance sheet characteristics of Winthrop
and the prospects for the combined company after consummation of the
proposed Merger.
11. Conducted discussions with members of management of Winthrop. Topics
discussed included, but were not limited to, the background and rationale
for the Merger, the financial condition, operating performance, balance
sheet characteristics and prospects of Winthrop.
12. Reviewed the financial terms, to the extent publicly available, of
certain comparable mergers and acquisitions which we deemed relevant.
13. Performed a discounted implied dividend analysis on the five-year
financial forecasts for Winthrop.
14. Considered the projected proforma effect of the Merger on TCF's earnings
per share for the three fiscal years ending December 31, 1999.
15. Considered the projected relative contribution of Winthrop to the
combined company for 1996 and the four years ending December 31, 2000.
16. Compared certain financial data of Winthrop with certain financial data
of companies deemed similar to Winthrop or within the business sector in
which Winthrop operates.
17. Reviewed such other financial data, performed such other analyses and
considered such other information as we deemed necessary and appropriate
under the circumstances.
We have relied upon and assumed the accuracy and completeness of the
financial statements and other information provided by TCF and Winthrop or
otherwise made available to us and have not assumed responsibility independently
to verify such information. We have further relied upon the assurances of TCF's
and Winthrop's management that the information provided pertaining to TCF and
Winthrop has been prepared on a reasonable basis and, with respect to financial
planning data, reflects the best currently available estimates and that they are
not aware of any information or facts that would make the information provided
to us incomplete or misleading. Without limiting the generality of the
foregoing, we have assumed that neither TCF nor Winthrop is a party to any
pending transaction, including external financing, recapitalizations,
acquisitions or merger discussions, other than the Transaction or in the
ordinary course of business, including the conversion of TCF's savings bank
subsidiaries to national banks, the redemption of the convertible debentures of
Great Lakes Bancorp, the issuance of 1,000,000 to 1,200,000 shares of TCF Common
Stock, the possible guarantee or assumption as co-obligor by TCF of senior
debentures of Winthrop and other actions required to facilitate such pending
transactions and actions.
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TCF Financial Corporation
February 25, 1997
Page 3
In arriving at our opinion, we have not performed nor been furnished any
appraisals or valuations of the specific assets or liabilities of Winthrop being
conveyed in the Transaction. We express no opinion regarding the liquidation
value of Winthrop. We have undertaken no independent analysis of any pending or
threatened litigation, possible unasserted claims or other contingent
liabilities, to which either TCF, Winthrop or their affiliates is a party or may
be subject and, at TCF's direction and with its consent, our opinion makes no
assumption concerning and therefore does not consider, the possible assertion of
claims, outcomes or damages arising out of any such matters.
Our opinion is necessarily based upon information available to us, facts and
circumstances and economic, market and other conditions as they exist and are
subject to evaluation on the date hereof; events occurring after the date hereof
could materially affect the assumptions used in preparing this opinion. We have
not undertaken to reaffirm or revise this opinion or otherwise comment upon any
events occurring after the date hereof. We express no opinion herein as to the
prices at which shares of TCF common stock may trade at any future time.
This opinion is for the benefit of the Board of Directors of TCF and shall
not be published or otherwise used, nor shall any public references to Piper
Jaffray be made except in accordance with our engagement letter.
Based upon and subject to the foregoing and based upon such other factors as
we consider relevant, it is our opinion that the Merger Consideration is fair,
from a financial point of view, to TCF stockholders, as of the date hereof.
Sincerely,
PIPER JAFFRAY INC.
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APPENDIX C
, 1997
The Board of Directors
Winthrop Resources Corporation
1015 Opus Center
9900 Bren Road East
Minnetonka, Minnesota 55343
To the Board of Directors:
You have requested our opinion, as of the date hereof, as to the fairness,
from a financial point of view, to the common stockholders of Winthrop Resources
Corporation, a Minnesota corporation (the "Company"), of the consideration to be
received in connection with an Agreement and Plan of Reorganization (the "Merger
Agreement"), dated February 28, 1997, by and among TCF Financial Corporation, a
Delaware corporation ("TCF"), and the Company.
Pursuant to the Merger Agreement, (i) a wholly-owned subsidiary of TCF will
be merged with and into the Company, and (ii) shares of the Company's common
stock will be converted into the right to receive the Merger Consideration (the
"Merger"). The "Merger Consideration" shall consist of 0.7766 shares of TCF
common stock for each share of the Company's common stock, equivalent to $
per share of the Company's common stock based on the closing price for TCF
common stock of $ per share on , 1997. Each of the Company's
outstanding stock options will be converted into options to acquire the Merger
Consideration. The Merger may be terminated (i) by the Company if the Average
TCF Stock Price (as defined below) is less than $42.30 per share, or (ii) by TCF
if the Average TCF Stock Price is more than $51.70 per share. The "Average TCF
Stock Price" shall be equal to the average of the daily closing sale prices of
TCF common stock for the 30 consecutive full trading days ending on the third
business day immediately prior to the later of: (x) the date of the last meeting
of stockholders to obtain stockholder approval for the Merger, or (y) the date
on which the last regulatory approval required to consummate the Merger has been
obtained and all waiting periods in respect thereof have expired. We understand
that after consummation of the Merger, TCF will contribute the stock of the
surviving entity to one of its subsidiaries which is either a federal savings
bank or a national bank.
Dain Bosworth Incorporated ("Dain Bosworth"), as part of its investment
banking business, is continually engaged in the valuation of businesses and
their securities in connection with mergers and acquisitions, negotiated
underwritings, competitive bids, secondary distributions of listed and unlisted
securities, private placements, and valuations for estate, corporate, and other
purposes. In the ordinary course of business Dain Bosworth has published
research reports and made recommendations regarding the equity securities of
both the Company and TCF, as well as other companies in the financial services
industry. Also, Dain Bosworth has acted as a market maker in the equity and debt
securities of both the Company and TCF, as well as other publicly traded
companies in the financial services industry and, accordingly, periodically may
have positions in such securities. Dain Bosworth served as a managing
underwriter for public offerings by TCF in 1990 and 1992 and received customary
fees for such services. In addition, Dain Bosworth acted as a managing
underwriter for a public offering of the Company's common stock and senior notes
in June 1996 and we have been engaged to act as the Company's financial advisor
in connection with the Merger. We will receive a fee for our advisory services,
a portion of which is contingent upon consummation of the Merger, and will be
indemnified against certain liabilities that may arise from activities related
to our engagement.
In connection with this opinion, we have, among other things, reviewed
certain publicly available information regarding the Company and TCF. In
addition, we have reviewed certain confidential financial, operating and other
information supplied to us by the Company and TCF. We have visited the corporate
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offices of both the Company and TCF and made inquiries of management regarding
the past and current business operations, financial condition, and future
prospects of each company. We have reviewed the Merger Agreement and selected
other documents related to the Merger. In addition, we have held discussions
with the senior management of both companies to understand their respective
reasons for completing the Merger.
We have analyzed the historical reported market prices and trading activity
of the common stock of both companies. We have compared financial and stock
market information on the Company and TCF to similar information for certain
publicly traded companies in the financial services industry. We have also
reviewed, to the extent publicly available, the terms of selected relevant
mergers and acquisitions, analyzed the general economic outlook for companies in
the financial services industry, and performed other studies and analyses as we
considered appropriate.
In conducting our review and in rendering our opinion, we have assumed and
relied upon the accuracy and completeness of the financial and other information
provided to us or publicly available and we have not assumed any responsibility
for independent verification of such information. It is understood that we were
retained by the Board of Directors of the Company, and that the Board of
Directors has not looked to us for independent verification with respect to the
financial and other information provided to us or publicly available, including
the projections provided to us relating to the Company. We have further relied
upon the assurances of management of the Company that they are not aware of any
facts that would make the information supplied to us, or publicly available,
inaccurate or misleading.
Our opinion as expressed herein is limited to the fairness to common
stockholders of the Company, from a financial point of view, of the
consideration to be received by such stockholders in connection with the Merger,
and does not address the Company's underlying business decision to proceed with
the Merger. We were not asked to solicit, and did not solicit, proposals from
other parties regarding a merger or acquisition of the Company. We did not make
an independent appraisal of the assets or liabilities of the Company or TCF, and
we do not express an opinion regarding the liquidation value or solvency of
either company or the regulatory compliance of TCF. Our opinion is based solely
on information available to us on or before the date hereof, and reflects
general market, economic, financial, monetary, and other conditions as of such
date.
This opinion is for the Board of Directors of the Company only and does not
constitute a recommendation to any stockholder of the Company as to how such
stockholder should vote at the stockholders' meeting to be held in connection
with the Merger. Also, our opinion may not be reproduced, quoted, published, or
referred to in any manner, nor be used for any other purposes, without our prior
written consent. This opinion confirms our opinion delivered orally to the Board
of Directors of the Company on February 26, 1997.
Based upon the foregoing, and other matters that we considered relevant, it
is our opinion that, as of the date hereof, the consideration to be received by
the common stockholders of the Company pursuant to the terms of the Merger is
fair to such stockholders from a financial point of view.
Very truly yours,
DAIN BOSWORTH INCORPORATED
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APPENDIX D
MINNESOTA BUSINESS CORPORATIONS ACT
302A.471. RIGHTS OF DISSENTING STOCKHOLDERS
Subd. 1. ACTIONS CREATING RIGHTS. A stockholder of a corporation may
dissent from, and obtain payment for the fair value of the stockholder's shares
in the event of, any of the following corporate actions:
(a) An amendment of the articles that materially and adversely affects the
rights or preferences of the shares of the dissenting stockholder in that it:
(1) alters or abolishes a preferential right of the shares;
(2) creates, alters, or abolishes a right in respect of the redemption of
the shares, including a provision respecting a sinking fund for the redemption
or repurchase of the shares;
(3) alters or abolishes a preemptive right of the holder of the shares to
acquire shares, securities other than shares, or rights to purchase shares or
securities other than shares;
(4) excludes or limits the right of a stockholder to vote on a matter, or to
cumulate votes, except as the right may be excluded or limited through the
authorization or issuance of securities of an existing or new class or series
with similar or different voting rights; except that an amendment to the
articles of an issuing public corporation that provides that section 302A.671
does not apply to a control share acquisition does not give rise to the right to
obtain payment under this section;
(b) A sale, lease, transfer, or other disposition of all or substantially
all of the property and assets of the corporation, but not including a
transaction permitted without stockholder approval in section 302A.661,
subdivision 1, or a disposition in dissolution described in section 302A.725,
subdivision 2, or a disposition pursuant to an order of a court, or a
disposition for cash on terms requiring that all or substantially all of the net
proceeds of disposition be distributed to the stockholders in accordance with
their respective interests within one year after the date of disposition;
(c) A plan of merger, whether under this chapter or under chapter 322B, to
which the corporation is a party, except as provided in subdivision 3;
(d) A plan of exchange, whether under this chapter or under chapter 322B, to
which the corporation is a party as the corporation whose shares will be
acquired by the acquiring corporation, if the shares of the stockholder are
entitled to be voted on the plan; or
(e) Any other corporate action taken pursuant to a stockholder vote with
respect to which the articles, the bylaws, or a resolution approved by the board
directs that dissenting stockholders may obtain payment for their shares.
Subd. 2. BENEFICIAL OWNERS. (a) A stockholder shall not assert dissenters'
rights as to less than all of the shares registered in the name of the
stockholder, unless the stockholder dissents with respect to all of the shares
that are beneficially owned by another person but registered in the name of the
stockholder and discloses the name and address of each beneficial owner on whose
behalf the stockholder dissents. In that event, the rights of the dissenter
shall be determined as if the shares as to which the stockholder has dissented
and the other shares were registered in the names of different stockholders.
(b) The beneficial owner of shares who is not the stockholder may assert
dissenters' rights with respect to shares held on behalf of the beneficial
owner, and shall be treated as a dissenting stockholder under the terms of this
section and section 302A.473, if the beneficial owner submits to the corporation
at the time of or before the assertion of the rights a written consent of the
stockholder.
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Subd. 3. RIGHTS NOT TO APPLY. Unless the articles, the bylaws, or a
resolution approved by the board otherwise provide, the right to obtain payment
under this section does not apply to a stockholder of the surviving corporation
in a merger, if the shares of the stockholder are not entitled to be voted on
the merger.
Subd. 4. OTHER RIGHTS. The stockholders of a corporation who have a right
under this section to obtain payment for their shares do not have a right at law
or in equity to have a corporate action described in subdivision 1 set aside or
rescinded, except when the corporate action is fraudulent with regard to the
complaining stockholder or the corporation.
302A.473. PROCEDURES FOR ASSERTING DISSENTERS' RIGHTS
Subd. 1. DEFINITIONS. (a) For purposes of this section, the terms defined
in this subdivision have the meanings given them.
(b) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action referred to in section 302A.471, subdivision 1 or the
successor by merger of that issuer.
(c) "Fair value of the shares" means the value of the shares of a
corporation immediately before the effective date of the corporate action
referred to in section 302A.471, subdivision 1.
(d) "Interest" means interest commencing five days after the effective date
of the corporate action referred to in section 302A.471, subdivision 1, up to
and including the date of payment, calculated at the rate provided in section
549.09 for interest on verdicts and judgments.
Subd. 2. NOTICE OF ACTION. If a corporation calls a stockholder meeting at
which any action described in section 302A.471, subdivision 1 is to be voted
upon, the notice of the meeting shall inform each stockholder of the right to
dissent and shall include a copy of section 302A.471 and this section and a
brief description of the procedure to be followed under these sections.
Subd. 3. NOTICE OF DISSENT. If the proposed action must be approved by the
stockholders, a stockholder who wishes to exercise dissenters' rights must file
with the corporation before the vote on the proposed action a written notice of
intent to demand the fair value of the shares owned by the stockholder and must
not vote the shares in favor of the proposed action.
Subd. 4. NOTICE OF PROCEDURE; DEPOSIT OF SHARES. (a) After the proposed
action has been approved by the board and, if necessary, the stockholders, the
corporation shall send to all stockholders who have complied with subdivision 3
and to all stockholders entitled to dissent if no stockholder vote was required,
a notice that contains:
(1) The address to which a demand for payment and certificates of
certificated shares must be sent in order to obtain payment and the date by
which they must be received;
(2) Any restrictions on transfer of uncertificated shares that will
apply after the demand for payment is received;
(3) A form to be used to certify the date on which the stockholder, or
the beneficial owner on whose behalf the stockholder dissents, acquired the
shares or an interest in them and to demand payment; and
(4) A copy of Section 302A.471 and this section and a brief description
of the procedures to be followed under these sections.
(b) In order to receive the fair value of the shares, a dissenting
stockholder must demand payment and deposit certificated shares or comply with
any restrictions on transfer of uncertificated shares within 30 days after the
notice required by paragraph (a) was given, but the dissenter retains all other
rights of a stockholder until the proposed action takes effect.
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Subd. 5. PAYMENT; RETURN OF SHARES. (a) After the corporate action takes
effect, or after the corporation receives a valid demand for payment, whichever
is later, the corporation shall remit to each dissenting stockholder who has
complied with subdivisions 3 and 4 the amount the corporation estimates to be
the fair value of the shares, plus interest, accompanied by:
(1) The corporation's closing balance sheet and statement of income for
a fiscal year ending not more than 16 months before the effective date of
the corporate action, together with the latest available interim financial
statements;
(2) An estimate by the corporation of the fair value of the shares and a
brief description of the method used to reach the estimate; and
(3) A copy of Section 302A.471 and this section, and a brief description
of the procedure to be followed in demanding supplemental payment.
(b) The corporation may withhold the remittance described in paragraph (a)
from a person who was not a stockholder on the date the action dissented from
was first announced to the public or who is dissenting on behalf of a person who
was not beneficial owner on that date. If the dissenter has complied with
subdivisions 3 and 4, the corporation shall forward to the dissenter the
materials described in paragraph (a), a statement of the reason for withholding
the remittance, and an offer to pay to the dissenter the amount listed in the
materials if the dissenter agrees to accept that amount in full satisfaction.
The dissenter may decline the offer and demand payment under subdivision 6.
Failure to do so entitles the dissenter only to the amount offered. If the
dissenter makes demand, subdivisions 7 and 8 apply.
(c) If the corporation fails to remit payment within 60 days of the deposit
of certificates or the imposition of transfer restrictions on uncertificated
shares, it shall return all deposited certificates and cancel all transfer
restrictions. However, the corporation may again give notice under subdivision 4
and require deposit or restrict transfer at a later time.
Subd. 6. SUPPLEMENTAL PAYMENT; DEMAND. If a dissenter believes that the
amount remitted under subdivision 5 is less than the fair value of the shares
plus interest, the dissenter may give written notice to the corporation of the
dissenter's own estimate of the fair value of shares, plus interest, within 30
days after the corporation mails the remittance under subdivision 5, and demand
payment of the difference. Otherwise, a dissenter is entitled only to the amount
remitted by the corporation.
Subd. 7. PETITION; DETERMINATION. If the corporation receives a demand
under subdivision 6, it shall, within 60 days after receiving the demand, either
pay to the dissenter the amount demanded or agreed to by the dissenter after
discussion with the corporation or file in court a petition requesting that the
court determine the fair value of the shares, plus interest. The petition shall
be filed in the county in which the registered office of the corporation is
located, except that a surviving foreign corporation that receives a demand
relating to the shares of a constituent domestic corporation shall file the
petition in the county in this state in which the last registered office of the
constituent corporation was located. The petition must name as parties all
dissenters who have demanded payment under subdivision 6 and who have not
reached agreement with the corporation. The corporation shall, after filing the
petition, serve all parties with a summons and copy of the petition under the
rules of civil procedure. Nonresidents of this state may be served by registered
or certified mail or by publication as provided by law. Except as otherwise
provided, the rules of civil procedure apply to this proceeding. The
jurisdiction of the court is plenary and exclusive. The court may appoint
appraisers, with powers and authorities the court deems proper, to receive
evidence on and recommend the amount of the fair value of the shares. The court
shall determine whether the stockholder or stockholders in question have fully
complied with the requirements of this section, and shall determine the fair
value of the shares, taking into account any and all factors the court finds
relevant, computed by any method or combination of methods that the court, in
its discretion, sees fit to use, whether or not used by the corporation or by a
dissenter. The fair value of the shares as determined by the court is binding on
all stockholders, wherever located. A dissenter is entitled to judgment for cash
for the
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amount by which the fair value of the shares as determined by the court, plus
interest, exceeds the amount, if any, remitted under subdivision 5, but shall
not be liable to the corporation for the amount, if any, by which the amount, if
any, remitted to the dissenter under subdivision 5 exceeds the fair value of the
shares as determined by the court, plus interest.
Subd. 8. COSTS; FEES; EXPENSES. (a) The court shall determine the costs
and expenses of a proceeding under subdivision 7, including the reasonable
expenses and compensation of any appraisers appointed by the court, and shall
assess those costs and expenses against the corporation, except that the court
may assess part or all of those costs and expenses against a dissenter whose
action in demanding payment under subdivision 6 is found to be arbitrary,
vexatious, or not in good faith.
(b) If the court finds that the corporation has failed to comply
substantially with this section, the court may assess all fees and expenses of
any experts or attorneys as the court deems equitable. These fees and expenses
may also be assessed against a person who has acted arbitrarily, vexatiously, or
not in good faith in bringing the proceeding, and may be awarded to a party
injured by those actions.
(c) The court may award, in its discretion, fees and expenses to an attorney
for the dissenters out of the amount awarded to the dissenters, if any.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
LIMITATION OF LIABILITY
As permitted by Section 102(b)(7) of the DGCL, Article 12 of the Restated
Certificate of Incorporation of TCF provides that a director of TCF shall not be
personally liable to TCF or its stockholders for monetary damages for breach of
fiduciary duty as a director, except: (i) for any breach of the director's duty
of loyalty to TCF or its stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the DGCL; or (iv) for any transaction from which the
director derived any improper personal benefit. If the DGCL is amended to
further eliminate or limit the personal liability of directors, then the
liability of a director of TCF shall be eliminated or limited to the fullest
extent permitted by the DGCL, as so amended.
INDEMNIFICATION
Section 145 of the DGCL provides:
a. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe that his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
b. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
c. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
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d. Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
stockholders.
e. Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the board of directors deems appropriate.
f. The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
g. A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
h. For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
i. For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
j. The indemnification and advancement of expenses provided by, or granted
pursuant to this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
k. The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw,
II-2
<PAGE>
agreement, vote of stockholders or disinterested directors, or otherwise. The
Court of Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees).
As set forth above, Section 145 of the DGCL authorizes a corporation to
indemnify directors, officers, employees and agents in certain circumstances and
under certain conditions. While the Board of Directors of TCF may act separately
under this grant of authority, its Certificate of Incorporation specifically
addresses indemnification in accordance with the DGCL.
Article 13 of the TCF Certificate generally provides that TCF shall
indemnify, to the fullest extent authorized by the DGCL as the same exists or
may hereafter be amended (but, in the case of any such amendment to the DGCL,
the right to indemnification shall be retroactive only to the extent that such
amendment permits TCF to provide broader indemnification rights than such law
prior to such amendment permitted TCF to provide), any person who was or is a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal or administrative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director or
officer of TCF or a subsidiary thereof or is or was serving at the request of
TCF as a director, officer, partner, member or trustee of another corporation,
partnership, joint venture, trust or other enterprise including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, partner, member
or trustee or in any other capacity while so serving, against all expense,
liability, and loss (including attorneys' fees, judgments, fines, and amounts
paid or to be paid in settlement of a proceeding) reasonably incurred by such
person in connection with such proceeding.
Article 13 provides that in the case of any amendment to the DGCL, the right
to indemnification shall be retroactive only to the extent that such amendment
permits TCF to provide broader indemnification rights than such law prior to
such amendment permitted TCF to provide.
Article 13 authorizes a person who has brought a claim under such Article to
bring suit against TCF for payment of a claim which has not been paid within 30
days after a written claim has been received in writing by TCF. It shall be a
defense to such an action that the claimant has not met the standards of conduct
that make it permissible under the DGCL for TCF to indemnify the claimant. The
burden of proving such a defense shall be on TCF.
Costs, charges and expenses (including attorneys' fees) incurred by a person
referred to in Article 13 in defending a civil or criminal action, suit or
proceeding shall be paid by TCF in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay all amounts so advanced in the event that it is
ultimately determined that such director or officer is not entitled to be
indemnified by TCF.
The indemnification provided by Article 13 is not exclusive of any other
rights to which any director, officer, employee or agent seeking indemnification
may be entitled under any law, vote of stockholders or disinterested directors
or otherwise, both as to action in his or her official capacity and as to action
in another capacity while holding office or while employed by or acting as agent
for TCF; and shall continue as to a person who has ceased to be a director,
officer, employee or agent, and shall inure to the benefit of the estate, heirs,
executors and administrators of such person. All rights to indemnification under
Article 13 are deemed to be a contract right.
Article 13 authorizes TCF to maintain insurance to protect itself and any
director, officer, employee, or agent of TCF or other entity against any
expense, liability or loss, whether or not TCF would have the power to indemnify
such person against expense, liability or loss under the DGCL.
Article 13 provides that any repeal or modification of the provisions of the
Article shall not adversely affect any right or protection provided by the
Article to any person in respect of any act or omission occurring prior to the
time of such repeal or modification. Article 13 also provides that if the
Article or any portion thereof shall be invalidated by any court of competent
jurisdiction, TCF shall nevertheless
II-3
<PAGE>
indemnify each director or officer of TCF to the full extent permitted by an
applicable portion of the Article that shall not have been invalidated and to
the full extent permitted by applicable law.
Article VII of the TCF Bylaws generally provides that TCF may indemnify
persons who serve as employees or agents of TCF or a subsidiary thereof or of
another entity at the request of TCF to the fullest extent authorized by the
DGCL.
In addition, TCF maintains an insurance policy that insures directors and
officers against certain liabilities.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
a) Exhibits
See Index to Exhibits at page II-8.
b) Financial Statement Schedules
None.
c) Reports, Opinions and Appraisals Materially Relating to the Transaction
Opinion of Piper Jaffray Inc. (included in Joint Proxy
Statement/Prospectus as Appendix B).
Opinion of Dain Bosworth Incorporated (included in Joint Proxy
Statement/Prospectus as
Appendix C).
ITEM 22. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act, and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement; Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or height end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement. Notwithstanding the
foregoing, any increase or
II-4
<PAGE>
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
The registrant undertakes that every prospectus (i) that is filed pursuant
to paragraph (1) immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Securities Act of 1933 and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of the receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant certifies
it has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Minneapolis, State of
Minnesota, on April 25, 1997.
TCF FINANCIAL CORPORATION
By: /s/ WILLIAM A. COOPER
-----------------------------------------
William A. Cooper, CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER AND DIRECTOR
By: /s/ RONALD J. PALMER
-----------------------------------------
Ronald J. Palmer, CHIEF FINANCIAL OFFICER
AND TREASURER (PRINCIPAL FINANCIAL
OFFICER)
By: /s/ MARK R. LUND
-----------------------------------------
Mark R. Lund, ASSISTANT TREASURER AND
CONTROLLER (PRINCIPAL ACCOUNTING OFFICER)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
* Chairman of the Board,
- ------------------------------ Chief Executive Officer April 24, 1997
William A. Cooper and Director
* Vice Chairman of the
- ------------------------------ Board, Chief Operating April 24, 1997
Thomas A. Cusick Officer and Director
*
- ------------------------------ Vice Chairman of the Board April 24, 1997
Robert E. Evans and Director
*
- ------------------------------ President and Director April 24, 1997
Lynn A. Nagorske
- ------------------------------ Director
Bruce G. Allbright
*
- ------------------------------ Director April 24, 1997
Rudy E. Boschwitz
- ------------------------------ Director
Robert J. Delonis
- ------------------------------ Director
John M. Eggemeyer, III
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
- ------------------------------ Director
Luella G. Goldberg
- ------------------------------ Director
Daniel F. May
*
- ------------------------------ Director April 24, 1997
Thomas J. McGough
- ------------------------------ Director
Mark K. Rosenfeld
*
- ------------------------------ Director April 24, 1997
Ralph Strangis
- ------------------------------ Director
Ronald A. Ward
*
- ------------------------------ Director April 24, 1997
William F. Bieber
</TABLE>
Gregory J. Pulles, pursuant to Powers of Attorney executed by each of the
officers and directors listed above whose name is marked by an asterisk and
filed as an exhibit hereto, by signing his name hereto does hereby sign and
execute this Registration Statement of TCF Financial Corporation on behalf of
each of such officers and directors in the capacities in which the names of each
appear above.
<TABLE>
<S> <C> <C> <C>
/s/ GREGORY J. PULLES
------------------------------------------ April 24, 1997
By: Gregory J. Pulles
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------- ------------------------------------------------------------------------------------------------
<C> <S> <C>
2 Agreement and Plan of Reorganization dated February 28, 1997 [incorporated by reference to
Exhibit 2.1 to TCF Financial Corporation's Current Report on Form 8-K, dated March 5, 1997,
No. 0-16431 (filed March 5, 1997)]
3 (a) Restated Certificate of Incorporation of TCF Financial Corporation, as amended [incorporated by
reference to Exhibit 3(a) to TCF Financial Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, No. 0-16431]
3 (b) Bylaws of TCF Financial Corporation, as amended [incorporated by reference to Exhibit 3(b) to
TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995, No. 0-16431]
4 (a) Rights Agreement, dated as of May 23, 1989, between TCF Financial Corporation and Manufacturers
Hanover Trust Company [incorporated by reference to Exhibit 1 to TCF Financial Corporation's
Registration Statement on Form 8-A, No. 0-16431 (filed May 25, 1989)], as amended October 1,
1995 [incorporated by reference to Exhibit 4(a) to TCF Financial Corporation's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1995, No. 0-16431 (filed November 14,
1995)]
4 (b) Indenture dated March 1, 1986 between Great Lakes Federal Savings Association and J. Henry
Schroder Bank & Trust Company [incorporated by reference to Exhibit 4.4 to TCF Financial
Corporation's Registration Statement on Form S-4, No. 33-56137 (filed December 12, 1994)], as
amended by First Supplemental Indenture dated February 8, 1995 [incorporated by reference to
Exhibit 4(b) to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, No. 0-16431]
4 (c) Indenture dated July 1, 1996 relating to 9.5% Senior Notes due 2003 between Winthrop Resources
Corporation ("Winthrop") and Norwest Bank Minnesota, National Association, as Trustee
[incorporated by reference to Exhibit 4.5 to Winthrop's Registration Statement on Form S-2,
File No. 333-04539 (filed May 24, 1996)].
5 Opinion of Kaplan, Strangis and Kaplan, P.A. regarding validity of shares (filed electronically
herewith)
8 Opinion of KPMG Peat Marwick LLP as to certain tax matters (to be filed by amendment)
10 (a) Stock Option and Incentive Plan of TCF Financial Corporation, as amended [the Plan and First
Amendment to the Plan incorporated by reference to Exhibit 10.1 to TCF Financial Corporation's
Registration Statement on Form S-4, No. 33-14203 (filed May 12, 1987), Second Amendment, Third
Amendment and Fourth Amendment to the Plan incorporated by reference to Exhibit 10(a) to TCF
Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1987, No. 0-16431; Fifth Amendment to the Plan incorporated by reference to Exhibit 10(a) to
TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1989, No. 0-16431; amendment dated January 21, 1991, incorporated by reference to Exhibit
10(a) to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, No. 0-16431, and as further amended by amendment dated January 28, 1992 and
amendment dated March 23, 1992 (effective April 15, 1992), incorporated by reference to
Exhibit 10(a) to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1991, No. 0-16431]
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------- ------------------------------------------------------------------------------------------------
<C> <S> <C>
10 (b) TCF Financial 1995 Incentive Stock Program, as amended October 1, 1995 [incorporated by
reference to Exhibit 10(b) to TCF Financial Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, No. 0-16431] amendment dated October 22, 1996
[incorporated by reference to Exhibit 10(b) to TCF Financial Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996, No. 0-16431]
10 (c) Amended and Restated TCF Financial Corporation Executive Deferred Compensation Plan
[incorporated by reference to Plan filed with registrant's definitive proxy statement dated
March 16, 1994, No. 0-16431] amendments dated July 23, 1996 and October 22, 1996 [incorporated
by reference to Exhibit 10(c) to TCF Financial Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, No. 0-16431]
10 (d) Trust Agreement for TCF Financial Corporation Executive Deferred Compensation Plan, as amended
[the Trust Agreement incorporated by reference to Exhibit 10(c) to TCF Financial Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31, 1989, No. 0-16431; amendment
effective April 1, 1991, incorporated by reference to Exhibit 10(c) to TCF Financial
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1990, No.
0-16431, and as further amended by amendment dated March 23, 1992, incorporated by reference
to Exhibit 10(c) to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1991, No. 0-16431]; amendment dated July 23, 1996 [incorporated by
reference to Exhibit 10(d) to TCF Financial Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, No. 0-16431]
10 (e) Employment Agreement of William A. Cooper, dated June 24, 1996 [incorporated by reference to
Exhibit 10(a) to TCF Financial Corporation's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, No. 0-16431]; amendment dated March 1, 1997 [incorporated by reference to
Exhibit 10(e) to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, No. 0-16431]
10 (f) Change in Control Agreement of William A. Cooper, dated June 24, 1996 [incorporated by reference
to Exhibit 10(b) to TCF Financial Corporation's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, No. 0-16431]
10 (g) Severance Agreement of Thomas A. Cusick, dated August 22, 1988 [incorporated by reference to
Exhibit 19(c) to TCF Financial Corporation's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1988, No. 0-16431], amendment thereto dated December 4, 1990 [incorporated
by reference to Exhibit 10(f) to TCF Financial Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1990, No. 0-16431], and amendment dated October 24, 1995
[incorporated by reference to Exhibit 10(f) to TCF Financial Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, No. 0-16431]
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------- ------------------------------------------------------------------------------------------------
<C> <S> <C>
10 (h) Severance Agreement of William E. Dove, dated August 22, 1988 [incorporated by reference to
Exhibit 19(d) to TCF Financial Corporation's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1988, No. 0-16431], amendment thereto dated December 4, 1990 [incorporated
by reference to Exhibit 10(g) to TCF Financial Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1990, No. 0-16431], and amendment thereto dated October 24,
1995 [incorporated by reference to Exhibit 10(g) to TCF Financial Corporation's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, No. 0-16431]
10 (i) Severance Agreement of Robert E. Evans, dated August 23, 1988 [incorporated by reference to
Exhibit 19(e) to TCF Financial Corporation's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1988, No. 0-16431], amendment thereto dated December 4, 1990 [incorporated
by reference to Exhibit 10(h) to TCF Financial Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1990, No. 0-16431], and amendment thereto dated October 24,
1995 [incorporated by reference to Exhibit 10(h) to TCF Financial Corporation's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, No. 0-16431]
10 (j) Severance Agreement of Lynn A. Nagorske, dated August 22, 1988 [incorporated by reference to
Exhibit 19(f) to TCF Financial Corporation's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1988, No. 0-16431], amendment thereto dated December 4, 1990 [incorporated
by reference to Exhibit 10(i) to TCF Financial Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1990, No. 0-16431], and amendment thereto dated October 24,
1995 [incorporated by reference to Exhibit 10(i) to TCF Financial Corporation's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, No. 0-16431]
10 (k) Severance Agreement of Gregory J. Pulles, dated August 23, 1988 [incorporated by reference to
Exhibit 19(g) to TCF Financial Corporation's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1988, No. 0-16431], amendment thereto dated December 4, 1990 [incorporated
by reference to Exhibit 10(j) to TCF Financial Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1990, No. 0-16431], and amendment thereto dated October 24,
1995 [incorporated by reference to Exhibit 10(j) to TCF Financial Corporation's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, No. 0-16431]
10 (l) Severance Agreement of James E. Tuite, dated August 23, 1988 [incorporated by reference to
Exhibit 19(i) to TCF Financial Corporation's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1988, No. 0-16431], amendment thereto dated December 4, 1990 [incorporated
by reference to Exhibit 10(l) to TCF Financial Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1990, No. 0-16431], and amendment thereto dated October 24,
1995 [incorporated by reference to Exhibit 10(k) to TCF Financial Corporation's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, No. 0-16431]
10 (m) Severance Agreement of Barry N. Winslow, dated December 30, 1988 and amendment thereto dated
December 4, 1990 [incorporated by reference to Exhibit 10(n) to TCF Financial Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31, 1990, No. 0-16431], and
amendment thereto dated October 24, 1995 [incorporated by reference to Exhibit 10(m) to TCF
Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995, No. 0-16431]
</TABLE>
II-10
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------- ------------------------------------------------------------------------------------------------
<C> <S> <C>
10 (n) Supplemental Employee Retirement Plan, as amended [the Plan, as amended by amendment dated
September 21, 1989 (effective January 1, 1990) incorporated by reference to Exhibit 10(n) to
TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1989, No. 0-16431; amendment dated July 31, 1990 (effective August 31, 1990) incorporated by
reference to Exhibit 10(o) to TCF Financial Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990, No. 0-16431; amendment dated June 26, 1994 incorporated
by reference to Exhibit 10(n) to TCF Financial Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994, No. 0-16431; amendment dated October 22, 1996
incorporated by reference to Exhibit 10(n) to TCF Financial Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996, No. 0-16431]
10 (o) Trust Agreement for TCF Financial Corporation Supplemental Employee Retirement Plan, dated
August 21, 1991 [incorporated by reference to Exhibit 10.16 to TCF Financial Corporation's
Registration Statement on Form S-2, filed November 15, 1991, No. 33-43988]
10 (p) TCF Financial Corporation Senior Officer Deferred Compensation Plan [the Plan incorporated by
reference to Exhibit 10(o) to TCF Financial Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, No. 0-16431; amendment effective April 1, 1991,
incorporated by reference to Exhibit 10(p) to TCF Financial Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990, No. 0-16431; amendments dated June 26,
1994, December 18, 1994 and January 23, 1995 incorporated by reference to Exhibit 10(p) to TCF
Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1994, No. 0-16431; amendments dated July 23, 1996 and October 22, 1996 incorporated by
reference to Exhibit 10(p) to TCF Financial Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, No. 0-16431]
10 (q) Trust Agreement for TCF Financial Corporation Senior Officer Deferred Compensation Plan
[incorporated by reference to Exhibit 10(p) to TCF Financial Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1989, No. 0-16431; amendment effective April
1, 1991, incorporated by reference to Exhibit 10(q) to TCF Financial Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990, No. 0-16431; amendment dated
December 18, 1994 incorporated by reference to Exhibit 10(q) to TCF Financial Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, No. 0-16431; amendment
dated July 23, 1996 incorporated by reference to Exhibit 10(q) to TCF Financial Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996, No. 0-16431]
10 (r) Directors Stock Program [incorporated by reference to Program filed with registrant's definitive
proxy statement dated March 22, 1996, No. 0-16431]
10 (s) Management Incentive Plan-Executive [incorporated by reference to Plan filed with registrant's
definitive proxy statement dated March 16, 1994, No. 0-16431], 1995 Plan Acknowledgment
[incorporated by reference to Exhibit 10(s) to TCF Financial Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, No. 0-16431], and 1997 Plan
Acknowledgement [incorporated by reference to Exhibit 10(t) to TCF Financial Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996, No. 0-16431]
</TABLE>
II-11
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------- ------------------------------------------------------------------------------------------------
<C> <S> <C>
10 (t) 1996 Performance-Based Incentive Policy [incorporated by reference to Policy filed with
registrant's definitive proxy statement dated March 22, 1996, No. 0-16431], 1996 Management
Incentive Plan-Executive [incorporated by reference to Exhibit 10(t) to TCF Financial
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, No.
0-16431], Incentive Compensation 1997 Plan [incorporated by reference to Plan filed with
registrant's definitive proxy statement dated March 17, 1997, No. 0-16431]
10 (u) Supplemental Pension Agreement with James E. Tuite, dated June 27, 1991 [incorporated by
reference to Exhibit 10.21 to TCF Financial Corporation's Registration Statement on Form S-4,
No. 33-57290 (filed January 22, 1993)]
10 (v) Supplemental Pension Agreement with Robert E. Evans, dated July 9, 1991 [incorporated by
reference to Exhibit 10.22 to TCF Financial Corporation's Registration Statement on Form S-4,
No. 33-57290 (filed January 22, 1993)]
10 (w) Employment Agreement of Robert J. Delonis, dated February 9, 1995 [incorporated by reference to
Exhibit 10(v) to TCF Financial Corporation's Annual Report on Form 10-K, No. 0-16431 (filed
March 30, 1995)], as amended December 18, 1995 [incorporated by reference to Exhibit 10(w) to
TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995, No. 0-16431]
10 (x) TCF Directors Deferred Compensation Plan [incorporated by reference to Plan filed with
registrant's definitive proxy statement dated March 15, 1995, No. 0-16431] and amendment dated
October 22, 1996 [incorporated by reference to Exhibit 10(x) to TCF Financial Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996, No. 0-16431]
10 (y) TCF Directors Retirement Plan dated October 24, 1995 [incorporated by reference to Exhibit 10(y)
to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December
31, 1995, No. 0-16431]
10 (z) Employment Agreement between John L. Morgan and Winthrop dated November 6, 1996 [incorporated by
reference to Exhibit 10.8 to Winthrop Resources Corporation's Annual Report for the fiscal
year ended December 31, 1996, No. 0-20123 (filed March 31, 1997)]
10 (aa) Employment Agreement between Kirk A. MacKenzie and Winthrop dated November 6, 1996 [incorporated
by reference to Exhibit 10.8 to Winthrop Resources Corporation's Annual Report for the fiscal
year ended December 31, 1996, No. 0-20123 (filed March 31, 1997)]
10 (bb) Employment Agreement between Jack A. Norqual and Winthrop dated November 6, 1996 [incorporated
by reference to Exhibit 10.8 to Winthrop Resources Corporation's Annual Report for the fiscal
year ended December 31, 1996, No. 0-20123 (filed March 31, 1997)]
10 (cc) Employment Agreement between Robert P. Murphy and Winthrop dated November 6, 1996 [incorporated
by reference to Exhibit 10.8 to Winthrop Resources Corporation's Annual Report for the fiscal
year ended December 31, 1996, No. 0-20123 (filed March 31, 1997)]
</TABLE>
II-12
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------- ------------------------------------------------------------------------------------------------
<C> <S> <C>
10 (dd) Office Lease Agreement dated January 15, 1987 between Winthrop and Alscor Investors Joint
Venture, as amended in Amendment No. 1 dated August 11, 1988; Amendment No. 2 dated February
28, 1990; Amendment No. 3 dated June 1, 1991 and Amendment No. 4 dated October 16, 1991
[incorporated by reference to Exhibit 10.2 to Winthrop's Registration Statement on Form S-1,
File No. 33-47435 (filed April 24, 1992) ("Winthrop's 1992 Registration Statement")]
10 (ee) Agreement and Plan of Reorganization by and between TCF Financial Corporation and Standard
Financial, Inc. dated March 16, 1997 [incorporated by reference to Exhibit 2.1 to Current
Report of TCF Financial Corporation on Form 8-K, dated March 21, 1997, No. 0-16431 (filed
March 21, 1997)]
10 (ff) Winthop 1992 Stock Incentive Plan [incorporated by reference to Exhibit 10.1 to Winthrop's 1992
Registration Statement]
11 (a) Statement regarding computation of earnings per common share (filed electronically herewith)
11 (b) Statement regarding computation of earnings per common share (filed electronically herewith)
13 Financial Statements of Standard Financial, Inc. ("Standard") for the year ended December 31,
1996 included in Item 14(a)(1) of Standard's Report on Form 10-K for the year ended December
31, 1996 (Commission File No. 0-24082) are hereby incorporated by reference.
21 Subsidiaries of TCF Financial Corporation (to be filed by amendment)
23 (a) Consents of KPMG Peat Marwick LLP dated April 21, 1997 (filed electronically herewith)
23 (b) Consent of Ernst & Young LLP dated April 23, 1997 (filed electronically herewith)
23 (c) Consent of Kaplan, Strangis and Kaplan, P.A. (included in Exhibit 5)
23 (d) Consent of Piper Jaffray Inc. (filed electronically herewith)
23 (e) Consent of Dain Bosworth Incorporated (filed electronically herewith)
24 Powers of Attorney (filed electronically herewith)
99 (a) Form of Proxy Card for Special Meeting of Stockholders of Winthrop Resources Corporation to be
held on June 24, 1997 (filed electronically herewith)
99 (b) Form of Proxy Card for Special Meeting of Stockholders of TCF Financial Corporation to be held
on June 24, 1997 (filed electronically herewith)
99 (c) Winthrop's Restated Articles of Incorporation [incorporated by reference to Exhibit 3.1 to
Winthrop's 1992 Registration Statement]
99 (d) Winthrop's Restated Bylaws, as amended on May 4, 1994 [incorporated by reference to Exhibit 3.2
to Winthrop's 1992 Registration Statement on Form S-8, File No. 33-80056 (filed June 8, 1994)]
</TABLE>
II-13
<PAGE>
EXHIBIT 5
Opinion of Kaplan, Strangis and Kaplan, P.A.
<PAGE>
[LETTERHEAD]
April 24, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street NW
Washington, D.C. 20549
Re: TCF Financial Corporation
Form S-4 Registration Statement (the "Registration Statement")
in connection with the Agreement and Plan of Reorganization
dated February 28, 1997 with Winthrop Resources Corporation
Ladies and Gentlemen:
This opinion is furnished in connection with the Registration Statement
on Form S-4 (the "Registration Statement") filed with the Securities and
Exchange Commission by TCF Financial Corporation (the "Company") covering up
to 7,050,000 shares of common stock, par value $.01 (the "Common Stock"),
reserved for issuance in connection with the transactions contemplated by the
Agreement and Plan of Reorganization dated February 28, 1997 between the
Company and Winthrop Resources Corporation (the "Merger Agreement").
We have acted as counsel to the Company and, as such, have examined the
Company's Certificate of Incorporation (including amendments thereto), Bylaws
and such other corporate records and documents as we have considered relevant
and necessary for the purpose of this opinion. We have participated in the
preparation and filing of the Registration Statement. We are familiar with
the proceedings taken by the Company with respect to the authorization and
proposed issuance of shares of Common Stock pursuant to the Merger Agreement
as contemplated by the Registration Statement.
Based on the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Delaware.
<PAGE>
April 24, 1997
Page 3
2. The Company has corporate authority to issue the shares of Common
Stock covered by the Registration Statement.
3. The 7,050,000 shares of Common Stock proposed to be issued pursuant
to the Merger Agreement described in the Registration Statement will, when
issued, be duly and validly issued, fully paid and non-assessable.
We hereby consent to the reference to our firm in the Registration
Statement.
Sincerely,
KAPLAN, STRANGIS AND KAPLAN, P.A.
By /s/ Bruce J. Parker
-------------------------------------
Bruce J. Parker
<PAGE>
EXHIBIT 5.1
Opinion of Kaplan, Strangis and Kaplan, P.A.
<PAGE>
Exhibit 11(a) - Computation of Earnings Per Common Share
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
WINTHROP RESOURCES CORPORATION
Computation of Pro Forma Combined Earnings Per Common Share
(Dollars in thousands, except per-share data)
(Unaudited)
<TABLE>
<CAPTION>
Computation of Earnings Per Common Year Ended December 31,
Share for Statements of Operations: ---------------------------------------
- ----------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Income before extraordinary item $ 100,377 $ 73,207 $ 79,544
Less: Dividends on preferred stock -- 678 2,710
----------- ----------- -----------
Income applicable to common stock before extraordinary item $ 100,377 $ 72,529 $ 76,834
----------- ----------- -----------
----------- ----------- -----------
Weighted average number of common and common equivalent shares outstanding:
Weighted average common shares outstanding 41,605,374 41,299,756 39,728,799
Dilutive effect of stock option plans and common stock warrants after
application of treasury stock method 320,506 665,273 1,161,744
----------- ----------- -----------
41,925,880 41,965,029 40,890,543
----------- ----------- -----------
----------- ----------- -----------
Earnings per common share before extraordinary item $ 2.39 $ 1.73 $ 1.88
----------- ----------- -----------
----------- ----------- -----------
Computation of Fully Diluted Earnings
Per Common Share(1):
- --------------------------------------
Income before extraordinary item $ 100,377 $ 73,207 $ 79,544
Add: Interest expense on 7 1/4% convertible subordinated debentures 325 387 433
Less: Dividends on preferred stock -- 678 2,710
----------- ----------- -----------
Income applicable to common stock before extraordinary item $ 100,702 $ 72,916 $ 77,267
----------- ----------- -----------
----------- ----------- -----------
Weighted average number of common and common equivalent shares outstanding:
Weighted average common shares outstanding 41,605,374 41,299,756 39,728,799
Dilutive effect of stock option plans and common stock warrants after
application of treasury stock method 336,969 740,693 1,405,141
Dilutive effect from assumed conversion of 7 1/4% convertible subordinated
debentures 421,415 504,661 582,508
----------- ----------- -----------
42,363,758 42,545,110 41,716,448
----------- ----------- -----------
----------- ----------- -----------
Earnings per common share before extraordinary item $ 2.38 $ 1.71 $ 1.85
----------- ----------- -----------
----------- ----------- -----------
____________________
(1) This calculation is submitted in accordance with Regulation S-K Item 601(b)(11) although not required by footnote 2 to
paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%.
</TABLE>
<PAGE>
EXHIBIT 11(b) - COMPUTATION OF EARNINGS PER COMMON SHARE
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
WINTHROP RESOURCES CORPORATION
STANDARD FINANCIAL, INC. AND SUBSIDIARIES
Computation of Pro Forma Combined Earnings Per Common Share
(Dollars in thousands, except per-share data)
(Unaudited)
<TABLE>
<CAPTION>
Computation of Earnings Per Common
Share for Statement of Operations: Year Ended December 31,
- ---------------------------------- -----------------------
1996
-----------
<S> <C>
Income applicable to common stock before
extraordinary item $ 99,180
-----------
-----------
Weighted average number of common and common
equivalent shares outstanding:
Weighted average common shares outstanding 46,550,374
Dilutive effect of stock option plans and
common stock warrants after application
of treasury stock method 320,506
-----------
46,870,880
-----------
-----------
Earnings per common share before extraordinary item $ 2.12
-----------
-----------
Computation of Fully Diluted Earnings
Per Common Share (1):
- -------------------------------------
Income before extraordinary item $ 99,180
Add: Interest expense on 7 1/4% convertible
subordinated debentures 325
-----------
Income applicable to common stock before extraordinary
item $ 99,505
-----------
-----------
Weighted average number of common and common
equivalent shares outstanding:
Weighted average common shares outstanding 46,550,374
Dilutive effect of stock option plans and
common stock warrants after application
of treasury stock method 336,969
Dilutive effect from assumed conversion of
7 1/4% convertible subordinated debentures 421,415
-----------
47,308,758
-----------
-----------
Earnings per common share before extraordinary item $ 2.10
-----------
-----------
</TABLE>
- ------------------
(1) This calculation is submitted in accordance with Regulation S-K Item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
<PAGE>
EXHIBIT 23(a)
[LOGO] PEAT MARWICK LLP
4200 Norwest Center
80 South Seventh Street
Minneapolis, MN 55402
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
TCF Financial Corporation:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
April 21, 1997
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Winthrop Resources Corporation:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/KPMG Peat Marwick LLP
Minneapolis, Minnesota
April 21, 1997
<PAGE>
Consent of Independent Auditors
We consent to the reference of our firm under the caption "Experts" and to
the incorporation by reference in the Joint Proxy Statement of TCF Financial
Corporation and Winthrop Resources Corporation, which is referred to and made
a part of this Prospectus and Registration Statement (Form S-4) of TCF
Financial Corporation for the registration of up to 7,050,000 shares of its
common stock of our report dated January 27, 1997, with respect to the
consolidated financial statements of Standard Financial, Inc., incorporated
by reference in its Annual Report (Form 10-K) for the year ended December 31,
1996 filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
-----------------------------
ERNST & YOUNG LLP
Chicago, Illinois
April 23, 1997
<PAGE>
Exhibit 23(d)
CONSENT OF PIPER JAFFRAY INC.
Board of Directors
TCF Financial Corporation
We hereby consent to the use of our name in the Joint Proxy
Statement/Prospectus of TCF Financial Corporation and Winthrop Resources
Corporation, forming part of the Registration Statement on Form S-4 of TCF
Financial Corporation and to the inclusion of our opinion as an appendix to
such Joint Proxy Statement/Prospectus.
In giving the foregoing consent, we do not admit that we are within the
category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder, nor do we admit that we are
experts with respect to any part of such Registration Statement within the
meaning of the term "experts" as used in the Securities Act of 1933, as
amended, or the rules or regulations of the Securities and Exchange
Commission thereunder.
PIPER JAFFRAY INC.
Minneapolis, Minnesota
____________, 1997
<PAGE>
Exhibit 23(e)
CONSENT OF DAIN BOSWORTH INCORPORATED
Winthrop Resources Corporation
1015 Opus Center
9900 Bren Road East
Minnetonka, MN 55343
We hereby consent to the inclusion in the Proxy Statement/Prospectus relating
to the proposed merger of a wholly-owned subsidiary of TCF Financial
Corporation with and into Winthrop Resources Corporation of our opinion
letter dated May __, 1997 appearing as Appendix C to the Proxy
Statement/Prospectus that is part of the Registration Statement on Form S-4
of TCF Financial Corporation, and to the references to our firm name therein.
In giving such consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations adopted by
the Securities and Exchange Commission thereunder, nor do we admit that we
are experts with respect to any part of such Registration Statement within
the meaning of the term "experts" as used in the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.
Dain Bosworth Incorporated
By /s/ David Welch
------------------------------------
Minneapolis, Minnesota
April 25, 1997
<PAGE>
POWER OF ATTORNEY
I, the undersigned Director/Officer of TCF Financial Corporation, a
Delaware corporation, do hereby name, constitute and appoint Lynn A. Nagorske
and Gregory J. Pulles, and each of them, my agent and attorney-in-fact, for
me and in my behalf as a Director/Officer of TCF Financial Corporation to
sign and execute a Registration Statement on Form S-4, any pre-effective
amendments thereto and any post-effective amendments thereto, relating to the
registration with the Securities and Exchange Commission of up to 7,050,000
shares of Common Stock, par value $.01 per share, of TCF Financial
Corporation in connection with the transactions contemplated by the Agreement
and Plan of Reorganization dated February 28, 1997 by and between TCF
Financial Corporation and Winthrop Resources Corporation.
Executed in counterparts this 24th day of April, 1997.
/s/ William A. Cooper
- ------------------------------ ------------------------------
William A. Cooper, Chairman of Luella G. Goldberg
the Board, Chief Executive Director
Officer and Director
/s/ Thomas A. Cusick
- ------------------------------ ------------------------------
Thomas A. Cusick Daniel F. May
Vice Chairman of the Board Director
and Director
/s/ Robert E. Evans /s/ Thomas J. McGough
- ------------------------------ ------------------------------
Robert E. Evans Thomas J. McGough
Vice Chairman of the Board Director
and Director
/s/ Lynn A. Nagorske
- ------------------------------ ------------------------------
Lynn A. Nagorske Mark K. Rosenfeld
President Director
/s/ Ralph Strangis
- ------------------------------ ------------------------------
Bruce G. Allbright Ralph Strangis
Director Director
/s/ Rudy E. Boschwitz
- ------------------------------ ------------------------------
Rudy E. Boschwitz Ronald A. Ward
Director Director
/s/ William F. Beiber
- ------------------------------ ------------------------------
Robert J. Delonis William F. Beiber
Director Director
- ------------------------------
John M. Eggemeyer, III
Director
<PAGE>
Exhibit 99(a)
[WINR LOGO]
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
WINTHROP RESOURCES CORPORATION
SPECIAL MEETING OF STOCKHOLDERS
, 1997
The undersigned hereby appoints John L. Morgan, Kirk A. MacKenzie and Jack
A. Norqual, and each of them, as proxies, each with full power of substitution,
and hereby authorizes each of them to represent and vote all shares of Common
Stock of Winthrop Resources Corporation ("Winthrop") held of record by the
undersigned on ________________, 1997, at the Special Meeting of Stockholders
(the "Winthrop Special Meeting") to be held at ________________, Minneapolis,
Minnesota, on Tuesday, June 24, 1997 at 10:00 a.m. local time and at any and all
adjournments thereof, as set forth on the reverse side hereof.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE AND MAIL THIS
PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. ALL PROXIES ARE
IMPORTANT, SO PLEASE COMPLETE EACH PROXY SENT TO YOU AND RETURN THE PROXY IN THE
ENVELOPE PROVIDED.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS STATED. IF ANY OTHER
BUSINESS IS PRESENTED AT THE SPECIAL MEETING, THIS PROXY WILL BE VOTED BY THE
PROXIES IN THEIR DISCRETION. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE SPECIAL MEETING.
/X/ PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
- -------------------------------------------------------------------------------
<PAGE>
1. A proposal to approve and adopt the FOR AGAINST ABSTAIN
Agreement and Plan of Merger by and / / / / / /
between TCF Financial Corporation
("TCF"), and Winthrop dated as of
February 28, 1997 (the "Merger
Agreement") and the transactions
contemplated thereby. Pursuant to the
Merger Agreement, among other things,
a newly formed subsidiary of TCF
will merge with and into Winthrop,
with Winthrop as the surviving
corporation and a wholly-owned
subsidiary of TCF (the "Merger"), and
each outstanding share of Winthrop
Common Stock automatically will be
converted into and exchangeable for
0.7766 (the "Exchange Ratio") of a
share of TCF Common Stock (with cash
paid in lieu of fractional shares),
except shares of Winthrop Common
Stock as to which statutory
dissenters' rights have been exercised
and not effectively withdrawn or
otherwise lost.
<PAGE>
2. A proposal to adjourn the Winthrop FOR AGAINST ABSTAIN
Special Meeting to a later date to / / / / / /
permit further solicitation of
proxies in the event an insufficient
number of shares is present in
person or by proxy at the Winthrop
Special Meeting to approve and adopt
the Merger Agreement and the
transactions contemplated thereby.
Should the undersigned be present and elect to vote at the Winthrop
Special Meeting or at any adjournment thereof and after notification
to the Secretary of Winthrop at the Winthrop Special Meeting of the
stockholders decide to revoke this proxy, then the power of said
attorneys shall be deemed terminated and of no further force and effect.
Please sign this card exactly as your name appears on the left side of
this card. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If shares are held jointly, each
holder should sign.
------------------------------------------------------------------------
------------------------------------------------------------------------
SIGNATURE(S) DATE(S)
[Winthrop Proxy Form]
<PAGE>
Exhibit 99(b)
Please mark
your votes
like this
/X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSAL:
Approval of the Agreement and Plan of Reorganization, dated February 28,
1997 between TCF Financial Corporation and Winthrop Resources Corporation
and each of the transactions contemplated thereby, including the issuance
of up to 7,050,000 shares of Common Stock of TCF Financial Corporation in
connection therewith.
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSAL:
Adjournment of the meeting if necessary to solicit additional proxies.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR APPROVAL OF THE AGREEMENT AND PLAN OF
REORGANIZATION, DATED FEBRUARY 28, 1997, BY AND BETWEEN TCF FINANCIAL
CORPORATION AND WINTHROP RESOURCES CORPORATION AND FOR ADJOURNMENT OF THE
MEETING IF NECESSARY TO SOLICIT ADDITIONAL PROXIES. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
Signature(s) Date
---------------------------------- -------------
NOTE: Please sign as name appears hereon. Only one signature is required
for a joint account. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
TCF
, 1997
PROXY SOLICITED BY BOARD OF DIRECTORS
The undersigned hereby appoints William A. Cooper and Gregory J. Pulles,
or either of them, as proxies with full power of substitution, to vote all
shares of stock of TCF Financial Corporation of record in the name of the
undersigned at the close of business on_______________, 1997 at a Special
Meeting of Stockholders to be held on June 24, 1997, or at any adjournment
thereof, hereby revoking all former proxies, on the items set forth on the
reverse side hereof, as described in the accompanying Joint Proxy
Statement/Prospectus and upon such other business as may properly come before
the Meeting including: any matters which the Board of Directors did not know,
a reasonable time before mailing this solicitation, would be presented at the
Meeting; and matters incident to the conduct of the Meeting.
(continued and to be signed on reverse side).
