First Chicago NBD, BankBoston, State Street and DST Systems to Create Nation's Largest shareholder Service Provider

CHICAGO and CANTON, Mass., Feb. 10, 1998 -- First Chicago NBD Corporation and Boston EquiServe -- a partnership between BankBoston and a joint venture of and DST Systems Inc. -- announced today that they will merge their stock transfer businesses, creating the largest shareholder servicer in the country.

The new partnership -- to be called EquiServe -- will combine the cutting-edge technology platform Boston EquiServe has begun to implement and the product innovation of First Chicago Trust Company of New York, a First Chicago NBD subsidiary. At closing, the existing Boston EquiServe partners and First Chicago NBD each will own half of the new industry leader, which will serve approximately 1,400 publicly traded companies and their shareholders.

"Our combined scale and technology leadership will create an unparalleled shareholder services business," said Verne G. Istock, chairman of First Chicago NBD. "Combining acknowledged leaders in corporate relationships, client satisfaction and loyalty also sets the stage for future growth."

"EquiServe will provide continued high-quality service and product innovation by leveraging the resources of three of America's premier financial institutions, BankBoston, First Chicago NBD and State Street Corporation," said Chad Gifford, chairman and chief executive officer of BankBoston. "EquiServe's state-of-the-art technology platform will set a new industry standard for meeting customer needs."

The new platform -- called Fairway -- is being developed by DST Systems Inc., which has established itself as a technology leader through its servicing of more than 40 million shareholders. EquiServe and DST have signed a memorandum of understanding that calls for DST to provide the Fairway platform and contribute its remote shareholder servicing business in exchange for a partnership interest and a contract to supply ongoing data processing services.

"The increased complexity of within the global marketplace demands the technological sophistication that EquiServe is capable of delivering," said Marshall N. Carter, chairman and chief executive officer of State Street. "By joining forces, we create shareholder servicing capabilities that are unmatched anywhere in the world."

EquiServe will maintain records of shareholders in publicly traded companies and provide related services such as dividend disbursement and reinvestment; direct stock and employee stock purchase plans; proxy mailing and tabulation; annual and interim report distribution; merger and acquisition services; and stock option services.

Since its formation as a joint venture in 1995, Boston EquiServe has become an established business, adding 300 new clients, including 200 that were initial public offerings. Boston EquiServe already has installed the first release of DST's Fairway technology platform for an initial group of customers.

First Chicago Trust has been a pioneer in product development. It was the first shareholder services company to offer direct registration; to win Securities and Exchange Commission approval to offer open availability, direct stock purchase programs; and to offer proxy voting over the Internet.

The transaction is expected to be completed in the first half of 1998, subject to regulatory approval.

The new EquiServe will employ nearly 2,000 people divided almost evenly between First Chicago's Jersey City, N.J., facility and Boston EquiServe's facility in Canton, Mass. Steve MacQuarrie will be president of the Boston EquiServe division and Joe Spadaford will be president of the First Chicago Trust division. Chief Operating Officer Morton B. Comer will report to Chief Executive Officer Chris Skaar, who will report to a six-member board of directors.

Boston EquiServe is a partnership owned 50 percent each by BankBoston and Boston Financial Data Services Inc., itself a joint venture between State Street Corporation and DST.

First Chicago NBD is the nation's 9th largest with assets of $114 billion.

BankBoston is the nation's 16th largest bank holding company with assets of $69.3 billion.

State Street Corporation is the world's leading specialist in servicing institutional investors, with more than $3.9 trillion in assets under custody and $390 billion in assets under management. DST Systems Inc. is a leading provider of technology for mutual funds, corporate stocks and bonds, and -related products.

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Media Contacts: First Chicago NBD Bank Boston Boston EquiServe State Street Thomas Kelly Kristin Habermann Stephen J. MacQuarrie Kari Murphy (312) 732-7007 (617) 434-6883 (781) 575-2055 (617) 664-6524

EQUISERVE AT A GLANCE

Corporate customers: 1,400 Market Rank: 1st Employees: 2,000 Operating divisions: First Chicago Trust and Boston EquiServe Primary locations: Jersey City, N.J., and Canton, Mass. Ownership at closing: First Chicago NBD (50 percent), BankBoston (25 percent) and Boston Financial Data Services (25 percent) Chief executive: Chris Skaar from First Chicago NBD

Chief operating officer: Morton B. Comer from DST Systems Inc.

Board of directors: Two members each from First Chicago NBD, BankBoston and Boston Financial Data Services. DST will be represented on the board when it receives a direct ownership interest.