<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE CHASE MANHATTAN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
THE CHASE MANHATTAN CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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 registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
1Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
CHASE
[LOGO]
NOTICE OF 1994
ANNUAL MEETING
OF STOCKHOLDERS
AND PROXY
STATEMENT
Meeting Date: April 19, 1994
Mailing Date: March 11, 1994
The Chase Manhattan Corporation
1 Chase Manhattan Plaza
New York, New York 10081-0001
<PAGE> 3
THE CHASE MANHATTAN CORPORATION
1 Chase Manhattan Plaza
New York, New York 10081-0001
CHASE
[LOGO]
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of The
Chase Manhattan Corporation to be held at the main office of the Corporation on
Tuesday, April 19, 1994 at 2:30 p.m. Further information about the meeting and
the nominees for election as Directors is in the formal Notice of the meeting
and Proxy Statement on the following pages.
It is important that your shares be represented at this meeting. Even if you
plan to attend this meeting, we hope that you will sign, date and return your
proxy promptly in the enclosed envelope. This will not limit your right to vote
in person or to attend the meeting.
A report of the voting at the meeting will be included in the Corporation's
report to stockholders for the first quarter of 1994.
Sincerely yours,
Thomas G. Labrecque Arthur F. Ryan
Thomas G. Labrecque Arthur F. Ryan
Chairman of the Board President
March 11, 1994
<PAGE> 4
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 19, 1994
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of The Chase Manhattan Corporation will be
held at the main office of the Corporation, 1 Chase Manhattan Plaza, New York,
New York, on Tuesday, April 19, 1994 at 2:30 p.m., for the following purposes:
Act upon resolutions proposed by the Board of Directors to
- elect six Directors
- approve the appointment of independent auditors for the current
year
- approve a proposed 1994 Long-Term Incentive Plan
Act upon resolutions, expected to be proposed by certain stockholders,
which are opposed by management, recommending or requesting that the Board of
Directors take action to
- reinstate the annual election of Directors
- provide for cumulative voting in the election of Directors
- develop a policy to promote certain banking practices for the
development of a democratic South Africa
- establish human rights, social, political and ecological criteria
for extending loans to or promoting other bank products in
developing countries and for writing off certain existing loans
Transact such other business as may properly be brought before the meeting.
The close of business on February 22, 1994 has been fixed as the time as of
which holders of Common Stock of the Corporation entitled to notice of and to
vote at the meeting shall be determined.
RONALD C. MAYER
Secretary
March 11, 1994
<PAGE> 5
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Proxy Statement........................................................ 1
Election of Directors............................................. 1
Board Meetings, Committees, Attendance, Fees and Retirement
Plan........................................................... 5
Stock Ownership................................................. 7
Executive Compensation.......................................... 9
Compensation Committee Report on Executive Compensation......... 11
The Retirement Plan............................................. 15
Termination of Employment and Change in Control Arrangements.... 16
Performance Graph............................................... 18
Transactions with Management and Others......................... 18
Approval of Auditors.............................................. 19
1994 Long-Term Incentive Plan..................................... 19
Purpose of the 1994 Plan........................................ 20
Number of Shares................................................ 20
Awards.......................................................... 20
Stock Options and Stock Appreciation Rights..................... 21
Restricted Stock Units and Restricted Stock..................... 21
Withholding for Payment of Taxes................................ 22
Administration.................................................. 22
Amendments...................................................... 22
Certain Federal Income Tax Consequences of the 1994 Plan........ 23
Miscellaneous................................................... 25
Approval of the Plan............................................ 25
Stockholder Proposals............................................. 25
Other Matters..................................................... 30
Exhibit A......................................................... A-1
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 6
THE CHASE MANHATTAN CORPORATION
1 Chase Manhattan Plaza
New York, New York 10081-0001
PROXY STATEMENT
This Proxy Statement, with the accompanying proxy card, is being mailed to
stockholders starting on March 11, 1994 and is furnished in connection with the
solicitation by the Board of Directors of The Chase Manhattan Corporation of
proxies to be used at the Annual Meeting of Stockholders of the Corporation to
be held on April 19, 1994, and at any adjournment thereof. Only holders of
shares of Common Stock of record at the close of business on February 22, 1994
will be entitled to vote. On that date there were 184,652,916 shares of Common
Stock of the Corporation outstanding and entitled to one vote per share.
A stockholder executing the enclosed proxy may revoke it any time before it
is exercised. No formal procedure is specified for revocation. Shares
represented by an unrevoked proxy will be voted as authorized by the
stockholder.
ELECTION OF DIRECTORS (Item 1 on Proxy)
The Certificate of Incorporation of the Corporation provides that the Board of
Directors shall be divided into three classes, as nearly equal in number as
possible, with the members of each class to hold office for three-year terms.
The Board, upon the recommendation of the Nominating Committee, has nominated
six of the seven Directors whose terms will expire at the 1994 Annual Meeting
for election as members of a class of Directors to hold office for three-year
terms until the Annual Meeting to be held in 1997 and until their successors are
respectively elected and qualified. The other Director whose term will expire at
the 1994 Annual Meeting, Howard C. Kauffmann, has determined not to stand for
reelection in keeping with the Board's general policy with respect to
retirement. It is anticipated that, effective immediately following the 1994
Annual Meeting, the Board will take appropriate action to reduce the number of
Directors constituting the Board to 19, thereby eliminating the vacancy which
would otherwise result from the retirement of Director Kauffmann. Accordingly,
proxies cannot be voted for a greater number of persons than the number of
nominees named below.
It is intended that the shares represented by the enclosed proxy will be
voted (unless such authority is withheld by a stockholder) for the election of
the six nominees referred to above, i.e., M. Anthony Burns, Jairo A. Estrada,
James L. Ferguson, William H. Gray, III, David T. McLaughlin and Henry B.
Schacht. If any nominee shall become unavailable, which is not anticipated, the
persons named in the proxy may vote the shares represented by them for the
election of such other person, if any, as Director, as may be nominated by the
Board of Directors, upon the recommendation of the Nominating Committee, or the
Board may reduce the number of Directors. A plurality of the votes cast at the
meeting by the holders of the shares of Common Stock of the Corporation entitled
to vote thereat is required to elect Directors. Each of the nominees was elected
as a Director of the Corporation at the 1991 Annual Meeting with the exception
of Directors Estrada and Gray, who were appointed as Directors by the Board
effective December, 1993, and August, 1992, respectively. Each of the current
Directors, except for Directors Ferguson, Gray, Lewis and McArthur, is currently
serving as a Director of the Corporation's subsidiary, The Chase Manhattan Bank
(National Association) (the "Bank"), and, except for those four Directors and
Director Kauffmann, is proposed to be elected a Director of the Bank at the
Bank's annual meeting in April, 1994. The name of each current Director of the
Corporation, including each nominee, the year each of them first joined the
Board, their ages, principal occupations and the class of or for which each is a
member or nominee, are as follows:
<PAGE> 7
<TABLE>
<S> <C>
PHOTO THOMAS G. LABRECQUE be-
came chairman of the
board and chief
DIRECTOR SINCE executive officer of the
1980 Corporation and the Bank
AGE 55 in 1990, after serving
CLASS OF 1995 as president and chief
operating officer from
1981. He is also a
director of Alumax Inc.,
the Federal Reserve Bank
of New York and Pfizer
Inc.
PHOTO JOAN GANZ COONEY has
served as chairman of
the executive committee
DIRECTOR SINCE of the Children's
1983 Television Workshop
AGE 64 since 1990. She co-
CLASS OF 1995 founded the Workshop in
1968, and served as
president and chief
executive officer from
1970 to 1988, and as
chairman and chief exec-
utive officer from 1988
to 1990. Mrs. Cooney is
also a director of
Johnson & Johnson,
Metropolitan Life In-
surance Company and
Xerox Corporation.
PHOTO ARTHUR F. RYAN became
president and chief
operating officer of the
DIRECTOR SINCE Corporation and the Bank
1985 in 1990, after serving
AGE 51 as an executive vice
CLASS OF 1996 president from 1982 to
1985 and as a vice
chairman of the board
from 1985.
PHOTO JAIRO A. ESTRADA has
served as chairman of
the board and chief
DIRECTOR SINCE executive officer of
1993 Garden Way Incorporated
AGE 46 since 1985. Mr. Estrada
NOMINEE FOR is also a director of
CLASS OF 1997 Rochester Telephone
Company.
PHOTO RICHARD J. BOYLE became
a vice chairman of the
board of the Corporation
DIRECTOR SINCE and the Bank in 1987,
1987 after serving as a
AGE 50 senior vice president
CLASS OF 1995 from 1975 to 1984 and as
an executive vice
president from 1984. He
is also a trustee of
Prudential Realty Trust.
PHOTO JAMES L. FERGUSON
retired as chairman of
the executive committee
DIRECTOR SINCE of General Foods
1975 Corporation in 1989. He
AGE 67 became chief executive
NOMINEE FOR officer of General Foods
CLASS OF 1997 in 1973 and chairman in
1974, holding these
positions until 1987
when he became chairman
of the executive
committee. Mr. Ferguson
is also a director of
DNA Plant Technology
Corporation, Glaxo
Holdings p.l.c. and ICOS
Corporation.
PHOTO M. ANTHONY BURNS has
served as chairman of
the board of Ryder
DIRECTOR SINCE System, Inc. since 1985.
1990 He has also served as
AGE 51 chief executive officer
NOMINEE FOR of Ryder since 1983 and
CLASS OF 1997 as president since 1979.
Mr. Burns is also a
director of J.C. Penney
Company, Inc. and Pfizer
Inc.
PHOTO EDWARD S. FINKELSTEIN
became chairman of the
board and president of
DIRECTOR SINCE Finkelstein Associates,
1981 Inc. in October, 1992,
AGE 68 after serving as chair-
CLASS OF 1996 man of the board of
directors and chief
executive officer of R.
H. Macy & Co., Inc. and
its predecessor from
1980 to April, 1992. He
is also a director of
Time Warner Inc.
</TABLE>
2
<PAGE> 8
<TABLE>
<S> <C>
PHOTO H. LAURANCE FULLER has
served as chairman of
the board and chief
DIRECTOR SINCE executive officer of
1985 Amoco Corporation since
AGE 55 1991. He has also served
CLASS OF 1996 as president of Amoco
since 1983. Mr. Fuller
is also a director of
Abbott Laboratories.
PHOTO DELANO E. LEWIS became
president and chief
executive officer of
DIRECTOR SINCE National Public Radio in
1993 January, 1994, after
AGE 55 serving as chief
CLASS OF 1996 executive officer of
Chesapeake & Potomac
Telephone Company from
1990 and as its presi-
dent from 1988. Mr.
Lewis is also a director
of Colgate-Palmolive
Company and GEICO
Corporation.
PHOTO WILLIAM H. GRAY, III has
served as president and
chief executive officer
DIRECTOR SINCE of the United Negro Col-
1992 lege Fund, Inc. since
AGE 52 1991. He was a member of
NOMINEE FOR the United States House
CLASS OF 1997 of Representatives from
1979 to 1991. Mr. Gray
is also a director of
Lotus Development
Corporation, MBIA Inc.,
The Prudential Insurance
Company of America,
Rockwell International
Corporation, Scott Paper
Company, Union Pacific
Corporation,
Warner-Lambert Company
and Westinghouse
Electric Corporation.
PHOTO PAUL W. MACAVOY has
served as dean of the
Yale University School
DIRECTOR SINCE of Organization and
1992 Management since July,
AGE 59 1992 and as the Williams
CLASS OF 1995 Brothers Professor of
Management Studies at
Yale since 1991. He was
dean of the William E.
Simon School of Business
Administration at the
University of Rochester
from 1983 to 1991. Mr.
MacAvoy is also a
director of Alumax Inc.,
American Cyanamid
Company and Lafarge Cor-
poration.
PHOTO HOWARD C. KAUFFMANN, re-
tired president, Exxon
Corporation, served on
DIRECTOR SINCE that company's board of
1976 directors from 1974 to
AGE 71 1985. He is also a
CLASS OF 1994 director of Pfizer Inc.
and Ryder System, Inc.
PHOTO JOHN H. MCARTHUR has
served as dean of the
Harvard Graduate School
DIRECTOR SINCE of Business
1980 Administration since
AGE 59 1980. He is also a
CLASS OF 1996 director of Cabot
Corporation, Rohm & Haas
Company, Springs
Industries, Inc. and
Teradyne, Inc.
PHOTO DAVID T. KEARNS has been
senior university fellow
at Harvard University
DIRECTOR SINCE since August, 1993. He
1982 is retired chairman and
AGE 63 chief executive officer
CLASS OF 1995 of Xerox Corporation,
having served as
chairman from 1985 to
1991. From 1991 to
January, 1993 he served
as deputy secretary of
education. Mr. Kearns
was a Director of the
Corporation from 1982 to
1991, and was
reappointed as a
Director in February,
1993. He is also a
director of Ryder
System, Inc. and Time
Warner Inc.
PHOTO DAVID T. MCLAUGHLIN
became president and
chief executive officer
DIRECTOR SINCE of the Aspen Institute
1980 in 1988, after serving
AGE 61 as chairman of the
NOMINEE FOR Institute from 1987.
CLASS OF 1997 From 1981 to 1987 he
served as president of
Dartmouth College. Mr.
McLaughlin is also a
director of Atlantic
Richfield Company,
PartnerRe Holdings Ltd.
and Westinghouse
Electric Corporation.
</TABLE>
3
<PAGE> 9
<TABLE>
<S> <C>
PHOTO EDMUND T. PRATT, JR.,
became chairman emeritus
of Pfizer Inc. in March,
DIRECTOR SINCE 1992, after serving as
1974 chairman of the board of
AGE 67 that company from 1972
CLASS OF 1995 and as its chief
executive officer from
1972 to April, 1991. He
continues as a director
of Pfizer, and is also a
director of Celgene
Corporation, General Mo-
tors Corporation,
International Paper
Company and Minerals
Technologies Inc.
PHOTO DONALD H. TRAUTLEIN is
retired chairman and
chief executive officer
DIRECTOR SINCE of Bethlehem Steel
1981 Corporation, having
AGE 67 served in those
CLASS OF 1995 capacities from 1980
until 1986. He is also a
director of Data Gen-
eral Corporation and
Phoenix Re Corporation.
PHOTO HENRY B. SCHACHT has
served as chairman of
the board and chief
DIRECTOR SINCE executive officer of
1982 Cummins Engine Company,
AGE 59 Inc. since 1977. He is
NOMINEE FOR also a director of
CLASS OF 1997 American Telephone and
Telegraph Company and
CBS Inc.
PHOTO KAY R. WHITMORE retired
as chairman of the board
and chief executive
DIRECTOR SINCE officer of Eastman Kodak
1984 Company in December,
AGE 61 1993, after serving in
CLASS OF 1996 those capacities from
1990. He also served as
president of that
company from 1983 to
December, 1993.
</TABLE>
4
<PAGE> 10
BOARD MEETINGS, COMMITTEES, ATTENDANCE, FEES AND RETIREMENT PLAN
The Board of Directors held thirteen meetings during 1993.
The Board has the following committees:
EXECUTIVE COMMITTEE
This committee held two meetings during 1993. This committee, when the Board is
not in session, is entitled to exercise all the powers of the Board to the
extent permitted by law.
The committee members are Directors Labrecque (chairman), Ryan and Boyle,
each of whom is a member ex-officio, Cooney, Finkelstein, Gray, Kearns, MacAvoy,
Pratt and Trautlein.
COMPENSATION COMMITTEE
This committee held four meetings during 1993. This committee approves the
compensation and appointment of certain senior officers and reviews and makes
recommendations to the Board concerning major compensation policies and the
compensation of officer-directors.
The committee members are Directors Kauffmann (chairman), Ferguson, Fuller,
Kearns, Lewis and McLaughlin, none of whom is an officer of the Corporation.
AUDIT COMMITTEE
This committee held five meetings during 1993. This committee is responsible for
reviewing the financial condition of the Corporation, its internal controls and
audit program, the performance and findings of the internal audit staff, and any
action to be taken thereon by management. It reviews loan, internal audit and
internal control policies. It also reviews audit and examination reports of
governmental agencies and of the independent auditors. The committee selects the
independent auditors for appointment by the Board.
The committee members are Directors Burns (chairman), Ferguson, Gray,
McArthur, Pratt and Trautlein, none of whom is an officer of the Corporation.
EMPLOYEE BENEFITS REVIEW COMMITTEE
This committee held four meetings during 1993. This committee reviews the
reports regarding the employee benefit plans of the Bank made by the Named
Fiduciaries, who are appointed pursuant to the Employee Retirement Income
Security Act of 1974, as amended.
The committee members are Directors McLaughlin (chairman), Finkelstein,
Lewis, Trautlein and Whitmore, none of whom is an officer of the Corporation.
INVESTMENT COMMITTEE
This committee held four meetings during 1993. This committee is responsible for
supervising the trust, other fiduciary and investment advisory activities of the
subsidiaries of the Corporation.
The committee members are Directors Cooney (chairman), Burns, Finkelstein,
MacAvoy and McArthur, none of whom is an officer of the Corporation.
NOMINATING COMMITTEE
This committee held three meetings during 1993. This committee is responsible
for considering and making recommendations to the Board regarding nominees for
election to the Board, Board committee assignments and succession in the offices
of chairman of the board, president and vice chairmen of the board.
The committee members are Directors Pratt (chairman), Ferguson, Kauffmann,
Kearns, McArthur and McLaughlin, none of whom is an officer of the Corporation.
5
<PAGE> 11
The committee will consider recommendations for nominees for election to
the Board which may be submitted by stockholders. These nominations should be
submitted to the secretary of the Corporation for review by the committee. Such
nominations for the 1995 Annual Meeting of Stockholders are required to be
submitted not later than January 21, 1995.
DIRECTOR ATTENDANCE
During 1993, all of the Directors except Director Lewis attended 75% or more of
the meetings of the Board and of the committees of which they were members.
DIRECTORS' FEES
Directors' fees are paid only to Directors who are not officers. Directors
receive a retainer at the rate of $25,000 per year. The chairman of the Audit
Committee receives an additional retainer at the rate of $12,000 per year and
the other members receive an additional retainer at the rate of $5,000 per year.
The chairman of the Compensation Committee receives an additional retainer at
the rate of $9,000 per year and the other members receive an additional retainer
at the rate of $2,500 per year. The chairman of each Board committee, other than
the Audit and Compensation Committees, receives an additional retainer at the
rate of $3,500 per year and the other members of those committees receive an
additional retainer at the rate of $1,200 per year. Fees for attendance at Board
and Board committee meetings are $1,000 for each meeting attended. The
Corporation and the Bank have standard arrangements pursuant to which Directors
may elect to defer all or part of their fees. These arrangements include the
option to have such fees credited as "phantom stock" units as described under
the caption Stock Ownership. The annual retainer and fee arrangements for
Directors provide that in the event of a change in control of the Corporation,
any retainer or fees previously deferred by a Director will be paid to the
Director in a single sum.
Directors who are not officers also receive an annual entitlement to
receive 300 shares of Common Stock of the Corporation. The actual delivery of
such shares is deferred until the Director is no longer a Director of the
Corporation or any of its subsidiaries. The shares to be delivered include the
additional shares that the Director would have been entitled to receive if the
Director had acquired each annual entitlement of shares on a current basis and
had reinvested the cash dividends paid on such shares pursuant to the
Corporation's Dividend Reinvestment and Stock Purchase Plan. In the event of a
change in control, each Director will receive a stock certificate for the shares
of Common Stock to which the Director is entitled pursuant to this arrangement.
DIRECTORS' RETIREMENT PLAN
Directors who have served on the Board for at least six years, and who are not
officers and are not eligible to receive a retirement benefit under the Bank's
Retirement Plan, are entitled to benefits on an unfunded basis under a
non-qualified retirement plan. Any such Director who ceases to be a Director
prior to the calendar year of the Director's 65th birthday (or, in the event of
the Director's death prior to such year, the Director's surviving spouse) is
entitled to receive an annual benefit equal in amount to the then annual cash
retainer for a Director, such annual benefit to be paid for the number of years
that the Director served in that capacity (and during which the Director was not
an officer). Any such Director who ceases to be a Director in or after the
calendar year of the Director's 65th birthday is entitled to receive the same
annual benefit, payable for the remaining years of the Director's life, provided
that if the Director dies before receiving such annual benefit for at least a
number of years equal to the number of years the Director served in that
capacity (and during which the Director was not an officer) the Director's
surviving spouse is entitled to receive such annual benefit for a number of
years equal to the remainder of such number of years of service. The retirement
plan provides that in the event of a change in control of the Corporation, each
Director's interest in the plan will be fully vested and will be paid to the
Director in a single sum.
6
<PAGE> 12
STOCK OWNERSHIP
STOCK OWNERSHIP OF MANAGEMENT
The following table shows, as of December 31, 1993, the number of shares of the
Corporation beneficially owned by all current Directors, nominees for Director,
and Executive Officers of the Corporation named under the caption Executive
Compensation, individually, and, together with all current Executive Officers of
the Corporation, as a group. Unless otherwise noted, all shares referred to in
the table and related footnotes are shares of Common Stock. The table also shows
the number of "phantom stock" units held by certain Directors as of December 31,
1993, entitling each such Director, upon retirement or an earlier change in
control of the Corporation, to receive a cash payment for each unit equal to the
fair market value at that time of a share of Common Stock of the Corporation.
Such units have been credited to the accounts of those Directors who have
elected to defer all or part of their Directors' fees and to have such deferred
fees treated as though invested in shares of Common Stock of the Corporation
participating in its Dividend Reinvestment and Stock Purchase Plan.
<TABLE>
<CAPTION>
Name of Individual or Number of Shares Number of "Phantom
Identity of Group Beneficially Owned(a) Stock" Units Held
- ----------------------------------- --------------------- -------------------
<S> <C> <C>
Thomas G. Labrecque 500,247 (b) --
Arthur F. Ryan 360,339 (b) --
Richard J. Boyle 196,781 (b)(c) --
M. Anthony Burns 962 --
Joan Ganz Cooney 2,392 --
Jairo A. Estrada 400 --
James L. Ferguson 1,878 (d) 4,421
Edward S. Finkelstein 1,792 7,568
H. Laurance Fuller 5,392 1,098
William H. Gray, III 809 --
Howard C. Kauffmann 3,392 --
David T. Kearns 709 --
Delano E. Lewis 559 --
Paul W. MacAvoy 1,709 --
John H. McArthur 1,912 --
David T. McLaughlin 3,002 --
Edmund T. Pratt, Jr. 1,592 36,695
Henry B. Schacht 1,639 --
Donald H. Trautlein 2,315 2,148
Kay R. Whitmore 1,573 (e) 11,118
E. Michel Kruse 53,479 (b) --
L. Edward Shaw, Jr. 113,864 (b) --
Directors, nominees and Executive
Officers as a group (27 persons) 1,719,104 (f) 63,048
- ---------------
<FN>
(a) Except as otherwise noted, the individuals referred to have sole voting and
investment power with respect to the shares listed. Each of such
individuals beneficially owns less than 1% of the outstanding shares of
Common or of any Series of Preferred Stock of the Corporation. The number
of shares shown for each Director other than Directors Labrecque, Ryan,
Boyle, Burns, Estrada, Gray, Kearns, Lewis and MacAvoy includes in each
case 1,392 shares that such Director is entitled to receive, after ceasing
to be a Director, pursuant to the annual retainer arrangement for
non-officer Directors. The number of shares shown for Director Burns
includes 862 shares that he is entitled to receive, after ceasing to be a
Director, pursuant to such arrangement. The number of shares shown for
Directors Gray, Kearns, Lewis and MacAvoy includes in each case 309 shares
that such Director is entitled to receive, after ceasing to be a Director,
pursuant to such arrangement. Each Director entitled to receive shares
pursuant to such arrangement disclaims beneficial ownership with respect
thereto.
(b) Includes shares which as of December 31, 1993 could be acquired within 60
days by Directors Labrecque, Ryan and Boyle, Messrs. Kruse and Shaw and all
Executive Officers included in the group described above upon the exercise
of options for the purchase of 408,199, 322,666, 169,599, 30,935,
7
<PAGE> 13
94,610 and 1,378,708 shares, respectively, as well as 1,459 shares issued
to Mr. Kruse upon the lapse of restrictions applicable to restricted stock
units during such 60-day period.
(c) Includes 676 shares as to which Director Boyle shares voting and investment
power with his wife.
(d) Does not include 200 shares owned by a foundation established by Director
Ferguson. Director Ferguson disclaims beneficial ownership with respect to
such shares.
(e) In addition, Director Whitmore owns 151 shares of Preferred Stock, Floating
Rate Series F, of the Corporation.
(f) See (b) through (d) above. Includes the beneficial interests of two
Executive Officers included in the group described above in 24,312 shares
which as of December 31, 1993 were held by the trustee under the Bank's
Thrift-Incentive Plan. In addition, one Executive Officer included in such
group owns 3,500 shares of Preferred Stock, 10.84% Series I, of the
Corporation. The total shown in the table represents approximately 0.93% of
the shares of Common Stock of the Corporation outstanding on December 31,
1993. The current Executive Officers are the 10 officers of the Corporation
determined by the Compensation Committee of the Corporation's Board of
Directors to fall within the definition of "executive officer" set forth in
Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the
"Securities Exchange Act").
</TABLE>
---------------
During 1993, Joan Ganz Cooney, a Director of the Corporation, did not file
on a timely basis one report required by Section 16(a) of the Securities
Exchange Act. Such report related to a single transaction and involved the
purchase of shares of Common Stock of the Corporation for purposes of
investment. The shares purchased have not subsequently been sold or otherwise
disposed of and appropriate reports were filed during 1993.
OTHER STOCK OWNER
The entity referred to below is the only person known by the Corporation to own
beneficially more than 5% of any class of the Corporation's voting securities.
According to information furnished by that entity in a Schedule 13G filed
pursuant to the Securities Exchange Act, the number of shares of Common Stock of
the Corporation beneficially owned by it as of December 31, 1993 and the
percentage of the total outstanding Common Stock of the Corporation represented
thereby was as follows:
<TABLE>
<CAPTION>
Number of
Shares
Beneficially Percent
Name and Address Owned of Class
------------------------------------------- ---------- --------
<S> <C> <C>
Barrow, Hanley, Mewhinney & Strauss, Inc.
280 Crescent Court, 19th Floor
Dallas, Texas 75201 10,814,123(a) 5.9%
- ---------------
<FN>
(a) According to the information furnished by them, Barrow, Hanley, Mewhinney &
Strauss, Inc. holds sole investment power with respect to all of such
shares, sole voting power with respect to 7,386,796 of such shares and
shared voting power with respect to the remaining 3,427,327 of such shares.
</TABLE>
8
<PAGE> 14
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth cash and certain other compensation paid or
accrued by the Corporation and its subsidiaries for the chief executive officer
and for each of the four other most highly compensated Executive Officers of the
Corporation. The Bank, which is the principal subsidiary of the Corporation, has
paid or accrued substantially all of the cash compensation shown.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------------------
Awards Payouts
Annual Compensation --------------------------- ----------
------------------------------------- Securities
Other Annual Restricted Underlying All Other
Name and Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation(a) Awards(b) SARs(#)(c) Payouts (d) sation(a)
- ---------------------- ----- -------- ---------- ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas G. Labrecque, 1993 $750,000 $1,500,000 $7,491 $800,000 (d) 40,000 $1,000,000 $ 30,000
Chairman of the Board 1992 750,000 625,000 5,791 0 40,000 0 30,000
of the Bank 1991 750,000 400,000 641,250 (c)(e) 40,000 0
Arthur F. Ryan, 1993 600,000 1,200,000 4,067 500,000 (d) 32,000 1,000,000 24,000
President of the 1992 600,000 500,000 2,316 0 32,000 0 24,000
Bank 1991 600,000 325,000 470,250 (c)(e) 32,000 0
Richard J. Boyle, 1993 500,000 425,000 4,067 0 22,000 400,000 20,000
Vice Chairman of the 1992 500,000 285,000 2,647 0 22,000 0 20,000
Board of the Bank 1991 500,000 225,000 320,625 (c)(e) 22,000 0
E. Michel Kruse, 1993 300,000 450,000 4,067 0 15,000 300,000 12,000
Executive Vice 1992 266,667 340,000 5,295 0 10,000 0 8,728
President of the 1991 231,250 225,000 128,250 (c)(e) 9,000 0
Bank
L. Edward Shaw, Jr., 1993 360,000 420,000 2,354 0 11,000 250,000 14,400
Executive Vice 1992 360,000 195,000 993 0 11,000 0 14,400
President of the 1991 360,000 125,000 203,063 (c)(e) 14,000 0
Bank
- ---------------
<FN>
(a) Pursuant to the transitional provisions of applicable rules of the
Securities and Exchange Commission, amounts of Other Annual Compensation and
All Other Compensation are excluded for 1991. For 1992 and 1993, the All
Other Compensation column reflects annual contributions or other allocations
to the Bank's Thrift-Incentive Plan and related defined contribution plans.
(b) The amounts reported represent the market value at the date of grant,
without giving effect to diminution in value attributable to the applicable
restrictions. At December 31, 1993, aggregate holdings of shares of
restricted stock and restricted stock units and their market value, without
giving effect to diminution in value attributable to the restrictions
applicable thereto, were as follows:
Name Number Value
--------------- ------ ----------
Mr. Labrecque 57,900 $1,961,363
Mr. Ryan 40,225 1,362,622
Mr. Boyle 18,600 630,075
Mr. Kruse 8,542 289,360
Mr. Shaw 11,000 372,625
(c) Reflects awards in January of the succeeding year taking into account
performance during the year for which reported.
(d) The 1993 LTIP payouts and restricted stock awards reported consisted of cash
payments and shares of restricted stock, respectively, awarded pursuant to
the three-year incentive arrangement established by the Compensation
Committee under the Management Incentive Plan in January, 1991 described in
the final paragraph under the caption Annual and Multi-Year Bonus
Arrangements included in the Compensation Committee Report on Executive
Compensation. The restricted stock awards consisted of 23,400 shares and
14,625 shares of Common Stock of the Corporation awarded, respectively, to
Messrs. Labrecque and Ryan. Normal quarterly dividends are paid on such
shares. The contractual restrictions on the transfer of such shares will
lapse in equal annual installments on each of the first three anniversaries
of the date of grant, or upon earlier termination of employment due to death
or disability. Such shares are non-forfeitable, and termination of
employment for any other reason will have no effect on the holder's
ownership thereof. Such shares may also not be sold or transferred unless
registered under the Securities Act of 1933, as amended, and applicable
state securities laws or unless the transfer qualifies for an exemption from
the registration provisions thereof.
(e) The 1991 awards reported consisted of restricted stock units awarded under
the Corporation's 1987 Long-Term Incentive Plan entitling the recipient,
upon the lapse of the restrictions applicable thereto, to receive shares of
Common Stock of the Corporation. The restrictions applicable to such
restricted stock units lapse in equal annual installments on each of the
third, fourth and fifth anniversaries of the date of grant. Such restricted
stock units will be canceled if the holder's employment is terminated for
any reason prior to the lapse of the applicable restrictions. The holder of
a restricted stock unit is entitled to receive cash payments equivalent to
the dividends which would have been received if the unit were a share of
Common Stock.
</TABLE>
9
<PAGE> 15
STOCK OPTION GRANTS
The table below contains information relating to stock options granted to the
Executive Officers named above.
Option/SAR Grants in Last Fiscal Year(a)
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Grant Date
Options/SARs Employees in Exercise Price Expiration Present
Name Granted Fiscal Year ($/sh)(b) Date Value(c)
-------------------- ------------ ------------- -------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Thomas G. Labrecque 40,000 1.55% $35.50 January 19, 2004 $ 399,600
Arthur F. Ryan 32,000 1.24 35.50 January 19, 2004 319,680
Richard J. Boyle 22,000 0.85 35.50 January 19, 2004 219,780
E. Michel Kruse 15,000 0.58 35.50 January 19, 2004 149,850
L. Edward Shaw, Jr. 11,000 0.43 35.50 January 19, 2004 109,890
- ---------------
<FN>
(a) Reflects non-qualified stock options granted on January 19, 1994 under the
1987 Long-Term Incentive Plan of the Corporation taking into account
performance during the year ended December 31, 1993. No stock appreciation
rights were granted. Such options will become exercisable one year after
the date of grant, and expire ten years after the date of grant or upon
earlier termination of employment, other than by reason of retirement with
the consent of the Corporation or death, subject to extension of the period
of exercisability (if the Compensation Committee so determines) for up to
90 days following termination of employment or in the event of a change in
control.
(b) The stock options were granted with an exercise price equal to the fair
market value per share of the Common Stock of the Corporation on the date
of grant.
(c) Present values were calculated using the Black-Scholes option pricing model
modified to take dividends into account. The model as applied used the
grant date of January 19, 1994 and the exercise price and fair market value
on that date of $35.50 per share referred to above. It also assumed (i) a
risk-free rate of return of 5.7%, which was the rate on 10-year U.S.
Treasury bonds on the grant date, (ii) a stock price volatility of 28%,
calculated using daily closing prices of the Common Stock of the
Corporation for a one-year period ending on the grant date, (iii) a
constant dividend yield of 3.7%, which was the yield on the grant date
based on the quarterly cash dividend rate of 33 cents per share paid by the
Corporation on its Common Stock and (iv) that the options normally would be
exercised on the final day of their 10-year term. No discount from the
theoretical value was taken to reflect the one-year waiting period prior to
vesting, the restrictions on the transfer of the options and the likelihood
that the options will be exercised in advance of the final day of their
term.
</TABLE>
------------------------
There is no assurance that the values actually realized upon the exercise
of the stock options referred to above will be at or near the present values as
of the date of grant shown in the foregoing table. As noted above, such present
values were calculated using the Black-Scholes option pricing model, which is a
widely used mathematical formula for estimating option values that incorporates
various assumptions that may not hold true over the 10-year life of these
options. For example, assumptions are required about the risk-free rate of
return as well as about the dividend yield on the Corporation's Common Stock and
the volatility of the Common Stock over the 10-year period. Also, the
Black-Scholes model assumes that an option holder can sell the option at any
time at a fair price that includes a premium for the remaining time value of the
option. The holder of an option granted under the Corporation's 1987 Long-Term
Incentive Plan, however, can realize its value before maturity only by
exercising and thereby sacrificing the option's remaining time value. Although
the negative impact of this and other restrictions on the value of this type of
option is well recognized, there is no accepted method for adjusting the
theoretical option value for them. The values set forth in the table should not
be viewed in any way as a forecast of the future performance of the
Corporation's Common Stock, which will be determined by future events and
unknown factors.
10
<PAGE> 16
OPTION/SAR EXERCISES, HOLDINGS AND YEAR-END VALUES
The table below contains information with respect to the Executive Officers
named above concerning the exercise of stock options and stock appreciation
rights during 1993 and the number and value of unexercised options and stock
appreciation rights at the end of such year.
Aggregated Option/SAR Exercises
in 1993 and Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at In-the-Money Options/SARs
December 31, 1993 at December 31, 1993(d)
Shares ----------------------------- -----------------------------
Acquired on Value
Name Exercise(a) Realized(b) Exercisable Unexercisable(c) Exercisable Unexercisable(e)
------------------------- ----------- ----------- ----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Thomas G. Labrecque 26,911 $ 279,634 341,532 106,667 $ 3,195,130 $777,508
Arthur F. Ryan 6,000 29,625 270,666 84,000 2,900,934 591,000
Richard J. Boyle 5,144 53,369 140,932 50,667 995,363 241,633
E. Michel Kruse 12,000 126,938 17,601 28,334 97,030 116,891
L. Edward Shaw, Jr. 0 0 80,276 25,334 514,348 120,828
- ---------------
<FN>
(a) Includes the number of shares of Common Stock of the Corporation with
respect to which stock appreciation rights were exercised.
(b) Reflects market value of underlying shares of Common Stock of the
Corporation on the date of exercise, minus the exercise price.
(c) Includes stock options granted on January 19, 1994 under the 1987 Long-Term
Incentive Plan of the Corporation taking into account performance during
the year ended December 31, 1993.
(d) Reflects market value of underlying shares of Common Stock of the
Corporation on December 31, 1993, minus the exercise price.
(e) The exercise price of the stock options granted on January 19, 1994
exceeded the market price of the Common Stock of the Corporation on
December 31, 1993. Accordingly, such options are not considered to have
been "in-the-money," and are not included.
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report is submitted by the Compensation Committee of the Corporation's
Board of Directors, which consists of six members, none of whom is an officer of
the Corporation.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
Decisions on compensation of the Corporation's Executive Officers generally are
made by the Compensation Committee. However, decisions by the Compensation
Committee on compensation for the Chairman of the Board, the President and the
Vice Chairman of the Board are reviewed by the Board of Directors without such
officers being present.
The Corporation's executive compensation policies are designed to provide
competitive levels of compensation that align compensation with the
Corporation's annual and long-term performance goals, reward good performance at
the corporate and business unit levels, recognize individual initiative and
achievements and assist the Corporation in attracting and retaining qualified
executives.
At the beginning of each year the Committee sets target levels of
compensation for all of the Corporation's Executive Officers, including Mr.
Labrecque. The Committee reviews recent historical levels of compensation at
other money center banks and large regional banks, all of which are included in
the KBW 50 Index whose performance is charted in the graph appearing under the
caption Performance Graph, and then establishes targets which are comparable to
the compensation paid by those competing organizations which have experienced
the better performance measured primarily by return on equity to their executive
officers holding comparable positions. A determination is then made based upon
the individual responsibilities and business function performed by the Executive
Officer as to what portion of the target for each Executive
11
<PAGE> 17
Officer is to be represented by each of the three principal elements of
compensation: salary, bonus opportunity and long-term incentive compensation
opportunity. Because a significant portion of an Executive Officer's potential
compensation is performance related, actual compensation levels vary from year
to year and in any particular year may be above or below those of the
Corporation's competitors.
The Compensation Committee believes that stock ownership by management of
the Corporation is beneficial in aligning the interests of management and the
Corporation's stockholders. Accordingly, the Compensation Committee intends to
continue to utilize stock-based compensation arrangements in compensating the
Corporation's Executive Officers.
RELATIONSHIP OF CORPORATE PERFORMANCE TO COMPENSATION
Compensation paid to the Corporation's Executive Officers for 1993 consisted
primarily of salary, bonuses awarded under The Chase Manhattan Management
Incentive Plan and awards of stock options under the Corporation's 1987
Long-Term Incentive Plan. The payment of bonuses and the award of stock options
are directly related to corporate and individual performance and, where
relevant, business unit performance.
SALARY ARRANGEMENTS
Each Executive Officer's salary is determined on the basis of the individual's
responsibilities bearing in mind the target level established for such Executive
Officer. Because of the Compensation Committee's emphasis on the
performance-related elements of compensation, the salary of most of the
Corporation's Executive Officers remained at the same level in 1993 as in 1992.
ANNUAL AND MULTI-YEAR BONUS ARRANGEMENTS
All Executive Officers at or above the Executive Vice President level are
eligible to participate in the Management Incentive Plan, which is administered
by the Compensation Committee. Executive Officers who do not participate in the
Management Incentive Plan are awarded bonuses based upon the recommendations of
the Executive Officer to whom they report.
Corporate performance determines the aggregate amount of annual bonuses, if
any, awarded to the Corporation's Executive Officers under the Management
Incentive Plan. In awarding annual bonuses based on 1993 performance, the
Compensation Committee gave primary consideration to the Corporation's return on
average common equity. While the increases in earnings per share and the price
of the shares of the Corporation's Common Stock were given significant
consideration by the Compensation Committee, they were not assigned the same
significance as return on average common equity. Specifically, the Compensation
Committee considered the fact that despite the issuance of approximately 25
million shares of Common Stock in June 1993, return on average common equity
improved to 14.59% from 11.14% in 1992, earnings per share increased from $3.46
in 1992 to $4.79 in 1993 and the price of a share of Common Stock increased
approximately 19% in 1993.
The Compensation Committee also considered the improvement in certain
measures of asset quality, including the decrease in the levels of net
charge-offs (excluding net charge-offs related to refinancing countries) and
nonperforming loans, the increase in the return on average assets, the increase
in the Corporation's capital ratios and the improvement in the Corporation's
basic expense to revenue ratio. Certain subjective factors, such as the
achievement of qualitative goals relating to customers and employees and the
historic level of bonus payments at other money center and large regional banks
referred to above in light of their relative performance, were also considered.
These secondary factors were considered as a whole without assigning specific
weights to any of them. After the Committee's evaluation of overall corporate
performance, the performance of individual business units and of each of the
Executive Officers were evaluated in light of the factors described above that
are relevant to such performance. The Compensation Committee also considered the
degree to which each Executive Officer adhered to the Corporation's corporate
values.
Certain of the Corporation's Executive Officers, including Mr. Labrecque,
were designated in 1991 as eligible to receive an additional payout under the
Management Incentive Plan pursuant to an arrangement
12
<PAGE> 18
established by the Compensation Committee in January 1991 to promote retention
and motivate senior management to achieve superior, above plan performance in a
difficult turnaround period. The Compensation Committee made awards of bonus
payments under this arrangement after considering the Corporation's progress
during the applicable three year period ended December 31, 1993, including its
achieving aggregate net income in excess of $2 billion during this period, and
after also evaluating the individual's performance as described in the preceding
paragraph during the three-year period. These awards consisted primarily of cash
payments, although the awards to Mr. Labrecque and Mr. Ryan were divided between
cash and shares of restricted stock.
LONG-TERM INCENTIVE PLAN ARRANGEMENTS
The long-term incentive component of the Executive Officers' compensation for
1993 consists of awards of stock options under the 1987 Long-Term Incentive
Plan. The Plan is designed to link rewards for Executive Officers and other key
personnel to increases in stockholder value, foster share ownership by the
Corporation's executives and enable the Corporation to retain and attract key
employees with superior management skills.
Awards under the Plan are made at the beginning of each year, taking into
account performance during the prior year and an assessment of each Executive
Officer's potential future contribution to the Corporation. Performance for 1993
was measured by the same criteria which were considered by the Compensation
Committee in awarding annual bonuses under the Management Incentive Plan. Thus,
the improvement in return on average common equity and earnings per common share
and the increase in the price of the Corporation's Common Stock were the primary
factors considered by the Compensation Committee, although of the three, return
on average common equity received the greatest weight. The Corporation's
progress toward meeting longer-term objectives, emphasizing profitability and
capital strength as indicated by the increase in return on equity and other
profitability ratios and the improvement in the Corporation's capital ratios,
was also considered. The Compensation Committee also considered the amount of
stock options already held by the Executive Officers in determining the amount
of stock options to award. It concluded that the awards made to the Executive
Officers were appropriate in light of the purposes which the 1987 Long-Term
Incentive Plan is designed to achieve.
The stock options granted to the Corporation's Executive Officers have an
exercise price equal to the market value of the Corporation's Common Stock on
the date of grant. The options are generally exercisable one year after the date
of grant and expire ten years after the date of grant or upon the earlier
termination of employment, provided that in the case of a termination due to
retirement or death, the options are generally exercisable until three years
after the termination of employment.
COMPENSATION OF MR. LABRECQUE
As discussed above, at the beginning of each year, the Compensation Committee
establishes a target for Mr. Labrecque's total compensation in light of
historical levels of chief executive officer compensation at other money center
and large regional banks and determines what portion of this target is to be
represented by salary, bonus opportunity and long-term incentive compensation
opportunity. Consistent with the Compensation Committee's emphasis on
performance-related compensation, Mr. Labrecque received a salary of $750,000 in
1993, the same annual salary he has received since becoming Chief Executive
Officer in November 1990. Because a significant portion of Mr. Labrecque's
potential compensation is performance related, his actual compensation varies
from year to year and in any particular year may be above or below his
counterparts at these competing organizations.
The Compensation Committee proposed that Mr. Labrecque receive an annual
bonus for 1993 under the Management Incentive Plan in the amount of $1,500,000
and options to acquire 40,000 shares of the Corporation's Common Stock under the
Long-Term Incentive Plan. The Board of Directors approved these proposals.
The Compensation Committee based its decision with respect to these awards
on the continuing improvement in 1993 in the performance of the Corporation.
Corporate performance was measured by the criteria described above to determine
annual bonus and stock option awards to the Corporation's other
13
<PAGE> 19
Executive Officers (see "Annual and Multi-Year Bonus Arrangements" above).
Accordingly, primary emphasis was placed on the increase in return on average
common equity, while increases in earnings per share and the price of the
Corporation's Common Stock also were given significant consideration. The
secondary factors described above also were considered. The Compensation
Committee also considered the amount of stock options owned by Mr. Labrecque in
proposing the award of stock options to him and concluded that the award was
consistent with the purposes which the 1987 Long-Term Incentive Plan is designed
to achieve.
The Compensation Committee also proposed, and the Board of Directors
approved, an award to Mr. Labrecque under the Management Incentive Plan of
$1,000,000 in cash and shares of restricted stock valued at $800,000 pursuant to
the arrangement established by the Compensation Committee in January 1991.
Pursuant to this award, Mr. Labrecque received a total of 23,400 shares of
restricted stock. The Compensation Committee proposed this award after
considering the Corporation's progress during this period and based upon its
evaluation of Mr. Labrecque's performance over this period. The Compensation
Committee proposed, and the Board of Directors approved, the payment of a
portion of this award in restricted stock in order to further align the
interests of Mr. Labrecque and the Corporation's stockholders.
PHILOSOPHY ON THE DEDUCTIBILITY OF COMPENSATION
The Compensation Committee designs its compensation arrangements to provide
competitive levels of compensation that align compensation with the
Corporation's annual and long-term performance goals, reward good performance,
recognize individual achievement and assist the Corporation in attracting and
retaining qualified executives, and in this way, achieve the best returns for
the Corporation's stockholders.
Under tax legislation enacted during 1993, beginning in 1994, the amount of
compensation paid to or accrued for the Chief Executive Officer and the four
other most highly compensated Executive Officers which may be deductible by the
Corporation for federal income tax purposes is limited to $1,000,000 per person
per year, except that compensation which is performance-based will be excluded
for purposes of calculating the amount of deductible compensation. The Internal
Revenue Service has proposed regulations to implement this legislation, but they
have not been finalized.
The Compensation Committee has been advised that all amounts paid by the
Corporation in 1993 to the Chief Executive Officer and the four other most
highly compensated Executive Officers, including the value of the restricted
stock issued to Mr. Labrecque and Mr. Ryan, will be fully deductible by the
Corporation. The Compensation Committee also has been advised that all
compensation expense associated with exercise of outstanding stock options
(including the stock options granted in January 1994) will be deductible for
federal income tax purposes.
As stated above, the Compensation Committee designs its compensation
arrangements to achieve various objectives and to the extent these objectives
can be achieved in a manner which maximizes the deductibility of compensation
paid by the Corporation it will seek to do so. Accordingly, the 1994 Long-Term
Incentive Plan which is being submitted to the stockholders at the 1994 Annual
Meeting was designed with a view to causing compensation expense associated with
future grants of options to qualify as deductible performance-based
compensation.
Because of the importance placed by the Compensation Committee on
establishing appropriate compensation arrangements, and because awards under the
Management Incentive Plan are made based on performance, but not as that term is
used in the legislation and the proposed regulations, the Compensation Committee
has concluded that it would be unwise to modify the Management Incentive Plan to
conform with the legislation and the proposed regulations at this time. The
Compensation Committee will continue evaluating whether it is possible to
achieve its compensation objectives in a manner which causes the incentive
compensation paid to the Corporation's Executive Officers to be fully deductible
and will reconsider possible changes to the Management Incentive Plan when final
regulations are issued. The Compensation Committee
14
<PAGE> 20
will also study whether it is possible or desirable to cause compensation
expense associated with future grants of restricted stock units to qualify as
deductible performance-based compensation and until this evaluation is
completed, the Compensation Committee will not award restricted stock units to
any Executive Officer.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Howard C. Kauffmann (Chairman)
James L. Ferguson
H. Laurance Fuller
David T. Kearns
Delano E. Lewis
David T. McLaughlin
THE RETIREMENT PLAN
The Bank's Retirement Plan provides retirement benefits to eligible employees of
participating "Employers" (the Corporation and certain subsidiaries of the
Corporation, principally the Bank). The Retirement Plan was amended, effective
as of January 1, 1989 and subject to Internal Revenue Service approval, to
provide a cash balance type of defined benefit retirement plan under which the
accrual of benefits for years of service after 1988 can be expressed in terms of
monthly credits to an account. Such credits ultimately will be converted into
annuity benefits or distributed as a lump sum payment.
Under the amended Retirement Plan, including the Bank's Supplemental
Retirement Plan adopted in 1981 which is applicable to certain key executives of
the Bank and its affiliates, benefits accrued through December 31, 1988 under
the formula in effect as of that date (the "Old Formula") are preserved. Credits
for periods after December 31, 1988 are made on a monthly basis at the annual
rate of 3% of compensation for compensation not exceeding the Social Security
wage base for the year, and 6% of compensation for compensation in excess of the
Social Security wage base. Participants with 10 or more years of service receive
an additional annual credit equal to 1% of compensation for compensation not
exceeding the Social Security wage base, and an additional 2% of compensation
for compensation in excess of the Social Security wage base. Additional annual
transition credits will also be provided through 1995, except that benefits
under the Bank's Supplemental Retirement Plan are determined without regard to
the annual transition credits. The amounts of such transition credits depend
upon the length of a participant's service as of December 31, 1988, and range
from 0.6% to a maximum of 5% of compensation. For purposes of the amended
Retirement Plan a participant's compensation is base salary plus, in the case of
the Bank's Supplemental Retirement Plan, awards made under certain incentive
compensation plans and programs. Both the regular annual credits and annual
transition credits receive interest credits at a rate that is set each year by
the Bank. For 1994, the interest credit has been set at an annual rate of 11%.
In lieu of the credits described above, participants who met certain age and
service requirements as of December 31, 1988 may elect when they retire to
receive their retirement benefits for all years of service (including service
after December 31, 1988) under the Old Formula, as modified to comply with the
Tax Reform Act of 1986 and subsequent legislation. The factors used to compute
retirement benefits under the Old Formula include base salary (plus, in the case
of the Bank's Supplemental Retirement Plan, awards under certain incentive
compensation plans and programs) and years of service (not in excess of 40),
reduced by a portion of the primary Social Security benefit payable to the
employee.
15
<PAGE> 21
The estimated annual retirement benefits payable to the individuals named
under the caption Executive Compensation are as follows:
<TABLE>
<CAPTION>
Estimated Annual
Year Attains Benefit If Retires
Name Age 65 At Normal Retirement Age(a)
---------------------- -------------- ---------------------------
<S> <C> <C>
Thomas G. Labrecque 2003 $ 742,000
Arthur F. Ryan 2007 669,000
Richard J. Boyle 2008 677,000
E. Michel Kruse 2009 364,000
L. Edward Shaw, Jr. 2009 389,000
- ---------------
<FN>
(a) Under the Retirement Plan, the normal retirement age is 65. The estimated
annual retirement benefits shown above are in the form of a single life
annuity, including the individuals' accrued benefits as of December 31, 1988
under the Old Formula, but in the case of benefits determined under the Old
Formula after the reduction for Social Security benefits. Benefits for years
of service after 1993 have been determined by assuming no increase in base
salaries and annual bonuses equal to the average annual bonuses received in
the last five years, and, for benefits determined under the amended
Retirement Plan, an interest credit at an 11% annual rate, which is the 1994
rate for the interest credit. Benefits are computed without reference to
limitations on compensation and benefits to which the Retirement Plan is
subject under the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"), because any benefits affected by such limitations are made
up under the Bank's supplemental benefit plans. Mr. Labrecque is eligible to
elect to receive his entire benefit under the Old Formula.
</TABLE>
TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
The Corporation has adopted a program that, in the event of a change in control,
protects compensation awards which have already been granted to employees (i.e.,
stock options, deferred compensation, retirement benefits and defined
contribution plan accounts). The program also provides that if an employee is
terminated within 24 months after a change in control, he or she would be paid
twice the amount of severance payable under the Corporation's salary
continuation policy. Under the program certain senior officers who are not
covered by the Corporation's salary continuation policy would receive one year's
salary plus payments based on service to a maximum of two year's salary if their
employment is terminated under limited circumstances before or within 24 months
following a change in control, and, subject to certain limitations, would
continue to participate in the Corporation's life, disability, accident and
insurance plans for a period equal to the number of weeks of salary being paid
to the officer.
As part of the program, the Corporation also has entered into agreements
with certain officers, including the Executive Officers named under the caption
Executive Compensation, who are not covered by the Corporation's salary
continuation policy or by the arrangement for certain senior officers described
above. These agreements provide that the officer agrees to remain in the employ
of the Corporation and its subsidiaries for a period of 12 months following a
change in control of the Corporation. They also provide generally that if the
officer's employment is terminated under certain limited circumstances before or
within 24 months after a change in control, the officer (a) will receive a
single sum payment equal to two or three times, depending on the officer's
position, the sum of (i) such officer's current annual base salary and (ii) an
amount equal to such current annual base salary multiplied by such officer's
average percentage annual bonus paid or payable over the preceding five years
(expressed as a percentage of annual base salary) and (b) subject to certain
limitations will continue to participate in the Corporation's life, disability,
accident and health insurance plans for up to 24 or 36 months, depending on the
officer's position, after such officer's termination. The agreements continue in
effect until December 31, 1994, and are automatically renewed thereafter for
additional one year periods unless at least three months prior notice is given;
however, each agreement terminates when the officer reaches age 65. The
agreements also provide that if an officer's change in control benefits, less
the 20% excise tax imposed under Section 4999 of the Internal Revenue Code,
would exceed the maximum amount which could be paid to the officer without such
excise tax being imposed, the Corporation
16
<PAGE> 22
will pay the officer an additional amount so that the net amount retained by the
officer equals the full amount of the officer's change in control benefits. In
all other situations, the officer's change in control benefits are limited to
the amount which can be paid without incurring such excise tax.
The 1982 and 1987 Long-Term Incentive Plans of the Corporation, as well as
its proposed 1994 Long-Term Incentive Plan, provide that in the event of a
change in control of the Corporation, or in certain limited circumstances upon
termination of employment prior to a change in control, (i) all non-qualified
stock options and related stock appreciation rights will be exercisable as of
the date of the change in control or, in the case of the 1982 and 1987 Plans,
six months after the option or stock appreciation right was granted, if later,
and (ii) the terms and conditions which must be satisfied with respect to any
restricted stock units or shares of restricted stock will be deemed satisfied.
The Plans also provide that in the case of termination of employment under
certain limited circumstances before or within 24 months after a change in
control of the Corporation, incentive stock options granted after July 17, 1990
and all non-qualified stock options (and related stock appreciation rights) will
be exercisable within 24 months after any such termination. The 1982 and 1987
Plans further provide that in the event of a change in control of the
Corporation, the value of any earned performance share units previously deferred
will be paid in a single sum after the change in control.
The amended Retirement Plan provides that, in the event of a change in
control of the Corporation on or prior to December 31, 1995, each participant's
interest in the Plan will be fully vested and the Plan may not be merged or
consolidated with, or transfer its assets or liabilities to, any other plan. The
Bank's Supplemental Retirement Plan and the Bank's supplemental benefit plans
also provide that in the event of a change in control of the Corporation, and in
certain limited circumstances as a result of a participant's termination of
employment prior to a change in control, each participant's interest in the
Supplemental Retirement Plan or benefit under a supplemental benefit plan will
be fully vested and paid in a single sum.
The Bank's Thrift-Incentive Plan provides that in the event of a change in
control of the Corporation on or prior to December 31, 1995, each participant's
interest in the Plan will be fully vested. Further, under the program, in the
event of a change in control of the Corporation, compensation awards deferred
under the management incentive program maintained by the Bank will be paid in a
single sum.
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<PAGE> 23
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Common Stock of the Corporation with that of the Standard & Poor's 500 Stock
Index (the "S&P 500 Index") and the KBW 50 Index, a bank stock index published
by Keefe, Bruyette & Woods, Inc. The KBW 50 Index is made up of 50 of the
nation's most important banking companies, including all money-center and
super-regional banking companies and most major regional banking companies. The
comparison for each of the periods assumes that $100 was invested on December
31, 1988 in each of the Common Stock of the Corporation, the stocks included in
the S&P 500 Index and the stocks included in the KBW 50 Index. These indexes,
which reflect formulas for dividend reinvestment and weighting of individual
stocks, do not necessarily reflect returns that could be achieved by individual
investors.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE CORPORATION, THE S&P 500 INDEX AND THE KBW 50 INDEX
<TABLE>
<CAPTION>
THE CHASE
MEASUREMENT PERIOD MANHATTAN S&P 500 IN-
(FISCAL YEAR COVERED) CORPORATION DEX KBW 50 INDEX
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 129.78 131.59 118.91
1990 43.58 127.49 85.40
1991 76.68 166.17 135.17
1992 131.04 178.81 172.23
1993 161.88 196.75 181.77
</TABLE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Directors and officers of the Corporation and their associates were customers
of, and had transactions with, the Bank and other subsidiaries of the
Corporation in the ordinary course of business during 1993, and additional
transactions in the ordinary course of business may be expected to take place in
the future with the Bank and other subsidiaries of the Corporation. All loans or
extensions of credit included in such transactions in 1993, or which were
outstanding during 1993 (including those to Macy's discussed below), were made
in the ordinary course of business on substantially the same terms, including
interest rates and collateral, if any, as those prevailing at the time for
comparable transactions with other persons and when made did not involve more
than normal risk of collectibility or present other unfavorable features.
On January 27, 1992, R. H. Macy & Co., Inc. filed a petition in the United
States District Court for the Southern District of New York for protection from
its creditors pursuant to Chapter 11 of the United States Bankruptcy Code.
Director Finkelstein was chairman of the board of directors and chief executive
officer of
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<PAGE> 24
that company until April 27, 1992. Since January 1, 1993, the Bank has extended
credit to R.H. Macy & Co., Inc. and certain of its subsidiaries ("Macy's") under
the facilities described below.
In July, 1986, the Bank and other lenders entered into a credit agreement
with Macy's, which was amended in April, 1988 (the "Credit Agreement"). The
Credit Agreement, which provides for both loans and letters of credit, is
secured by equipment, certain contractual rights and other collateral. In May,
1988, the Bank entered into an interest rate swap agreement with Macy's (the
"Swap Agreement") under which Macy's obligations are secured by the same
collateral as under the Credit Agreement. In 1993, the contractual rate of
interest under the Credit Agreement averaged approximately 7.5%. The maximum
principal amount outstanding under the Credit Agreement during the period from
January 1, 1993 through January 31, 1994 was approximately $700 million, of
which the Bank's exposure was approximately $1,928,000. According to the Bank's
records, as of January 31, 1994, the Bank's principal and interest exposure was
approximately $1,928,000 under the Credit Agreement and approximately
$16,584,000 under the Swap Agreement. The Bank has no contingent exposure to
Macy's under the Swap Agreement.
In the ordinary course of business the Corporation and its subsidiaries,
including the Bank, use the products or services of a number of organizations
with which Directors of the Corporation are or were affiliated as officers or
directors. Management believes that such transactions were on terms that were at
least as favorable to the Corporation or the subsidiaries of the Corporation
involved as would have been available from unaffiliated parties. It is expected
that the Corporation and its subsidiaries will in the future have transactions
with organizations with which Directors of the Corporation are affiliated as
officers or directors.
APPROVAL OF AUDITORS (Item 2 on Proxy)
The firm of Price Waterhouse has been selected by the Audit Committee and
appointed by the Board of Directors to serve as the Corporation's independent
auditors for the fiscal year beginning January 1, 1994. In line with past
practice, the Board is requesting stockholder approval of the appointment. A
partner in the firm will be present at the meeting to answer questions and will
have the opportunity to make a statement, if he so desires. The firm is
presently serving both the Corporation and the Bank as independent auditors.
Management recommends that the stockholders vote FOR approval of this
appointment. If the appointment is not approved by a majority of the votes cast
at the meeting on this proposal by the holders of the shares of Common Stock of
the Corporation entitled to vote thereat, the appointment of the independent
auditors will be reconsidered by the Board and the Audit Committee of the Board.
The Corporation's expense for the auditing and auditing related services
provided by the firm during 1993 was approximately $8,900,000. If not otherwise
specified, proxies will be voted FOR approval of this appointment.
1994 LONG-TERM INCENTIVE PLAN (Item 3 on Proxy)
The Board of Directors believes that the future success of the Corporation and
its subsidiaries is dependent upon the quality and continuity of management. The
Board also believes that compensation programs, in particular long-term
incentive programs such as The Chase Manhattan 1987 Long-Term Incentive Plan
(the "1987 Plan"), are important in attracting and retaining individuals of
superior ability and in motivating their efforts on behalf of the Corporation
and its business interests.
The Board of Directors believes that the 1987 Plan has been successful in
meeting the objectives of the Corporation with respect to provision of long-term
incentives. Under the terms of the 1987 Plan, as amended in 1990, however, no
award may be granted after April 30, 1995, except awards of stock appreciation
rights ("SARs") granted with respect to outstanding option awards. At present,
only approximately 798,000 shares of Common Stock of the Corporation remain
available for grants of awards and distributions with respect to awards made
under the 1987 Plan. Accordingly, the Board of Directors has ratified the action
of the Compensation Committee of the Board (the "Compensation Committee") in
establishing The Chase Manhattan 1994 Long-Term Incentive Plan (the "1994 Plan")
as the successor to the 1987 Plan, and recommends that the holders of the Common
Stock of the Corporation approve the 1994 Plan, to be effective May 1, 1994.
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<PAGE> 25
If the 1994 Plan is approved by the holders of the Common Stock of the
Corporation, no further awards will be made under the 1987 Plan. The last awards
under the 1987 Plan were granted in January, 1994.
Generally, the provisions of the 1994 Plan are similar to those of the 1987
Plan. The 1994 Plan, however, differs from the 1987 Plan in that it has no fixed
expiration date and contains an annual, as opposed to an aggregate, limit on the
number of shares of the Corporation's Common Stock that may be made the subject
of awards pursuant to its terms. The three-year restriction period applicable to
restricted stock units under the 1987 Plan is also applicable under the 1994
Plan, but under the 1994 Plan if the Compensation Committee so determines a
shorter restriction period, of not less than one year, may be applied. The 1994
Plan also contains no provisions authorizing the award of performance share
units (none of which are currently outstanding under the 1987 Plan). While
certain of the provisions of the 1994 Plan are summarized below, such summary is
qualified in its entirety by reference to the copy of the 1994 Plan which is set
forth in full as Exhibit A to this Proxy Statement.
PURPOSE OF THE 1994 PLAN
The purpose of the 1994 Plan is to advance the interests of the Corporation and
its subsidiaries by providing long-term incentive awards and stock ownership
opportunities to certain key employees (including officers and Directors who are
employees) who contribute significantly to the longer-term performance of the
Corporation and its subsidiaries. The 1994 Plan also is intended to continue to
enhance the ability of the Corporation and its subsidiaries to attract and
retain individuals of superior managerial ability and to motivate such employees
to exert their best efforts toward the future progress and profitability of the
Corporation and its subsidiaries.
NUMBER OF SHARES
Under the 1994 Plan, the aggregate number of shares of Common Stock that may be
made the subject of awards may not exceed 100,000 shares during 1994. During
1995, the aggregate number of such shares that may be made the subject of awards
may not exceed 1.5% of the number of shares of Common Stock outstanding on
December 31, 1994. The number of shares of Common Stock that may be made the
subject of awards under the 1994 Plan during any calendar year subsequent to
1995 may not exceed the sum of (i) 1.5% of the number of shares of Common Stock
outstanding on December 31 of the preceding year and (ii) the number of such
shares as to which awards could have been made under the 1994 Plan on December
31 of the preceding year but as to which awards were not made during such year.
The aggregate number of shares of Common Stock as to which incentive stock
options may be granted under the 1994 Plan is, however, limited to 5,000,000
shares, and no incentive stock options may be granted under the 1994 Plan after
February 15, 2004. The limits on the numbers of shares described in this
paragraph are subject to proportional adjustment to reflect certain stock
changes, such as stock dividends and stock splits.
If, however, an outstanding option expires or terminates unexercised, or
any award of restricted stock units (or shares of restricted stock into which it
may be converted) terminates for any reason, the shares of Common Stock
allocable to the unexercised or terminated portion of such option or award may
again be made the subject of awards under the 1994 Plan beginning in the
calendar year after the year in which such expiration or termination occurs.
Such shares will be included in the number of shares determined as described in
clause (ii) of the preceding paragraph as of the end of such year.
AWARDS
The 1994 Plan provides for two types of awards: options to purchase shares of
Common Stock of the Corporation (and related SARs) and restricted stock units
which can be converted into shares of restricted stock.
All salaried employees (including officers and Directors who are salaried
employees) of the Corporation and its subsidiaries are eligible to receive
awards under the 1994 Plan. Salaried employees who would be eligible to receive
awards of stock options (and SARs) under the 1994 Plan would also be eligible to
receive awards of restricted stock units. The maximum number of shares of Common
Stock of the Corporation with respect to which options (and SARs) may be granted
in any calendar year to any employee will not exceed 10% of the total number of
shares of Common Stock that may be the subject of awards as of the first day of
that calendar year (subject to proportional adjustment to reflect certain stock
changes). All awards under the 1994 Plan will be made by the Compensation
Committee.
20
<PAGE> 26
No determination has been made as to any awards which may be granted under
the 1994 Plan, although it is anticipated that recipients of awards will include
the current Executive Officers of the Corporation. While the criteria for
participation in the 1994 Plan are subjective in nature, based on its experience
under the 1987 Plan, which has similar features, the Corporation currently
estimates that approximately 900 salaried employees are likely to receive awards
each year under the 1994 Plan.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The 1994 Plan provides for the grant of options to purchase shares of Common
Stock of the Corporation at option prices which are not less than the fair
market value of shares of Common Stock at the date of grant. The 1994 Plan also
provides for the grant of SARs, which entitle holders, upon surrender of the
related stock option, to receive either cash or shares of Common Stock or a
combination thereof, as the Compensation Committee in its discretion shall
determine, with a value equal to the difference between (i) the fair market
value on the exercise date of the shares with respect to which a SAR is
exercised and (ii) the option price which would have been payable upon exercise
of the related option for the same number of shares.
Awards of options under the 1994 Plan, which may be either incentive stock
options (which qualify for special tax treatment) or non-qualified stock
options, are determined by the Compensation Committee. The terms and conditions
of each option (and of any related SAR) are to be determined by the Compensation
Committee at the time of grant.
Options (and related SARs) may not be exercisable earlier than one year
following the date of grant. Exercise of an option (or an SAR) will result in
the cancellation of the related SAR (or option) to the extent of the number of
shares in respect of which such option or SAR has been exercised. Options and
SARs granted under the 1994 Plan will expire not more than 10 years from the
date of grant, and the option agreements entered into with the optionees will
specify the extent to which options (and related SARs) may be exercised during
their respective terms. The 1994 Plan provides that in the event of a change in
control of the Corporation or in certain limited circumstances upon termination
of employment prior to a change in control, all non-qualified stock options and
related SARs will be exercisable as of the date of the change in control.
The 1994 Plan provides for termination of outstanding options (and related
SARs) upon termination of employment, other than by reason of retirement with
the consent of the Corporation, disability or death. The Compensation Committee
may, however, allow options (and related SARs) which are then exercisable to
remain exercisable for up to 90 days after termination of employment. All
options (and related SARs) exercisable at the time of retirement with the
consent of the Corporation will remain exercisable for their entire original
term. Termination of employment due to disability is treated as retirement with
the consent of the Corporation. Options (and related SARs) exercisable at the
time of death will remain exercisable for 36 months after the date of death, but
not later than the expiration of their original term. The 1994 Plan provides
that in the case of termination of employment under certain limited
circumstances before or within 24 months after a change in control of the
Corporation all stock options (and related SARs) will be exercisable within 24
months after any such termination.
Payment for shares issuable pursuant to the exercise of an option may be
made either in cash or by tendering shares of Common Stock of the Corporation
with a fair market value at the date of exercise equal to the portion of the
exercise price which is not paid in cash.
RESTRICTED STOCK UNITS AND RESTRICTED STOCK
A restricted stock unit awarded under the 1994 Plan will entitle the recipient,
upon the satisfaction of conditions established by the Compensation Committee at
the time of the award (but not earlier than three years after the award, unless
the Compensation Committee determines that a shorter period of not less than one
year shall apply), to receive a share of Common Stock of the Corporation. The
holder of a restricted stock unit will have no rights as a stockholder, but will
be entitled to receive cash payments equivalent to the dividends which would
have been received if the restricted stock unit were a share of Common Stock of
the Corporation.
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<PAGE> 27
Under the 1994 Plan, the Compensation Committee may determine to convert
all or a portion of an award of restricted stock units into an equivalent number
of shares of restricted stock. A share of restricted stock issued upon the
conversion of a restricted stock unit is a share of Common Stock of the
Corporation which is subject to the same restrictions, terms and conditions as
applied to the converted restricted stock unit and may not be transferred until
the terms and conditions imposed by the Compensation Committee have been
satisfied. The 1994 Plan provides that in the event of a change in control of
the Corporation or in certain limited circumstances upon termination of
employment prior to a change in control, the terms and conditions which must be
satisfied with respect to any restricted stock units or shares of restricted
stock will be deemed satisfied.
All awards of restricted stock units under the 1994 Plan will be determined
by the Compensation Committee. In general, the 1994 Plan provides that upon
termination of employment for any reason other than disability any restricted
stock units as to which the conditions established by the Compensation Committee
have not been satisfied are cancelled.
WITHHOLDING FOR PAYMENT OF TAXES
Under the 1994 Plan, the Compensation Committee may establish rules and
conditions which will permit an individual who is required to make appropriate
arrangements for payment of amounts required to be withheld or paid with respect
to federal, state and local tax and other laws as a result of the exercise of a
non-qualified stock option, or the payment of awards under the 1994 Plan in
shares of Common Stock of the Corporation, to elect to have a portion of the
shares otherwise issuable withheld or tendered back to the Corporation in order
to satisfy all or a portion of the withholding or payment requirement.
ADMINISTRATION
The administration, interpretation and operation of the 1994 Plan will be vested
in the Compensation Committee. No member of the Compensation Committee, nor any
other Director who is not a salaried employee of the Corporation, will be
eligible to receive an award under the 1994 Plan. The day-to-day administration
of the 1994 Plan will be carried out by officers and employees of the Bank
designated by the Compensation Committee. To the extent permitted under Rule
16b-3 under the Securities Exchange Act and Section 162(m) of the Internal
Revenue Code, the determinations of the Compensation Committee as to the stock
options (and related SARs) to be granted to Executive Officers who are also
Directors of the Corporation and the aggregate number of options and restricted
stock units to be awarded to all other employees under the 1994 Plan will be
subject to the review and approval of the non-employee members of the
Corporation's Board of Directors.
AMENDMENTS
The Compensation Committee may from time to time alter, amend, suspend,
discontinue or terminate the 1994 Plan or any award under the 1994 Plan,
provided, however, that no such action of the Compensation Committee may,
without the approval of the holders of the Common Stock of the Corporation,
alter the provisions of the 1994 Plan so as to: (a) increase the maximum number
of shares of Common Stock which may be made the subject of awards in any
calendar year or increase the maximum number of shares of Common Stock as to
which stock options (and related SARs) may be awarded to any employee in any
calendar year; (b) change the class of employees eligible to receive awards
under the 1994 Plan; (c) extend beyond 10 years the maximum term of incentive
stock options or related SARs granted under the 1994 Plan or increase the
aggregate number of shares of Common Stock as to which incentive stock options
may be awarded; (d) permit the price at which any option may be exercised to be
less than the fair market value of the underlying shares of Common Stock on the
date of grant; (e) withdraw the administration of the 1994 Plan from the
Compensation Committee; or (f) permit any member of the Compensation Committee
to be eligible to receive an award under the 1994 Plan.
No alteration, amendment, suspension, discontinuance or termination of any
individual award under the 1994 Plan (as opposed to any such action with respect
to the 1994 Plan) may materially and adversely affect the rights of any holder
of an award without the consent of such holder. The Compensation Committee may,
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<PAGE> 28
however, if permitted under applicable law, alter, amend, suspend, discontinue
or terminate the 1994 Plan and any awards under the 1994 Plan without the
approval of the holders of the Common Stock of the Corporation or any holder of
an award under the 1994 Plan, if necessary in order to comply with Rule 16b-3
under the Securities Exchange Act or Sections 162(m) or 422 of the Internal
Revenue Code.
Certain amendments to the 1994 Plan which could be made without stockholder
approval, such as a decrease in the minimum required length of the restriction
period for a restricted stock unit (or share of restricted stock), might, if
made, increase the cost of the 1994 Plan to the Corporation.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE 1994 PLAN
INCENTIVE STOCK OPTIONS
Options granted under the 1994 Plan may be incentive stock options (within the
meaning of Section 422 of the Internal Revenue Code) or non-qualified stock
options. Upon the grant of an incentive stock option, the optionee will not
recognize any income. No income is recognized by the optionee upon the exercise
of an incentive stock option if the holding period requirements contained in the
Internal Revenue Code are met, including the requirement that the optionee
remain an employee of the Corporation (or a subsidiary) during the period
beginning with the date of the grant of the option and ending on the day three
months (one year if the optionee becomes disabled) before the date the option is
exercised. For the year in which an optionee exercises an incentive stock
option, the alternative minimum taxable income of such optionee will be
increased by the amount that would have been ordinary income had the option been
a non-qualified stock option, unless the optionee disposes of the shares
acquired upon exercise during such year in a taxable disposition.
Upon the subsequent disposition of shares acquired upon the exercise of an
incentive stock option, the federal income tax consequences will depend upon
when the disposition occurs and the type of disposition. If the shares are
disposed of by the optionee after the end of the one-year period beginning on
the day after the day the shares are issued to the optionee, any gain or loss
realized upon such disposition will be long-term capital gain or loss, and the
Corporation (or a subsidiary) will not be entitled to any income tax deduction
in respect of the option or its exercise. For purposes of determining the amount
of such gain or loss, the optionee's tax basis in the shares will be the option
price.
Generally, if the shares are disposed of by the optionee in a taxable
disposition within the one-year period beginning on the day after the day the
shares are issued to the optionee, the excess, if any, of the amount realized
(up to the fair market value of the shares on the exercise date) over the option
price will be compensation taxable to the optionee as ordinary income, and the
Corporation (or a subsidiary) will be entitled to a deduction (subject to the
provisions of Section 162(m) of the Internal Revenue Code discussed under the
caption Limits on Deductions) equal to the amount of ordinary income realized by
the optionee.
If an optionee has not remained an employee of the Corporation (or a
subsidiary) during the period beginning with the grant of an incentive stock
option and ending on the day three months (one year if the optionee becomes
disabled) before the date the option is exercised, the exercise of such option
will be treated as the exercise of a non-qualified stock option with the tax
consequences described below.
NON-QUALIFIED STOCK OPTIONS
Upon the grant of a non-qualified stock option, an optionee will not recognize
any income. At the time a non-qualified option is exercised, the optionee will
recognize compensation taxable as ordinary income, and the Corporation (or a
subsidiary) will be entitled to a deduction (subject to the provisions of
Section 162(m) of the Internal Revenue Code discussed under the caption Limits
on Deductions), in an amount equal to the difference between the fair market
value on the exercise date of the shares acquired pursuant to such exercise and
the option price. Upon a subsequent disposition of the shares, the optionee will
recognize long-or short-term capital gain or loss, depending upon the holding
period of the shares. For purposes of determining the amount of such gain or
loss, the optionee's tax basis in the shares will be the fair market value of
such shares on the exercise date.
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<PAGE> 29
EFFECT OF SHARE FOR SHARE EXERCISE
If an optionee elects to tender shares of the Corporation's Common Stock in
partial or full payment of the option price for shares to be acquired through
the exercise of an option, generally the optionee will not recognize any gain or
loss on such tendered shares. However, if the shares tendered in connection with
any share for share exercise were previously acquired upon the exercise of an
incentive stock option, and such share for share exercise occurs within one year
after the tendered shares were transferred to the optionee, the tender of such
shares will be a taxable disposition with the tax consequences described above
for the taxable disposition within one year of shares acquired upon the exercise
of an incentive stock option. If the optionee tenders shares upon the exercise
of an option which would result in the receipt of compensation by the optionee,
as described above under the caption Non-qualified Stock Options, the optionee
will recognize compensation taxable as ordinary income, and the Corporation (or
a subsidiary) will be entitled to a deduction (subject to the provisions of
Section 162(m) of the Internal Revenue Code discussed under the caption Limits
on Deductions), in an amount equal only to the fair market value of the number
of shares received by the optionee upon exercise which is in excess of the
number of tendered shares, less any cash paid by the optionee.
STOCK APPRECIATION RIGHTS
Upon the grant of an SAR, an optionee will not recognize any income. At the time
an SAR is exercised, the optionee will recognize compensation taxable as
ordinary income, and the Corporation (or a subsidiary) will be entitled to a
deduction (subject to the provisions of Section 162(m) of the Internal Revenue
Code discussed under the caption Limits on Deductions), in an amount equal to
the sum of the cash paid by the Corporation and the fair market value on the
exercise date of any shares issued. The optionee's tax basis of any shares
received upon the exercise of an SAR will be the fair market value of such
shares on the exercise date.
RESTRICTED STOCK
An employee will not recognize any income upon the grant of an award of
restricted stock units or the conversion of a restricted stock unit into a share
of restricted stock. Generally, any dividends or dividend equivalents received
by the employee with respect to shares of restricted stock or restricted stock
units prior to the date the employee recognizes income with respect to such an
award will be treated by the employee as compensation taxable as ordinary
income, and the Corporation (or a subsidiary) will be entitled to a deduction
(subject to the provisions of Section 162(m) of the Internal Revenue Code
discussed under the caption Limits on Deductions) equal to the amount of
ordinary income recognized by the employee.
Generally, at the time the restrictions on an award lapse, an employee will
recognize compensation taxable as ordinary income, and the Corporation (or a
subsidiary) will be entitled to a deduction (subject to the provisions of
Section 162(m) of the Internal Revenue Code discussed under the caption Limits
on Deductions), in an amount equal to the then fair market value of the shares
of Common Stock held by the employee without restriction. The employee's tax
basis for any shares received would be the fair market value of such shares on
the date the employee recognizes income with respect to such shares.
LIMITS ON DEDUCTIONS
Under Section 162(m) of the Internal Revenue Code, the amount of compensation
paid to the Chief Executive Officer and the four other most highly paid
Executive Officers of the Corporation in the year for which a deduction is
claimed by the Corporation (including its subsidiaries) is limited to $1,000,000
per person, except that compensation which is performance-based will be excluded
for purposes of calculating the amount of compensation subject to this
$1,000,000 limitation. The ability of the Corporation to claim a deduction for
compensation paid to any other Executive Officer or employee of the Corporation
(including its subsidiaries) is not affected by this provision.
The Corporation has structured the 1994 Plan so that any compensation for
which the Corporation may claim a deduction in connection with the exercise of
non-qualified stock options and related SARs and the
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<PAGE> 30
disposition by an optionee of shares acquired upon the exercise of incentive
stock options will be performance-based within the meaning of Section 162(m) of
the Internal Revenue Code. Because the restricted stock units under the 1994
Plan and the restricted stock into which they may be converted are not deemed to
be performance-based under Section 162(m) of the Internal Revenue Code, amounts
for which the Corporation may claim a deduction upon the lapse of any
restrictions on such restricted stock units or shares of restricted stock will
be subject to the limitations on deductibility in Section 162(m). See the
discussion under the caption Philosophy on the Deductibility of Compensation
included in the Compensation Committee Report on Executive Compensation.
ADDITIONAL INFORMATION
The recognition by an employee of compensation income with respect to a grant or
an award under the 1994 Plan will be subject to withholding for federal income
and employment tax purposes. If an employee, to the extent permitted by the
terms of a grant or award under the 1994 Plan, uses shares of Common Stock to
satisfy the federal income and employment tax withholding obligation, or any
similar withholding obligation for state and local tax obligations, the employee
will recognize a capital gain or loss, short-term or long-term, depending on the
tax basis and holding period for such shares of Common Stock.
If the provisions of the 1994 Plan relating to a change in control become
applicable, certain compensation payments or other benefits received by
"disqualified individuals" (as defined in Section 280G(c) of the Internal
Revenue Code) under the 1994 Plan or otherwise may cause or result in "excess
parachute payments" (as defined in Section 280G(b)(1) of the Internal Revenue
Code). Section 4999 of the Internal Revenue Code generally imposes a 20% excise
tax on the amount of any such excess parachute payment received by such a
disqualified individual, and any such excess parachute payments will not be
deductible by the Corporation (or a subsidiary). In addition, certain
disqualified individuals may receive reimbursement payments from the Corporation
to eliminate the adverse effect of such 20% excise tax. Any such reimbursement
payments will be compensation income to the recipient subject to additional
income and excise taxation, but will not be deductible by the Corporation or any
subsidiary.
MISCELLANEOUS
No award received under the 1994 Plan will be assignable or transferable.
However, under the provisions of the 1994 Plan, options and SARs will be
transferable by will or by the laws of descent and distribution.
At February 22, 1994, the number of outstanding shares of Common Stock of
the Corporation was 184,652,916 shares. The closing price of Common Stock of the
Corporation on the New York Stock Exchange on March 9, 1994 was $31.875 per
share.
APPROVAL OF THE PLAN
To become effective, the 1994 Plan must be approved by the affirmative vote of a
majority of the votes cast at the meeting on this proposal by the holders of the
shares of Common Stock of the Corporation entitled to vote thereat.
The Board of Directors recommends that the stockholders vote FOR approval
of this proposal. If not otherwise specified, proxies will be voted FOR
approval.
STOCKHOLDER PROPOSALS (Items 4, 5, 6 and 7 on Proxy)
Stockholders submit a number of proposals each year. In prior years, the
Corporation has adopted some of these recommendations, either as proposed or in
modified form. As announced at prior Annual Meetings, a stockholder proposal
generally will be voted on only if the stockholder or the stockholder's
representative attends the meeting and presents the proposal.
This year, the management of the Corporation, with the approval of the
Board of Directors, has determined that each of the following proposals should
be opposed. For approval, a proposal must receive the affirmative vote of a
majority of the votes cast at the meeting on such proposal by the holders of the
shares of Common Stock of the Corporation entitled to vote thereat. In addition,
formal implementation of the proposals described below under Items 4 and 5 on
Proxy would require the adoption at a later stockholders'
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meeting of amendments to the Certificate of Incorporation of the Corporation
approved by the affirmative vote of the holders of 75% or more of the voting
power of the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of Directors, voting together as a
single class.
(Item 4 on Proxy)
Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue, N.W., Suite
215, Washington, D.C. 20037, who owned 200 shares of Common Stock of the
Corporation of record on February 22, 1994, has stated that she intends to
introduce the following resolution at the meeting for the reasons given:
RESOLVED: "That the shareholders of Chase Manhattan recommend that the
Board of Directors take the necessary steps to reinstate the election of
directors ANNUALLY, instead of the stagger system which was recently
adopted."
REASONS: "Until recently, directors of Chase Manhattan were elected
annually by all shareholders."
"The great majority of New York Stock Exchange listed corporations
elect all their directors each year."
"This insures that ALL directors will be more accountable to ALL
shareholders each year and to a certain extent prevents the
self-perpetuation of the Board."
"Last year the owners of 39,255,763 shares, representing approximately
39% of shares voting, voted FOR this proposal."
"If you AGREE, please mark your proxy FOR this resolution."
------------------------
The management of the Corporation again recommends a vote AGAINST this
proposal, which was defeated at six prior Annual Meetings. At the 1993 Annual
Meeting over 52,704,000 shares were voted against it.
In 1986, the stockholders approved an amendment to the Corporation's
Certificate of Incorporation which, in addition to related matters, classified
the Board into three classes of nearly equal size. The members of each class
serve for three years and one class is elected at each Annual Meeting.
The Board recommended the amendment in 1986 to help assure a measure of
continuity in the management of the business and affairs of the Corporation and
provide the Board with sufficient time to review any proposal from a substantial
stockholder and to take appropriate actions which are believed to be in the best
interests of all of the Corporation's stockholders. Management believes that the
reasons for the Board's recommendation are still valid.
(Item 5 on Proxy)
John J. Gilbert, 1165 Park Avenue, New York, New York 10128-1210, who owned 200
shares of Common Stock of the Corporation of record on February 22, 1994 (and
who has stated that he represents an additional interest of 100 shares of such
Common Stock) has stated that he intends to introduce the following resolution
at the meeting for the reasons given:
RESOLVED: That the stockholders of Chase Manhattan Corporation,
assembled in annual meeting in person and by proxy, hereby request the
Board of Directors to take the steps necessary to provide for cumulative
voting in the election of directors, which means each stockholder shall be
entitled to as many votes as shall equal the number of shares he or she
owns multiplied by the number of directors to be elected, and he or she may
cast all of such votes for a single candidate, or any two or more of them
as he or she may see fit.
REASONS
Continued very strong support along the lines we suggest were shown at
the last annual meeting when 27.51%, an increase over the previous year,
4,442 proxies from owners of 25,208,324 shares, were cast in favor of this
proposal. The vote against included 5,256 unmarked proxies.
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Perhaps the enormous credit card losses could have been prevented
having independent directors elected through cumulative voting.
The National Bank Act has provided for cumulative voting.
Unfortunately, in so many cases companies get around it by forming holding
companies without cumulative voting. Thus with so many banking failures the
result is that tax payers have to make up the losses. Banking authorities
have the right to question the capability of directors to be on banking
boards. Unfortunately, in so many cases authorities come in after and say
the director or directors were not qualified. So there is no reason why
this could not be done for corporations under the SEC and banking
authorities.
Many successful corporations have cumulative voting. For example,
Pennzoil having cumulative voting defeated Texaco in that famous case.
Another example, in spite of still having a stagger system of electing
directors, Ingersoll-Rand, which has cumulative voting, won two awards. In
Fortune magazine it was ranked second as "America's Most Admired
Corporations" and the Wall Street Transcript noted "on almost any criteria
used to evaluate management, Ingersoll-Rand excels." We believe Chase
Manhattan Corporation should follow their example.
A law enacted in California provides that all state pension holding,
as well as state college funds, invested in shares, must be voted in favor
of cumulative voting proposals, showing increasing recognition of the
importance of this democratic means of electing directors.
If you agree, please mark your proxy for this resolution; otherwise it
is automatically cast against it, unless you have marked to abstain.
------------------------
The management of the Corporation again recommends a vote AGAINST this
proposal. A similar proposal has been submitted to the stockholders at eleven
earlier Annual Meetings and each time was defeated by a substantial vote. At the
1993 Annual Meeting over 66,409,000 shares were voted against the proposal.
Management continues to believe that the Directors should represent
stockholders as a group rather than each Director representing a different
special interest faction. Cumulative voting could result in a Director being
committed to serve the special interests of the faction responsible for the
Director's election rather than the overall best interests of the stockholders.
(Item 6 on Proxy)
The General Board of Pensions of the United Methodist Church, 1200 Davis Street,
Evanston, Illinois 60201, the Reformed Church in America, 475 Riverside Drive,
New York, New York 10115, the Board of Pensions of the Evangelical Lutheran
Church in America, 800 Marquette Avenue, Minneapolis, Minnesota 55402-2885, and
the Retirement Plans for Employees of the Sisters of Mercy of the Regional
Community of Detroit, 34605 Twelve Mile Road, Farmington Hills, Michigan
48331-3221, who have stated that they beneficially owned, respectively, 19,700
shares, 300 shares, 11,600 shares and 25,700 shares of Common Stock of the
Corporation on February 22, 1994, have stated that they intend to introduce the
following resolution at the meeting:
WHEREAS, our bank had approximately $350 million in outstanding loans
and credits in South Africa in the mid-1980s, when the apartheid system was
fully in place, and we believe it was then forced to reduce its exposure as
a result of the political instability caused by the decay of that system;
WHEREAS, we expect the establishment of an interim government more
representative of the majority of the people of South Africa in the near
future, and believe that our bank has a responsibility, stemming from its
past history, to participate in the development of a new economic order;
WHEREAS, the South African Council of Churches (1993) stated: "Even
after the establishment of a democratic dispensation, the poor in South
Africa will continue, for some period at least, to suffer from vast
inequalities in income, wealth, living standards and power . . . we must
work to foster an ethical approach to the economy";
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WHEREAS, adequate housing for about 7 million people who live in
makeshift shanties is crucial to development and political stability;
WHEREAS, the Urban Foundation of South Africa noted in 1990 that
174,000 new housing units would be required each year for five years to
meet the needs of the existing black population;
WHEREAS, South African financial and nongovernmental institutions have
little experience or expertise in providing for low-income housing;
WHEREAS, we believe that U.S. banks could help increase the capacity
of South African financial and other institutions to provide housing and
development loans to low-income communities of color, through:
(1) Provision of loan guarantees, standby letters of credit, and/or
other credit enhancement mechanisms,
(2) Technical assistance with lending to low-income people of color
upon the request of South African institutions, and
(3) Loans and grants for community development;
WHEREAS, we believe that our bank can make an important contribution
to the construction of a viable and democratic South Africa, because it has
significant expertise in community reinvestment, and can provide support
for South African community development initiatives;
RESOLVED, that the shareholders request that the bank develop a policy
to promote responsible banking practices for the development of a
democratic South Africa, once a transitional government is in place. This
policy should include:
(1) Rolling over outstanding loans and credits on terms conducive to
South Africa's long-term democratic development, and
(2) Increasing and capacity of South African institutions to provide
financial resources to those groups previously denied equal access
to credit.
------------------------
The management of the Corporation recommends a vote AGAINST this proposal.
The Corporation has established general policies for foreign lending and other
activities which it believes are in the best interests of the Corporation and
its stockholders. The proposed resolution would not in any way further those
interests.
The Corporation continues to monitor the evolving situation in South Africa
and hopes that further progress will occur in South Africa. Management intends
to conduct its business and philanthropic activities in a manner that will be
consistent with the future development of that country and has undertaken a
number of initiatives, including participating in a training program conducted
for non-white South African bankers.
However, management opposes the resolution because it seeks to impose one
standard to measure the Corporation's lending activities in South Africa and
would limit management's flexibility in taking action to protect the interests
of the Corporation in South Africa.
(Item 7 on Proxy)
The Sisters of Charity of Cincinnati, 5900 Delhi Road, Mount St. Joseph, Ohio
45051, the Dominican Sisters of Houston, Texas, 6501 Almeda Road, Houston, Texas
77021-2095, the Loretto Literary and Benevolent Institution, Nerinx, Kentucky
40049-9999, and the Catholic Foreign Mission Society of America, Inc., P.O. Box
306, Maryknoll, New York 10545-0306, who have stated that they beneficially
owned, respectively, 1,000 shares, 3,900 shares, 432 shares and 2,500 shares of
Common Stock of the Corporation on February 22, 1994, have stated that they
intend to introduce the following resolution at the meeting:
WHEREAS, the developing world owes over $1.3 trillion to
industrialized countries. One-third of this debt is owed to U.S. commercial
banks and the U.S. government. In 1990, debt service resulted in a net
transfer of approximately $60 billion from the South to the North,
according to the World Bank. This enormous financial drain has had an
adverse effect on the debtor countries' poorest sectors, which in many
cases never benefitted from loans and certainly did not incur them;
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Michael Camdessus, the IMF's Managing Director, said: "Too often in
recent years it is the poorest segments of the population that have carried
the heaviest burden of economic adjustment." UNICEF noted that for
one-sixth of humanity "the march of human progress has become a
retreat . . . it is the children who are bearing the heaviest burden of
debt and recession in the 1990's."
Latin American countries owe U.S. commercial banks more than half a
trillion dollars. One of five Latin Americans lives in poverty; one of
every three consumes fewer calories than the level recommended by the World
Health Organization. One out of every 20 of the region's children dies
before the age of one.
In industrializing countries like Mexico, Argentina and the
Philippines, we believe that loans were largely absorbed not by projects
which foster widespread social development but by (1) large projects which
did little to reduce poverty, resulting in (2) burdensome interest payments
on past loans; and permitting (3) capital flight, and (4) military
spending.
For example, Brazil used foreign loans to finance three dysfunctional
nuclear power plants which cost billions of dollars and produce no
electricity.
We believe more responsible lending criteria will reduce the bank's
future risks and losses by taking into full account of the potential loans'
social, economic, political, and ecological impact on the people and
environment of less economically developed countries.
We believe the bank's long-term interest mandates lending,
restructuring and write-off criteria which support debtor nations' human
rights, economic and political democracy, environmental protection and
sustainable growth;
RESOLVED that the shareholders request that Chase take the following
measures to protect itself, its shareholders, the financial community and
the people of developing countries from unsustainable exposure in those
countries by establishing and disclosing to shareholders human rights,
social, political and ecological criteria for:
1. Extending loans to or promoting other bank products in developing
countries, and
2. Writing off existing loans that place an intolerable burden on the
population.
SUPPORTING STATEMENT
We believe it is important to protect the people of the developing
countries from past loan practices which have at times jeopardized their
economies and ecologies and even the very survival of the poor. Responsible
lending practices which promote a more viable global economy are also
needed to protect our corporation and its shareholders as well as U.S. jobs
and overseas markets.
------------------------
The management of the Corporation recommends a vote AGAINST this proposal.
Proposals relating to third world debt were defeated at five prior Annual
Meetings. Over 90% of the shares voted at each of those meetings were voted
against the proposals.
Management believes that the lending activities of the Corporation relating
to developing countries support economic growth and development, thus benefiting
the populations of these countries. In conducting these activities the
Corporation's existing policies require it to consider the purpose of any
financing and to pay strict attention to "the legal, moral, and social
implications of all loan and investment decisions." Further delineation and
disclosure of these matters would not be practical and could put the Corporation
at a competitive disadvantage.
Insofar as the proposal relates to existing loans, management believes the
international banking community should continue to work with the countries
involved to develop meaningful economic programs that will promote the
confidence of local as well as foreign investors. In countries where such
programs are designed that include debt restructuring or partial debt
forgiveness as one element of a comprehensive effort, the Corporation has
demonstrated its willingness to participate. We believe such programs have been
successful in many countries and enable the countries to repay their debt over
time while also providing a basis for sustained growth that will benefit all
levels of society.
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OTHER MATTERS
Management of the Corporation knows of no other matters to be presented for
action at the meeting by or on behalf of the Corporation or its management. If
any other matters shall be brought before the meeting, it is the intention of
the persons named in the accompanying proxy to vote on such matters in
accordance with their judgment. Neither abstentions nor broker non-votes will be
counted as votes cast at the meeting on any proposal.
The cost of soliciting proxies will be borne by the Corporation. In
addition to solicitations by mail, officers and regular employees of the
Corporation and the Bank may solicit proxies personally and by telephone,
telegraph or other means, for which they will receive no compensation in
addition to their normal compensation. Arrangements may also be made with
brokerage houses and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of stock held of
record by such persons, and the Corporation may reimburse them for their
reasonable out-of-pocket and clerical expenses. Morrow & Co. Inc. has been
retained to aid in the solicitation of proxies for a fee of $15,000 plus out-of-
pocket expenses.
Proposals of stockholders to be presented at the 1995 Annual Meeting must
be received by the Corporation by November 10, 1994.
RONALD C. MAYER
Secretary
March 11, 1994
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EXHIBIT A
THE CHASE MANHATTAN 1994 LONG-TERM INCENTIVE PLAN
EFFECTIVE MAY 1, 1994*
1. PURPOSE
The purpose of The Chase Manhattan 1994 Long-Term Incentive Plan (the
"Plan") is to advance the interests of The Chase Manhattan Corporation ("CMC")
and its Subsidiaries by providing long-term incentive awards and stock ownership
opportunities to certain key employees (including officers and directors who are
employees) who contribute significantly to the longer term performance of CMC
and its Subsidiaries. In addition, the Plan is intended to enhance the ability
of CMC and its Subsidiaries to attract and retain individuals of superior
managerial ability and to motivate such key employees to exert their best
efforts towards the future progress and profitability of CMC and its
Subsidiaries.
For purposes of this Plan, a Subsidiary shall be any corporation in which
CMC has a direct or indirect ownership interest, including any corporation in
which CMC acquires any such interest after the adoption of this Plan, but only
if CMC owns or controls, directly or indirectly, stock possessing not less than
50 percent of the total combined voting power of all classes of stock in such
corporation.
2. ADMINISTRATION AND INTERPRETATION
a. ADMINISTRATION. The administration and operation of the Plan shall be vested
in the Compensation Committee of the Board of Directors of CMC, or such other
committee of such Board of Directors which shall succeed to the functions and
responsibilities, in whole or in part, of said Compensation Committee (the
"Committee"). The Committee shall consist of not less than three members of the
Board of Directors of CMC (the "Board of Directors") who are not officers or
employees of CMC or any Subsidiary and who are (i) "disinterested" within the
meaning of Rule 16b-3 as in effect from time to time under the Exchange Act (as
defined in Section 6(e)) ("Rule 16b-3") and (ii) "outside directors" under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations promulgated thereunder as in effect from time to time (the
"Section 162(m) Regulations"). No member of the Committee shall be entitled to
participate in the Plan.
The Committee shall have the authority, consistent with the provisions of
the Plan, to determine the provisions of the awards to be granted under the
Plan; to determine the form of any such award; to interpret the Plan and any
award granted under the Plan; to adopt, amend and rescind rules and regulations
for the administration of the Plan and the awards granted under the Plan; and to
make all determinations in connection therewith which may be necessary or
advisable. The day-to-day administration of the Plan shall be carried out by
such officers and employees of The Chase Manhattan Bank (National Association)
as shall be designated from time to time by the Committee.
b. INTERPRETATION. The interpretation and construction by the Committee of any
provisions of the Plan or of any award granted under the Plan and any
determination by the Committee under any provision of the Plan or any such award
shall be final and conclusive.
c. LIMITATION ON LIABILITY. Neither the Board of Directors nor the Committee,
nor any member of either, shall be liable for any act, omission, interpretation,
construction or determination made by the Committee or any member thereof in
connection with the Plan in good faith, and the members of the Board of
Directors and the members of the Committee shall be entitled to indemnification
and reimbursement by CMC in respect of any claim, loss, damage or expense
(including counsel fees) arising therefrom to the full extent permitted by law
and under any directors and officers liability insurance coverage which may be
in effect from time to time.
d. RESERVED AUTHORITY OF THE BOARD OF DIRECTORS. The determinations by the
Committee as to:
(i) the Incentive Stock Options (as defined in Section 4(b)(2)) and/or
Non-qualified Stock Options (as defined in Section 4(b)(3)) to be granted
to a senior executive officer of CMC who is a
- ---------------
* Subject to approval by stockholders on April 19, 1994.
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<PAGE> 37
member of the Board of Directors and the aggregate number of Incentive
Stock Options and/or Non-qualified Stock Options to be granted to all other
eligible employees pursuant to Section 4(b)(1);
(ii) the Stock Appreciation Rights (as defined in Section 4(c)) to be
granted pursuant to Section 4(c) to any optionee who is a senior executive
officer of CMC and who is a member of the Board of Directors and who has
been granted Options (as defined in Section 4(b)(1)); and/or
(iii) the aggregate number of Restricted Stock Units (as defined in
Section 5) which may be granted to all eligible individuals under the Plan
pursuant to Section 5(b);
shall be subject to the review and approval of the members of the Board of
Directors who are both "disinterested" under Rule 16b-3 and "outside directors"
under Section 162(m) of the Code and the Section 162(m) Regulations only if such
review and approval (a) shall not cause the administration of the Plan to be
other than "disinterested" under Rule 16b-3 and (b) shall allow CMC to maintain
the deductibility of certain compensation paid pursuant to this Plan under
Section 162(m) of the Code and the Section 162(m) Regulations, as determined by
counsel for CMC.
3. SHARES SUBJECT TO AWARDS UNDER THE PLAN
a. LIMITATION ON NUMBER OF SHARES. The shares subject to Options and authorized
for issuance upon the exercise of Stock Appreciation Rights ("Option Shares"),
and the shares subject to awards of Restricted Stock Units, shall be shares of
CMC's authorized but unissued common stock, par value $2.00 per share ("Common
Stock"), and shares, if any, of such Common Stock held as treasury stock by CMC.
The aggregate number of shares of Common Stock that may be made the subject of
awards under the Plan (a) during calendar year 1994 shall not exceed 100,000
shares and (b) during calendar year 1995 shall not exceed one and one-half
percent (1.5%) of the number of shares of Common Stock outstanding on December
31, 1994. The aggregate number of shares of Common Stock that may be made the
subject of awards under the Plan during any calendar year subsequent to calendar
year 1995 shall not exceed the sum of (i) one and one-half percent (1.5%) of the
number of shares of Common Stock outstanding on December 31 of the preceding
calendar year and (ii) the number of shares of Common Stock as to which awards
could have been made under the Plan on December 31 of the preceding calendar
year but as to which awards were not made during such year.
If any Option awarded under this Plan expires or terminates unexercised or
any award of Restricted Stock Units (or shares of Restricted Stock into which it
may be converted) under this Plan expires or is terminated for any reason, the
shares allocable to the unexercised or terminated portion of such Option or
award may again be made the subject of awards under the Plan. Such shares shall
be included in the amount determined pursuant to clause (ii) of the immediately
preceding paragraph as of the end of the year in which such termination or
expiration occurs.
b. ADJUSTMENTS OF NUMBER OF SHARES. The number of shares that may be made the
subject of awards as provided in Section 3(a) shall be subject to appropriate
adjustment, from time to time, in accordance with the provisions of Sections
4(d)(8) and 4(d)(9). In the event of a change in the Common Stock of CMC which
is limited to a change in the designation thereof to "Capital Stock" or other
similar designation, or to a change in the par value thereof, or from par value
to no par value, without increase or decrease in the number of issued shares,
the shares resulting from any such change shall be deemed to be Common Stock
within the meaning of the Plan.
4. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
a. ELIGIBILITY. The individuals who shall be eligible to receive Options and
Stock Appreciation Rights under the Plan shall be all salaried employees
(including officers and directors who are salaried employees) of CMC or of any
Subsidiary as the Committee from time to time shall determine as provided below.
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<PAGE> 38
b. GRANTS OF OPTIONS.
(1) In General. Options granted under the Plan may be either "Incentive
Stock Options" or "Non-qualified Stock Options" (collectively referred to herein
as "Options"); provided, however, that no Option Shares under the Plan shall be
subject to more than one Option; and provided, further, that no Incentive Stock
Options may be granted under the Plan after February 15, 2004. Options granted
under the Plan shall be of such type and for such number of Option Shares
(subject to the limitation contained in Section 3), as the Committee shall
designate at the time of grant; provided, however, that the maximum number of
shares of Common Stock with respect to which Options or Stock Appreciation
Rights shall be granted in any calendar year to any individual under this Plan
shall not exceed ten percent (10%) of the total number of shares of Common Stock
that may be made the subject of awards during any calendar year under Section 3
of the Plan as determined on the effective date of the Plan for calendar year
1994 and for any calendar year thereafter, on the first day of such calendar
year; provided, further, that such maximum number of shares shall be subject to
appropriate adjustment, from time to time, in accordance with the provisions of
Sections 4(d)(8) and 4(d)(9). The Committee, at any time and from time to time,
may authorize the granting of Incentive Stock Options and/or Non-qualified Stock
Options to any individual eligible to receive the same.
(2) Incentive Stock Options. The term "Incentive Stock Option" shall mean
an Option which is intended to qualify as an incentive stock option under
Section 422 of the Code. Subject to adjustment as provided in Section 3(b), the
aggregate number of shares of Common Stock as to which Incentive Stock Options
may be granted under the Plan shall not exceed 5,000,000 shares of Common Stock.
Such number of shares shall be subject to appropriate adjustment, from time to
time, in accordance with the provisions of Sections 4(d)(8) and 4(d)(9).
(3) Non-qualified Stock Options. The term "Non-qualified Stock Option"
shall mean any Option which is not an Incentive Stock Option. Except as
specifically provided herein, the provisions of this Plan shall apply in the
same manner to Incentive Stock Options and to Non-qualified Stock Options.
c. GRANTS OF STOCK APPRECIATION RIGHTS.
(1) In General. The term "Stock Appreciation Right" shall mean the right to
receive from CMC upon surrender of an Option or a portion thereof, but without
any payment to CMC, an amount equal to the value (based on Market Value Per
Share (as defined in Section 4(d)(4)), on the exercise date, of the total number
of Option Shares for which the Stock Appreciation Right is exercised, less the
option price which the optionee would have otherwise been required to pay upon
purchase of such Option Shares. The amount payable by CMC upon the exercise of a
Stock Appreciation Right may be paid in cash or in Option Shares or in any
combination thereof, as the Committee in its sole discretion shall determine. No
fractional shares shall be issuable pursuant to any Stock Appreciation Right.
The Committee in the same manner as is provided with respect to Options in
Section 4(b) may, from time to time, authorize the granting of Stock
Appreciation Rights to any optionee who has been granted Options. Each Stock
Appreciation Right shall relate only to Option Shares subject to a specific
Option granted under this Plan and may be granted concurrently with the Option
to which it relates or at any time prior to the exercise, termination or
expiration of such Option. However, at no time shall the total number of Option
Shares with respect to which Stock Appreciation Rights remain outstanding and
unexercised exceed the total number of Option Shares subject to Options then
outstanding and unexercised.
(2) Limitations on Stock Appreciation Rights. The Committee may fix, with
respect to Stock Appreciation Rights granted under the Plan, such waiting
periods, exercise dates or other limitations as it shall deem appropriate;
provided, however, that no Stock Appreciation Right shall be exercisable prior
to the date when the Option to which it relates first becomes exercisable or
after the expiration of such related Option. In addition, the Committee may
impose at any time after the grant of any Stock Appreciation Right a total
prohibition on the exercise of such Stock Appreciation Right for such period or
periods as it, in its sole discretion, deems to be in the best interest of CMC.
d. TERMS OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options granted pursuant to
this Plan shall be evidenced by agreements ("Stock Option Agreements"). Stock
Appreciation Rights, if any, shall be evidenced by
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agreements amending and forming a part of the Stock Option Agreements to which
such Stock Appreciation Rights relate.
Stock Option Agreements, and the Options and Stock Appreciation Rights, if
any, represented thereby, shall comply with and be subject to the following
terms and conditions and may contain such other provisions, consistent with the
terms of this Plan, as the Committee shall deem advisable.
(1) Medium of Payment. Upon exercise of an Option, the option price
shall be payable to CMC (i) in United States dollars in cash or by check,
bank draft or money order payable to the order of CMC (or such other forms
of payment as the Committee may determine to be acceptable) or (ii) by
tendering to CMC shares of Common Stock owned by the optionee having an
aggregate Market Value Per Share as of the date of exercise which is not
greater than the option price and by paying the remainder of the option
price as provided in (i) above. Payment instruments will be received
subject to collection.
(2) Number of Shares. Each Stock Option Agreement shall state the
total number of Option Shares which are subject to the Option and, if
applicable, the total number of Option Shares in respect of which any
related Stock Appreciation Right shall be exercisable.
(3) Option Price. The option price for each Option Share shall be not
less than the Market Value Per Share on the date of the granting of the
Option.
(4) Market Value Per Share. The Market Value Per Share as of any
particular date shall be the mean between the highest and lowest quoted
selling prices for shares of Common Stock as reported on the composite tape
on such date (or, if such date shall not be a business day, then the next
preceding day which shall be a business day); or, if no sale takes place,
then the mean between the bid and asked prices on such date; and if no bid
and asked prices are quoted for such date, then such value as shall be
determined by such method as the Committee shall deem to reflect fair
market value as of such date.
(5) Term. The term of each Option and related Stock Appreciation Right
shall be determined by the Committee at the date of grant; provided,
however, that each Option and related Stock Appreciation Right shall expire
not more than ten years from the date the Option is granted.
(6) Date of Exercise. Each Stock Option Agreement shall state that the
Option or Stock Appreciation Right granted therein may not be exercised in
whole or in part for any period or periods of time specified in such
agreement or otherwise as specified by the Committee. Except as may be so
specified, any Option or related Stock Appreciation Right may be exercised
in whole at any time or in part from time to time during its term;
provided, however, that no Option, or portion thereof, or related Stock
Appreciation Right may be exercisable until at least one year after the
date of grant of such Option.
(7) Termination of Employment. In the event that an optionee's
employment by CMC or any of its Subsidiaries shall terminate, the
optionee's Options and related Stock Appreciation Rights, if any, shall
terminate immediately, except as hereinafter provided in this subsection.
The Committee, in its sole discretion, may determine that the
optionee's Options and/or related Stock Appreciation Rights, if any, to the
extent exercisable immediately prior to such termination of employment, may
remain exercisable for a designated period of time not to exceed 90 days
after such termination of employment.
If any termination of employment is due to retirement with the consent
of CMC, the optionee shall have the right, subject to the provisions of
subsections (5) and (6) above, to exercise each of his Options and related
Stock Appreciation Rights, if any, at any time until the end of the term of
each such Option and related Stock Appreciation Right to the extent that
the optionee was entitled to exercise the same immediately prior to such
retirement. Retirement by an optionee on or after the optionee's normal
retirement date in accordance with the provisions of the retirement plan of
CMC or one of its Subsidiaries under which the optionee is then covered
shall be deemed to be retirement with the consent of CMC. Termination of an
optionee's employment due to disability (as determined by the Committee in
its sole discretion) shall be deemed, solely for purposes of this Section
4(d)(7), to be a retirement with the consent of CMC; provided that if the
optionee thereafter returns to employment with CMC or any of its
Subsidiaries, the optionee's employment shall be deemed for purposes of
this Section 4(d)(7) to have
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never been terminated. Whether any other termination of employment is to be
considered a retirement with the consent of CMC and whether an authorized
leave of absence or absence on military or government service or for other
reasons shall constitute a termination of employment for the purposes of
the Plan shall be determined by the Committee.
If an optionee shall die (whether in the employment of CMC or any of
its Subsidiaries or following the optionee's retirement with the consent of
CMC) while entitled to exercise an Option and related Stock Appreciation
Right, if any, the optionee's estate, personal representative, or
beneficiary, as the case may be, shall have the right, subject to the
provisions of subsections (5) and (6) above, to exercise the Option and
related Stock Appreciation Right, if any, at any time within thirty-six
months after the date of the optionee's death (but in no event later than
the expiration of the term of each such Option and related Stock
Appreciation Right, if any), to the extent that the optionee was entitled
to exercise the same immediately prior to the optionee's death.
(8) Recapitalization. The aggregate number of shares determined under
Section 3 and stated in Section 4(b)(2), the maximum number of shares that
may be made the subject of awards of Options or Stock Appreciation Rights
to any individual in any calendar year, the number of Option Shares to
which each outstanding Option and Stock Appreciation Right relates, and the
option price in respect of each such Option and Stock Appreciation Right,
shall all be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a subdivision or
consolidation of shares or other capital adjustments, or the payment of a
stock dividend or other increase or decrease in such shares, effected
without receipt of consideration by CMC or a Subsidiary; provided, however,
that any fractional shares resulting from any such adjustment shall be
eliminated.
(9) Certain Mergers or Consolidations. After a merger of one or more
corporations into CMC, or after a consolidation of CMC and one or more
corporations (a "Merger Event"), in which CMC shall be the surviving or
resulting corporation, an optionee shall, at the same cost, be entitled
upon the exercise of an Option, to receive (subject to any required action
by stockholders) such securities of the surviving or resulting corporation,
as shall be equivalent, as nearly as practicable, to the nearest whole
number and class of shares of stock or other securities, to the Option
Shares which were then subject to such Option, and such shares of stock or
other securities shall, after such merger or consolidation, be deemed to be
Option Shares for all purposes of the Plan and of the Options and Stock
Appreciation Rights granted under the Plan.
(10) Other Transactions. If CMC enters into any agreement with respect
to any transaction which would, if consummated, result in a Merger Event in
which CMC will not be the surviving corporation, the Committee shall, in
its sole discretion, and without liability to any person, determine what
actions shall be taken with respect to outstanding Options and related
Stock Appreciation Rights, if any, including without limitation, the
payment of a cash amount in exchange for the cancellation of the Option and
any related Stock Appreciation Right or requiring the issuance of
substitute options, that will substantially preserve the value, rights and
benefits of any affected Options and/or related Stock Appreciation Rights
previously granted hereunder as of the date of the consummation of the
Merger Event.
(11) Optionee's Agreement. If, at the time of the exercise of any
Option or Stock Appreciation Right, in the opinion of counsel for CMC, it
is necessary or desirable, in order to comply with any then applicable laws
or regulations relating to the sale of securities, that the optionee
exercising the Option or Stock Appreciation Right shall agree to hold any
Option Shares issued to the optionee for investment and without any present
intention to resell or distribute the same and that the optionee will
dispose of such shares only in compliance with such laws and regulations,
the optionee will, upon the request of CMC, execute and deliver to CMC a
further agreement to such effect.
e. EFFECT OF EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS. The right of an
optionee to exercise an Option shall terminate to the extent that such Option is
exercised and to the extent that the Option Shares subject to such Option are
used to calculate amounts receivable upon the exercise of a related Stock
Appreciation Right. The right of an optionee to exercise a Stock Appreciation
Right shall terminate to the extent that such Stock
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Appreciation Right is exercised and, also, to the extent that such optionee
exercises the Option to which such Stock Appreciation Right is related.
f. OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER
CORPORATIONS. Options and Stock Appreciation Rights may be granted under the
Plan from time to time in substitution for stock options held by employees of
corporations who become salaried employees of CMC or of any Subsidiary as a
result of a merger or consolidation of the employing corporation with CMC or
such Subsidiary, or the acquisition by CMC or a Subsidiary of the assets of the
employing corporation, or the acquisition by CMC or a Subsidiary of stock of the
employing corporation with the result that such employing corporation becomes a
Subsidiary.
g. APPLICATION OF FUNDS. The proceeds received by CMC from the sale of Option
Shares pursuant to Options will be used for general corporate purposes.
5. RESTRICTED STOCK UNITS AND RESTRICTED STOCK
a. ELIGIBILITY. The individuals who shall be eligible to receive an award of
Restricted Stock Units under the Plan shall be all salaried employees (including
officers and directors who are salaried employees) of CMC, or of any Subsidiary,
as the Committee from time to time shall determine.
b. AWARDS OF RESTRICTED STOCK UNITS.
The Committee, at any time and from time to time, may determine (subject to
the limitation contained in Section 3):
(i) those eligible individuals, if any, who shall receive an award of
Restricted Stock Units under the terms of the Plan;
(ii) the number of Restricted Stock Units that shall be awarded to
each such individual;
(iii) the terms and conditions which must be satisfied for the
restrictions and conditions on each Restricted Stock Unit to be removed,
and the period of time during which such terms and conditions shall apply,
which period shall be not less than three years from the date of the award,
unless the Committee otherwise determines, in which event such period shall
not be less than one year from the date of the award; and
(iv) the time and manner in which all or a portion of each award shall
be paid to such individual in accordance with the provisions of Section
5(e).
c. DESCRIPTION OF RESTRICTED STOCK UNITS. A Restricted Stock Unit awarded to an
employee shall entitle the employee to receive, upon the satisfaction of the
terms and conditions established under Section 5(b), a share of Common Stock.
The holder of a Restricted Stock Unit shall be entitled to receive a cash
payment on each dividend payment date for Common Stock as if such Restricted
Stock Unit were a share of Common Stock. The number of shares of Common Stock
subject to an award of Restricted Stock Units shall be appropriately adjusted,
from time to time, in the manner provided in Sections 4(d)(8) and 4(d)(9) for
any stock dividend, stock split, recapitalization, reorganization, merger,
consolidation, split-up or any similar change affecting the Common Stock.
After the satisfaction of the terms and conditions set by the Committee at
the time of the grant of an award of Restricted Stock Units to an employee, the
Secretary of CMC shall be so advised and a certificate for the appropriate
number of shares of Common Stock shall be delivered to the employee. The
remaining Restricted Stock Units granted under such award, if any, shall either
be canceled or, if appropriate under the terms of the award, shall continue to
be subject to the restrictions, terms and conditions set by the Committee at the
time of the grant of the award.
The Committee may from time to time before the satisfaction of the terms
and conditions established under Section 5(b) with respect to an award of
Restricted Stock Units determine to convert all or a portion of such Restricted
Stock Units into an equivalent number of shares of Restricted Stock.
d. DESCRIPTION OF RESTRICTED STOCK. A share of Restricted Stock issued upon the
conversion of a Restricted Stock Unit is a share of Common Stock which may not
be sold, exchanged, pledged, transferred, assigned, hypothecated or otherwise
encumbered or disposed of until the terms and conditions set by the Committee at
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the time of the award of the Restricted Stock Unit have been satisfied. A share
of Restricted Stock shall be subject to the same restrictions, terms and
conditions as applied to the converted Restricted Stock Unit.
If an employee receives shares of Restricted Stock, the employee shall be
the record owner of such shares and shall have all the rights of a stockholder
with respect to such shares, including the right to vote and the right to
receive dividends or other distributions made or paid with respect to such
shares. Any certificate or certificates representing shares of Restricted Stock
shall bear the following legend:
The shares represented by this certificate have been issued pursuant
to the terms of an award under The Chase Manhattan 1994 Long-Term Incentive
Plan and may not be sold, exchanged, pledged, transferred, assigned,
hypothecated or otherwise encumbered or disposed of in any manner until
such time as is set forth in the terms of such award dated .
Any new, additional or different securities that an employee may become entitled
to receive with respect to any shares of Restricted Stock by virtue of a stock
dividend, stock split, recapitalization, reorganization, merger, consolidation,
split-up, or any similar change affecting the Common Stock shall be subject to
the same restrictions, terms and conditions as apply to such shares of
Restricted Stock.
In order to enforce the restrictions, terms and conditions which may be
applicable to an employee's shares of Restricted Stock, the Committee may
require the employee, upon the receipt of a certificate or certificates
representing such shares, or at any time thereafter, to deposit such certificate
or certificates together with stock powers and other instruments of transfer,
appropriately endorsed in blank, with CMC or an escrow agent designated by CMC
under an escrow agreement in such form as shall be determined by the Committee.
After the satisfaction of the terms and conditions set by the Committee at
the time of an award of Restricted Stock Units to an employee which are
applicable to shares of Restricted Stock, a new certificate, without the legend
set forth above, for the number of shares which are no longer subject to such
restrictions, terms and conditions shall be delivered to the employee. The
remaining shares of Restricted Stock issued with respect to such award, if any,
shall either be canceled or, if appropriate under the terms of the award
applicable to such shares, shall continue to be subject to the restrictions,
terms and conditions set by the Committee at the time of the award.
e. PAYMENT OF RESTRICTED STOCK UNITS AND RESTRICTED STOCK.
(1) In General. The satisfaction of the terms and conditions set by the
Committee at the time of an award of Restricted Stock Units and the delivery of
a certificate, without the legend set forth above, for the portion of such award
which is no longer subject to such restrictions, terms and conditions is
hereinafter referred to as the "payment" of such portion of the award (or the
shares of Restricted Stock into which it may be converted). Subject to the
provisions of this Section 5(e) and Sections 5(c) and 5(d), each award shall be
paid at the time and in the manner specified by the Committee at the time of the
award.
(2) Payment in the Event of Termination of Employment. If the employment
with CMC of an employee to whom an award of Restricted Stock Units has been made
is terminated for any reason (including death, but excluding disability (as
determined by the Committee in its sole discretion), which for purposes of this
Section 5(e) shall not be deemed a termination of employment) before
satisfaction of the terms and conditions for the payment of all or a portion of
the award, then only such portion of the award, if any, shall be paid as shall
have been specified by the Committee at the time of the award and the remaining
portion of such award shall be canceled.
If an employee to whom Restricted Stock Units have been awarded dies after
satisfaction of the terms and conditions for the payment of all or a portion of
an award but prior to the actual payment of all or such portion of the award,
such payment shall be made to the employee's beneficiary or beneficiaries at the
time and in the same manner that such payment would have been made to the
employee.
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6. CHANGE IN CONTROL PROVISIONS.
a. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. Notwithstanding any provision in
the Plan or in any Stock Option Agreement to the contrary, the following
provisions shall apply if there is a Change in Control, as defined in Section
6(e):
(1) Any Option or Stock Appreciation Right, other than an Incentive
Stock Option and related Stock Appreciation Rights, which is not otherwise
exercisable at the date of the Change in Control may be exercised, subject
to the provisions of Sections 4(d)(5) and 4(d)(7), at any time after the
date of the Change in Control.
(2) If an optionee's employment is terminated within twenty-four
months after a Change in Control, unless such termination is (i) for Cause
(as defined in Section 6(e)), (ii) by reason of death, Disability (as
defined in Section 6(e)), or retirement with the consent of CMC (as defined
in Section 4(d)(7)), or (iii) by the optionee without Good Reason (as
defined in Section 6(e)), the optionee shall have the right, subject to the
provisions of Section 4(d)(5), to exercise his Options and Stock
Appreciation Rights at any time within the twenty-four month period after
such termination of employment. After a Change in Control, any purported
termination of an employee's employment (other than by reason of death)
shall be communicated by a Notice of Termination (as defined in Section
6(e)) from CMC to the employee or from the employee to CMC, as the case may
be.
b. RESTRICTED STOCK UNITS AND RESTRICTED STOCK. Notwithstanding any provision of
the Plan or any terms or conditions relating to any Restricted Stock Units or
shares of Restricted Stock to the contrary, in the event of a Change of Control,
the terms and conditions set by the Committee at the time of an award of
Restricted Stock Units shall be deemed to have been satisfied and, within 15
days after the Change in Control, a certificate for the appropriate number of
shares of Common Stock shall be delivered to the employee to whom such
Restricted Stock Units were awarded. Further, at the time of a Change in Control
the terms and conditions with respect to any shares of Restricted Stock issued
under the Plan shall be deemed to have been satisfied and, within 15 days after
the Change in Control, the holder of such shares shall receive a new certificate
for such shares without the legend set forth in Section 5(d).
c. TERMINATION AS A RESULT OF A POTENTIAL CHANGE IN CONTROL. For purposes of
Section 6(a)(2), an employee's employment shall be deemed to have been
terminated following a Change in Control without Cause or by the employee with
Good Reason, if the employee's employment is terminated prior to a Change in
Control without Cause at the request of a Person (as defined in Section 6(e))
who has entered into an agreement with CMC the consummation of which will
constitute a Change in Control or if the employee terminates his employment with
Good Reason prior to a Change in Control (determined by treating a Potential
Change in Control (as defined in Section 6(e)), as a Change in Control in
applying the definition of Good Reason) if the circumstance or event which
constitutes Good Reason occurs at the request of such Person. Further, for all
purposes of Sections 6(a)(1), 6(b) and 6(d), in determining any such employee's
rights to exercise Options and Stock Appreciation Rights, to receive a
distribution of shares of Common Stock with respect to Restricted Stock Units,
or to have the restrictions on shares of Restricted Stock deemed satisfied, a
Change in Control shall be deemed to have occurred immediately prior to the
employee's termination of employment.
d. RESTRICTION ON POWER TO AMEND AND TERMINATE. Notwithstanding any provision in
the Plan or in any award granted under the Plan to the contrary, while Section 9
of the Plan reserves to the Committee the right, subject to certain limitations
and restrictions, to from time to time and at any time alter, amend, suspend,
discontinue or terminate the Plan and any awards granted under the Plan, no such
action of the Committee, nor any action by the Board of Directors, shall
adversely affect an employee's rights under any award granted under the Plan
without the written consent of such employee if such action is within
twenty-four months after the month in which a Change in Control occurred or is
within twelve months after a Potential Change in Control.
e. DEFINITIONS. For purposes of this Section 6, the following words and phrases
shall have the meaning specified:
(1) "Beneficial Owner" shall have the meaning defined in Rule 13d-3 of
the Exchange Act.
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(2) "Cause" shall mean, unless otherwise defined in an employee's
individual severance agreement with CMC or, with respect to an employee who
is a participant in CMC's Special Severance Plan, in such Special Severance
Plan (in which case said definition shall govern), the termination of an
employee's employment, after a Change in Control, as a result of (i) the
willful and continued failure by the employee to substantially perform the
employee's duties, as they may be defined from time to time, with the
employee's employers or abide by the written policies of CMC or the
employee's primary employer (other than any such failure resulting from the
employee's incapacity due to physical or mental illness or any such actual
or anticipated failure after the issuance of a Notice of Termination for
Good Reason by the employee) after a written demand for substantial
performance is delivered to the employee by the Corporate Human Resources
Executive of CMC, which demand specifically identifies the manner in which
the Corporate Human Resources Executive believes that the employee has not
substantially performed the employee's duties or has not abided by such
written policies, or (ii) the willful engaging by the employee in conduct
which is demonstrably and materially injurious to CMC or its Subsidiaries,
monetarily or otherwise. For purposes of the preceding sentence, no act, or
failure to act, on a employee's part shall be deemed "willful" unless done,
or omitted to be done, by the employee not in good faith and without
reasonable belief that the employee's act, or failure to act, was in the
best interest of CMC and its Subsidiaries.
(3) A "Change in Control" shall be deemed to have occurred if any one
of the following conditions shall have been satisfied:
(i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of CMC (not including in the securities
beneficially owned by such Person any securities acquired directly from
CMC or its affiliates) representing 25 percent or more of the combined
voting power of CMC's then outstanding securities; or
(ii) during any period of twenty-four consecutive months,
individuals who at the beginning of such period constitute the Board of
Directors and any new director (other than a director designated by a
Person who has entered into an agreement with CMC to effect a
transaction described in subsections (i), (iii) or (iv) of this Section)
whose election by the Board of Directors or nomination for election by
CMC's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of
the Board of Directors; or
(iii) the stockholders of CMC approve a merger or consolidation of
CMC with any other corporation, or a plan of complete liquidation of
CMC, other than (A) a merger, consolidation or liquidation which would
result in the voting securities of CMC outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or
being converted into voting securities of the surviving entity), in
combination with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of CMC or a Subsidiary, at
least 80 percent of the combined voting power of the voting securities
of CMC or such surviving entity outstanding immediately after such
merger, consolidation or liquidation, or (B) a merger, consolidation or
liquidation effected to implement a recapitalization of CMC (or similar
transaction) in which no Person acquires more than 50 percent of the
combined voting power of CMC's then outstanding securities; or
(iv) the stockholders of CMC approve an agreement for the sale or
disposition by CMC (other than to a Subsidiary) of all or substantially
all CMC's assets.
Notwithstanding the foregoing, with respect to a particular employee, a
Change in Control shall not include any event, circumstance or transaction
occurring during the twelve-month period following a Potential Change in
Control which results from the action of any entity or group which
includes, is affiliated with or is wholly or partly controlled by one or
more executive officers of CMC in which the employee participates (a
"Management Group"); provided, however, that such action shall not be taken
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into account for this purpose if it occurs within a twelve-month period
following a Potential Change in Control resulting from the action of any
Person which is not a Management Group.
(4) "Date of Termination" shall mean (i) if an employee's employment
is terminated for Disability, 30 days after Notice of Termination is given
(provided that the employee shall not have returned to the full-time
performance of the employee's duties during such 30 day period), and (ii)
if an employee's employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a termination
by the employee's employer, shall not be less than 30 days (except in the
case of a termination for Cause) and, in the case of a termination by the
employee, shall not be less than 15 days nor more than 60 days,
respectively, from the date such Notice of Termination is given).
(5) "Disability" shall be deemed to be the reason for the termination
of an employee's employment, if, as a result of the employee's incapacity
due to physical or mental illness, the employee shall have been absent from
the full-time performance of the employee's duties with the employee's
employer for a period of six consecutive months, a Notice of Termination
for Disability shall have been given to the employee, and, within 30 days
after such Notice of Termination is given, the employee shall not have
returned to the full-time performance of the employee's duties.
(6) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(7) "Good Reason" for termination by a employee of the employee's
employment shall mean, unless otherwise defined in an employee's individual
severance agreement with CMC or, with respect to an employee who is a
participant in CMC's Special Severance Plan, in such Special Severance Plan
(in which case said definition shall govern), the occurrence (without the
employee's express written consent) of any one of the following acts by the
employee's employer, or failure by the employee's employer to act, unless,
in the case of any act or failure to act described in subsection (i), (iii)
or (iv) of this subsection, such act or failure to act is corrected prior
to the Date of Termination specified in the Notice of Termination given in
respect thereof:
(i) the assignment to the employee of any duties materially
inconsistent with the nature and status of the employee's
responsibilities immediately prior to a Change in Control, or a
substantial adverse alteration in the nature or status of the employee's
responsibilities from those in effect immediately prior to the Change in
Control; provided, however, that a redesignation of the employee's title
or employer among CMC and its Subsidiaries shall not constitute Good
Reason if the employee's overall duties and status among CMC and its
Subsidiaries are not substantially adversely affected;
(ii) a reduction in the employee's annual base salary as in effect
on May 1, 1994 (or the employee's most recent date of hire, if later),
as the same may be increased from time to time, where "annual base
salary" is the employee's regular basic annual compensation prior to any
reduction therein under a salary reduction agreement pursuant to Section
401(k) or Section 125 of the Code, and, without limitation, shall not
include, cost of living allowances and post allowances for foreign
service, fees, retainers, reimbursements, bonuses, incentive awards,
prizes or similar payments;
(iii) the failure by the employee's primary employer to pay to the
employee any portion of the employee's current compensation, or to pay
to the employee any portion of an installment of deferred compensation
under any deferred compensation program, within seven days of the date
such compensation is due; or
(iv) any purported termination of the employee's employment which
is not effected pursuant to a Notice of Termination, and for purposes of
this Section, no such purported termination shall be effective.
An employee's right to terminate the employee's employment for Good Reason
shall not be effected by the employee's incapacity due to physical or
mental illness. The employee's continued employment shall
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not constitute consent to, or a waiver of rights with respect to, any act
or failure to act constituting Good Reason hereunder.
(8) "Notice of Termination" shall mean, unless otherwise defined in an
employee's individual severance agreement with CMC or, with respect to an
employee who is a participant in CMC's Special Severance Plan, in such
Special Severance Plan (in which case said definition shall govern), a
written notice which shall indicate the specific termination provision in
this Section 6 relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
employee's employment under the provision so indicated. A Notice of
Termination for Cause is required to include a statement signed by the
Corporate Human Resources Executive of CMC that, in the good faith opinion
of the Corporate Human Resources Executive, the employee engaged in conduct
set forth in Section 6(e)(2)(i) or 6(e)(2)(ii) (the definition of Cause),
and specifying the particulars thereof in detail.
(9) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
provided, however, a Person shall not include (i) CMC or any Subsidiary,
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of CMC or a Subsidiary, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of CMC in
substantially the same proportions as their ownership of stock of CMC.
(10) "Potential Change in Control" shall be deemed to have occurred if
any one of the following conditions shall have been satisfied:
(i) CMC enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control;
(ii) CMC or any Person publicly announces an intention to take or
to consider taking actions which, if consummated, would constitute a
Change in Control;
(iii) any Person who is or becomes the Beneficial Owner, directly
or indirectly, of securities of CMC representing 15 percent or more of
the combined voting power of CMC's then outstanding securities,
increases such Person's beneficial ownership of such securities by 5
percentage points or more over the percentage so owned by such Person on
July 18, 1990; or
(iv) the Board of Directors adopts a resolution to the effect that,
for purposes of the Plan, a Potential Change in Control has occurred.
7. WITHHOLDING FOR TAXES
Any cash payment under the Plan shall be reduced by any amounts required to
be withheld or paid with respect thereto under all present or future federal,
state and local tax and other laws and regulations which may be in effect as of
the date of each such payment. Any distribution of shares of Common Stock under
the Plan shall not be made until appropriate arrangements have been made for the
payment of any amounts which may be required to be withheld or paid with respect
thereto, including, but not limited to, withholding the distribution of a
portion of the shares of Common Stock otherwise issuable or the tendering of
such shares back to CMC (under such rules and conditions as may be established
by the Committee) in order to satisfy all or a portion of the required
withholdings or payments.
8. DESIGNATION OF BENEFICIARY
Each employee to whom an award or awards of Restricted Stock Units has been
made under this Plan may designate a beneficiary or beneficiaries (which
beneficiary may be an entity other than a natural person) to receive any payment
which under the terms of such award or awards may become payable on or after the
employee's death. At any time, and from time to time, any such designation may
be changed or canceled by the employee without the consent of any such
beneficiary. Any such designation, change or cancellation must be on a form
provided for that purpose by the Committee and shall not be effective until
received by the Committee. If no beneficiary has been named by a deceased
employee, or the designated beneficiaries have predeceased the employee, the
beneficiary shall be the employee's estate. If an employee designates more than
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one beneficiary, any payments under this Plan to such beneficiaries shall be
made in equal shares unless the employee has designated otherwise, in which case
the payments shall be made in the shares designated by the employee.
9. AMENDMENT AND TERMINATION
The Committee may from time to time and at any time alter, amend, suspend,
discontinue or terminate this Plan and any awards granted hereunder; provided,
however, that no such action of the Committee may, without the approval of the
shareholders of CMC, alter the provisions of the Plan so as to (i) increase the
maximum number of shares of Common Stock which may be made the subject of awards
in any calendar year (except as provided in Section 3(b)) or increase the
maximum number of shares of Common Stock as to which awards of Options and Stock
Appreciation Rights may be made to any awardee in any calendar year (except as
provided in Section 4(b)(1)); (ii) change the class of employees eligible to
receive awards under the Plan; (iii) extend beyond ten years the maximum term of
Incentive Stock Options or related Stock Appreciation Rights granted under the
Plan or increase the aggregate number of shares of Common Stock as to which
Incentive Stock Options may be granted under the Plan (except as provided in
Section 4(b)(2)); (iv) permit the option price of any Option Share to be less
the Market Value Per Share on the date of the granting of the Option; (v)
withdraw the administration of the Plan from the Committee; or (vi) permit any
member of the Committee to be eligible to receive an award pursuant to the terms
of the Plan. No alteration, amendment, suspension, discontinuance or termination
of any individual award (as opposed to any such action with respect to this
Plan) shall, however, materially adversely affect the rights of any awardee
without the written consent of the awardee. Notwithstanding the proviso to the
first sentence of this Section 9 or the provisions of the second sentence of
this Section 9, the Committee may alter, amend, suspend, discontinue or
terminate this Plan and any awards granted hereunder without the approval of the
shareholders of CMC or any awardee under the Plan if necessary in order to
enable the Plan or any award hereunder, or any other plan of CMC or any
Subsidiary intended to be so qualified or any award thereunder, to qualify for
(x) the exemption provided by Rule 16b-3, (y) the benefits provided under
Section 422 of the Code, or (z) the exclusion for qualified performance-based
compensation under Section 162(m) of the Code and the Section 162(m)
Regulations.
10. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS
Anything in the Plan or any Stock Option Agreement or other agreement
entered into pursuant to the Plan to the contrary notwithstanding, if, at any
time specified herein or therein for the making of any determination, the issue
or other distribution of shares of Common Stock, or the payment of consideration
to an employee as a result of the exercise of any Stock Appreciation Right, as
the case may be, any law, regulation or requirement of any governmental
authority having jurisdiction in the premises shall require either CMC or the
employee (or the employee's beneficiary thereof), as the case may be, to take
any action in connection with any such determination, the shares then to be
issued or distributed, or such payment, the issue or distribution of such shares
or the making of such determination or payment, as the case may be, shall be
deferred until such action shall have been taken.
11. MISCELLANEOUS
a. NO EMPLOYMENT CONTRACT. Nothing contained in the Plan or any Stock Option
Agreement or other agreement shall be construed as conferring upon an employee
the right to continue in the employ of CMC or any Subsidiary.
b. EMPLOYMENT WITH SUBSIDIARIES. Employment by CMC for the purposes of this Plan
shall be deemed to include employment by, and to continue during any period in
which an employee is in the employment of, any Subsidiary.
c. NO RIGHTS AS A STOCKHOLDER. An employee shall have no rights as a stockholder
with respect to Option Shares covered by the employee's Options or Stock
Appreciation Rights until the date of the issuance of such shares to the
employee and only after such shares are fully paid. No adjustment will be made
for dividends or other distributions or rights for which the record date is
prior to the date of such issuance. An employee shall have no rights as a
stockholder with respect to any award of Restricted Stock Units under the Plan.
A-12
<PAGE> 48
d. NO RIGHT TO CORPORATE ASSETS. Nothing contained in the Plan shall be
construed as giving an employee, the employee's beneficiaries or any other
person any equity or interest of any kind in any assets of CMC or a Subsidiary
or creating a trust of any kind or a fiduciary relationship of any kind between
CMC or a Subsidiary and any such person.
e. NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan shall be
construed to prevent CMC or any Subsidiary from taking any corporate action
which is deemed by CMC or such Subsidiary to be appropriate or in its best
interest, whether or not such action would have an adverse effect on the Plan or
any award made under the Plan. No employee, beneficiary or other person shall
have any claim against CMC or any Subsidiary as a result of any such action.
f. NON-ASSIGNABILITY. Neither an employee nor an employee's beneficiary shall
have the power or right to sell, exchange, pledge, transfer, assign, hypothecate
or otherwise encumber or dispose of such employee's or beneficiary's interest in
the Plan or in any award received under the Plan, other than by will or the laws
of descent and distribution; nor shall such interest be subject to seizure for
the payment of an employee's or beneficiary's debts, judgments, alimony, or
separate maintenance or be transferable by operation of law in the event of an
employee's or beneficiary's bankruptcy or insolvency. Any Option or Stock
Appreciation Right granted under the Plan shall be exercisable during an
awardee's lifetime only by such awardee or his or her guardian or legal
representative.
CMC's or a Subsidiary's obligations under the Plan are not assignable or
transferable except to a corporation which acquires all or substantially all of
the assets of CMC or such Subsidiary or to any corporation into which CMC or
such Subsidiary may be merged or consolidated.
g. OTHER BENEFIT PLANS. No awards or payments under the Plan shall be taken into
account in determining any benefits under any retirement, profit-sharing or
other plan maintained by CMC or a Subsidiary.
h. GOVERNING LAW; CONSTRUCTION. All rights and obligations under the Plan shall
be governed by, and the Plan shall be construed in accordance with, the laws of
the State of New York. Titles and headings to Sections herein are for purposes
of reference only, and shall in no way limit, define or otherwise affect the
meaning or interpretation of any provisions of the Plan.
i. EFFECTIVE DATE. The Plan shall be effective May 1, 1994, subject to the
approval of the Plan by the stockholders of CMC in accordance with Rule 16b-3
and Sections 162(m) and 422 of the Code.
A-13
<PAGE> 49
CHASE
[LOGO]
THE CHASE MANHATTAN CORPORATION
1 Chase Manhattan Plaza
New York, New York 10081-0001
(212) 552-2222
<PAGE> 50
PROXY- THE CHASE MANHATTAN CORPORATION
COMMON STOCK
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS-APRIL 19, 1994
Robert B. Adams and Kathy A. MaGaw, and each of them, with full power of
substitution, are hereby appointed proxies to vote all shares (unless a lesser
number is specified on the other side) of Common Stock of The Chase Manhattan
Corporation that the undersigned would be entitled to vote at the Annual
Meeting of Stockholders of the Corporation to be held at 1 Chase Manhattan
Plaza, New York, New York, on April 19, 1994 at 2:30 P.M., and any adjournments
thereof, with all powers the undersigned would possess if personally present,
for the Election of Directors, on each of the other matters described in the
Proxy Statement and otherwise in their discretion.
The Shares represented by this proxy will be voted as directed by the
stockholder. AUTHORITY TO VOTE SUCH SHARES "FOR" THE ELECTION OF DIRECTORS
(NO.1) WILL BE DEEMED GRANTED BY THE SIGNED PROXY UNLESS WITHHELD. IF NO
CONTRARY DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED "FOR" THE APPROVAL OF
AUDITORS (NO.2) AND THE 1994 LONG-TERM INCENTIVE PLAN (NO.3) AND "AGAINST" THE
STOCKHOLDER PROPOSALS (NOS. 4-7).
(Continued, and To Be Signed and Dated, on the Other Side)
FOLD AND DETACH HERE
<PAGE> 51
MANAGEMENT RECOMMENDS A VOTE FOR NOS. 1,2 AND 3: COMMON STOCK
1 Election of Directors: Burns, Estrada, Ferguson, Gray, McLaughlin and
Schacht
(To withhold authority to vote for any
WITHHOLD particular nominee write the name below.)
FOR AUTHORITY
/ / / / ----------------------------------------------
2
Approval of
Auditors
FOR AGAINST ABSTAIN
/ / / / / /
3
Incentive
Plan
FOR AGAINST ABSTAIN
/ / / / / /
MANAGEMENT RECOMMENDS A VOTE AGAINST NOS. 4-7:
4
Reinstate Annual Election
of All Directors
FOR AGAINST ABSTAIN
/ / / / / /
5
Cumulative Voting
for Directors
FOR AGAINST ABSTAIN
/ / / / / /
6
South Africa
Policy
FOR AGAINST ABSTAIN
/ / / / / /
7
Developing
Country Loans
FOR AGAINST ABSTAIN
/ / / / / /
P SIGNATURE(S) SHOULD AGREE WITH NAME(S) SHOWN AT LEFT. IF
R SIGNING FOR ESTATES, TRUSTS OR CORPORATIONS, TITLE OR CAPAC-
O ITY SHOULD BE STATED. IF SHARES ARE HELD JOINTLY, EVERY HOLD-
X ER SHOULD SIGN.
Y
-------------------------------------------------------------
SIGNATURE
-------------------------------------------------------------
SIGNATURE
DATE , 1994
--------------------------------------------------
FOLD AND DETACH HERE
PLEASE COMPLETE AND RETURN THE ATTACHED PROXY CARD AS SOON AS POSSIBLE.
