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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 25, 2001
REGISTRATION NO. 333-58958
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NATIONAL PROCESSING, INC.
(Exact name of registrant as specified in its charter)
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OHIO 61-1303983
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
1231 DURRETT LANE
LOUISVILLE, KENTUCKY 40213-2008
(Address of principal executive offices) (Zip code)
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NATIONAL CITY SAVINGS AND INVESTMENT PLAN
AND
NATIONAL CITY SAVINGS AND INVESTMENT PLAN NO. 2
AND
NATIONAL CITY SAVINGS AND INVESTMENT PLAN NO. 3
(Full title of the plan)
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CARLTON E. LANGER, ESQ.
SECRETARY
NATIONAL CITY CORPORATION
1900 EAST NINTH STREET
CLEVELAND, OHIO 44114
(Name and address of agent for service)
(216) 575-3339
(Telephone number, including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please 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, other than securities offered only in connection with the dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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PROSPECTUS
NATIONAL PROCESSING, INC.
REGISTRATION OF 60,000 SHARES OF
NATIONAL PROCESSING, INC. COMMON STOCK
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THE NATIONAL CITY SAVINGS AND INVESTMENT PLAN
THE NATIONAL CITY SAVINGS AND INVESTMENT PLAN NO. 2
THE NATIONAL CITY SAVINGS AND INVESTMENT PLAN NO. 3
This Prospectus relates to the Common Stock, no par value of National
Processing, Inc. ("NPI Stock") offered by (NPI) under the National City Savings
and Investment Plan ("SIP 1"), the National City Savings and Investment Plan No.
2 ("SIP 2") and the National City Savings and Investment Plan No. 3 ("SIP 3").
Throughout this Prospectus, SIP 1, SIP 2 and SIP 3 will be referred to
collectively as "the Plans".
- Under these Plans, NPI Stock is being offered in units, with an initial
price of $10.00 per unit. NPI Stock is listed on the New York Stock
Exchange under the symbol "NAP".
- Additional information concerning the Plans may be obtained, upon written
or oral request, from Thomas A. Richlovsky, Senior Vice President and
Treasurer of National City Corporation, 1900 East Ninth Street,
Cleveland, Ohio 44114-3484, telephone number (216) 575-2126.
- PLEASE READ THIS PROSPECTUS CAREFULLY BEFORE MAKING ANY INVESTMENT
DECISIONS WHICH MAY PERTAIN TO THE OFFERING OF NPI STOCK, OR ANY OF THE
OFFERINGS DETAILED IN THIS PROSPECTUS. IN PARTICULAR, PLEASE TAKE NOTE OF
THE RISK FACTORS BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is June 1, 2001.
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
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AVAILABLE INFORMATION
NPI has filed with the Securities and Exchange Commission a Form S-3
Registration Statements under the Securities and Exchange Act of 1933, as
amended, with respect to the NPI Stock that may be sold under of the Plans. NPI
is subject to the information reporting requirements of the Securities Exchange
Act of 1934 as amended, and accordingly, files reports, proxy statements and
other information with the Securities and Exchange Commission. These reports,
proxy statements and other information may be inspected or copied at the public
reference facilities of the Commission located at 450 Fifth Street, N.W.,
Washington, D.C. 20549; at the Commission's Midwest Regional Office, Citicorp
Center 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and at its
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such materials may also be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, reports, proxy statements and other
information concerning NPI may be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005 and are also available
to the public from commercial document retrieval services and at the website
maintained by the Commission at "http://www.sec.gov".
THE COMPANY
NPI is a publicly held company incorporated under the laws of the State of
Ohio and headquartered in Louisville, Kentucky. NPI, through its wholly owned
subsidiary, National Processing Company, is a leading provider of merchant
credit card processing. NPI is 87 percent owned by National City Corporation, a
financial holding company incorporated under the laws of the State of Delaware
and headquartered in Cleveland, Ohio. NPI supports over 500,000 merchant
locations, representing one out of every five VISA(R) and MasterCard(R)
transactions processed nationally and over $100 billion in transactions
annually.
ADOPTION AND PURPOSE OF PLANS
ADOPTION: SIP 1 was adopted by the Board of Directors of National City
Corporation on July 23, 1984 and became effective as of July 1,
1984. It has been amended from time to time, restated effective
as of July 1, 1992 and, as so amended and restated and
subsequently amended from time to time. By a December 30, 1991
Instrument of Assumption of, and Spin off from, the National
City Savings and Investment Plan and Trust, SIP 2 was created
as a separate plan effective as of January 1, 1992. SIP 3 will
be established effective on or before May 16, 2001.
PURPOSE: The Plans are intended to provide you with assistance in
preparing financially for your retirement years. The Plans are
intended to qualify under Section 401(k) of the Internal
Revenue Code of 1986,
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as amended from time to time. The Plans provide several
investment options for you to invest a portion of your pre-tax
compensation.
DESCRIPTION OF THE PLANS
The statements under this caption are summaries of the provisions of the
Plans and are not complete. While the main features of the Plans are summarized
below, such summaries are subject to the complete text of the Plans. The terms
and provisions in all the Plans are essentially the same with the exception of
the ESOP feature of SIP 1 described on page 20. As used in this Prospectus,
references to "Employers" refers to NPI, National City Corporation, or any of
their subsidiaries.
If you are classified as a non-exempt employee of NPI under the Fair Labor
Standards Act, you are covered under SIP 2. If you are classified as a U.S.
based Military Banking employee of National City Bank of Indiana, you are
covered under SIP 3. All other employees of NPI are covered by SIP 1. If you are
participating in one Plan and are transferred or take a position which would be
covered by another Plan, your Account will transfer as well. You do not need to
make any new elections. You may not participate in more than one Plan at a time.
ELIGIBILITY AND PARTICIPATION
As an employee of the Employers, you are eligible to participate in one of the
Plans on an unmatched basis on the first day of the month after you have:
- - Completed 30 days of service, and
- - Reached the age of 21,
Provided you are not a student intern, a special project employee, or a law
enforcement officer hired to perform off-duty security services.
Note: Deferral-only participants are not eligible for Employer Matching
Contributions. Eligibility for Employer Matching Contribution begins the first
of the month following one year of service, provided you have met the other
eligibility requirements.
If you meet the eligibility requirements, you participate in the Plans by making
an enrollment election by means of:
- - "PlanLine," a telephone voice response system, or
- - "PlanWorks OnLine," an internet-based computer access system, or
- - By contacting your employer.
Enrollments completed by 4:00 p.m. Eastern time on or before the third
business day of the month are effective as of the fifteenth day of the
month. Enrollment completed by 4:00 p.m. Eastern time on or before the
thirteenth business day of the month are effective as of the last pay
of the month.
If you are an employee who is paid on an hourly basis, hours of service are
credited at a rate of 10 hours per day, 45 hours per week or 190 hours per
month.
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EMPLOYEE DEFERRALS
By using PlanLine or PlanWorks Online, you may direct your Employer to
make contributions as payroll deductions to the Trust Fund which
reduces your before-tax cash compensation (base pay and up to $75,000
of additional pay including, but not limited to, overtime, shift
differential, cash commissions and bonuses paid in cash).
You may defer up to 12% (on a before-tax basis) in 1% increments.
After-tax contributions are not permitted.
The legal limit on the amount of before-tax contributions that you may
make to a qualified retirement plan in 2001 is $10,500. This amount may
be adjusted each year by the Internal Revenue Service to account for
the cost of living or for other reasons.
The maximum amount that may be contributed to your Account each year is
the lesser of $30,000 or 25% of your compensation before payroll
deductions have been made.
Your contributions are invested at the time they are made in one of the
sixteen investment funds, according to your election.
Once each business day, that is, any day in which the New York Stock
Exchange and National City Bank are open, you can make investment
choices and changes by using PlanLine or PlanWorks OnLine.
Please exercise caution when making an election to reduce your
compensation because you may have to pay taxes if you later decide to
withdraw funds from the Plans prior to termination of employment under
federal tax laws.
EMPLOYER MATCHING CONTRIBUTIONS
- - Under the Plans, Employers make contributions to your Account in the Trust
Fund in cash or National City Corporation Common Stock ("National City Common
Stock") equal to the percentage of your contribution to the Trust Fund. Under
the Plans, Employers make separate Employer Matching Contributions by matching
the first 6% of the pay that you save at a rate of $1.15 for every dollar you
contribute. The Employer Matching Contributions will be deposited into your
Account at the same time deferral contributions are deposited.
- - Each Employer Matching Contribution will be credited to your Account.
- - Any additional deferrals you make from 7% to 12% of your compensation are not
eligible for Employer Matching Contributions.
- - The Employer Matching Contributions made to your Account in the Plan are
invested in National City Corporation Stock Fund, not in the NPI Stock Fund.
Once per business day, you can transfer all or any part of your investments in
the National City Corporation Stock Fund to any of the other available
investment funds
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(other than the NPI Stock Fund) in the Plan. (See "Investments and Operation
of the Trust Fund")
- - All amounts contributed to your Accounts under the Plans are 100% vested.
Note: U.S. tax law provides for nondiscrimination tests that are designed to
ensure that employees at all compensation levels benefit equally from qualified
retirement plans. If these tests are not met for any year, it is possible that
contributions made that year by or for some highly-paid employees may have to be
returned. If the test is not met during the year, future contributions of the
highly-paid employees will have to be reduced or suspended. You will be notified
if your contributions are affected.
RISK FACTORS
PLEASE READ CAREFULLY BEFORE MAKING ANY INVESTMENT DECISIONS.
AN INVESTMENT IN NPI STOCK INVOLVES A DEGREE OF RISK. YOU SHOULD CAREFULLY
CONSIDER THE FOLLOWING RISKS AND THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE
INVESTING IN NPI STOCK. OUR BUSINESS AND RESULTS OF OPERATIONS COULD BE HARMED
BY ANY OF THE FOLLOWING RISKS. THE TRADING PRICE OF NPI STOCK COULD DECLINE DUE
TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. THESE
UNCERTAINTIES INCREASE THE LIKELIHOOD THAT OUR RESULTS COULD FALL BELOW THE
EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND INVESTORS, WHICH WOULD CAUSE OUR
STOCK PRICE TO FALL.
RISKS RELATING TO NPI STOCK
OUR STOCK PRICE MAY BE VOLATILE BECAUSE OF CHANGES IN SECURITIES ANALYSTS'
ESTIMATES, COMPETITIVE DEVELOPMENTS, CHANGES IN OUR RELATIONSHIP WITH NATIONAL
CITY AND OTHER FACTORS BEYOND OUR CONTROL, AND YOU MAY LOSE ALL OR A PART OF
YOUR INVESTMENT.
The market price of our common stock may fluctuate significantly in
response to a number of factors, including:
- changes in securities analysts' estimates of our financial performance;
- fluctuations in stock market prices and volumes, particularly in the
merchant card processing industry;
- discussion of our company or stock price in online investor communities
such as chat rooms;
- changes in market valuations of similar companies;
- announcements by us or our competitors of significant contracts, new
technologies, acquisitions, commercial relationships, joint ventures or
capital commitments;
- variations in our quarterly operating results;
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- loss of a major customer or failure to complete significant commercial
contracts;
- loss of a relationship with National City;
- additions or departures of key personnel; and
- changes in banking regulations, credit card association rules,
regulations or operations, or changes in other laws or regulations that
may impact our business.
- We have not declared or paid any dividends since we went public in August
of 1996.
RISKS SPECIFIC TO NPI AS A COMPANY
- Interest rate changes, principally in the United States, may impact our
financial performance.
- Changes in consumer spending habits may impact our financial performance.
- Our primary revenue is generated by our merchant card processing
services, therefore, growth rates in the use of credit card and debit
card usage may impact our financial performance.
- Changes in credit card association rules, regulations or operations may
impact our business.
- Consolidation in the banking, card processing or business outsourcing
industries may also impact our financial performance.
Scale is one of the primary competitive factors that drives success in the
merchant card processing industry. In 2000, we authorized and settled
approximately 19% of all Visa(R) and MasterCard(R) transactions in the United
States. We are the second largest provider of merchant card processing services
in the world. That means nearly one out of every five times someone in the
United States uses his or her Visa(R) or MasterCard(R) to make a purchase, NPI
will process that transaction.
We provide services to a wide array of customers in virtually every
industry. From independent retailers to national accounts and financial
institutions, we have the knowledge and expertise to meet the demands of a
rapidly changing market place.
Consolidation in banking, card processing or business outsourcing
industries; consolidation of major customers or industries serviced; significant
industry competition; renewal of major customer relationships; reliance on third
party processing relationships; and organizational changes or loss of key
management personnel all may have a material adverse affect on our business
which would affect our scale.
We face significant competition from other companies. Many of our
competitors are well-established companies, and some of them have greater
financial, technical and operating resources than we do. Competition in our
business is based primarily upon
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pricing, quality of products and services, breadth of products and services, new
product development and the ability to provide technological solutions.
In particular, the markets for merchant card services are highly
competitive. Due to the fact that a large percent of our revenue comes from
merchant card services, competition to maintain contracts with merchant card
services customers is intense. This competition may influence our prices and
requires us to aggressively control costs in order to maintain acceptable profit
margins.
BECAUSE OUR SOFTWARE PLATFORM MANAGES TRANSACTIONS IN THE RETAIL AND COMMERCIAL
ENVIRONMENTS, ONLINE SECURITY BREACHES INVOLVING CONFIDENTIAL CUSTOMER DATA
COULD EXPOSE US TO LIABILITY AND HARM OUR REPUTATION.
A significant barrier to online commerce and communications is the need for
the secure transmission of confidential information over public networks.
Although we rely on the latest software and technology to ensure security for
our customers, our products such as VirtualPAY(R), PortNPC.com and Global Pay(R)
are involved with the transmission of confidential retail customer information
such as credit card data, customers historical payment data, and healthcare
claim payment information. If any such compromise of our security were to occur,
it could have a material adverse effect on our reputation, business, prospects,
financial condition and results of operations.
We may be required to expend significant capital and other resources to
protect against such security breaches or to alleviate problems caused by such
breaches. To the extent that our activities or the activities of third-party
contractors involve the storage and transmission of proprietary information,
such as credit card numbers, security breaches could damage our reputation and
expose us to a risk of loss or litigation and possible liability. There is no
guarantee that our security measures will prevent security breaches or that
failure to prevent such security breaches will not have a material adverse
effect on our business, prospects, financial condition and results of
operations.
The adoption of new laws or the adoption or changes of existing laws to the
Internet may decrease the growth in the use of the Internet, which could in turn
decrease the demand for our online processing and reporting tools, increase our
cost of doing business or otherwise harm our business. Few laws or regulations
currently directly apply to commerce on the Internet. In particular, changes
involving credit card associations and the use of Federal, state, local and
foreign governments are considering a number of legislative and regulatory
proposals relating to Internet commerce. As a result, a number of laws or
regulations may be adopted regarding Internet user privacy, pricing, quality of
products and services and intellectual property ownership. How existing laws
will be applied to the Internet in areas such as property ownership, copyright,
trademark, and trade secrets is uncertain.
WE DEPEND ON THE CONTINUED SERVICE OF OUR EXECUTIVE OFFICERS. THESE EXECUTIVES
HAVE ENTERED INTO AGREEMENTS WITH NPI THAT CONTAIN NONCOMPETITION COVENANTS THAT
REMAIN IN EFFECT FOR APPROXIMATELY TWO YEARS AFTER THEIR TERMINATION OF
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EMPLOYMENT. HOWEVER, THE LOSS OF KEY PERSONNEL OR ANY INABILITY TO ATTRACT AND
RETAIN ADDITIONAL PERSONNEL COULD AFFECT OUR ABILITY TO SUCCESSFULLY GROW OUR
BUSINESS.
Our success also depends in part on our ability to attract, manage and
retain qualified management and clerical personnel. Competition for qualified
management personnel is intense. There can be no assurance that we will be
successful in attracting and retaining the management personnel it requires to
manage the growth of our business successfully. We realize substantial turnover
on a regular basis among a large portion of our workforce, primarily among those
workers in entry-level positions who perform tasks integral to our operations
such as data entry. There can be no assurance that we will continue to be able
to attract a sufficient number of workers for our entry-level positions in the
future. Our results of operations could be adversely affected if we were unable
to attract, manage and retain management and clerical personnel, or if revenue
were to fail to increase at a rate sufficient to absorb any resulting increase
in associated expenses.
WE HAVE EXPERIENCE IN COMPETING IN INTERNATIONAL MARKETS. HOWEVER, OUR
INTERNATIONAL EXPANSION PLANS EXPOSE US TO GREATER POLITICAL, INTELLECTUAL
PROPERTY, REGULATORY, EXCHANGE RATE FLUCTUATION AND OTHER RISKS, WHICH COULD
HARM OUR BUSINESS.
To date, we have generated revenues from sales outside the United States
through our corporate outsourcing solutions segment. NPI, through its
wholly-owned subsidiary NPC operates facilities in the Caribbean Basin and
Mexico. We intend to establish additional offices in selected international
markets. We anticipate that we will devote resources and management attention to
expanding international opportunities. Expanding internationally subjects us to
a number of risks, including:
- greater difficulty in staffing and managing foreign operations;
- changes in a specific country's or region's political or economic
conditions;
- expenses associated with localizing our products;
- differing intellectual property rights;
- longer sales cycles and collection periods or seasonal reductions in
business activity;
- multiple, conflicting and changing laws and government regulations; and
- foreign currency restrictions and exchange rate fluctuations.
NPI is recognized regionally, nationally and internationally as a leader in
the merchant card processing services industry. Our reputation in the industry
is necessary for our development in the expanding marketplace.
OUR RELATIONSHIP WITH OTHER COMPANIES ENABLES US TO NOT ONLY EXPAND IN THE
MERCHANT CARD INDUSTRY, BUT DEVELOP PARTNERSHIPS WHICH CONTRIBUTE TO THE
IMPROVEMENT OF OUR EXISTING BUSINESS. IF WE ARE UNABLE TO MAINTAIN THESE
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RELATIONSHIPS, OUR EXPANSION AND IMPROVEMENTS COULD BE AT RISK WHICH COULD, IN
TURN, AFFECT YOUR INVESTMENT.
While we continue to add new and expand existing relationships with many
large national chains, we are also aggressively increasing our market share in
the regional market. This dual strategy is allowing us to take solutions
utilized by larger more sophisticated merchants and deploy them to the regional
merchants. Regional merchants also benefit from the outstanding service culture
we have developed through our national customer base. If we are unable to
maintain relationships with significant partners, we will have to expend
resources on locating and securing relationships with companies actively pursued
by our competitors.
One crucial key to our business is our relationships with over 400
community banks. We provide state-of-the-art processing solutions to their
customers. Banks and other depository institutions with whom we do business are
also subject to extensive regulation at the federal and state levels under laws
and regulations applicable to regulated financial institutions. They are also
subject to extensive examination and oversight by federal and state regulatory
agencies. Changes in the laws, rules and regulations affecting our client banks
and financial institutions and the examination of their activities by applicable
regulatory agencies could adversely affect our results of operations.
MERCHANT AND EMPLOYEE FRAUD RELATED TO CREDIT CARD TRANSACTIONS
We are susceptible to fraudulent credit card transactions initiated by our
merchant customers. Examples of merchant fraud include inputting false sales
transactions and altering transaction amounts. We conduct a background review of
our customers and monitor merchant transactions against standards we have
developed to help prevent merchant fraud. We also have the ability to hold a
merchant's daily settlement if we suspect fraudulent activity. Notwithstanding
these measures, however, there can be no assurance that we will not experience
significant amounts of merchant fraud in the future, which may have a material
adverse effect on our financial condition and results of operations.
LITIGATION AND LEGAL MATTERS INVOLVING THE MERCHANT CARD SERVICES BUSINESS AND
OTHER TRANSACTIONS RELATED TO THE OPERATIONS OF NPI MAY HAVE AN EFFECT ON YOUR
INVESTMENT.
From time to time, we are involved in various legal matters and other
litigation arising in the ordinary course of business, none of which management
believes, either individually or in the aggregate, currently is material.
However, there is always a risk that litigation matters may adversely affect our
business.
DIFFICULTIES IN COMBINING THE OPERATIONS OF FUTURE ACQUIRED ENTITIES WITH OUR
OWN OPERATIONS MAY PREVENT US FROM ACHIEVING THE EXPECTED BENEFITS FROM SUCH
ACQUISITIONS.
We may not be able to achieve fully the strategic objectives and operating
efficiencies in all of our acquisitions. Inherent uncertainties exist in
integrating the operations of an acquired company with our own. In addition, the
markets and
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industries in which we operate are highly competitive. We also may lose key
personnel, either from the acquired entities or from ourself, as a result of
acquisitions. These factors could contribute to our not achieving the expected
benefits from such acquisitions within the desired time frames, if at all.
RISKS RELATING TO THE NPI STOCK FUND
- Transfers out of the NPI Stock Fund are limited to 20% of your balance in
the Fund on any day. This restriction will inhibit your ability to
quickly exit the NPI Stock Fund, especially in a down market.
- Only future Deferrals and any loan repayments may be allocated to the NPI
Stock Fund. You may not transfer existing balances in other funds to the
NPI Stock Fund.
- Because NPI Stock has a relatively small average number of shares traded
per day, liquidity of the fund is a concern. Also, this limited daily
trading volume may cause the NPI Stock price to be more volatile than
some stocks with large average daily trading volumes. Please keep this in
mind when choosing to invest in the NPI Stock Fund.
- Approximately 20% of your balance of the NPI Stock Fund will be in cash
or money market investments. This may cause the NPI Stock Fund to have a
different investment performance from NPI Stock's performance.
- The NPI Stock Fund is valued in units, not shares, therefore the current
market price of NPI Stock may not provide you with an accurate investment
performance on any given day.
RISKS RELATING TO YOUR DEFERRALS INTO THE PLANS, INCLUDING LIMITS ON
CONTRIBUTIONS AND TAXES FOR EARLY WITHDRAWALS
- Consult a tax advisor on the tax matters relating to the Plans. There may
be additional taxes for early withdrawals. There may be mandatory
withdrawal of funds after you have reached age 70 1/2.
- Deferrals may only be invested in the investment options provided under
each of the Plans from time to time. The investment performance of these
options may not be the same as other investments or market indices.
INVESTMENTS AND OPERATIONS OF THE TRUST FUND
The percentage which you have elected to contribute to your Account
together with any Employer Matching Contributions in the Plans will be held in a
Trust Fund in accordance with the terms of the Plans by National City Bank, P.O.
Box 5756, Cleveland, Ohio 44101 (216) 575-2000, as Trustee. National City Bank
is a national banking association and a wholly-owned subsidiary of National City
Corporation.
The Trust Fund maintained under the Plans is divided into sixteen
Investment Funds: (i) the Armada Equity Growth Fund, (ii) the Armada Bond Fund,
(iii) the Armada Money Market Fund, (iv) the NCC Stock Fund, (v) the Capital
Preservation Fund, (vi) the Armada Small Cap Value Fund, (vii) the Armada Large
Cap Value Fund, (viii) the Armada Equity Index Fund, (ix) the Armada Balanced
Allocation
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Fund, (x) the Templeton Institutional Funds, Inc. Foreign Equity Series, (xi)
the Janus Twenty Fund, (xii) the Franklin Small Cap Growth Fund-Advisor, (xiii)
the MFS Capital Opportunities Fund I, (xiv) the Armada International Equity
Fund, (xv) the Armada Larger Cap Ultra Fund, and (xvi) the NPI Stock Fund.
National City Corporation may from time to time add or delete Investment Funds.
The Plans allow for the appointment of an independent agent to make purchases
and sales of National City Common Stock for the NCC Stock Fund and NPI Stock for
the NPI Stock Fund. The independent agent currently appointed is KeyBank, a
national banking association located in Cleveland, Ohio.
YOU SHOULD READ EACH INVESTMENT FUND'S PROSPECTUS FOR MORE INFORMATION BEFORE
DECIDING TO INVEST IN ANY PARTICULAR FUND.
ARMADA EQUITY GROWTH FUND
Except as otherwise described below, the investment objective of the Armada
Equity Growth Fund is to provide capital appreciation by investing in a
diversified portfolio of publicly traded larger cap equity securities. The fund
will normally invest at least 80% of its total assets in a diversified portfolio
of common stocks and securities convertible into common stocks of companies with
large stock market capitalization. The fund may invest up to 20% of its total
assets at the time of purchase in foreign equity securities.
The fund's adviser considers factors such as historical and projected earnings
growth, earnings quality and liquidity when buying and selling securities for
the fund.
ARMADA BOND FUND
Except as otherwise described below, the investment objective of the Armada
Bond Fund is to provide current income as well as preservation of capital by
investing primarily in a portfolio of high- and medium-grade fixed income
securities. The investment objective may be changed without a shareholder vote.
The Armada Bond Fund normally invests at least 80% of the value of its total
assets in high- and medium-grade fixed income securities of all types, including
obligations of corporate and U.S. Government issuers and mortgage-backed and
asset-backed securities. Corporate obligations may include bonds, notes and
debentures. U.S. Government securities may include U.S. Treasury obligations and
obligations of certain U.S. Government agencies or instrumentalities such as
Ginnie Maes and Fannie Maes. High- and medium-grade fixed income securities are
those rated in one of the four highest rating categories by a major rating
agency, or determined by the adviser to be of equivalent quality.
ARMADA MONEY MARKET FUND
Except as otherwise described below, the investment objective of the Armada
Money Market Fund is to provide a high level of current income as is consistent
with the liquidity and stability of principal. The Armada Money Market Fund
invests in a variety of high quality money market securities, including
certificates of deposit and
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other obligations issues by domestic and foreign banks, as well as commercial
paper. The adviser also invests in securities issued or guaranteed by the U.S.
Government or its agencies (government obligations) and repurchase agreements
collateralized by government obligations and issued by financial institutions
such as banks, and broker-dealers. High quality money market instruments are
securities that present minimal credit risks as determined by the adviser and
generally include securities that are rated at the time of purchase by a major
rating agency in the highest two rating categories for such securities, and
certain securities that are not rated but are of comparable quality as
determined by the adviser.
NCC STOCK FUND
Except as otherwise described below, the investment objective of the NCC
Stock Fund is to invest in the common stock of National City Corporation to the
extent consistent with the fund's liquidity needs. The majority of all of the
assets of the fund will normally be invested in shares of National City Common
Stock. However, the fund may also hold cash for fund liquidity purposes. Pending
the purchase of shares of National City Common Stock, the fund may also invest
in money market instruments. Absent unusual circumstances, the percentage of
fund assets held in cash or money market instruments will not exceed 5%.
CAPITAL PRESERVATION FUND
Except as described below, up to 75% of the assets placed in the Capital
Preservation Fund may be invested in guaranteed investment contracts issued by
major insurance companies or banks or in synthetic GIC contracts; the remaining
portion of the Capital Preservation Fund may be invested in short term
investments or investments payable on demand, but will not be invested in any
security or contract of the Employers or their affiliates. From time to time,
fund activities could cause the investment in guaranteed investment contracts to
temporarily exceed 75%. All or part of the Capital Preservation Fund may be
invested in permissible investments through the National City Investment Funds
for Retirement Capital Preservation Fund and/or the Armada Money Market Fund.
Investments in guaranteed investment contracts will be made by private purchase
by the Trustee, with no broker's fee or commission.
ARMADA SMALL CAP VALUE FUND
Except as otherwise described below, the investment objective of the Armada
Small Cap Value Fund is to provide capital appreciation by investing in a
diversified portfolio of publicly traded small cap equity securities. The fund
will normally invest at least 80% of its total assets in the common stocks of
small capitalization companies. The fund may invest up to 20% of its total
assets at the time of purchase in foreign equity securities. The adviser
generally seeks to invest in equity securities based upon price/earnings,
price/book and price/cash flow ratios which are lower than the market averages.
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ARMADA LARGE CAP VALUE FUND
Except as otherwise provided below, the investment objective of Armada
Large Cap Value Fund is to provide capital appreciation by investing in a
diversified portfolio of publicly traded larger capitalization (large cap)
equity securities. The fund will normally invest at least 80% of the value of
its net assets in common stocks and securities convertible into common stocks of
value-oriented companies. The Adviser will generally dispose of securities when
they fail to satisfy investment criteria. The fund is managed with a value
approach, exhibiting aggregate valuation characteristics such as price/earnings,
price/book and price/cash flow ratios which are at a discount to the market
averages. Additional factors, such as private market value, balance sheet
strength, and long-term earnings potential are also considered in stock
selection.
ARMADA EQUITY INDEX FUND
Except as otherwise described below, the Armada Equity Index Fund's
investment objective is to provide investment results that, before fund
expenses, approximate the aggregate price and dividend performance of the
securities included in the S&P 500 Composite Index by investing in securities
comprising the S&P 500 Composite Index. The fund buys and holds all stocks
included in the S&P 500 Composite Index in exactly the same proportion as those
stocks are held in the S&P Composite Index. The adviser makes no attempt to
"manage" the fund in the traditional sense (i.e., by using economic, financial
or market analysis).
ARMADA BALANCED ALLOCATION FUND
Except as otherwise provided below, the investment objective of the Armada
Balanced Allocation Fund is to provide long-term capital appreciation and
current income. The fund intends to invest 50% to 70% of its net assets in
common stocks and convertible securities, 25% to 55% of its net assets in
investment grade fixed income securities such as corporate bonds and U.S.
Government securities and up to 30% of its net assets in cash and cash
equivalent securities. The fund may invest up to 20% of its total assets at the
time of purchase in foreign securities (which includes common stock, preferred
stock and convertible bonds of companies headquartered outside the United
States).
The fund also invests in the common stock of small capitalization
companies. The adviser buys and sells equity securities based on their potential
for long-term capital appreciation.
The fund invests the fixed income portion of its portfolio of investments
in a broad range of investment grade debt securities (which are those rated at
the time of investment in one of the four highest rating categories by a major
rating agency) for current income. If a fixed income security is downgraded, the
adviser will re-evaluate the holding to determine whether it is in the best
interests of investors to sell. The adviser buys and sells fixed income
securities and cash equivalents based on a number of factors, including yield to
maturity, maturity, quality and the outlook for particular
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issuers and market sectors. The fund invests in cash equivalent, short-term
obligations for stability and liquidity.
TEMPLETON INSTITUTIONAL FUNDS, INC. FOREIGN EQUITY SERIES
Except as otherwise described below, at least 65% of the Templeton
Institutional Funds, Inc. Foreign Equity Series will be invested in equity
securities (common stock, preferred stock, securities convertible into common or
preferred stock, and warrants or rights to subscribe to or purchase such
securities) issued by companies located outside the United States. Up to 35% of
the Templeton Institutional Funds, Inc. Foreign Equity Series may be invested in
debt securities of companies or governments outside the United States when in
the opinion of the investment manager such investment outweighs the capital
growth potential through investment in stocks.
JANUS TWENTY FUND
Except as otherwise described below, the investment objective of the Janus
Twenty Fund is to seek long-term growth of capital. It pursues its objective by
investing primarily in common stocks selected for their growth potential. The
fund normally concentrates its investments in a core group of 20-30 common
stocks.
The fund may invest substantially all of its assets in common stocks if its
portfolio manager believes that common stocks will appreciate in value. The
portfolio manager generally seeks to identify individual companies with earnings
growth potential that may not be recognized by the market at large. He looks at
companies one at a time, regardless of size, country of organization, place of
principal business activity, or other similar selection criteria. Realization of
income is not a significant consideration when choosing investments for the
fund. Income realized on the fund's investments will be incidental to its
objective.
Foreign securities are generally selected on a stock-by-stock basis without
regard to any defined allocation among countries or geographic regions. However,
certain factors are considered in selecting foreign securities such as expected
levels of inflation, government policies influencing business conditions, the
outlook for currency relationships, and prospects for economic growth among
countries, regions or geographic areas. There are no limitations on the
countries in which the fund may invest and the fund may at times have
significant foreign exposure.
FRANKLIN SMALL CAP GROWTH FUND-ADVISOR
Except as otherwise described below, the investment objective of the
Franklin Small Cap Growth Fund-Advisor is long-term capital growth. The fund
invests primarily in common stocks of small cap U.S. companies.
Under normal market conditions, the fund will invest at least 65% of its
total assets in the equity securities of U.S. small capitalization (small cap)
companies. For this fund, small cap companies are those companies with market
cap values not exceeding: (i) $1.5 billion; or (ii) the highest market cap value
in the Russell 2000 Index; whichever is greater, at the time of purchase. That
index consists of 2,000
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small companies that have publicly traded securities. Market capitalization is
defined as share price multiplied by the number of common stock shares
outstanding. The fund generally expects that its portfolio median market cap
will significantly exceed the Index's median market cap. The manager may
continue to hold an investment for further capital growth opportunities even if
the company is no longer a small cap.
In addition to its main investments, the fund may invest in equity
securities of larger companies. When suitable opportunities are available, the
fund may also invest in initial public offerings of securities, and may invest a
very small portion of its assets in private or illiquid securities, such as late
stage venture capital financings. An equity security represents a proportionate
share of the ownership of a company; its value is based on the success of the
company's business, any income paid to stockholders, the value of its assets,
and general market conditions. Common and preferred stocks, and securities
convertible into common stock, are examples of equity securities.
The manager is a research driven, fundamental investor, pursuing a growth
strategy. As a "bottom-up" investor focusing primarily on individual securities,
the manager chooses companies that it believes are positioned for rapid growth
in revenues, earnings, or assets. The manager relies on a team of analysts to
provide in-depth industry expertise and uses both qualitative and quantitative
analysis to evaluate companies for distinct and sustainable competitive
advantages. Advantages, such as a particular marketing or product niche, proven
technology, and industry leadership are all factors the manager believes point
to strong long-term growth potential. The manager diversifies the fund's assets
across many industries, but from time to time may invest substantially in
certain sectors.
When the manager believes market or economic conditions are unfavorable for
investors, is unable to locate suitable investment opportunities, or seeks to
maintain liquidity, it may invest all or substantially all of the fund's assets
in short-term investments, including cash or cash equivalents. Under these
circumstances, the fund may temporarily be unable to pursue its investment goal.
MFS CAPITAL OPPORTUNITIES FUND I
Except as otherwise described below, the investment objective of the MFS
Capital Opportunities Fund I is capital appreciation. The fund's objective may
be changed without shareholder approval.
The fund invests, under normal market conditions, at least 65% of its total
assets in common stocks and related securities, such as preferred stock,
convertible securities and depositary receipts. The fund focuses on companies
which its investment adviser, Massachusetts Financial Services Company (referred
to as MFS or the adviser), believes have favorable growth prospects and
attractive valuations based on current and expected earnings or cash flow. The
fund's investments may include securities traded in the over-the-counter
markets.
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MFS selects securities based upon fundamental analysis performed by the
fund's portfolio manager and MFS' large group of equity research analysts.
The fund may invest in foreign securities (including emerging market
securities), and may have exposure to foreign currencies through its investment
in these securities, its direct holdings of foreign currencies or through its
use of foreign currency exchange contracts for the purchase or sale of a fixed
quantity of a foreign currency at a future date.
The fund has engaged and may engage in active and frequent trading to
achieve its principal investment strategies.
ARMADA INTERNATIONAL EQUITY FUND
Except as otherwise described below, the investment objective of the Armada
International Equity Fund is to provide capital appreciation by investing in a
portfolio of equity securities of foreign issuers. Equity securities of foreign
issuers include common stock, preferred stock and convertible bonds, of
companies headquartered outside the United States. The fund will normally invest
at least 80% of its total assets in the equity securities of foreign issuers.
The fund focuses on issuers included in the Morgan Stanley Capital International
Europe, Australasia, Far East (World EAFE) Index. The World EAFE Index is an
unmanaged index which represents the performance of more than 1,000 equity
securities of companies located in those regions. The adviser makes investment
judgments based on the relative valuation, growth prospects, fiscal, monetary
and regulatory government policies. The percentage of the fund in each country
is determined by its relative attractiveness and weight in the World EAFE Index.
More than 25% of the fund's assets may be invested in the equity securities of
issuers located in the same country. Within foreign markets, the adviser buys
and sells securities based on its analysis of competitive position and
valuation. The adviser sells securities whose competitive position is
deteriorating or whose valuation is unattractive relative to industry peers.
Likewise, companies that perform well in comparison to their peers are
considered for purchase.
ARMADA LARGE CAP ULTRA FUND
Except as otherwise described below, the investment objective of the Armada
Large Cap Ultra Fund is to provide growth by investing in a diversified
portfolio of publicly traded larger cap equity securities. The fund will
normally invest at least 80% of its total assets in a diversified portfolio of
common stocks and securities convertible into the common stocks of companies
with large market capitalizations.
The adviser typically invests in companies that have exhibited consistent,
above-average growth in revenues and earnings, strong management, and sound and
improving financial fundamentals. The adviser will consider selling a security
when there is a decline in long-term growth.
The fund considers a large capitalization or "large cap" company to be one
that has a comparable market capitalization as the companies in the S&P
500/Barra
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Growth Index. The S&P 500/Barra Growth Index is an unmanaged index comprised of
common stocks which are capitalization-weighted and have higher price-to-book
ratio.
NPI STOCK FUND
Except as otherwise described below, the investment objective of the NPI
Stock Fund is to invest in the common stock of NPI to the extent consistent with
the fund's liquidity needs. The majority of all the assets of the fund will
normally be invested in shares of NPI Stock. Initially, the fund will contain
only cash and money market investments until the total value of the fund reaches
$20,000. At that time, shares of NPI Stock will be purchased. Depending on the
frequency and volume with which NPI Stock is publicly traded, the assets in the
fund may increase or decrease. Following the fund's initial purchase of NPI
Stock, absent unusual circumstances, the percentage of fund assets held in cash
or money market instruments should not exceed 25%.
Since the NPI Stock Fund is a pooled investment consisting of both NPI
Stock and cash, you will invest in units rather than in shares of NPI Stock. For
this reason, the unit price of the NPI Stock Fund will differ from the current
market price of NPI Stock.
Because shares of NPI Stock may not trade in large volumes on any
particular day, certain transaction restrictions regarding transfers into and
out of the NPI Stock Fund have been designed to stabilize the NPI Stock Fund.
YOU SHOULD CAREFULLY CONSIDER THESE RESTRICTIONS AS PART OF YOUR INVESTMENT
DECISION. A Participant may only invest in the NPI Stock Fund by allocating a
percentage of his contributions (and loan repayments, if any) into the NPI Stock
Fund. Transfers of existing balances into the NPI Stock Fund are not permitted.
Further, while transfers out of the NPI Stock Fund will be permitted, THE AMOUNT
WHICH YOU MAY TRANSFER FROM THE NPI STOCK FUND INTO THE OTHER INVESTMENT FUNDS
ON ANY SINGLE DAY WILL BE LIMITED TO 20% OF THE YOUR BALANCE IN THE NPI STOCK
FUND AS OF THAT DAY (SUBJECT TO A DE MINIMIS EXCEPTION FOR PARTICIPANTS WITH NPI
STOCK FUND BALANCES OF LESS THAN 2 UNITS). BECAUSE OF THIS RESTRICTION, YOUR
ABILITY TO QUICKLY TRANSFER YOUR INVESTMENT OUT OF THE NPI STOCK FUND WILL BE
LIMITED.
Cash requirements and restrictions on transfers will be periodically
evaluated. You will be notified of any changes made to these requirements and
restrictions.
With respect to each of the Investment Funds the Trustee retains necessary
administrative rights typically kept by trustees to make in-kind distributions
or to terminate the fund (with potential in-kind distributions).
See Investment of Funds for historical financial data relating to each of
the Investment Funds.
With respect to each of the Investment Funds, the Trustee retains the
discretion to make in-kind distributions of any of the sixteen funds or to
terminate the fund (with potential in-kind distributions).
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OPERATIONS OF THE TRUST FUND
- The Trustee maintains your Accounts reflecting your contribution
elections and the Employer Matching Contributions and any other amount
held under the Plan.
- Your Accounts are subdivided to show the portion of each account invested
in each Investment Fund. You will receive a statement at least once a
year that shows the current value of your Account based on contributions
and investment earnings or losses, if they apply.
- Investment Results are also available daily on PlanLine and PlanWorks
OnLine.
- You may invest all of your contributions in any of the sixteen Investment
Funds or divide your contributions among the funds in 1% increments. You
must make your investment selections when you enroll in the Plan. If you
fail to make a selection, your contributions will be invested in the
ARMADA MONEY MARKET FUND.
- Your investment selections will remain in effect for all future
contributions until you change your investment selection. These changes
will be effective upon your next pay deferral.
- You may change your existing balances once per calendar day. Any changes
made, if completed by 4:00 p.m. Eastern time, will be effected at market
prices at the close of business on that business day, while changes made
after 4:00 p.m. Eastern time, will be effected at market prices at the
close of business the next business day. Transfers of existing balances
into the NPI Stock Fund are NOT permitted. Your investments will only be
made on business days.
- Again, you are limited on the amount you transfer from the NPI Stock Fund
into other Investment Funds on any single day to 20% of your balance in
the NPI Stock Fund as of the beginning of that day.
- Your investment selection will not be affected by a change in the amount
you contribute to the Plan.
ACCOUNT VALUATION AND OPERATION
As of the close of business on each business day, the Trustee will
determine the fair market value of all assets in each Investment Fund. The
Trustee will then determine the net gain or loss of each Investment Fund from
the business day before and allocate such gain or loss in proportion to the
amount you have invested in each fund in your Account. The Trustee's decisions
as to the market value of all assets and the gain or loss on each fund is
conclusive and binds you if you have an interest in such fund.
The Trustee has broad discretionary powers under the Plans to invest and
reinvest the principal and income of the Investment Funds in the Trust Fund. The
Trustee has the discretion to do all such things as it may deem necessary or
advisable to carry out
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the purposes of the Plans, which may include, (i) the power to pledge borrow
money and pledge the assets of the Trust Fund as security thereof, (ii) to
commingle the assets of the Trust Fund with assets of other trusts through the
medium of the Trust Fund, and (iii) to vote upon any stocks or other securities,
except National City Common Stock, as otherwise described below.
The Trustee in its discretion instructs the independent agent to purchase
securities for the Trust Fund. The independent agent will purchase securities
for the Trust Fund, including National City Common Stock and NPI Stock in the
open market or through private purchase at the current market price or unit
price for the NPI Stock Fund. The independent agent will select brokers to make
these transactions.
The Trustee and the independent agent may both be removed at any time with
or without cause. The Trustee and the independent agent may also resign. In the
case of resignation or removal, National City Corporation is given the power to
appoint a successor Trustee or independent agent.
Expenses of the Trustee necessary for the administration of the existing
Investment Funds, including any taxes assessed to each fund, will generally be
charged to such fund. However, any extraordinary expenses incurred with respect
to your interest in the Trust Fund will be charged to your Account, at the
discretion of the Trustee and subject to the Administrative Committee's
approval. Subject to any changes in the future, all other expenses of the
Trustee and any other compensation of the Trustee will be paid by your Employer
or the fund.
National City Management Company, a Michigan corporation and a wholly-
owned indirect subsidiary of National City Corporation, serves as the investment
advisor for the Armada Funds. An investment advisory fee is paid by the Armada
Funds. Investment advisory fees are computed daily and paid monthly based on the
average net assets or each fund. Please see the prospectus of each fund for
specific fee information.
VOTING RIGHTS
You will have the right to vote or direct the Trustee to vote the shares of
National City Common Stock deemed allocated to your Account in the NCC Stock
Fund. The Trustee will give you proxy information and other materials which are
also given to other National City Corporation stockholders. You will have an
opportunity to vote or direct the Trustee to vote the shares of National City
Corporation held in your Account. If the Trustee does not receive timely
directions from you to vote the shares of National City Common Stock allocated
to your Account in the Plans, the Trustee will vote those shares in proportion
as directed by other participants in each Plan acting in their capacity as
fiduciaries thereunder.
The Trustee will vote all the shares held in the NPI Stock Fund. With the
exception of the NCC Stock Fund, you will not be able to vote or direct the
Trustee to vote the interest you may have in any of the other Investment Funds
including the NPI Stock Fund.
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TENDER OFFERS:
In the event of a tender offer for National City Common Stock, if any
portion of your interest in the Trust Fund is in the NCC Stock Fund, you
may direct the Trustee, on a form provided by the Trustee, to tender or
sell all or a portion of the shares of National City Common Stock that are
in your Account. The cash proceeds of the tender or sale will be invested
as of the next business day in the Investment Funds at your direction. If
you do not make such a direction, the cash proceeds will go into the Armada
Money Market Fund, and any other proceeds will be held in the NCC Stock
Fund pending your direction. The Trustee will tender or sell only those
shares of National City Common Stock directed by you.
During a tender offer, (i) no investment shall be made in National City
Common Stock, but at the direction of the Trustee, assets of the NCC Stock
Fund other than stock will remain uninvested or will be invested in
obligations or instruments which are appropriate investments for the Armada
Money Market Fund; (ii) contributions to the Trust Fund will only be made
in cash; and (iii) no portion of the interest in the Trust Fund allocated
to your Account will be distributed to, or transferred to another
Investment Fund pursuant to your investment selection.
Except as provided above with respect to National City Common Stock, the
Trustee shall vote all securities held in the Trust Fund.
THE EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
As described above, you may direct the Trustee to vote shares of National
City Common Stock allocated to your Account (regardless or whether or not
the stock allocated is held in the ESOP). Unallocated shares of the
National City Common Stock held in the ESOP are, in turn, voted by the ESOP
Trustee (the U.S. Trust Company) in direct proportion to the way you voted
for the National City Common Stock allocated to your Account. Currently,
there are no unallocated shares of National City Common Stock held by the
ESOP.
PLEASE NOTE, THE ESOP IS NOT PART OF SIP 2 OR SIP 3.
DISTRIBUTIONS AND WITHDRAWALS
QUALIFICATION:
You will be eligible to receive distributions under the Plans in the event of
(i) any voluntary or involuntary termination of employment, (ii) retirement
or disability as defined in the Plans, (iii) application after attaining age
59 1/2 without termination or employment. Transfers or other changes in
employment among NPI and National City Corporation's affiliates are not
deemed a termination of employment or retirement for the purposes of the
Plans. You may, under certain circumstances borrow from the Trust Fund and
may be eligible to make a hardship withdrawal with respect to your
contributions under the Plans.
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(i) If you have attained age 59 1/2, you may receive two (2) distributions
during any calendar year while still employed, and you may suspend your
contributions made under the Plans for the remainder of such calendar
year following the second distribution.
(ii) If your employment is terminated by reason of death, retirement or
permanent disability, your beneficiary may elect to receive their entire
interest under the Plans in a lump sum payment and/or in annual,
quarterly or monthly installments over a term not exceeding your life
expectancy or the life expectancy of your beneficiary.
(a) Permanent disability means any physical or mental impairment of a
presumably permanent and continuous nature which the Administrative
Committee determines renders you incapable of performing the duties
which you were employed to perform.
(b) Beneficiary means your surviving spouse (if applicable), or with
written consent of your spouse (if you are married), the person you
have designated as such in a written instrument filed with the
Administrative Committee or, in the absence of such designation, your
surviving spouse, your surviving children (natural or adopted), your
surviving parents, or your estate, in that order.
The method of distribution in the event of death, retirement or
permanent disability will be at your election. If your employment with NPI,
National City Corporation or any of their affiliates is terminated for any
other reason, your interest under the Plans will be distributed to you in a
lump-sum payment.
DISTRIBUTIONS:
Generally, you or your beneficiary will determine when distributions
will begin and when they will be made, but in no event earlier than 30 days
after the earlier of (i) your termination of employment, (ii) your
disability; (iii) your death; (iv) you reach age 59 1/2; and no later than
(v) April 1 of the year after you have reached age 70 1/2.
Distributions shall be made as soon as practicable after any
termination of employment if the distributable amount is $5,000 or less.
Amounts not distributed after termination of employment shall be invested in
any fund as you or your legal representative may direct, so long as such
amounts remain in the Trust Fund.
In the event that you are rehired by NPI or National City Corporation
or any of their affiliates, any distribution being made or about to be made
because of your prior termination of employment will be suspended.
If you die before your benefit payments begin under the Plans, your
interest under the Plans must be paid over a period of five years or less,
unless it is to be paid over the life of your beneficiary (or over a period
not extending beyond your beneficiary's life expectancy). The distribution
begins no later than the Decem-
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ber 31st of the year following the year of your death to a beneficiary who is
not your surviving spouse and no later than the day you would have attained
age 70 1/2 to your surviving spouse. However, if a distribution to you has
commenced prior to your death, such distribution may continue to any
beneficiary over the period originally selected by you.
HARDSHIP WITHDRAWALS
If you suffer a severe hardship, the Administrative Committee, upon
your written application, may allow you to immediately withdraw part of your
interest under the Plans as the Administrative Committee deems necessary to
alleviate the hardship. Generally, the circumstances which may qualify you to
make a hardship withdrawal are:
- Medical expenses incurred by (or required to be paid in advance to
obtain medical treatment) you, your spouse, or your dependent(s),
- Tuition expenses and/or related education fees for the next twelve
months of post secondary education for you, you spouse or your
dependent(s),
- Your purchase of a principal residence,
- Payment to prevent your eviction from or foreclosure of your principal
residence,
- Payment of a debt to avoid insolvency, or
- Other expenses, if any, that are defined as being immediate and heavy
financial need, in accordance with the regulations prescribed by the
Secretary of the Treasury.
There is no minimum amount to hardship withdrawals. However, before a
hardship withdrawal can be made, you must withdraw any non-taxable amounts
available from any qualified plan. Hardship withdrawals are limited to the
amount needed to cure the hardship (including taxes and penalties that result
from the withdrawal - See Federal Tax Consequences).
Hardship withdrawals will be applied against your Account, which may be
withdrawn in full except for income earned after January 1, 1989. Such a
withdrawal will be debited against any of the Investment Funds, in any
proportion as you direct. If you have made a hardship withdrawal, your
contributions made through payroll deductions will be suspended for one year.
LOANS:
You may borrow a portion of your interest in the Trust Fund from your
Account, provided that you have directed liquidation of a sufficient portion
of your interest in one or more of the Investment Funds sufficient to provide
the loan funds. Each loan will be secured by, and constitute a first lien
against 50% of your interest in the Trust Fund and will be evidenced by a
promissory note specifying a reasonable rate of interest and a repayment
period of five (5) years or less.
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Loans less than $2,000 have a repayment period of three years or less,
but in no event later than your death or termination of employment with NPI,
National City Corporation or any of their affiliates.
Each loan to you will be treated as an asset of the Trust Fund held
solely for your benefit, and payments of principal and interest on such loan
will be invested as of the next business day in one or more of the Investment
Funds in accordance with your investment selection. Loan principal and
interest is repaid to your Account through payroll deductions. The interest
rate charged on your loans is set at the time the loan is requested.
Loans may be paid off in full at any time without prepayment penalties.
You may request a loan once in each 12-month period and may have up to two
outstanding loans at a time.
UNDER THE PLANS, IF YOU MAKE A HARDSHIP WITHDRAWAL YOU MAY NOT MAKE
CONTRIBUTIONS TO THE PLANS OR APPLY FOR A LOAN FOR AT LEAST TWELVE MONTHS.
FORM OF DISTRIBUTIONS:
All distributions and withdrawals under the plans will be in cash,
except that you may elect to receive any distribution from the Plans in whole
shares of National City Common Stock. In addition, any balance in the NPI
Stock Fund may be distributed as cash or as an "in-kind" distribution of
shares of NPI Stock. HOWEVER, YOU MUST HAVE A MINIMUM OF 200 UNITS IN THE NPI
STOCK FUND AT THE TIME OF THE DISTRIBUTION TO REQUEST THE "IN-KIND"
DISTRIBUTION OF NPI STOCK. YOU MAY NOT, HOWEVER, ELECT TO HAVE AMOUNTS
INVESTED IN OTHER FUNDS OF THE TRUST FUND DISTRIBUTED IN SHARES OF NPI STOCK.
There are no restrictions on resales of the securities distributed
under the Plans other than those provided by law if you are an affiliate of
NPI or National City or deemed to be in a control relationship with NPI or
National City.
ROLLOVER ACCOUNTS
You may transfer proceeds received from qualified employee benefit plans of
prior employers into either Plan by means of a rollover from such prior employer
plan. Such transfers may only be of assets eligible to be transferred by a
qualified rollover, and must be approved by the Administrative Committee and the
Trustee in order to qualify for such treatment.
Each rollover shall be separately accounted for by the Trustee and shall be
100% vested in the Employee rollover source. Investment of such rollover
accounts shall be effected in the same manner as otherwise provided for the Plan
balances.
ADMINISTRATION
Generally, National City Corporation is responsible for the administration
of the Plans. However, each Plan provides for the establishment of an
Administrative Committee consisting of three or more persons who may be (but are
not required to
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be) Participants, employees or directors of an Employer or of National City. The
Plans provide that there is to be one Administrative Committee responsible for
the administration of both Plans, and that committee is referred to in this
Prospectus as the "Administrative Committee". National City Corporation has the
power to fix the terms of the members of the Administrative Committee, to remove
any of them and to appoint successors to fill any vacancies. The members of the
Administrative Committee serve without compensation (unless National City
Corporation provides for the compensation of non-employee members). The names of
the members of the Administrative Committee are: James R. Bell, III; Paul G.
Clark; Jeffrey D. Kelly; Robert G. Siefers; Shelley J. Seifert and David L.
Zoeller. Each member of the Administrative Committee is an officer of NPI,
National City Corporation or any of their affiliates under the Plans. The
complete address of the Administrative Committee is:
c/o NATIONAL CITY CORPORATION
Corporate Human Resources
Locator -- #2263
1900 East Ninth Street
Cleveland, Ohio 44114
The Chair of the Administrative Committee is Shelley J. Seifert and is the
person to whom all requests for information should be delivered. Written
requests should be addressed to the above address.
The Administrative Committee is given the authority to (i) adopt rules for
the administration of the Plans, (ii) delegate its duties to members or agents,
(iii) interpret the provisions of the Plans, (iv) determine your rights and
status under the Plans, (v) make findings of fact in the case of disputes, (vi)
make determinations with respect to benefits payable and the persons entitled
thereto and (vii) instruct the Trustee as to benefits to be paid and furnish any
other information needed by the Trustee in making distributions or withdrawals
from and investments in the Investment Funds.
NONTRANSFERABILITY OF RIGHTS
Except for loans to you and except as provided by federal income tax laws
or as otherwise permitted by law, no right or interest of any kind of you or
your beneficiary are transferable or assignable, nor are any such right or
interest subject to alienation, anticipation, encumbrance, garnishment,
attachment, execution or levy of any kind, voluntary or involuntary.
AMENDMENT OR TERMINATION
National City Corporation intends to continue the Plans indefinitely but
has reserved the right to terminate or amend the Plans at any time and in any
manner that it may deem advisable without the consent of the Employer or any
person.
If any of the Plans are terminated, all future contributions under the
terminated Plan will cease, but no termination or amendment will decrease the
amount to be contributed by your Employer for any calendar year prior to the
year of termination or
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amendment. In the event of the termination of either of the Plans, the Trust
Fund will continue to be administered as if that Plan had not been terminated.
If your Employer withdraws from a Plan, the Plan is terminated with respect
to its employees. An Employer may withdraw from a Plan at any time by filing a
written election with the Administrative Committee. In the event of the sale of
all or a substantial portion of the operating assets of an Employer and the
transfer of affected employees to the purchaser, such Employer will be deemed to
have withdrawn from a Plan with respect to such employees unless both the
Employer and the Administrative Committee agree in writing to the Employer's
continued participation in that Plan. At the request of a withdrawing Employer,
the Administrative Committee in its discretion may direct the Trustee to
transfer to a successor qualified plan and trust of such Employer, the portion
of the Trust Fund representing the interest therein of employees of such
Employer.
The Plans are intended to qualify under Sections 401(a), 401(k) and 501(a)
of the Code and National City Corporation has received rulings from the Internal
Revenue Service to that effect with respect to SIP 1 and SIP 2. National City
Corporation intends to apply to the Internal Revenue Service for such a ruling
on SIP 3.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
Each Plan is subject to some, but not all, of the provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). It is
subject to all of the provisions of Title I, except Part 3 which basically deals
with the funding of defined benefit pension plans. It is subject to all of the
applicable provisions of Title II and Title III of ERISA. It is not subject to
Title IV of ERISA, which provides for insurance of pension benefits in the event
of the termination of a pension plan.
Title IV of ERISA sets up a program of termination insurance to guarantee
benefits of pension plans that are not fully funded. For the reasons described
above, such insurance protection is not necessary with respect to payment of
benefits pursuant to the Plans.
MERGERS
ELIGIBILITY, PARTICIPATION
In the case of employees who become eligible to participate in the Plans as
a result of a merger or acquisition, only Hours of Service after such merger or
acquisition will be counted in determining eligibility to participate in the
Plans unless the Administrative Committee decides otherwise.
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INVESTMENT OF FUNDS
Set forth below are the investment results, computed on a percentage of
increase or decrease, for each of the Investment Funds described herein, for the
period commencing January 1, 1996 through December 31, 2000. The returns shown
for the Armada, Templeton Funds, Janus Twenty Fund, MFS Capital Opportunities
Fund I and Franklin Small Cap Fund-Advisor are net of fees. Performance history
for the NPI Stock Fund is not available because the fund is new.
PERFORMANCE -- TOTAL RETURNS 1996 1997 1998 1999 2000
---------------------------- ------- ------ ------ ------ ------
NCC Stock Fund #1(1).................... 34.48% 45.97% 9.94% -31.53% 28.05%
NCC Stock Fund #2....................... 39.06% 43.95% 8.74% -31.44% 26.99%
Janus Twenty............................ 27.86% 29.70% 73.39% 64.90% -32.42%
Franklin Small Cap Growth............... 27.07% 15.79% -0.02% 97.08% -9.80%
MFS Capital Opportunities I(2).......... 16.67% 26.49% 27.11% 47.72% -5.30%
Armada Large Cap Ultra.................. 23.24% 29.07% 42.62% 29.04% -16.76%
Armada International Equity............. N/A N/A 19.98% 50.13% -16.89%
Armada Equity Growth Fund............... 22.50% 36.61% 29.09% 22.98% -5.21%
Armada Equity Index Fund................ N/A N/A N/A 20.61% -9.20%
Armada Small Cap Value Fund............. 22.64% 32.43% -6.96% 7.91% 33.60%
Templeton Instl Fund: Foreign Equity
Series................................ 21.58% 11.43% 9.80% 27.34% -5.86%
Armada Balanced Allocation Fund......... N/A N/A N/A 15.27% 1.66%
Armada Equity Income Fund............... 18.08% 28.69% 10.23% -0.13% 11.62%
Armada Bond Fund........................ 3.48% 7.97% 8.45% -1.89% 7.53%
NCC Retirement Capital Preservation
Fund.................................. 5.92% 5.92% 5.90% 5.82% 6.17%
Armada Money Market Fund................ 5.19% 5.32% 5.25% 4.92% 6.22%
- ---------------
(1) NCC Stock Fund #1 represents participant directed investments and employer
matching contributions under SIP 1, together with those shares of National
City Common Stock which were previously contributed to the ESOP portion of
SIP 1. Participant directed investments and employer matching contributions
under SIP 2 are (and, in the case of SIP 3 following its establishment will
be) invested in Stock Fund #2.
(2) Performance history for year-ended December 31, 1996 pertain to the MFS
Capital Opportunities Fund Class A shares (the "Fund"). Performance history
for years ended December 31, 1997, 1998, 1999 and 2000 pertain to the Fund's
Class I shares which became available in January 1997 and are the shares
available to National City employees pursuant to the Plans. The Fund's 1996
performance history was included in this chart to indicate that while the
institutional shares have a four-year performance history, the Fund has a
much longer one.
PAST PERFORMANCE OF NPI STOCK
The NPI Stock Fund is a newly created fund that has no historical
performance data. The performance of the NPI Stock since its having gone public
on August 9, 1996 follows. Please remember that the NPI Stock Fund will not
necessarily track the performance of the NPI Stock because of the cash and cash
equivalents that will be held in the NPI Stock Fund.
1996 1997 1998 1999 2000
------- ------ ------ ------ ------
NPI Stock............................... *-15.78% -38.28% -44.30% 61.36% 91.54%
- ---------------
* Total Return Information Obtained from Bloomberg.
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FEDERAL TAX CONSEQUENCES
The following discussion of certain of the United States federal income tax
consequences of participation in the Plans is merely intended to help you
understand the current federal income tax rules that generally apply. The
discussion is based on the United States federal income tax laws and regulations
as currently in effect and your Employer will not necessarily undertake to
apprise you of any changes to such laws and regulations. Because the actual
United States federal income tax impact on you will depend upon your own
particular circumstances, the following discussion does not address every
possible United States federal income tax effect of participation in the Plans.
Nor does the following discussion address United States federal estate or gift
tax effects or any state, local or foreign tax consequences. YOU ARE RESPONSIBLE
FOR YOUR OWN TAX FILING AND PAYMENT OBLIGATIONS IN CONNECTION WITH PARTICIPATION
IN THE PLANS. YOU SHOULD, THEREFORE, SEEK AND RELY UPON THE ADVICE OF THEIR OWN
COMPETENT PROFESSIONAL ADVISORS ON ALL TAX MATTERS RELATING TO THE PLANS.
Under present law, if a Plan meets the requirements of Sections 401(a),
401(k) and 501(a) of the Internal Revenue Code:
(i) Contributions will reduce the amount of your earnings otherwise
includable in gross income for federal income tax purposes but not for
purposes of Social Security taxes. The maximum amount of contributions
which may be excluded from your gross income is limited by the tax
regulations. The maximum amount so excludable in 2001 is $10,500; that
amount may change in years thereafter.
(ii) Employer Matching Contributions will not be included in your gross
income for federal income tax purposes when made.
(iii) You otherwise will not become subject to federal income taxes
with respect to your participation in the Plans until the amounts in your
Account are withdrawn or distributed to you.
(iv) If you receive a lump sum distribution of your entire interest in
the Plans you will be subject to federal income tax, at ordinary income
rates, on the excess of the amount received over the sum of (a) any prior
after-tax contributions not theretofore withdrawn and (b) any net
unrealized appreciation in shares of National City Common Stock and/or
shares of NPI Stock included in the distribution. Net unrealized
appreciation generally is the increase in the value of the employer stock
while it was held by the Plan. The portion of the withdrawal includable in
gross income may be subject to an additional 10% tax as discussed in
paragraph (x) below.
(v) If you receive your entire interest in the Plans (and your entire
interest in similar plans required to be aggregated under the Internal
Revenue Code) within one taxable year, either on account of retirement or
termination of employment, or after you reach age 59 1/2 (a "lump sum
distribution"), special rules will generally apply to any gain realized by
you on such lump sum distribution. Your gain will be the excess of the
amount received over the sum of
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(a) your after-tax contributions not previously withdrawn and (b) if you
elects, any net unrealized appreciation (as defined in paragraph (iv)
above) in shares of National City Common Stock included in the distribution
(regardless of whether such shares are attributable to your after-tax
contributions). Such gain will be considered to be ordinary income for
federal income tax purposes. In certain instances, if you were born before
1936, special ten-year averaging treatment may be applied to the otherwise
ordinary income. Otherwise the distribution will be taxable under the
ordinary federal income tax rules.
(vi) The tax basis of any shares of National City Common Stock and/or
NPI Stock received in a lump-sum distribution described in paragraph (v)
above will be the fair market value of such shares less any net unrealized
appreciation (as defined in paragraph (iv) above) in such shares on which
tax was deferred. Any gain on the subsequent disposition of such shares
(including any net unrealized appreciation in excess of the tax basis) will
be taxed as a capital gain.
(vii) If your distribution is not a lump-sum distribution, the
distribution will be allocated between a portion representing return of
your after-tax contributions, if any (not taxable), and the remainder of
the distribution, which will be taxed as ordinary income when received,
provided that if the distribution includes shares of National City Common
Stock, any net unrealized appreciation (as defined in paragraph (iv) above)
in the shares attributable to your after tax contributions will not then be
taxable but will be taxed on their disposition as described in paragraph
(vi).
(viii) If you or your beneficiary receives your entire interest under
the Plans within one taxable year, the special income tax provisions
described in paragraph (v) may apply to the distribution.
(ix) Under certain circumstances, a distribution to a recipient will
not be included in your income at the time of distribution if you satisfy
the requirements for "rolling over" such distribution (either by means of a
"direct rollover" to an individual retirement account or to another
employer's tax-qualified retirement plan (see xi below) or otherwise) in
the manner and within the time required by the applicable provisions of the
Internal Revenue Code.
(x) If an individual who receives a distribution from the Plans is not
age 59 1/2 at the date of such distribution, is not receiving the
distribution as a beneficiary of a deceased Plan employee, is not disabled,
is not receiving part of a series of substantially equal periodic
installments over his life expectancy or over a joint life expectancy with
a beneficiary, or who is not at least age 55 and separated from service,
then an additional tax of 10% of the amount of the distribution included in
the individual's gross income must be paid. The additional 10% tax does not
apply to distributions made for deductible medical expenses, made to
alternate payees pursuant to qualified domestic relations orders, or made
as a return of contributions or Employer Matching Contributions, to the
extent that such a return may be required by the Internal Revenue Service's
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nondiscrimination tests. The additional 10% tax does not apply to any part
of the distribution which is "rolled over". (See paragraph (ix).)
(xi) Except for distributions of substantially equal periodic payments
over your life expectancy or the joint life expectancy of you and your
beneficiary or over a period of 10 years or more, distributions which are
taxable under the federal income tax provisions which are distributions of
cash (not distributions of National City Common Stock or NPI Stock) are
generally "eligible rollover distributions" and are subject to mandatory
20% federal income tax withholding unless directly rolled over to an
individual retirement account or another employer's tax-qualified
retirement plan.
(xii) Distributions from the Plans other than "eligible rollover
distributions" will be subject to federal income tax withholding, unless
you as the taxpayer elect not to have withholding apply.
THE FOREGOING IS ONLY A SUMMARY AND, EXCEPT AS OTHERWISE NOTED, APPLIES
ONLY TO UNITED STATES FEDERAL INCOME TAXES. THE LAW ON WHICH THE ABOVE
DISCUSSION IS BASED IS SUBJECT TO CHANGE AT ANY TIME. FOR ADVICE AS TO BOTH
FEDERAL INCOME TAXES AND OTHER TAXES AND FOR ADVICE ON YOUR SPECIFIC SITUATION
NOW AND IN THE FUTURE, YOU SHOULD CONSULT YOUR OWN TAX ADVISOR.
Under present law, your Employer is allowed tax deductions for the
contributions and Employer Matching Contributions made to the Plans.
UPDATING
From time to time, NPI may update this Prospectus. NPI will also deliver to
you as Employees copies of their annual reports, proxy statements, and other
communications distributed to shareholders of NPI. Certain information contained
in these documents also updates this Prospectus. All of these documents and the
documents incorporated by reference are available to you without charge, upon
written or oral request to National City Corporation, the attention of Thomas A.
Richlovsky, Senior Vice President and Treasurer, National City Corporation, 1900
East Ninth Street, Cleveland, OH 44114-3484, telephone (216) 575-2126.
This Prospectus incorporates documents of NPI by reference which are not
presented herein or delivered herewith. The documents of National City and NPI
so incorporated (other than certain exhibits to any such documents) are
available to any person to whom a copy of this Prospectus has been delivered
upon written or oral request to National City Corporation, 1900 East Ninth
Street, Cleveland, Ohio 44114, Attention: Thomas A. Richlovsky, Senior Vice
President and Treasurer, telephone number (216) 575-2126, and will be furnished
without charge.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The U.S. Securities and Exchange Commission or SEC allows NPI to
"incorporate by reference" the information filed with the SEC. This means:
- Incorporated documents are considered part of the Prospectus;
- NPI can disclose important information to you by referring to those
documents; and
- Information that NPI and the Plans file with the SEC will automatically
update the Prospectus.
NPI
The following documents filed by NPI with the SEC are incorporated in this
Prospectus by reference:
- NPI's Annual Report on Form 10-K for the fiscal year ended December 31,
2000;
- NPI's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
- NPI's Current Reports on Form 8-K dated January 9, 2001, January 22, 2001
and April 30, 2001;
- the description of the NPI Common Stock contained in the NPI's
Registration Statement on Form 8-A filed by NPI on July 18, 1996 and any
amendment or report filed for the purpose of updating such description;
and
- Registration Rights Agreement between Registrant and National City
Corporation, dated July 16, 1996 (filed as Exhibit 4.2 to Registration
Statement No. 333-05507 dated July 18, 1996); and
- All documents subsequently filed by NPI pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities and Exchange Act prior to the
filing of a post-effective amendment to NPI's Registration Statement on
Form S-3 relating to the Plans, as filed with the SEC, indicating that
all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference
and to be part of this Prospectus from the date of filing of such
documents.
LEGAL OPINIONS
Certain legal matters, including the validity of the securities, will be
passed upon by the National City Corporation Law Department, (acting as counsel
for NPI). Members of the National City Corporation Law Department may
beneficially own shares of NPI Common Stock and/or participate in SIP 1.
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EXPERTS
Ernst & Young LLP, independent auditors, have audited NPI's consolidated
financial statements included in NPI's Annual Report on Form 10-K for the year
ended December 31, 2000, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement filed
with the SEC. Our consolidated financial statements are incorporated by
reference in reliance on Ernst & Young, LLP's report, given on their authority
as experts in accounting and auditing.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses expected to be incurred by
National Processing, Inc. (the "Corporation") in connection with the sale and
distribution of the shares of Common Stock being registered. With the exception
of the registration fee, all amounts shown are estimates.
SEC registration fee........................................ $ 273.75
Printing and engraving expenses............................. 60,000.00
Legal fees and expenses..................................... 10,000.00
Accounting fees and expenses................................ 1,000.00
Miscellaneous fees and expenses............................. 0.00
----------
Total............................................. $71,273.75
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
NPI shall indemnify, to the full extent permitted by Ohio law, 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, by reason of the fact that he is or was a
member of the Board or an officer, employee or agent of NPI, or is or was
serving at the request of NPI as director, trustee, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise.
NPI shall pay, to the full extent of Ohio Revised Code Section 1701.13,
expenses, including attorney's fees, incurred by a member of the Board in
defending such action, suit or proceeding as they are incurred, in advance of
the final disposition thereof, and may pay, in the same manner and to the full
extent permitted under Ohio law, such expenses incurred by any other person.
NPI may, to the full extent permitted by Ohio law and authorized by the Board,
purchase and maintain insurance or furnish similar protection, including but not
limited to trust funds, letters or credit or self-insurance, on behalf of or for
any persons aforementioned against any liability asserted against and incurred
by any such person in any such capacity, or arising out of his status as such,
whether or not NPI would have the power to indemnify such person against such
liability. Insurance may be purchased from or maintained with a person in which
NPI has a financial interest.
NPI may enter into agreements with any persons whom NPI may indemnify under the
by-laws in accordance with Ohio law and undertake thereby to indemnify such
persons and to pay expenses incurred by them in defending any action, suit or
proceeding against them.
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ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration Statement:
4.1 Specimen Certificate for the NPI Common Stock without par value, of
the Registrant (filed as Exhibit 4.1 to Registration Statement No.
333-05507 dated July 18, 1996 and incorporated herein by reference).
4.2 Registration Right Agreement between Registrant and National City
Corporation, dated July 16, 1996 (filed as Exhibit 4.2 to Registration
Statement No. 333-05507 dated July 18, 1996 and incorporated herein by
reference).
4.3 Form of National City Savings and Investment Plan and any amendments
thereto (the "SIP Plan"), (filed as Exhibit 4.3)
4.4 Form of National City Savings and Investment Plan No. 2. and any
amendments thereto (the "1992 Plan"), (filed as Exhibit 4.4)
4.5 Form of National City Savings and Investment Plan No. 3 (filed as
Exhibit 4.5)
5.1 Opinion of National City Corporation's Law Department as to the
legality of the common stock being registered (filed as Exhibit 5.1)
23.1 Consent of Ernst & Young LLP, Independent Auditors for NPI (filed as
Exhibit 23.1).
23.2 Consent of National City Corporation Law Department (included in
Exhibit 5.1)
24.1 Power of Attorney (filed as Exhibit 24.1).
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth
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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 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 to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information."
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of The Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on form S-3 and has duly caused this Form S-3
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Louisville, Commonwealth of Kentucky, on this
13th day of April, 2001.
NATIONAL PROCESSING, INC.
By /s/ DAVID E. FOUNTAIN
--------------------------------------
David E. Fountain
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this S-3
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------- ---------------
/s/ THOMAS A. WIMSETT President and Chief Executive April 13, 2001
- ------------------------------------------ Officer (Principal Executive
Thomas A. Wimsett Officer)
/s/ DAVID E. FOUNTAIN Senior Vice President and Chief April 13, 2001
- ------------------------------------------ Financial Officer (Principal
David E. Fountain Financial Officer)
/s/ PAUL G. CLARK* Director and Chairman of the Board April 13, 2001
- ------------------------------------------
Paul G. Clark
Director
- ------------------------------------------
Aureliano Gonzalez-Baz
/s/ JON L. GORNEY* Director April 13, 2001
- ------------------------------------------
Jon L. Gorney
Director
- ------------------------------------------
Jeffrey P. Gotschall
Director
- ------------------------------------------
Preston B. Heller, Jr.
/s/ JEFFREY D. KELLY* Director April 13, 2001
- ------------------------------------------
Jeffrey D. Kelly*
/s/ J. ARMANDO RAMIREZ* Director April 13, 2001
- ------------------------------------------
J. Armando Ramirez
/s/ ROBERT G. SIEFERS* Director April 13, 2001
- ------------------------------------------
Robert G. Siefers
/s/ THOMAS A. WINSETT* Director April 13, 2001
- ------------------------------------------
Thomas A. Winsett
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*Carlton E. Langer, Secretary, the undersigned attorney-in-fact, by signing
his name below, does hereby sign this S-3 Registration Statement on behalf of
each of the above-indicated officers and directors of NPI (constituting a
majority of the directors) pursuant to a power of attorney executed by such
persons.
By /s/ CARLTON E. LANGER
--------------------------------------
Carlton E. Langer,
Secretary
April 13, 2001
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