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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
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Preliminary Proxy Statement |
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CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2)) |
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section
240.14a-11(c) or Section 240.14a-12
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BANK ONE CORPORATION
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1) Title of each class of
securities to which transaction applies:
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(2) Aggregate number of securities to which
transaction applies:
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Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):
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(4) Proposed maximum aggregate
value of transaction:
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(5) Total fee paid:
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Fee paid previously with
preliminary materials.
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Check box if any part of the fee
is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule
and the date of its filing.
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(1) Amount Previously Paid:
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(2) Form, Schedule or
Registration Statement No.:
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(4) Date Filed:
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Notes:
[logo]
April 5,
2000
TO
OUR
STOCKHOLDERS
:
I am pleased to invite you to attend the
Annual Meeting of Stockholders of BANK ONE CORPORATION, which will be held
at 9:30 a.m., Chicago time, Tuesday, May 16, 2000, at the Bank One
Auditorium located at 1 Bank One Plaza in the Chicago Loop, bounded by
Madison, Clark, Monroe and Dearborn Streets. Please use the Dearborn Street
entrance to the Bank building.
The election of twenty directors is scheduled
for consideration at this Meeting. In addition a stockholder proposal will
be acted upon if properly presented at the Meeting. The Meeting will also
provide an opportunity to review with you the business and affairs of the
Corporation and its subsidiaries during 1999 and give you a chance to meet
your directors.
Whether you plan to attend or not, please
date, sign and return the proxy card in the accompanying envelope. In the
alternative, you may vote your shares by telephone or via the Internet.
Instructions are included with the proxy card. Your vote is important no
matter how many shares you own. If you do attend the Meeting and
desire to vote in person, you may do so even though you have previously
submitted your proxy.
I look forward to seeing you at the
Meeting.
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Chairman of the
Board and
Chief Executive Officer
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[LOGO OF BANK
ONE]
NOTICE OF
ANNUAL MEETING
OF
STOCKHOLDERS
MAY 16,
2000
TO
OUR
STOCKHOLDERS
:
The Annual Meeting of Stockholders of BANK ONE
CORPORATION will be held on Tuesday, May 16, 2000, at 9:30 a.m., Chicago
time, at the Bank One Auditorium, 1 Bank One Plaza, Chicago, Illinois, for
the purpose of considering and voting upon:
1.
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The election of
twenty directors for a term of one year;
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2.
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One stockholder
proposal, if properly presented at the Meeting, which is described in the
accompanying proxy statement; and
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3.
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Such other business
as may properly come before the Meeting or any adjournments
thereof.
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The record date for
determining stockholders entitled to notice of, and to vote at, the Meeting
is the close of business March 17, 2000.
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By order of the
Board of Directors,
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April 5,
2000
PLEASE COMPLETE,
SIGN AND RETURN THE ENCLOSED FORM
OF PROXY IN THE
ENVELOPE PROVIDED FOR THAT PURPOSE, OR VOTE BY TELEPHONE OR INTERNET AS
DESCRIBED ON THE FORM.
BANK ONE
CORPORATION
1 Bank One
Plaza
Chicago, Illinois
60670
PROXY
STATEMENT
FOR
ANNUAL MEETING
TO BE HELD MAY 16, 2000
This proxy statement is furnished in
connection with the solicitation on behalf of the Board of Directors of BANK
ONE CORPORATION (the “Corporation” or “Bank One”) of
proxies for use at the Annual Meeting of Stockholders (the “Annual
Meeting”) of the Corporation to be held at 9:30 a.m., Chicago time, on
Tuesday, May 16, 2000, and at any adjournments of the meeting.
The Board of Directors has fixed the close of
business on March 17, 2000, as the record date for determining stockholders
entitled to notice of, and to vote at, the Annual Meeting. On the record
date, the Corporation had outstanding and entitled to vote 1,147,619,141
shares of Common Stock. Each share of Common Stock entitles the holder to
one vote. The presence, in person or by proxy, of the holders of a majority
of the shares of Common Stock entitled to vote at the Annual Meeting will
constitute a quorum.
Directors will be elected by a plurality of
the votes cast at the Annual Meeting; therefore, the twenty nominees who
receive the largest number of votes cast will be elected as directors.
Shares represented by proxies marked to withhold authority to vote with
respect to any nominee will be counted for purposes of establishing a
quorum, but will have no effect on the election of that nominee. An
affirmative vote of a majority of the shares present in person or by proxy
and entitled to vote at the Annual Meeting is required for approval of each
other matter to be presented. Shares represented by proxies which are marked
“abstain” on each such matter will be counted as shares present
for purposes of determining the presence of a quorum; such shares will also
be treated as shares present and entitled to vote, which will have the same
effect as a vote against each such matter. Proxies relating to “street
name” shares which are not voted by brokers on each matter presented
will be treated as shares present for purposes of determining the presence
of a quorum, but will not be treated as shares represented at the Annual
Meeting as to any matter not voted upon by the broker.
The proxy statement, form of proxy and the
Corporation’s 1999 Annual Report will be mailed to each stockholder
commencing on or about April 10, 2000.
The principal executive offices of the
Corporation are located at 1 Bank One Plaza, Chicago, Illinois
60670.
The Corporation was formed as the result of
the merger (the “Merger”) of First Chicago NBD Corporation (
“First Chicago NBD”) and BANC ONE CORPORATION (“Banc One
”) with and into the Corporation. The Merger became effective October
2, 1998.
ELECTION OF
DIRECTORS
At the Annual Meeting, twenty directors are
proposed to be elected to hold office until the next annual meeting of
stockholders and until their successors are elected and have
qualified.
It is intended that shares represented by
proxies solicited on behalf of the Board of Directors will be voted for the
nominees listed below. In the event that any nominee is unable or declines
to serve, an event which is not anticipated, proxies may be voted at the
Annual Meeting for another person in place of such nominee, or the number of
directors constituting the entire Board may be reduced.
The name, principal occupation, certain
biographical information and Board committee memberships of each nominee are
provided below. Each of the nominees is currently serving as a director of
the Corporation and has served as a director since the effective date of the
Merger, October 2, 1998, except for Mr. Boardman, who has served as a
director since December 21, 1999, and Mr. Dimon, who has served as a
director since March 27, 2000. In the following biographies and the
remainder of this proxy statement, “First Chicago” means the
corporation which merged with and into NBD Bancorp, Inc. (“NBD”)
on December 1, 1995. NBD was renamed “First Chicago NBD” upon its
merger with First Chicago. The year in which each director commenced his or
her period of service with Banc One, First Chicago, NBD or First Chicago NBD
is also given below.
[PHOTO]
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Mr. Boardman, 58, has been Vice Chairman of
the Board of the Corporation since December 21, 1999. He has headed the
Corporation’s credit card line of business since October, 1999, and
prior to that time served as head of acquisitions for the Corporation and
Banc One. Mr. Boardman has served in a number of senior executive
positions with the Corporation and Banc One since joining Banc One in
1984. Mr. Boardman also is a director of Checkfree Holdings Corporation.
He is an ex-officio member of the Executive Committee.
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[PHOTO]
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Mr. Bryan, 63, is Chairman and Chief
Executive Officer of Sara Lee Corporation, a global packaged food and
consumer products company, and has held that position since 1976. In
addition to Sara Lee Corporation, Mr. Bryan is a director of BP Amoco
p.l.c., General Motors Corporation and Goldman Sachs & Co. Mr. Bryan
became a director of First Chicago in 1982. He is a member of the Risk
Management Committee.
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[PHOTO]
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Mr. Buschmann, 62, is Chairman and Chief
Executive Officer of The Budd Company, a producer of automotive parts and
assemblies and a subsidiary of Thyssen Krupp AG, and has held that
position since 1989. He also serves as Chairman and President of Thyssen
Krupp USA, Inc. Mr. Buschmann became a director of NBD in 1991. He is a
member of the Audit Committee.
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[PHOTO]
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Mr. Crown, 46, is a General Partner of Henry
Crown and Company (Not Incorporated), a diversified investment company, a
position he has held since 1985. In addition, Mr. Crown is a director of
General Dynamics Corporation and Sara Lee Corporation. Mr. Crown became a
director of First Chicago in 1991. He is a member of the Employee and
Public Responsibility Committee and the Organization, Compensation and
Nominating Committee.
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[PHOTO]
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Mr. Dimon, 44, was elected Chairman of the
Board and Chief Executive Officer of the Corporation on March 27, 2000.
From November 1998 until he assumed his positions with the Corporation, he
was a private investor. Prior to that time he served as President of
Citigroup Inc., having held that position during October and November 1998
following the merger of Travelers Group Inc. and Citicorp. Prior to the
creation of Citigroup, Mr. Dimon had been President and Chief Operating
Officer of Travelers Group for seven years. He was named Chairman and
Chief Executive Officer of its Smith Barney Inc. subsidiary in January
1996, having previously been the firm’s Chief Operating and Chief
Administrative Officer. In November 1997, he was named Co-Chairman of the
Board and Co-Chief Executive Officer of Salomon Smith Barney Holdings Inc.
Mr. Dimon also is a director of Tricon Global Restaurants Inc. He became a
director of the Corporation on March 27, 2000, and is Chair of the
Executive Committee.
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[PHOTO]
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Mr. Dorrance, 54, is a private investor and
Chairman and Managing Director of DMB Associates, Inc., a real estate
investment and development company. Mr. Dorrance is a director of Campbell
Soup Company, Inc. He became a director of Banc One in 1996. He is a
member of the Employee and Public Responsibility Committee and the
Organization, Compensation and Nominating Committee.
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[PHOTO]
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Dr. Fay, 65, is President of the University
of Detroit Mercy. She has held that position since 1990, and was President
of its predecessor, Mercy College of Detroit, from 1983 through 1990. She
is a director of Kelly Services, Inc. Dr. Fay became a director of NBD in
1985. She serves on the Employee and Public Responsibility Committee, of
which she is Chair, the Organization, Compensation and Nominating
Committee and the Executive Committee.
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[PHOTO]
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Mr. Hall, 67, who served as non-executive
Chairman of the Board of the Corporation from December 21, 1999 to March
27, 2000, is the retired Chairman and Chief Executive Officer of Ashland,
Inc., a refiner, manufacturer and distributor of chemicals. Mr. Hall
served as Chairman of Ashland, Inc. from 1981 to 1997 and as Chief
Executive Officer from 1981 to 1996. Mr. Hall serves as a director of The
Canada Life Assurance Company, CSX Corporation, Humana, Inc., Reynolds
Metals Company, UCAR International, Inc. and USEC Inc. He became a
director of Banc One in 1987. Mr. Hall is a member of the Executive
Committee and is Chair of the Organization, Compensation and Nominating
Committee.
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[PHOTO]
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Mr. Istock, 59, has been President of the
Corporation since October 19, 2000, and served as acting Chief Executive
Officer from December 21, 1999 to March 27, 2000. From the Merger until
October, 1999 he was Chairman of the Board of the Corporation. Mr. Istock
was Chairman of First Chicago NBD from 1996 to 1998 and served as
President and Chief Executive Officer of First Chicago NBD from 1995 to
1998. Mr. Istock, who joined NBD Bank (Michigan) in 1963, served as Vice
Chairman of NBD Bancorp, Inc. and NBD Bank (Michigan) from 1985 to 1994,
and served as Chairman and Chief Executive Officer of NBD Bancorp, Inc.
from 1994 until December 1995. Mr. Istock also is a director of Kelly
Services, Inc., and Masco Corporation. He became a director of NBD in 1985
and is a member of the Executive Committee.
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[PHOTO]
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Mr. Jackson, 57, has been Chairman and Chief
Executive Officer of Clear Creek Properties, Inc., a real estate
development company, since 1989. Prior to that time, he served as Chairman
and Chief Executive Officer of International Spike, Inc. Mr. Jackson also
is a director of Interactive Pictures Corporation. He became a director of
Banc One in 1993. He is a member of the Audit Committee.
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[PHOTO]
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Mr. Kessler, 64, has been Chairman of The
New Albany Company, a real estate development firm, since 1988. He also
serves as Chairman of the real estate development firms Marsh and McLennan
Real Estate Advisors, Inc. and John W. Kessler Company. Mr. Kessler is a
director of Abercrombie & Fitch Co. Mr. Kessler served as a director
of Banc One from 1986 to 1992 and from 1995 until the Merger. He is a
member of the Organization, Compensation and Nominating
Committee.
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[PHOTO]
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Mr. Manoogian, 63, is Chairman and Chief
Executive Officer of Masco Corporation, a diversified manufacturer of home
improvement and building products, a position he has held since 1985.
Prior to that time, he held a number of other executive positions within
the company. In addition, Mr. Manoogian serves as the Chairman and a
director of MascoTech, Inc. and a director of MSX International, Inc. He
became a director of NBD in 1978. He is a member of the Organization,
Compensation and Nominating Committee.
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[PHOTO]
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William T.
McCormick, Jr.
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Mr. McCormick, 55, is Chairman and Chief
Executive Officer of CMS Energy Corporation, a diversified energy company,
a position he has held since 1988. He is also Chairman of its principal
subsidiary, Consumers Energy. In addition to CMS Energy Corporation and
Consumers Energy, Mr. McCormick is a director of Rockwell International
Corporation and Schlumberger Limited. He became a director of NBD in 1985.
He is a member of the Risk Management Committee.
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[PHOTO]
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Mr. Reilly, 60, is Chairman and Chief
Executive Officer of Reilly Industries, Inc., a diversified chemical
manufacturing company. He has held that position since 1990, and prior to
that time held other executive positions within the company. In addition
to Reilly Industries, Inc., Mr. Reilly is a director of Herff Jones, Inc.
and Lilly Industries, Inc. He became a director of NBD in 1995 and later
that year became a director of First Chicago NBD. He serves on the
Employee and Public Responsibility Committee, the Executive Committee and
the Audit Committee, of which he is Chair.
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[PHOTO]
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Mr. Rogers, 42, is President and Co-Chief
Investment Officer of Ariel Capital Management, Inc., an institutional
money management firm that he founded in 1983. His firm also serves as the
investment advisor, administrator and distributor of Ariel Mutual Funds.
Mr. Rogers is a director of Aon Corporation, Burrell Communications Group,
Inc., GATX Corporation and Unicom Corporation. He became a director of
First Chicago NBD in 1998. He is a member of the Employee and Public
Responsibility Committee and the Risk Management Committee.
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[PHOTO]
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Ms. Shackelford, 65, is an educational
consultant. Ms. Shackelford founded School Selection Consulting, an
admissions service for placement in independent secondary schools and
colleges, in 1978. Ms. Shackelford serves as a director of Fiserv Inc. and
Wendy’s International, Inc. She became a director of Banc One in
1993. She serves on the Employee and Public Responsibility Committee and
the Risk Management Committee.
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[PHOTO]
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Mr. Shumate, 49, has been the Office
Managing Partner of Squire, Sanders & Dempsey LLP, a law firm, since
1991. Mr. Shumate, who joined Squire, Sanders & Dempsey in 1988,
served as Chief Counsel and Deputy Chief of Staff to the Governor of Ohio
from 1985 to 1988. Mr. Shumate serves as a director of Intimate Brands,
Inc. and Wm. Wrigley Jr. Company. He became a director of Banc One in
1993. He serves on the Audit Committee and the Employee and Public
Responsibility Committee.
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[PHOTO]
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Frederick P.
Stratton, Jr.
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Mr. Stratton, 61, has been Chairman and
Chief Executive Officer of Briggs & Stratton Corporation, a
manufacturer of air cooled gasoline engines for outdoor power equipment,
since 1986. Mr. Stratton also serves as a director of Briggs &
Stratton Corporation, Midwest Express Holdings, Inc., Weyco Group, Inc.,
Wisconsin Electric Power Company and Wisconsin Energy Corporation. He
became a director of Banc One in 1988. He is a member of the Audit
Committee and the Employee and Public Responsibility
Committee.
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[PHOTO]
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Mr. Tolleson, 51, has been Chief Executive
Officer of The Tolleson Group, a private investment firm, since June 1997,
and also is Managing Director of Arena Capital Partners, LLC, a private
equity fund. Mr. Tolleson served as Chairman and Chief Executive Officer
of First USA, Inc. from 1985 to June 1997. Mr. Tolleson serves as a
director of Capstead Mortgage Corporation, Haggar Corp. and Viad
Corporation. He became a director of Banc One in 1997. He is a member of
the Risk Management Committee.
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[PHOTO]
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Robert D.
Walter
Mr. Walter, 54, has been Chairman and Chief
Executive Officer of Cardinal Health, Inc., a pharmaceutical service
provider, since 1971. Mr. Walter is a director of Cardinal Health, Inc.,
CBS Corporation and Infinity Broadcasting Corporation. He became a
director of Banc One in 1987. He is a member of the Executive Committee
and serves as Chair of the Risk Management Committee.
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COMMITTEES OF THE
BOARD OF DIRECTORS
It is the primary responsibility of the
Corporation’s Board of Directors to oversee the management of the
business of the Corporation and its subsidiaries. To assist in carrying out
its responsibilities, the Board of Directors has established five standing
committees which are described below.
Audit
Committee
The members of the Audit Committee of the
Corporation are Siegfried Buschmann, Laban P. Jackson, Jr., Alex Shumate,
Frederick P. Stratton, Jr., and Thomas E. Reilly, Jr., who serves as Chair.
The Audit Committee met seven times in 1999.
Included among the functions performed by the
Audit Committee are (i) appointment of the Corporation’s independent
public accountants; (ii) review of the plan and results of the independent
public accountants’ auditing engagement; (iii) approval of the
professional services provided by the independent public accountants and
related fees and consideration of the possible effect the performance and
fees would have on the independence of the accountants; (iv) review of the
plan and findings with respect to the internal audit, credit review and
market risk oversight functions; (v) review of the representations of
management and the findings of the independent public accountants as to the
adequacy of the Corporation’s systems of internal controls in order to
obtain reasonable assurance that the Corporation’s annual and quarterly
financial reports are prepared in accordance with generally accepted
accounting principles and are free from material fraud or error; (vi) review
of the assessment of management regarding compliance by subsidiary banks
with laws and regulations designated by bank regulatory agencies as
essential for safety and soundness; (vii) review of the expenses of the
inside directors; (viii) approval of the selection and discharge of the
Corporation’s General Auditor; and (ix) review of reports of
examinations by regulatory agencies relating to the Corporation and its
subsidiaries.
Employee and
Public Responsibility Committee
The members of the Employee and Public
Responsibility Committee of the Corporation are James S. Crown, Bennett
Dorrance, Thomas E. Reilly, Jr., John W. Rogers, Jr., Thekla R. Shackelford,
Alex Shumate, Frederick P. Stratton, Jr. and Maureen A. Fay, who serves as
Chair. The Employee and Public Responsibility Committee met three times in
1999. The Employee and Public Responsibility Committee has responsibility
and authority for matters relating to the Corporation’s and its
subsidiaries’ charitable contributions; diversity, affirmative action,
leadership development and equal employment opportunity policies and
procedures; practices in handling customer inquiries and complaints;
compliance with the Community Reinvestment Act, fair lending laws and
applicable consumer-related laws; neighborhood and social initiatives; and
current and emerging public policy issues.
Executive
Committee
The members of the Executive Committee of the
Corporation are Maureen A. Fay, John R. Hall, Verne G. Istock, Thomas E.
Reilly, Jr., Robert D. Walter, and James Dimon, who serves as Chair. William
P. Boardman serves as an ex officio member. The Executive Committee
met once in 1999. The Executive Committee exercises all the powers of the
Board of Directors in the management of the business and affairs of the
Corporation while the Board of Directors is not in session.
Risk Management
Committee
The members of the Risk Management Committee
of the Corporation are John H. Bryan, William T. McCormick, Jr., John W.
Rogers, Jr., Thekla R. Shackelford, John C. Tolleson and Robert D. Walter,
who serves as Chair. The Risk Management Committee met five times in 1999.
The Risk Management Committee has responsibility and authority for
reviewing, advising on, approving where appropriate and providing guidance
with respect to risk management, financial securities transactions and
capital actions, and financial planning and performance.
Organization,
Compensation and Nominating Committee
Committee Interlocks and Insider Participation
The members of the Organization, Compensation
and Nominating Committee of the Corporation are James S. Crown, Bennett
Dorrance, Maureen A. Fay, John W. Kessler, Richard A. Manoogian and John R.
Hall, who serves as Chair. The Organization, Compensation and Nominating
Committee met six times in 1999.
All of the members of the Organization,
Compensation and Nominating Committee, or their associates, were customers
of, or had transactions with, the Corporation or the Corporation’s
banking or other subsidiaries in the ordinary course of business during
1999. Additional transactions may be expected to take place in the future.
All outstanding loans to the directors and their associates, commitments and
sales, purchases and placements of investment securities and other financial
instruments included in such transactions were made in the ordinary course
of business, on substantially the same terms, including interest rates and
collateral, where applicable, as those prevailing at the time for comparable
transactions with other persons, and did not involve more than normal risk
of collectibility or present other unfavorable features.
Committee Responsibilities and Authorities
Included among the functions related to human
resources management and compensation performed by the Organization,
Compensation and Nominating Committee are (i) ensuring the effectiveness of
senior management and appropriate management continuity; (ii) ensuring the
reasonableness and appropriateness of senior management compensation
arrangements and levels; (iii) overseeing senior management officer titling;
(iv) reviewing the succession plan for the Office of the Chief Executive;
(v) reviewing plans to be followed should the Chairman or the Chief
Executive Officer be absent or disabled; (vi) monitoring the overall
soundness and effectiveness of the Corporation’s compensation and
benefit programs; and (vii) providing advice and counsel regarding the
Corporation’s human resources strategy and key human resources
practices and issues.
Regarding formal authorities for compensation
matters, the Corporation’s Board of Directors approves, upon
recommendation of the Committee, (i) the adoption and amendment of
stock-based plans (subject to stockholder approval where required); (ii) the
adoption and amendment of all compensation plans that cover executive
management (subject to stockholder approval where required); and (iii) all
compensation actions, including employment and separation arrangements, for
officers at or above the level of vice chairman.
The Board of Directors has delegated authority
to the Committee to approve (i) the terms and conditions of stock-based
grants for executive management; (ii) the total number of available shares
to be used each year in stock-based plans; (iii) funding for senior
management annual incentive awards; and (iv) all compensation actions for
members of executive management below the level of vice
chairman.
Additionally, the Committee is responsible for
(i) proposing new directors and reviewing the performance of the Board of
Directors; (ii) providing counsel regarding the organization of the Board of
Directors and its committee structure, charters and membership; and (iii)
overseeing director compensation arrangements.
The Organization, Compensation and Nominating
Committee will consider candidates for nominees for election as directors of
the Corporation submitted by stockholders. Any stockholder who wishes to
have the Committee consider a candidate should submit the name of the
candidate, along with any biographical or other relevant information the
stockholder wishes the Committee to consider, to the Secretary of the
Corporation at the address appearing on the first page of this proxy
statement.
DIRECTOR MEETING
ATTENDANCE AND FEE ARRANGEMENTS
The Board of Directors of the Corporation met
ten times in 1999. Each incumbent director attended 75% or more of the total
number of meetings held during 1999 by the Board of Directors and Committees
thereof on which the director served. (Mr. Boardman attended the December
meeting of the Board of Directors at which he was appointed a member; Mr.
Dimon was appointed to the Board in March 2000.)
Each non-officer director of the Corporation
receives an annual cash retainer of $60,000 and an annual grant of shares of
the Corporation’s Common Stock equal in value to one-half of the annual
cash retainer. The non-officer Chair of each Committee receives a
chairperson retainer of $6,000. Maureen A. Fay, John R. Hall, Thomas E.
Reilly, Jr., and Robert D. Walter are the current Committee Chairs receiving
the chairperson retainer. In addition, each non-officer director who is a
member of the Executive Committee receives a fee of $1,000 for each meeting
of the Executive Committee which he or she attends, and all non-officer
directors receive a $1,000 meeting attendance fee when they attend meetings
relating to special committees. No additional fees are paid to non-officer
directors for attending Board or Committee meetings. Officers of the
Corporation or its subsidiaries do not receive an annual retainer, meeting
fees, shares of Common Stock, or other compensation for service as directors
of the Corporation or on Committees of the Board.
Non-officer directors may elect each year to
have their annual cash retainer paid in any combination of the following:
(i) cash paid on a quarterly basis; (ii) a deferred cash payment pursuant to
the Corporation’s Plan for Deferring the Payment of Directors’
Fees (the “Director Deferral Plan”); or (iii) in shares of Common
Stock, stock options, or stock units pursuant to the Corporation’s
Director Stock Plan. Amounts deferred into the Director Deferral Plan earn a
return equivalent to the rate of return on one or more of the investment
funds in the Corporation’s Savings and Investment Plan.
BENEFICIAL
OWNERSHIP OF THE CORPORATION’S COMMON STOCK
Generally, under the rules of the Securities
and Exchange Commission (the “Commission”), a person is deemed to
be the beneficial owner of a security with respect to which such person,
through any contract, arrangement, understanding, relationship or otherwise,
has or shares voting power (which includes power to vote, or direct the
voting of, such security) or investment power (which includes power to
dispose of, or direct the disposition of, such security). In addition,
a person is deemed to be the beneficial owner of a security if he or she has
the right to acquire such voting power or investment power over the security
within sixty days, such as through the exercise of a stock
option.
The following table shows the beneficial
ownership of the Corporation’s Common Stock as of December 31, 1999 by
(i) each director, (ii) each executive officer named in the Summary
Compensation Table on page 14, and (iii) all directors and executive
officers as a group.
Name
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Amount and
Nature of
Beneficial
Ownership
as of
December 31,
1999
|
|
Percent
of Class
(if 1%
or
greater)
|
| William P. Boardman
|
|
182,416 |
(a)(b) |
|
—
|
% |
| John H.
Bryan |
|
13,534 |
|
|
—
|
|
| Siegfried
Buschmann |
|
4,689 |
|
|
—
|
|
| James S.
Crown |
|
9,031,940 |
(a)(c) |
|
—
|
|
| James
Dimon |
|
2,035,242 |
(d) |
|
|
|
| Bennett
Dorrance |
|
16,930 |
(a)(e) |
|
—
|
|
| Maureen A.
Fay |
|
5,624 |
|
|
—
|
|
| John R.
Hall |
|
48,255 |
(a)(f) |
|
—
|
|
| Verne G.
Istock |
|
912,088 |
(a)(g) |
|
—
|
|
| Laban P. Jackson,
Jr. |
|
26,672 |
(a) |
|
—
|
|
| John W.
Kessler |
|
26,992 |
(a)(h) |
|
—
|
|
| Richard A.
Manoogian |
|
15,619 |
|
|
—
|
|
| William T.
McCormick, Jr. |
|
20,884 |
|
|
—
|
|
Name
|
|
Amount and
Nature of
Beneficial
Ownership
as of
December 31,
1999
|
|
Percent
of Class
(if 1%
or
greater)
|
| John B.
McCoy |
|
1,868,841 |
(a)(i) |
|
—
|
| Thomas E. Reilly,
Jr. |
|
221,145 |
(a)(j) |
|
—
|
| John W. Rogers,
Jr. |
|
3,607 |
|
|
—
|
| Robert A.
Rosholt |
|
279,801 |
(a) |
|
—
|
| Thekla R.
Shackelford |
|
202,992 |
(a) |
|
—
|
| Alex
Shumate |
|
6,633 |
(a) |
|
—
|
| Kenneth T.
Stevens |
|
67,079 |
(a) |
|
—
|
| Frederick P.
Stratton, Jr. |
|
41,619 |
(a)(k) |
|
—
|
| Geoffrey L.
Stringer |
|
73,144 |
(a) |
|
—
|
| John C.
Tolleson |
|
1,031,768 |
(a) |
|
—
|
| Robert D.
Walter |
|
106,050 |
(a) |
|
—
|
All Directors and
Executive Officers as
a Group(a)(l) |
|
18,012,179 |
(a) |
|
1.57 |
|
(a)
|
As set forth in the
following table, the beneficial ownership amounts include shares subject
to options held as of December 31, 1999, exercisable within sixty days,
and also include any shares held pursuant to one of the Corporation’s
401(k) plans as of December 31, 1999. Shares held pursuant to a 401(k)
plan as of February 29, 2000, will be subject to the voting direction of
such persons at the Annual Meeting.
|
| |
|
Shares
|
Name
|
|
Subject
to
options
|
|
Pursuant
to 401(k)
plans
|
| William P.
Boardman |
|
63,146 |
|
7,304 |
| James S.
Crown |
|
15,851 |
|
N/A |
| Bennett
Dorrance |
|
8,738 |
|
N/A |
| John R.
Hall |
|
21,127 |
|
N/A |
| Verne G.
Istock |
|
447,213 |
|
0 |
| Laban P. Jackson,
Jr. |
|
17,455 |
|
N/A |
| John W.
Kessler |
|
7,711 |
|
N/A |
| John B.
McCoy |
|
1,230,552 |
|
8,912 |
| Thomas E. Reilly,
Jr. |
|
8,722 |
|
N/A |
| |
|
Shares
|
Name
|
|
Subject
to
options
|
|
Pursuant
to 401(k)
plans
|
| Robert A.
Rosholt |
|
133,022 |
|
1,709 |
| Thekla R.
Shackelford |
|
17,455 |
|
N/A |
| Alex
Shumate |
|
4,528 |
|
N/A |
| Kenneth T.
Stevens |
|
0 |
|
1,018 |
| Frederick P.
Stratton, Jr. |
|
21,127 |
|
N/A |
| Geoffrey L.
Stringer |
|
38,237 |
|
0 |
| John C.
Tolleson |
|
3,287 |
|
N/A |
| Robert D.
Walter |
|
21,127 |
|
N/A |
All Directors and
Executive Officers as a
Group |
|
2,837,644 |
|
59,076 |
|
(b)
|
Includes 1,272
shares Mr. Boardman owns as trustee for the benefit of his children and of
which he disclaims beneficial ownership.
|
(c)
|
The number of
shares of Common Stock shown as beneficially owned by James S. Crown
comprises 68,045 shares Mr. Crown owns individually; 5,227,611 shares
owned by partnerships of which Mr. Crown is a partner; 1,172,063 shares
owned by a partnership, of which a corporation, of which Mr. Crown is a
director, officer and shareholder, and a trust, of which Mr. Crown is a
beneficiary, are partners; 781,404 shares owned by a not-for-profit
corporation of which Mr. Crown is a director; and 1,517,820 shares owned
by a partnership, of which a corporation, of which Mr. Crown is a
shareholder, and a partnership, of which Mr. Crown is a partner, are
partners. Also included are 244,761 shares owned by trusts of which Mr.
Crown is a co-trustee, and 4,385 shares owned by Mr. Crown’s spouse.
Mr. Crown disclaims beneficial ownership of the shares held by the various
persons and entities described above except for the shares he owns or has
a right to own individually and, with respect to shares owned by entities,
except to the extent of his interest in such entities.
|
(d)
|
Reflects shares
owned on March 27, 2000, and includes 1,000,000 shares held by Mr. Dimon
’s spouse.
|
(e)
|
Includes 7,700
shares held by a trust of which Mr. Dorrance is trustee.
|
(f)
|
Includes 896 shares
of which Mr. Hall disclaims beneficial ownership, held by Mr. Hall’s
spouse.
|
(g)
|
Includes 27,954
shares, of which Mr. Istock disclaims beneficial ownership, held by Mr.
Istock’s spouse.
|
(h)
|
Includes 17,000
shares held by a trust of which Mr. Kessler is trustee.
|
(i)
|
Includes 20,793
shares owned by Mr. McCoy’s spouse and 136,576 shares held by Mr.
McCoy, as trustee for the benefit of his children, of which Mr. McCoy
disclaims beneficial ownership.
|
(j)
|
Includes 193,440
shares held in trusts of which Mr. Reilly is co-trustee; 965 shares held
by Mr. Reilly’s spouse; and 2,096 shares, of which Mr. Reilly
disclaims beneficial ownership, held by Mr. Reilly’s spouse as
custodian for an adult child.
|
(k)
|
Includes 5,000
shares held in a retirement plan for Mr. Stratton’s
benefit.
|
(l)
|
For purposes of
this table, the term “executive officers” includes all persons
who were executive officers of the Corporation on December 31, 1999, plus
Mr. McCoy, who retired on December 21, 1999, and Mr. Dimon, who became an
executive officer on March 27, 2000.
|
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act
of 1934 requires each of the Corporation’s directors and officers, and
each beneficial owner of more than ten percent of a registered class of the
Corporation’s equity securities, to file with the Commission an initial
report of the person’s beneficial ownership of the Corporation’s
equity securities and subsequent reports regarding changes in such
ownership. To the best of the Corporation’s knowledge each person who
was so subject to Section 16(a) with respect to the Corporation at any time
during 1999, filed, on a timely basis, all reports required for the year
pursuant to Section 16(a).
ORGANIZATION,
COMPENSATION AND NOMINATING
COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Organization, Compensation and Nominating
Committee (“the Committee”) is the committee of the Corporation
’s Board of Directors responsible for establishing and monitoring
various compensation programs of the Corporation.
Objectives and
Policies
The Committee has established guiding
principles for the Corporation’s compensation programs of which the
primary objectives are to attract, motivate and retain executives with the
experience and capabilities needed to maximize shareholder value, provide
outstanding leadership to employees, and deliver superior products and
services to customers.
Performance
Criteria and Competitive Posture
Each year, the Committee reviews and
establishes a “peer group” to be used in assessing competitive
compensation trends and pay levels. For 2000, the Committee has defined the
“Peer Group” as a selected group of bank holding companies and 2
diversified financial institutions. The Committee has reviewed and analyzed
the existing executive compensation programs with respect to each major
component of compensation and aggregate total compensation to ensure
competitiveness against the Peer Group.
Each year the Committee establishes the
Corporation’s executive compensation programs based on trends and
practices within the Peer Group as well as on information provided by
third-party consultants and special compensation surveys. The Committee also
annually reviews compensation trends and practices within the Peer Group in
order to establish or validate compensation decisions. Appropriate peer
groups may also be developed within various Bank One lines of business to
ensure a competitive total compensation program. The Committee believes that
Bank One’s most direct competitors for executive talent are not
necessarily the same companies that would be included in a peer group
established to compare shareholder returns. Thus, the Peer Group used for
compensation purposes differs from the peer group index set forth and used
in the Comparison of Five-Year Cumulative Total Return graph.
Compensation
Program
The key components of the Corporation’s
executive compensation program are base salary, annual incentive
compensation and long-term, stock-based compensation. The program is
designed to provide competitive and performance-based current compensation,
as well as opportunities to earn longer-term rewards commensurate with
superior shareholder value creation. Each component of executive
compensation is discussed below.
Base
Salaries
Base salaries for executive officers are
reviewed annually and adjusted to reflect competitive practices within the
Peer Group for positions with similar roles or responsibilities. Individual
performance, time in position, prior experience and specific knowledge are
also considered during the annual salary review process. Base salaries may
also be adjusted at other times of the year for changes in position, level
of responsibility, special assignments or competitive situations. The
Committee exercises broad discretion when setting base salary levels and
considers all of the above criteria.
The overall rate of increase for base salaries
of executive officers is intended to be consistent with competitive trends
in the industry. Base salaries of executive officers are targeted at levels
reflecting the median of the Peer Group. All base salary increases for
executive officers in 1999 were reviewed and approved by the Committee or,
in the case of Vice Chairman or higher level positions, recommended by the
Committee and approved by the Board of Directors.
In April 1999, Mr. Istock’s annual salary
was increased to $995,000 from $825,000 reflecting both his normal annual
review and his competitive position relative to the Peer Group. The base
salary earnings of $949,231 reported in the Summary Compensation Table
differ only due to the timing of the increase during the year. Mr. McCoy
’s annual salary was also increased in April 1999 to $1,200,000 from
$995,000. The base salary earnings of $1,151,988 reflected in the Summary
Compensation Table are a result of timing of his annual increase and his
employment termination before year end. The approximate 20% increase in base
salaries for Messrs. Istock and McCoy reflected the Committee’s
determination that such adjustments were appropriate based upon Peer Group
compensation for comparable positions.
Annual Incentive
Compensation
During 1999, the Corporation’s executive
officers participated in the Executive Management Annual Incentive Plan (
“AIP”). The AIP was approved for 1999 as a replacement program for
various annual incentive
programs previously utilized by Banc One and First Chicago NBD. The AIP
establishes target annual incentive levels based on competitive practices of
the Peer Group as reflected in Proxy Statements, published compensation
surveys and other sources. The aggregate of all target awards for the
executive management group is the basis for an incentive “pool”
which is approved by the Committee at the beginning of each
year.
The Committee also establishes financial
performance expectations as well as minimum or threshold performance goals
each year which may be based upon earnings per share (“EPS”), net
income, return on equity (“ROE”), total shareholder return (
“TSR”) or other measures as it may deem appropriate. The Committee
further establishes a prescribed formula for adjusting the final incentive
“pool” based on actual financial results compared to its
pre-determined measures and goals. For 1999, the Committee had established
an EPS goal and a prescribed funding formula for adjustment of the incentive
pool. Based on 1999 EPS results which were well above threshold levels but
below expectations, the final incentive pool was adjusted downward to 45% of
its original level.
Under the AIP, individual incentive
opportunities are based on competitive compensation trends for specific
positions. Final awards must be funded from the adjusted, approved “pool
” and reflect the Committee’s subjective assessment of the
performance of the executive relative to his or her attainment of specific
financial results and other strategic or non-financial objectives. Based on
the reduction in the available incentive “pool”, executive officer
awards were generally below target and below amounts paid for the prior
year. Mr. Istock requested that no annual cash incentive be paid to him
based on the Corporation’s 1999 financial results. The Committee agreed
with Mr. Istock’s request. Mr. McCoy did not receive an annual
incentive award for 1999 as his employment terminated before the end of the
year.
Long Term Stock
Incentive Compensation
Stock-based incentive compensation provides a
long-term link between the results achieved for shareholders and the rewards
provided to executive officers and selected other key managers. Stock
incentive awards are made under the Bank One Stock Performance Plan (the
“Stock Plan”).
Each year, as part of its annual executive
compensation review, the Committee reviews competitive practices of the Peer
Group to determine appropriate levels of stock incentive compensation for
executive officers and selected other key members of management. The
Committee establishes award guidelines that are intended to provide stock
incentive award opportunities that are at or above the Peer Group median
when measured on a total economic value basis. In granting stock incentive
awards the Committee will also give consideration to the aggregate amount,
type, mix and conditions associated with the Peer Group’s use of stock
incentive compensation. For 2000, the Committee has elected to use a
combination of non-qualified stock options and restricted stock grants for
its normal annual grant but may use other types of stock incentives as
necessary. All stock options will be granted with an exercise price at least
equal to the fair market value of the Corporation’s Common Stock on the
date of grant.
During 1999, stock awards under the Stock Plan
also were in the form of non-qualified options and restricted share grants.
Award targets were established based on competitive practices. Target award
levels and the expected percent of eligible employees receiving stock awards
were highest for higher level managers and executive officers. Non-qualified
stock options were used exclusively at lower levels of management with
restricted share grants limited to higher level managers and certain
“high potential” middle level managers.
Generally, non-qualified options awarded under
the Stock Plan during 1999 vested in three years with one-half of the shares
vesting in two years and the remaining one-half at the end of the third
year. The option term was twenty years. Restricted share grants under the
Stock Plan during 1999 normally vested in five years with one-half of the
award vesting at the end of the third year and the remaining half at the end
of the fifth year. During the restriction period, recipients receive
dividend income. There were certain exceptions to these terms for newly
hired employees and other special circumstances. The Committee must approve
the terms and conditions of any stock award to an executive officer. In
February 1999, both Messrs. Istock and McCoy each received an award of
189,000 non-qualified stock options and 40,000 restricted shares with the
terms and conditions outlined above. The number of shares granted reflected
median award levels within the Peer Group as well as the Committee’s
subjective assessment of their past performance and expected future
contributions to the Corporation’s success.
Retirement of
John McCoy
In December 1999, the Committee reviewed and
recommended for the Board of Directors’ approval terms of an agreement
with Mr. McCoy covering various financial and non-financial provisions in
connection with his retirement from the Corporation. A summary of this
agreement is set forth in the Proxy Statement. The Corporation retained two
independent executive compensation consultants to provide advice concerning
the terms of the agreement and it was their opinion that the recommended
arrangements were well within the range of current competitive practices.
Based upon this advice and other pertinent information provided to the
Committee, the Committee was satisfied as to the appropriateness of the
terms of the agreement.
Deductibility
The Internal Revenue Code (“IRC”)
limits allowable Federal income tax deductions for compensation paid by a
publicly held corporation. Specifically, section 162(m) of the IRC limits
deductible compensation to $1 million for the Corporation’s chief
executive officer and for each of the four other most highly compensated
executive officers employed at year end. However, performance-based
compensation may be excluded from this limit provided, among other things,
that payment is made pursuant to a plan approved by stockholders; that it is
payable upon attainment of pre-determined, objective goals; and that the
board committee approving such payments is made up of “outside”
’ directors as defined in Section 162(m). The Corporation currently
believes that all performance-based compensation paid for 1999 qualifies for
maximum deductibility under Section 162(m).
The Committee believes that executive
compensation should be reasonable and competitive and that a substantial
portion of total compensation should be based upon the Corporation’s
performance. It has approved both annual cash and long-term incentive
compensation programs and developed target award opportunities accordingly.
It is the Committee’s policy to optimize both the effectiveness and
tax-efficiency of the Corporation’s executive compensation plans by
utilizing performance-based compensation that allows for maximum
deductibility under section 162(m) of the IRC. However, tax deductibility is
only one of many factors that must be considered in any final decision
regarding executive compensation. In order to serve best the Corporation and
the interests of its stockholders, the Committee may determine that payment
of non-deductible compensation is necessary to provide an appropriate award
consistent with its overall philosophy and the intent of the
performance-based programs.
Stock Ownership
Guidelines
Consistent with the importance of long-term,
stock-based incentives and to further ensure that the interests of its
senior managers are in line with those of stockholders, the Corporation
maintains formal stock ownership guidelines for executive management and
selected senior level managers.
|
The Organization,
Compensation and
|
PERFORMANCE
GRAPH
The following graph compares the cumulative
total return on the Corporation’s Common Stock with the Standard &
Poor’s 500 Index (the “S&P 500 Index”) and the Standard
& Poor’s Bank Composite Index (“S&P Bank Composite Index
”). The S&P 500 Index and the S&P Bank Composite Index are
market-capitalization-weighted indices, meaning that companies with a higher
market value count more in each index. The S&P Bank Composite Index is
comprised of the larger “Major Regional” and “Money Center
” banks selected by Standard & Poor’s. As of December 31,
1999, the S&P Bank Composite Index included 25 Major Regional and four
Money Center banks and bank holding companies. Each of these indices
includes the Corporation’s Common Stock. The values in the graph show
the relative performance of a $100 investment made on December 31, 1994, in
the Corporation’s Common Stock, the S&P 500 Index and S&P Bank
Composite Index.
|
Comparison of Five
Year Cumulative Total Return
(1)
|
|
Among the
Corporation, S&P 500 Index and S&P Bank Composite Index.
(2)
|
[PERFORMANCE GRAPH
FOR COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN]
| |
|
1994 |
|
1995 |
|
1996 |
|
1997 |
|
1998 |
|
1999 |
| Corporation |
|
100 |
|
154 |
|
201 |
|
262 |
|
279 |
|
182 |
| S&P
500 |
|
100 |
|
137 |
|
169 |
|
225 |
|
289 |
|
350 |
S&P Bank
Composite |
|
100 |
|
159 |
|
225 |
|
325 |
|
346 |
|
302 |
(1)
|
Assumes $100
invested at December 31, 1994, with quarterly reinvestment of
dividends.
|
(2)
|
At December 31 in
each year.
|
COMPENSATION OF
EXECUTIVE OFFICERS
Executive Officer
Compensation Table
The following table sets forth the
compensation paid, earned or awarded for the years indicated therein, to the
individuals who served as the Corporation’s chief executive officer
during 1999 and its other four most highly compensated executive
officers.
Summary
Compensation Table
| |
|
|
|
|
|
Long Term
Compensation
|
|
|
| |
|
|
|
Annual Compensation
|
|
Awards
|
|
Payouts
|
|
|
| Name and
Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Other
Annual
Compen-
sation
($)(1)
|
|
Restricted
Stock
Awards
($)(2)
|
|
Securities
Underlying
Options/SARs
(#)(3)
|
|
LTIP
Payouts
($)(4)
|
|
All
Other
Compen-
sation
($)(5)
|
| |
| |
| |
| |
| |
| Verne G.
Istock* |
|
1999
|
|
$
949,231
|
|
$
0
|
|
$6,631
|
|
$2,002,400
|
|
189,000
|
|
$
0
|
|
$
42,715
|
| President and
Acting |
|
1998
|
|
818,270
|
|
1,750,000
|
|
177,091
|
|
0
|
|
333,567
|
|
0
|
|
13,806,873
|
| Chief Executive
Officer |
|
1997
|
|
796,797
|
|
1,100,000
|
|
131,153
|
|
0
|
|
281,615
|
|
657,628
|
|
35,856
|
| |
| John B.
McCoy* |
|
1999
|
|
1,151,988
|
|
0
|
|
356,091
|
|
2,002,400
|
|
189,000
|
|
0
|
|
10,502,073
|
| Chief Executive
Officer |
|
1998
|
|
995,000
|
|
2,200,000
|
|
366,075
|
|
0
|
|
165,126
|
|
1,828,474
|
|
3,708,241
|
|
|
1997
|
|
995,000
|
|
1,500,000
|
|
345,089
|
|
1,079,764
|
|
102,623
|
|
0
|
|
4,116,872
|
| |
| William P.
Boardman |
|
1999
|
|
471,817
|
|
315,000
|
|
147,069
|
|
400,480
|
|
37,800
|
|
0
|
|
33,630
|
| Vice Chairman of
the Board |
|
1998
|
|
444,720
|
|
350,000
|
|
21,570
|
|
342,423
|
|
23,515
|
|
671,693
|
|
31,102
|
| |
|
1997
|
|
427,500
|
|
260,000
|
|
19,717
|
|
459,971
|
|
21,807
|
|
0
|
|
2,770,111
|
| |
| Robert A.
Rosholt |
|
1999
|
|
427,308
|
|
350,000
|
|
0
|
|
400,480
|
|
37,800
|
|
0
|
|
19,315
|
| Executive Vice
President |
|
1998
|
|
343,269
|
|
475,000
|
|
0
|
|
0
|
|
25,483
|
|
0
|
|
2,194,394
|
|
|
|
1997
|
|
318,269
|
|
410,000
|
|
0
|
|
0
|
|
43,984
|
|
622,484
|
|
14,322
|
|
| Kenneth T.
Stevens |
|
1999
|
|
508,860
|
|
350,000
|
|
5,584
|
|
320,384
|
|
30,200
|
|
0
|
|
37,669
|
| Executive Vice
President |
|
1998
|
|
504,900
|
|
465,000
|
|
7,745
|
|
390,558
|
|
31,892
|
|
791,724
|
|
32,936
|
|
|
1997
|
|
485,000
|
|
291,000
|
|
15,837
|
|
319,976
|
|
28,220
|
|
0
|
|
1,013,793
|
|
|
| Geoffrey L.
Stringer |
|
1999
|
|
267,308
|
|
2,000,000
|
|
0
|
|
100,120
|
|
9,450
|
|
0
|
|
12,029
|
| Executive Vice
President |
|
1998
|
|
257,308
|
|
1,000,000
|
|
0
|
|
0
|
|
25,901
|
|
0
|
|
509,429
|
|
|
1997
|
|
247,308
|
|
935,000
|
|
0
|
|
0
|
|
26,916
|
|
0
|
|
11,129
|
*
|
Mr. McCoy
retired as Chief Executive Officer on December 21, 1999, at which time
Mr. Istock was elected Acting Chief Executive Officer.
|
(1)
|
This column
includes the following:
|
Name
|
|
|
|
1999
|
|
1998
|
|
1997
|
| John B.
McCoy |
|
Personal use of
company aircraft |
|
$38,524
|
|
$24,244
|
|
$22,913
|
|
|
Annual club
dues |
|
31,926
|
|
25,177
|
|
24,628
|
| William P.
Boardman |
|
Moving
expenses |
|
65,201
|
|
—
|
|
—
|
(2)
|
As of December
31, 1999, the total number of outstanding restricted shares and the
value of the shares (based upon the $32 per share closing price) were
as follows:
|
Name
|
|
Shares
|
|
Value
|
| Verne G.
Istock |
|
40,000 |
|
$1,280,000 |
| John B.
McCoy |
|
106,872 |
|
3,419,904 |
| William P.
Boardman |
|
47,665 |
|
1,525,280 |
| Robert A.
Rosholt |
|
8,000 |
|
256,000 |
| Kenneth T.
Stevens |
|
30,911 |
|
989,152 |
| Geoffrey L.
Stringer |
|
2,000 |
|
64,000 |
Dividends on these shares are payable in
cash.
(3)
|
For Messrs.
Istock, Rosholt and Stringer, the number of stock options listed in
this column for 1998 and 1997 represents the sum of new and restorative
stock options granted during the year. The number of new stock options
granted to Messrs. Istock, Rosholt and Stringer in 1998 and 1997 were
as follows:
|
Name
|
|
1998
|
|
1997
|
| Verne G.
Istock |
|
106,920 |
|
170,100 |
| Robert A.
Rosholt |
|
12,150 |
|
14,580 |
| Geoffrey L.
Stringer |
|
5,832 |
|
8,748 |
|
For a
description of restorative stock options, see footnote (2) to the
“Options/SAR Grants in Last Fiscal Year” table on page
16.
|
(4)
|
The dollar
values equal the market value of the Common Stock on the date the
payouts of performance share awards were effective.
|
(5)
|
This column
consists of the following:
|
|
a. A Deferred
Compensation Award to Mr. McCoy for 1998 in the amount of $3,528,800;
and Special Recognition Awards to Messrs. McCoy, Boardman and Stevens
for 1997 in the amounts of $4,000,000, $2,750,000 and $1,000,000,
respectively.
|
|
b. Payment of
shares of Common Stock in 1998 to Messrs. Istock, Rosholt and Stringer
pursuant to performance share awards outstanding at the time of the
Merger. Based upon the market value of the Common Stock on the
effective date of the Merger, the values of the shares of Common Stock
paid to Messrs. Istock, Rosholt and Stringer were $13,769,667,
$2,178,636 and $497,850. Under applicable change in control provisions,
outstanding awards became payable as a result of the Merger at the
maximum level.
|
|
c. The values of
split-dollar life insurance arrangements in the amounts of $101,513,
$9,743 and $9,047 for 1999; $104,591, $9,960 and $9,059 for 1998; and
$106,872 $10,111 and $9,043 for 1997 for Messrs. McCoy, Boardman and
Stevens, respectively. The split dollar life insurance program is
structured so that all premium payments are returned to the Corporation
at the later of (i) the executive attaining age 65 or (ii) the
expiration of 15 policy years. In addition to the executive
split-dollar policies, Mr. McCoy is covered by a split-dollar
arrangement that insures the lives of Mr. McCoy and his wife, the value
of which is included above.
|
|
d. Employer
matching contributions in the following amounts to the 401(k) and
supplemental 401(k) plans in which the named executive officers
participated.
|
Name
|
|
1999
|
|
1998
|
|
1997
|
| Verne G.
Istock |
|
$
42,715 |
|
$37,206 |
|
$35,856 |
| John B.
McCoy |
|
100,560 |
|
74,850 |
|
10,000 |
| William P.
Boardman |
|
23,887 |
|
21,142 |
|
10,000 |
| Robert A.
Rosholt |
|
19,315 |
|
15,758 |
|
14,322 |
| Kenneth T.
Stevens |
|
28,622 |
|
23,877 |
|
4,750 |
| Geoffrey L.
Stringer |
|
12,029 |
|
11,579 |
|
11,129 |
|
e. A severance
payment for 1999 to Mr. McCoy of $10.3 million pursuant to the
agreement described on page 20.
|
Option Grants
Table
The following table provides information on
stock options granted in 1999 to the executive officers named in the
Summary Compensation Table. In 1999, all options to these officers were
new grants and no grants were restorative stock options. All options
granted by the Corporation in 1999 were non-qualified stock options, and
no stock appreciation rights (“SARs”) were granted in
1999.
Option/SAR
Grants in Last Fiscal Year
Name
|
|
Individual
Grants
|
|
Grant
Date
Present
Value ($)
(4)
|
| |
Number of
Securities
Underlying
Options/
SARs Granted
(#) (1)(2)
|
|
Percent
of Total
Options/SARs
Granted to
Employees in
Fiscal Year
(3)
|
|
Exercise
or
Base Price
($/Sh)
|
|
Expiration
Date
|
| Verne G.
Istock |
|
189,000 |
|
1.21% |
|
$50.06 |
|
2/16/2019 |
|
$2,999,245 |
| John B.
McCoy |
|
189,000 |
|
1.21
|
|
50.06 |
|
2/16/2019 |
|
2,999,245 |
| William P.
Boardman |
|
37,800 |
|
0.24
|
|
50.06 |
|
2/16/2019 |
|
599,849 |
| Robert A.
Rosholt |
|
37,800 |
|
0.24
|
|
50.06 |
|
2/16/2019 |
|
599,849 |
| Kenneth T.
Stevens |
|
30,200 |
|
0.19
|
|
50.06 |
|
2/16/2019 |
|
479,244 |
| Geoffrey L.
Stringer |
|
9,450 |
|
0.06
|
|
50.06 |
|
2/16/2019 |
|
149,962 |
(1)
|
One-half of each
option grant is exercisable on the second and third anniversaries of
the grant date, which was February 16, 1999.
|
(2)
|
Restorative
Option Feature: The new stock options granted by the Corporation in
1999, and by First Chicago NBD, First Chicago and NBD that were
outstanding at the time of the Merger, include a feature which provides
for the issuance of restorative options. The restorative feature allows
a participant who exercises a stock option during the participant
’s employment, and who pays all or a part of the exercise price of
a stock option with shares of Common Stock held by the participant for
at least six months, to receive a restorative option to purchase the
number of shares of Common Stock equal to the number of whole shares
used by the participant in payment of the stock option’s exercise
price. Restorative options become exercisable six months after the date
of grant. The expiration date of a restorative option is the expiration
date of the original stock option to which it relates, and the exercise
price is not less than 100% of the fair market value of the Common
Stock on the date the restorative option is granted.
|
Under the restorative feature
of stock options issued by First Chicago, additional restorative options
are granted with respect to shares exchanged to pay tax withholding
obligations related to the option exercise; the market price of the
Common Stock must be at least 25% higher than the exercise price of the
outstanding stock option at the time of exercise of the new stock option;
and a restorative stock option will not be granted upon the exercise of a
restorative stock option.
(3)
|
The percentages
shown are based on total options granted in 1999 (both new and
restorative options) on 15,556,494 shares of Common Stock.
|
(4)
|
The grant date
present values were determined using the Black-Scholes standard option
pricing model based on the following assumptions:
|
Option
Type
|
|
Vesting
|
|
Duration
|
|
Dividend
Yield
|
|
Volatility
|
|
Risk free
Rate of Return
|
|
|
| Non-qualified |
|
1
/2 at 2 and 3 years
|
|
20
years |
|
3.55% |
|
38.389% |
|
4.53% |
|
No adjustments
were made in calculating the grant date present value of an option to
account for potential forfeiture or the non-transferable nature of the
option.
|
The actual value
of the options will depend on the market value of the Common Stock on the
dates the options are exercised. No realization of value from the options
is possible without an increase in the price of the Common Stock, which
would benefit all stockholders.
1999 Option
Exercises and Year-End Option Value Table
The following table provides information on
options exercised in 1999 by the executive officers named in the Summary
Compensation Table, the number of unexercised options held at December
31, 1999, and the value of the unexercised in-the-money options held as
of that date. No SARs were outstanding at any time during
1999.
Aggregated
Option/SAR Exercises in Last Fiscal Year
and FY-End
Option/SAR Values
Name
|
|
Shares
Acquired
on
Exercise
(#)
|
|
Value
Realized
($)
|
|
Number of
Securities
Underlying Unexercised
Options/SARs
at FY-End (#)
|
|
Value of
Unexercised
In-the-Money Options/SARs
at FY-End ($) (1)
|
|
|
|
Exercisable
|
|
Unexercisable
|
|
Exercisable
|
|
Unexercisable
|
| Verne G.
Istock |
|
0 |
|
$
0 |
|
447,213 |
|
189,000 |
|
$
621,403 |
|
$
0 |
| John B.
McCoy |
|
49,388 |
|
1,588,644 |
|
438,636 |
|
791,916 |
|
2,916,097 |
|
1,657,312 |
| William P.
Boardman |
|
5,097 |
|
209,580 |
|
63,146 |
|
140,838 |
|
355,764 |
|
246,153 |
| Robert A.
Rosholt |
|
0 |
|
0 |
|
133,022 |
|
37,800 |
|
208,244 |
|
0 |
| Kenneth T.
Stevens |
|
0 |
|
0 |
|
0 |
|
121,025 |
|
0 |
|
9,076 |
| Geoffrey L.
Stringer |
|
0 |
|
0 |
|
38,237 |
|
9,450 |
|
0 |
|
0 |
(1)
|
The values are
based on the $32 per share closing price of the Common Stock on
December 31, 1999, less the exercise price of the options.
|
Pension
Plans
Personal Pension Account Plan
In general, salaried employees and regular
hourly employees (scheduled to work at least 20 hours per week) of
designated subsidiaries of the Corporation are eligible to participate in
the Corporation’s Personal Pension Account Plan (“PPAP”)
upon completing one year of service. The PPAP provides that a participant
is 100% vested after completing five years of vesting service. The PPAP
was amended and restated effective as of January 1, 2000, reflecting the
merger of the prior First Chicago NBD, Banc One and First USA pension
plans. Various transition benefits for employees at or nearing retirement
age under prior pension plans continue to apply, with certain
modifications, under the PPAP.
After becoming eligible to participate in
the PPAP, an employee’s PPAP account is credited with a percentage
of the employee’s covered compensation for each month, as reflected
in the following chart. Covered compensation includes base pay,
commissions, eligible bonus, overtime, shift differential, and certain
amounts deducted on a pre-tax basis up to applicable compensation limits
imposed by the IRC.
Completed
Anniversary Years of Service
For PPAP Contributions
|
|
Percent
of Eligible Monthly Pay
Credited to PPAP Account
|
|
1–
4 |
|
3.0% |
|
5–
9 |
|
4.0
|
|
10–14 |
|
5.0
|
|
15–19 |
|
6.0
|
|
20–24 |
|
7.5
|
|
25+ |
|
9.0
|
Also at the end of each month, the
participant’s beginning account balance is credited with interest
for the month at a rate equal to the one-year U.S. Treasury bill rate
plus 1% (subject to a minimum rate of 4.5%). Interest rates are
determined on a quarterly basis.
Generally, an employee who has attained age
65 (with a minimum of five years of vesting service) is entitled to
receive annual retirement income (in monthly installments) for life equal
to the actuarial equivalent of the employee’s balance. Participants
may commence a reduced annuity benefit at any earlier age after
separation from service, and (with spousal consent) may elect a lump sum
payment of their PPAP account balance.
Supplemental Personal Pension Account Plan
The Corporation’s Supplemental
Personal Pension Account Plan (“Supplemental PPAP”) permits the
payment of supplemental benefits to employees whose annual benefits upon
retirement under the PPAP would exceed those permitted by the IRC. There
is a $1 million annual ceiling on total covered compensation. The
Supplemental PPAP provides that if the amount of the annual retirement
benefit that would otherwise be payable under the PPAP to a person who
has completed five or more years of vesting service is limited by reason
of compliance with the IRC, such person shall be entitled to a
supplemental benefit equal to the difference between the benefit such
person receives under the PPAP and the benefit such person would have
received if such limitation had not been included. The benefit is payable
from the general assets of the Corporation.
Estimated Annual Benefits Payable to Executive
Officers
The following table provides the estimated
annual benefits (including any Supplemental PPAP benefits) payable for
life, beginning at normal retirement age (65), for each of the executive
officers named in the Summary Compensation Table based on years of
service through December 31, 1999, and with projected interest credits on
cash balances estimated at a rate of 6.55% per annum (the applicable rate
in January 2000).
Name
|
|
Year of
65th Birthday
|
|
Estimated
Annual Benefit
|
| Verne G.
Istock |
|
2005 |
|
$921,448 |
| John B.
McCoy(1) |
|
— |
|
— |
| William P.
Boardman(2) |
|
— |
|
— |
| Robert A.
Rosholt |
|
2015 |
|
330,896 |
| Kenneth T.
Stevens |
|
2017 |
|
23,656 |
| Geoffrey L.
Stringer |
|
2008 |
|
266,437 |
(1)
|
Mr. McCoy’s
pension benefits will be paid pursuant to the agreement described on
page 20.
|
(2)
|
Mr. Boardman
’s pension benefits will be paid pursuant to the agreement
described on page 20.
|
Supplemental Executive Retirement Plan
Effective January 1, 2000, the Corporation
adopted (by amending and restating a prior Banc One plan) a Supplemental
Executive Retirement Plan (“SERP”) which provides benefits to
certain executives who have attained age 55 and completed 10 or more
years of service at the time of termination of employment or death. The
SERP generally provides retirement benefits at age 65 equal to the
average of the five highest annual amounts of compensation (base salary
plus bonus) paid to the participant during the last ten years prior to
retirement, multiplied by a percentage (which may not exceed 60%)
computed by multiplying the number of years of the participant’s
credited service by 2%. Payments under the SERP are reduced by other
sources of retirement income, including benefits under the PPAP and the
Supplemental PPAP, but not benefits under Social Security. Reduced
benefits are available in the event of termination prior to age 65;
however, participants with total age and years of service equal to or
exceeding 85 at retirement receive unreduced benefits. Payment of
benefits under the SERP may be in the form of a single lump sum or an
annuity.
The following table illustrates the
estimated annual benefits payable under the SERP upon retirement at
specified levels of average compensation and years of credited service
assuming retirement at age 65 on January 1, 2000. The amounts shown in
the table are straight life annuity amounts, are not subject to
deductions for Social Security or other offset amounts, and include
amounts payable pursuant to the PPAP and the Supplemental
PPAP.
|
|
|
Years of
Credited Service
|
Average
Compensation
|
|
10
|
|
15
|
|
20
|
|
25
|
|
30+
|
| $
500,000 |
|
$100,000 |
|
$
150,000 |
|
$
200,000 |
|
$
250,000 |
|
$
300,000 |
|
1,000,000 |
|
200,000 |
|
300,000 |
|
400,000 |
|
500,000 |
|
600,000 |
|
1,500,000 |
|
300,000 |
|
450,000 |
|
600,000 |
|
750,000 |
|
900,000 |
|
2,000,000 |
|
400,000 |
|
600,000 |
|
800,000 |
|
1,000,000 |
|
1,200,000 |
|
2,500,000 |
|
500,000 |
|
750,000 |
|
1,000,000 |
|
1,250,000 |
|
1,500,000 |
|
3,000,000 |
|
600,000 |
|
900,000 |
|
1,200,000 |
|
1,500,000 |
|
1,800,000 |
|
3,500,000 |
|
700,000 |
|
1,050,000 |
|
1,400,000 |
|
1,750,000 |
|
2,100,000 |
The years of credited service and average
compensation under the SERP as of January 1, 2000 for each of the
executive officers named in the Summary Compensation Table are as
follows:
Name
|
|
Years of
Credited Service(1)
|
|
Average
Compensation
|
| Verne G.
Istock |
|
36 |
|
$1,783,974 |
| John B.
McCoy(2) |
|
— |
|
— |
| William P.
Boardman(3) |
|
— |
|
— |
| Robert A.
Rosholt |
|
25 |
|
732,986 |
| Kenneth T.
Stevens |
|
3 |
|
800,695 |
| Geoffrey L.
Stringer |
|
25 |
|
1,026,022 |
(1)
|
Years of
credited service is limited to 30 under the SERP.
|
(2)
|
Mr. McCoy’s
pension benefits will be paid pursuant to the agreement described on
page 20.
|
(3)
|
Mr. Boardman
’s pension benefits will be paid pursuant to the agreement
described on page 20.
|
Termination of
Employment and Change of Control Agreements
Change of Control Agreements. Change
of control severance agreements are in effect between the Corporation and
certain key executives (including Messrs. Istock, Boardman, Rosholt,
Stevens and Stringer). These executive change of control agreements (the
“Change of Control Agreements”) provide, generally, that if an
executive officer terminates his employment for any reason during the
30-day period which begins one year after a Change of Control (as
defined) or if, during the three years following a Change of Control, the
executive’s employment is terminated (other than for cause as
defined or due to death or disability) or the executive terminates
employment for good reason (as defined), the executive will be entitled
to receive a severance payment consisting of: (a) the executive’s
base salary through the date of termination, (b) a proportionate bonus
based upon the average bonus paid to the executive with respect to the
three fiscal years prior to the date of the Change of Control (the
“Average Bonus”), (c) two and one-half times the sum of the
executive’s base salary and the Average Bonus, and (d) unpaid
deferred compensation and vacation pay. In addition to the severance
payment, upon a covered termination, the executive will also be entitled
to a payment having an actuarial present value equal to the additional
pension benefits under the Corporation’s qualified and supplemental
retirement plans that the executive would have received had the executive
remained employed for 30 months after the date of termination. The
Corporation will also provide the executive with continued medical and
welfare benefits coverage for 30 months after the date of termination and
with outplacement services. If any amounts payable to an executive under
the Change of Control Agreements or otherwise would subject such
executive to the excise tax under section 4999 of the IRC, the
Corporation will make a payment to the executive such that after the
payment of all income and excise taxes, the executive will be in the same
after-tax position as if no excise tax under section 4999 had been
imposed, provided that, if such payments (excluding additional amounts
payable due to the excise tax) are not at least $100,000 in excess of the
greatest amount that could be paid without giving rise to the excise tax,
no additional payments will be made with respect to the excise tax, and
the payments otherwise due to the executive will be reduced to an amount
necessary to prevent the application of the excise tax.
Executive Management Separation
Plan. The Corporation has adopted an Executive Management Separation
Plan for its executive officers (including Messrs. Istock, Boardman,
Rosholt, Stevens and Stringer), effective October 1, 1999. If an eligible
officer is involuntarily terminated, excluding termination for cause, or
resigns in circumstances determined to be in the best interests of the
Corporation, the officer must irrevocably elect, during a 30-day
transition period beginning upon his initial notice of termination,
either a lump sum payment option or a salary continuation option.
Pursuant to the lump sum payment option, a payment equal to two times the
officer’s annualized base salary plus two times the officer’s
average annual bonus (based on the highest two of the officer’s
prior three bonus awards) will be paid to the officer upon employment
termination, which will be at the conclusion of the transition period.
Pursuant to the salary continuation option, the officer’s
termination date will occur on the earlier of the date twelve months from
the end of the transition period or the date upon which he obtains
employment elsewhere and his salary continuation ceases. Under this
option, the officer will continue to receive his base salary until his
termination date and a lump sum equal to one year’s base salary
(plus any unpaid salary continuation) will be paid at the termination
date. The officer also will receive his or her average bonus (based on
the highest two of the prior three bonus awards), which will be paid at
the next annual bonus cycle following the initial notice date, and an
additional bonus equal to his or her average bonus,
which will be paid at termination. Under either option, the officer is
eligible for continuation of certain benefits until his employment
termination date and is eligible to vest in awards previously granted as
if he were a retiree retiring on the termination date. Until December 31,
2000, all terminations, except in cases of death or termination for
cause, are deemed to be in the best interests of the Corporation, and in
that circumstance, the plan provides for a special minimum benefit equal
to the amounts calculated as of October 1, 1999, pursuant to clauses (b)
and (c) of the preceding paragraph concerning the Change of Control
Agreements.
Agreement with John B. McCoy. In
connection with Mr. McCoy’s retirement as an officer of the
Corporation effective December 21, 1999, he entered into an agreement
which included the following provisions: a severance payment to him of
$10.3 million in January 2000; a pension of $3 million per year
commencing in 2001 which includes the pension benefits to which he is
otherwise entitled; the vesting in January 2000 of his February 16, 1999
award of 40,000 restricted shares and his 1997 and 1998 Special
Recognition Awards of $4 million and $3.5 million; the right to exercise
all outstanding stock options, whether or not yet exercisable, in January
2000, with all options continuing to be exercisable through January 2005,
except those with an earlier expiration date; reimbursement for all
relocation and moving expenses, including any loss he may incur on the
sale of his Chicago residence; and office space and secretarial support
for life or until he commences other full-time employment.
Agreement with William P. Boardman.
In connection with Mr. Boardman’s new responsibilities as Vice
Chairman of the Board and head of Credit Card, in March 2000, he entered
into an agreement with the Corporation which provides that if he remains
actively employed by the Corporation, subject to certain exceptions,
until he attains age 60, upon his retirement he will receive the
following: a pension of not less than $525,000 per year; unrestricted
ownership of all outstanding restricted shares (other than special
awards); the right to exercise all outstanding stock options (other than
special awards), whether or not yet exercisable, with all such stock
options continuing to be exercisable for ten years after retirement
except those with an earlier expiration date; reimbursement on an
after-tax basis for the incremental cost of medical health insurance
until age 65; and reimbursement on an after-tax basis for any loss he may
incur on the sale of his residence.
TRANSACTIONS
WITH DIRECTORS, EXECUTIVE OFFICERS, STOCKHOLDERS AND
ASSOCIATES
Directors and executive officers of the
Corporation and their associates were customers of, or had transactions
with, the Corporation or the Corporation’s banking or other
subsidiaries in the ordinary course of business during 1999. Additional
transactions may be expected to take place in the future. All outstanding
loans to directors, executive officers and their associates, commitments
and sales, purchases and placements of investment securities and other
financial instruments included in such transactions, were made in the
ordinary course of business, on substantially the same terms, including
interest rates and collateral, where applicable, as those prevailing at
the time for comparable transactions with other persons, and did not
involve more than normal risk of collectibility or present other
unfavorable features. All other transactions described below were entered
into in the ordinary course of business and on substantially the same
terms as those prevailing at the time for comparable transactions with
other persons.
During 1999, a subsidiary of the
Corporation paid approximately $2,146,500 for rent and incidental
services under a lease for office space to REI Investments, Inc. Thomas
E. Reilly, Jr., a director of the Corporation, is a director of and has
an indirect equity ownership interest in REI Investments,
Inc.
Alex Shumate, a director of the
Corporation, is Office Managing Partner of the Columbus, Ohio, office of
Squire, Sanders & Dempsey LLP. The Corporation and its subsidiaries
retained Squire, Sanders & Dempsey for legal services in 1999 and
will utilize the law firm in 2000. Payments to Squire, Sanders &
Dempsey by the Corporation and its subsidiaries in 1999 did not exceed 5%
of the law firm’s gross revenues for the year and were comparable to
payments that would have been paid by the Corporation and its
subsidiaries to non-affiliated persons for similar services.
On March 25, 2000, James Dimon, the
Chairman of the Board, Chief Executive Officer and a director of the
Corporation, purchased from the Corporation 2,000,000 shares of Common
Stock at an aggregate purchase price of $56,750,000. The $28.375 per
share purchase price was equal to the closing price of the Common Stock
on the New York Stock Exchange on the preceding day, March 24,
2000.
INDEPENDENT
PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur
Andersen LLP (“Andersen”) to serve as the Corporation’s
independent public accountants. Representatives of Andersen will be
present at the Annual Meeting to make a statement if they desire to do so
and to respond to appropriate questions.
Prior to the Merger, Banc One had engaged
Coopers & Lybrand, LLP, now PricewaterhouseCoopers LLP (“PwC
”), as its independent public accountant while First Chicago NBD had
engaged Andersen. In anticipation of the Merger, a process was initiated
to select the independent public accountant for the merged entity.
Selection of Andersen as the independent public accountant was
recommended to the Banc One Audit Committee on July 20, 1998. The Banc
One Audit Committee approved the selection and so reported to the Banc
One Board of Directors on July 21, 1998, and PwC was notified that,
effective immediately, the firm would no longer be engaged as independent
public accountant.
The PwC audit reports on the consolidated
financial statements of Banc One for the years ended December 31, 1996
and 1997, respectively, did not contain an adverse opinion or disclaimer
of opinion and were not qualified or modified as to uncertainty, audit
scope or accounting principles. During the two fiscal years ended
December 31, 1997, and the interim period preceding the change of
independent accountants, there were no disagreements between Banc One and
PwC on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedures, which
disagreements, if not resolved to the satisfaction of PwC, would have
caused it to make reference to the subject matter of the disagreement in
connection with its report. Further, PwC did not advise Banc One of any
reportable events during the aforementioned time period.
STOCKHOLDER
PROPOSAL
The Corporation has been advised that Mr.
John J. Gilbert, 29 East 64th Street, New York, New York 10021-7043,
President of the Ruffy Corporation, owner of 200 shares of Common Stock,
and Martin Glotzer, 7061 North Kedzie Avenue, Chicago, Illinois 60645,
who is the owner of 10 shares and represents a further family interest of
11 shares of Common Stock, intend to introduce the following resolution
at the Annual Meeting:
RESOLVED: That the stockholders of BANK ONE
CORPORATION, assembled in annual meeting in person and by proxy, hereby
request the Board of Directors take the needed steps to hire an
investment banking firm to sell the Corporation.
Messrs. Gilbert and Glotzer have submitted
the following statement in support of the resolution:
You are urged to vote “FOR” this
proposal for we believe you will benefit.
The Board of Directors recommends a vote
AGAINST the stockholder proposal.
The Board of Directors opposes this
proposal because it believes that it is based on the faulty premise that
it is in the best interests of the Corporation and its stockholders that
the Corporation be promptly sold with the objective of realizing a
premium over the current market price of its Common Stock. The Board
believes this premise does not properly take into account the current
position and prospects of the Corporation.
The Board’s opposition to an immediate
sale, as envisioned in the proposal, is based on two primary
arguments:
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First, it would
not maximize long-term stockholder value. Any public speculation that
the Corporation was for sale would engender uncertainty among employees
and customers that would produce an immediate and ongoing deterioration
in the business and value of the Corporation.
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Second, recent
actions and strategic decisions to address the issues resulting in the
current discounted stock price valuation should be given time to yield
targeted performance improvements before any sale is contemplated. This
would assure that existing stockholders, rather than stockholders of
any acquiring company, would receive a higher proportional benefit from
any positive revaluation in the stock price resulting from the targeted
financial performance improvement.
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The Board believes that the current
depressed stock price valuation primarily reflects negative earnings
performance issues within the credit card business but that these issues
are being addressed through a series of recent management changes and
strategic decisions. The Board believes that the results of these
decisions will begin to be reflected in improved credit card financial
performance with the objective of achieving industry-levels of
profitability by the end of the year. The Board believes that when these
targeted results are realized, a positive relative stock price
revaluation will occur.
The Board will continue to review and make
determinations, as it has from time to time, as to what it believes are
the best actions to maximize stockholder value. To assist the Board in
doing this, the Corporation maintains close relationships with nationally
recognized investment banking firms and regularly obtains their expert
advice on financial and strategic matters. For the reasons stated, the
Board feels that an immediate sale of the Corporation, as is contemplated
by the proposal, would be premature and would not maximize returns for
existing stockholders. The Board, therefore, recommends a vote AGAINST
this stockholder proposal.
SUBMISSION
OF STOCKHOLDER PROPOSALS
Any proposal that a holder of Common Stock
intends to present at next year’s Annual Meeting of Stockholders
must be received by the Corporation, at the address appearing on the
first page of this proxy statement, no later than December 6, 2000, in
order to be included in the proxy statement and form of proxy relating to
that meeting.
ANNUAL MEETING
ADVANCE NOTICE REQUIREMENTS
The Corporation’s Restated Certificate
of Incorporation (the “Certificate”) and By-Laws (the
“By-Laws”) provide that stockholder nominations for election as
directors or proposals of other business may be made in compliance with
certain advance notice, informational and other applicable requirements.
In order to be considered, a stockholder’s notice of director
nomination or other proposals must be delivered to or mailed and received
by the Secretary of the Corporation at 1 Bank One Plaza, Chicago,
Illinois 60670 at least 60 but no more than 90 days prior to the
anniversary date of the Corporation’s immediately preceding annual
meeting; provided, however, that in the event the annual meeting is more
than 30 days before or 60 days after such anniversary date, notice by the
stockholder must be delivered not earlier than the close of business on
the 90
th
day prior to the
annual meeting and not later than the close of business on the later of
the 60
th
day prior to such
annual meeting or the 10
th
day following the
day on which public announcement of the date of such meeting is first
made by the Corporation. A shareholder’s notice of director
nominations or other proposals must contain certain information required
by the Certificate and By-Laws. Copies of the Certificate and By-Laws are
available upon request made to the Secretary of the Corporation at the
above address. The requirements described above do not supersede the
requirements or conditions established by the Commission for shareholder
proposals to be included in the Corporation’s proxy materials for a
meeting of stockholders.
OTHER
MATTERS
As of the date of this proxy statement, the
Board of Directors of the Corporation does not know of any matters to be
presented at the Annual Meeting other than those specifically set forth
in the Notice of Annual Meeting of Stockholders. If other proper matters,
however, should come before the Annual Meeting or any adjournment
thereof, the persons named in the enclosed proxy intend to vote the
shares represented by them in accordance with their best judgment in
respect to any such matters.
MISCELLANEOUS
The cost of soliciting proxies will be
borne by the Corporation. The solicitation will be primarily by mail. In
addition to the use of the mail, some of the officers, directors and
regular employees of the Corporation and its subsidiaries may solicit
proxies by telephone, telegram or personal interview without additional
remuneration therefor. The Corporation intends to reimburse banks,
brokerage houses and other institutions, custodians, nominees and
fiduciaries for reasonable expenses in forwarding proxy material to their
principals. The Corporation has also made arrangements with Georgeson
& Company, Inc. to assist the Corporation in soliciting proxies from
banks, brokers and nominees and has agreed to pay approximately $20,000
plus expenses for such services.
Stockholders are urged to sign and date the
enclosed proxy and return it as promptly as possible in the envelope
enclosed for that purpose. Stockholders of record can also give proxies
by calling a toll-free telephone number or by using the Internet. The
telephone and Internet voting procedures are designed to authenticate
stockholders’ identities, to allow stockholders to give their voting
instructions and to confirm that stockholders’ instructions have
been recorded properly. The Corporation has been advised by counsel that
the procedures that have been put in place are consistent with the
requirements of applicable law. Specific instructions for stockholders of
record who wish to use the telephone or Internet voting procedures are
included with the enclosed proxy card.
Properly executed proxies will be voted in
accordance with stockholders’ directions. If no directions are
given, proxies will be voted for the election of directors and, with
respect to each other matter scheduled for consideration at the Annual
Meeting, in accordance with the recommendations of the Board of Directors
as set forth in this proxy statement. The proxy does not affect the right
to vote in person at the Annual Meeting and may be revoked at any time
prior to the voting at the meeting by submitting a later dated proxy
(including a proxy via telephone or the Internet) or by giving written
notice of such revocation to the Secretary of the
Corporation.
The Bank One Auditorium, in which the
Meeting will be held, offers special access for people in wheelchairs and
headsets for the hearing-impaired. Stockholders who wish to arrange for
either of these services are invited to call (312) 732-8208 by Friday,
May 12, 2000.
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By order of the
Board of Directors,
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April 5,
2000
BANK ONE CORPORATION
PROXY/VOTING INSTRUCTIONS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, MAY 16, 2000
The undersigned hereby appoints Timothy P.
Moen and Susan S. Moody and each of them, as proxies, with full power of
substitution, to represent the undersigned and to vote all shares of
stock of BANK ONE CORPORATION that the undersigned is entitled to vote at
the Annual Meeting of Stockholders of the Corporation to be held on May
16, 2000, and any adjournments thereof, upon all matters that may
properly come before the Meeting. This proxy/instructions card when
when properly executed will be voted in the manner specified by the
undersigned stockholder and, in the discretion of the proxies, on all
other matters. If no choice as to the manner of voting the
proxy/instructions card is specified, this proxy/instructions card will
be voted FOR the election of all nominees for director listed below and
AGAINST the stockholder proposal.
This card also provides voting instructions
for any shares held in the Corporaton's dividend reinvestment and stock
purchase plan and to the trustees of any 401(k) plan maintained by the
Corporation or its subsidiaries for all shares held by such trustees that
the undersigned is entitled to vote.
Your vote for the election of the Directors
may be indicated on the other side. The nominees are 01. Boardman, 02.
Bryan, 03. Buschmann, 04. Crown, 05. Dimon, 06. Dorrance, 07. Fay, 08.
Hall, 09. Istock, 10. Jackson, 11. Kessler, 12. Manoogian, 13. McCormick,
14. Reilly, 15. Rogers, 16. Shackelford, 17. Shumate, 18. Stratton, 19.
Tolleson, and 20. Walter.
Please date and sign on the reverse side
and return promptly in the enclosed business reply
envelope.
If you are a stockholder of record and
do not sign and return a proxy, or vote your shares over the telephone or
the Internet, or attend the meeting and vote by ballot, your shares
cannot be voted. If your shares are held by the trustees for a plan and
your voting instructions are not timely received, the trustees of the
plan will cause your shares to be voted in the same manner and proportion
as the other shares of the plan for which timely instructions have been
received.
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DIVIDEND DIRECT DEPOSIT
BANK ONE CORPORATION offers common
stockholders the convenience of having dividends electronically deposited
without charge into their checking, savings or money market account at
most U.S. financial institutions. To obtain an enrollment card, contact
First Chicago Trust, a Division of EquiServe, at 1-888-764-5592.
DIVIDEND REINVESTMENT AND STOCK PURCHASE
PLAN
Stockholders can increase their ownership
in the Corporation without brokerage commissions or service fees through
the Dividend Reinvestment and Stock Purchase Plan. For a prospectus and
an enrollment card, contact First Chicago Trust, a Division of EquiServe,
at 1-888-764-5592.
xPlease mark your votes as in this
example.
This proxy/voting instructions card, when
properly executed, will be voted in the manner specified, but if no
choice is specified on this card, it will be voted FOR the election of
directors and AGAINST the stockholder proposal.
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FOR |
WITHHELD |
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FOR |
AGAINST |
WITHHELD |
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Election of
Directors
(see reverse) |
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2. |
Stockholder Proposal-
Sell the company |
[_] |
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| Except vote withheld from the following
nominee(s): |
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The signer hereby revokes all
proxies/instructions heretofore given by the signer to vote at said
meeting or any adjournments thereof. |
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Please sign exactly as name appears
hereon. Joint owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such. |
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SIGNATURE(S)
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IMPORTANT: PLEASE VOTE AND SIGN YOUR
PROXY/INSTRUCTION CARD AND RETURN IT IN THE ENVELOPE PROVIDED
BANK ONE CORPORATION
Annual Meeting of Stockholders
May 16, 2000
9:30 A.M. (Chicago Time)
Bank One Auditorium
1 Bank One Plaza
Chicago, Illinois
Bank One common stockholders can vote their shares
either over the telephone or the Internet. This eliminates the need to
return the proxy/instruction card.
To vote your shares over the telephone or the
Internet you must have your proxy/instruction card and SSN available. The
series of numbers that appear in the box above must be used to access the
system.
| 1. |
To vote over the telephone:
On a touch-tone telephone call
1-877-PRX-VOTE (1-877-779-8683) 24 hours a day, 7 days a
week. |
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To vote over the Internet:
Log on to the Internet and go tothe website
http://www.eproxyvote.com/one. |
Your vote over the telephone or the Internet
authorizes the named proxies in the same manner as if you marked, signed,
dated and returned your proxy/instruction card. If you choose to vote your shares over the telephone
or the Internet, there is no need for you to mail back your
proxy/instruction card.
