<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CHEMICAL BANKING CORP.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CHEMICAL BANKING CORP.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(LOGO)
CHEMICAL BANKING CORPORATION
270 Park Avenue, New York, New York 10017-2036
March 27, 1995
Dear Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
of Chemical Banking Corporation. This meeting will be held in the auditorium of
Chemical's wholly owned subsidiary, Texas Commerce Bank National Association, at
the Texas Commerce Center, 601 Travis Street, Houston, Texas, at 8:30 a.m.,
Houston Time, on May 16, 1995.
Twenty directors are to be elected at the Annual Meeting. In addition, you
will be asked to vote on ratification of the appointment of independent
accountants; the approval of an amendment to the Employee Stock Purchase Plan;
and on certain stockholder proposals, if introduced at the meeting. The Annual
Report for the calendar year 1994 is enclosed. Following the custom of past
meetings, we shall review the major developments of 1994. A report of the
meeting will be included in the next Quarterly Report to Stockholders.
We hope you will be able to attend the meeting. However, even if you
anticipate attending in person, we urge you to mark, sign and return the
enclosed proxy card promptly to ensure that your shares will be represented. If
you attend, you will, of course, be entitled to vote in person. You may obtain
an admission ticket for the meeting by using the ticket request form on the last
page of the Proxy Statement.
Sincerely,
/s/ Walter V. Shipley
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
(LOGO)
CHEMICAL BANKING CORPORATION
270 Park Avenue, New York, New York 10017-2036
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NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD
TUESDAY, MAY 16, 1995
The Annual Meeting of Stockholders of Chemical Banking Corporation (the
"Corporation") will be held in the Texas Commerce Auditorium at the Texas
Commerce Center, 601 Travis Street, Houston, Texas, on Tuesday, May 16, 1995, at
8:30 a.m., Houston Time, to consider the following matters:
(1) the election of twenty directors;
(2) the ratification of the appointment of independent accountants for
the current year;
(3) the approval of an amendment to the Employee Stock Purchase Plan;
and
(4) the transaction of such other business as may properly be brought
before the meeting, including, if introduced at the meeting,
taking action upon the resolutions which are quoted under the
heading "Stockholder Proposals" in the accompanying Proxy
Statement.
Pursuant to the By-laws of the Corporation, the Board of Directors has
fixed the close of business on March 20, 1995, as the time for determining
stockholders of record entitled to notice of, and to vote at, the meeting. Each
share of the Corporation's common stock, $1 par value, will entitle the holder
thereof to one vote on all matters which may properly come before the meeting.
By Order of the Board of Directors
JOHN B. WYNNE
Secretary
March 27, 1995
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PLEASE DATE AND SIGN THE ENCLOSED FORM OF PROXY
AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE.
IF YOU PLAN TO ATTEND THE MEETING,
PLEASE USE THE TICKET REQUEST FORM PRINTED
ON THE LAST PAGE OF THE PROXY STATEMENT.
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<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Proxy Statement.................................................................. 1
Proposal 1: Election of Directors........................................... 1
Information Regarding the Nominees.......................................... 2
Security Ownership of Certain Beneficial Owners and Management.............. 7
Compliance with Section 16(a) of the Securities Exchange Act................ 8
Board Meetings, Committees and Attendance................................... 8
Directors' Compensation..................................................... 9
Director and Officer Transactions........................................... 9
Executive Compensation...................................................... 10
Compensation and Benefits Committee Report on Executive Compensation... 10
Comparison of Five-Year Cumulative Total Return........................ 12
Compensation Committee Interlocks and Insider Participation............ 12
Summary Compensation Table............................................. 13
Stock Option/SAR Grants Table -- 1994 Grants........................... 14
Aggregated Stock Option/SAR Exercises in 1994 and Option/SAR
Values as of Year-End 1994........................................... 14
Long-Term Incentive Plan Awards in 1994................................ 15
Pension and Other Defined Benefit or Actuarial Plans................... 15
Employment Contracts and Termination of Employment Arrangements........ 17
Proposal 2: Appointment of Independent Accountants.......................... 17
Proposal 3: Approval of an Amendment to the Employee Stock Purchase Plan.... 17
Stockholder Proposals....................................................... 18
Proposal 4: Political Contributions.................................... 18
Proposal 5: Unmarked Proxies........................................... 19
Proposal 6: Emerging Economies......................................... 21
Proposal 7: Cumulative Voting.......................................... 22
Miscellaneous............................................................... 24
Ticket Request
</TABLE>
<PAGE> 5
PROXY STATEMENT
This Proxy Statement has been prepared on behalf of the Board of Directors
by the management of Chemical Banking Corporation (the "Corporation") and is
furnished in connection with the solicitation of proxies to be used at the
Annual Meeting of Stockholders of the Corporation to be held on May 16, 1995,
and any adjournment thereof. The approximate date on which this Proxy Statement
is first being sent to stockholders is March 27, 1995.
Only holders of record at the close of business on March 20, 1995, of the
Corporation's common stock, $1 par value ("Common Stock"), will be entitled to
vote. On that date, there were outstanding 240,754,639 shares of Common Stock
(excluding shares held in treasury). Each share of Common Stock is entitled to
one vote on each matter to be voted on at the Annual Meeting. Shares
representing a majority of the votes entitled to be cast by the outstanding
shares of Common Stock must be represented in person or by proxy at the Annual
Meeting in order for a quorum to be present.
The form of proxy solicited by the Board of Directors affords stockholders
the ability to specify a choice among approval of, disapproval of, or abstention
with respect to each matter to be acted upon at the Annual Meeting. Shares
represented by the proxy will be voted and, where the solicited stockholder
indicates a choice on the form of proxy with respect to any matter to be acted
upon, the shares will be voted as specified. Abstentions and broker nonvotes
will not be counted as either "for" or "against" the items being voted on in the
tabulation of votes on proposals.
PROPOSAL 1: ELECTION OF DIRECTORS
One of the purposes of the meeting is the election of twenty directors,
constituting the entire Board of Directors of the Corporation, to hold office
until the next Annual Meeting and until their successors are elected and have
qualified.
The election of Directors requires a plurality of the votes cast at the
meeting. Shares represented by proxies solicited by the Board of Directors will,
unless contrary instructions are given, be voted for the election of the
nominees named in the following pages as Directors. If any nominee is
unavailable for election, the shares may be voted for the election of a
substitute nominee as management of the Corporation may propose.
If a stockholder wishes to withhold authority to vote for any nominee, such
stockholder can do so by following the directions set forth on the form of proxy
solicited by the Board of Directors or on the ballot distributed at the Annual
Meeting, if such stockholder wishes to vote in person.
Each nominee is currently a Director of the Corporation and its principal
subsidiary, Chemical Bank. Except as noted, all of the nominees have been
continuously employed by their present employers for more than five years. All
of the nominees are heavily involved in community and charitable affairs.
Set forth in the following pages is information about each nominee. To the
extent appropriate, information is included concerning Manufacturers Hanover
Corporation ("MHC") which merged with the Corporation effective December 31,
1991 (the "Merger").
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<PAGE> 6
INFORMATION REGARDING THE NOMINEES
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JOHN F. MCGILLICUDDY (AGE 64)
Retired Chairman of the Board and Chief Executive
Officer of the Corporation as of December 31, 1993,
having served in that position since the Merger. Prior
to the Merger, Mr. McGillicuddy had been Chairman and
Chief Executive Officer of MHC. He had been a Director
(PHOTO) of MHC since 1970 and became a Director of the
Corporation on December 31, 1991. Mr. McGillicuddy is
also a Director of The Continental Corporation, UAL
Corporation, USX Corporation, Empire Blue Cross and
Blue Shield and Kelso & Company, Inc., and serves on
the Public Policy Committee.
--------------------------------------------------------------------------------
MARINA V.N. WHITMAN (AGE 60)
Professor of Business Administration and Public
Policy, University of Michigan. Prior to her
appointment at the University of Michigan effective
September 1, 1992, Doctor Whitman was Vice President
and Group Executive of General Motors Corporation. She
(PHOTO) is also a Director of The Procter & Gamble Company,
Browning-Ferris Industries, Inc., Unocal Corp. and
Aluminum Company of America. Doctor Whitman had been a
Director of MHC since 1973, became a Director of the
Corporation on December 31, 1991, and serves on the
Compensation and Benefits Committee and the Public
Policy Committee.
--------------------------------------------------------------------------------
RICHARD D. WOOD (AGE 68)
Retired Chairman of the Board of Eli Lilly and Company
since June 1993, having served as Chairman and Chief
Executive Officer until November 1991. Mr. Wood is also
(PHOTO) a Director of Amoco Corporation, Dow Jones & Company,
Inc. and The Chubb Corporation. He became a Director of
the Corporation in 1974, and serves on the Compensation
and Benefits Committeeand the Nomination and Board
Affairs Committee.
--------------------------------------------------------------------------------
W. BRUCE THOMAS (AGE 68)
Private investor. Until October 1991, Mr. Thomas was
Vice Chairman- Administration, Chief Financial Officer
and a Director of USX Corporation. Mr. Thomas had been
(PHOTO) a Director of MHC since 1977, became a Director of the
Corporation on December 31, 1991, and serves on the
Audit and Examining Committees and the Public
Policy Committee.
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2
<PAGE> 7
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MICHEL C. BERGERAC (AGE 63)
Chairman of the Board and Chief Executive Officer of
Bergerac & Co., Inc. Mr. Bergerac is also a Director of
CBS, Inc. and Melarx Pharmaceuticals. He had been a
(PHOTO) Director of MHC since 1978, became a Director of the
Corporation on December 31, 1991, and serves on the
Compensation and Benefits Committee and the
Public Policy Committee.
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ANDREW C. SIGLER (AGE 63)
Chairman of the Board and Chief Executive Officer of
Champion International Corporation. Mr. Sigler is also
a Director of AlliedSignal, Inc., Bristol-Myers Squibb
(PHOTO) Company and General Electric Company as well as a
member of the Board of Trustees for Dartmouth College.
He became a Director of the Corporation in 1979, and
serves on the Nomination and Board Affairs Committee.
--------------------------------------------------------------------------------
FRANK A. BENNACK JR. (AGE 62)
President and Chief Executive Officer of The Hearst
Corporation. In addition to serving as a Director of
The Hearst Corporation, Mr. Bennack is a Director of
(PHOTO) American Home Products Corporation. He had been a
Director of MHC since 1981, became a Director of the
Corporation on December 31, 1991, and serves on the
Compensation and Benefits Committee and the
Nomination and Board Affairs Committee.
--------------------------------------------------------------------------------
MICHAEL I. SOVERN (AGE 63)
President Emeritus and Chancellor Kent Professor of Law
of Columbia University since June 1993, having served
as President prior to that time. Mr. Sovern is a
Director of American Telephone and Telegraph Company,
(PHOTO) Warner-Lambert Company, Greater New York Insurance
Group and Orion Pictures Corporation. He became a
Director of the Corporation in 1981, and serves on the
Audit and Examining Committees and the Public
Policy Committee.
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3
<PAGE> 8
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WALTER V. SHIPLEY (AGE 59)
Chairman of the Board and Chief Executive Officer of
the Corporation 1983-1992 and 1994 to the present. Mr.
(PHOTO) Shipley is also a Director of Champion International
Corporation, NYNEX Corporation and The Reader's Digest
Association, Inc. He became a Director of the
Corporation in 1982.
--------------------------------------------------------------------------------
JOHN R. STAFFORD (AGE 57)
Chairman, President and Chief Executive Officer of
American Home Products Corporation. Mr. Stafford is
also a Director of AlliedSignal, Inc., Metropolitan
(PHOTO) Life Insurance Company and NYNEX Corporation. He had
been a Director of MHC since 1982, became a Director of
the Corporation on December 31, 1991, and serves on the
Compensation and Benefits Committee and the
Nomination and Board Affairs Committee.
--------------------------------------------------------------------------------
JOHN P. MASCOTTE (AGE 55)
Chairman of the Board and Chief Executive Officer of
The Continental Corporation. Mr. Mascotte is also a
Director of Business Men's Assurance Company of America
(PHOTO) and Hallmark Cards, Inc. He had been a Director of MHC
since 1983, became a Director of the Corporation on
December 31, 1991, and serves on the Audit and
Examining Committees and the Nomination and Board
Affairs Committee.
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MELVIN R. GOODES (AGE 59)
Chairman of the Board and Chief Executive Officer of
Warner-Lambert Company, having served as President and
Chief Operating Officer until August 1991. Mr. Goodes
(PHOTO) is also a Director of Ameritech Corporation and Unisys
Corporation. He became a Director of the Corporation in
1986, and serves on the Compensation and Benefits
Committee and the Nomination and Board Affairs
Committee.
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4
<PAGE> 9
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GEORGE V. GRUNE (AGE 65)
Chairman of the Board of The Reader's Digest
Association, Inc. Mr. Grune is also a Director of Avon
Products, Inc., CPC International, Inc., and Federated
(PHOTO) Department Stores, Inc. He became a Director of the
Corporation in 1986, and serves on the Audit and
Examining Committees and the Nomination and Board
Affairs Committee.
--------------------------------------------------------------------------------
CHARLES W. DUNCAN JR. (AGE 68)
Private investor. Mr. Duncan is a Director of American
Express Company, The Coca-Cola Company, Newfield
Exploration Company, Panhandle Eastern Corporation and
(PHOTO) United Technologies Corporation. He became a Director
of the Corporation in 1987, and serves on the Audit and
Examining Committees and the Public Policy
Committee.
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HAROLD S. HOOK (AGE 63)
Chairman and Chief Executive Officer of American
General Corporation. Mr. Hook is also a Director of
Cooper Industries, Inc., Panhandle Eastern Corporation
(PHOTO) and Sprint Corporation. He became a Director of the
Corporation in 1987, and serves on the Compensation and
Benefits Committee and the Nomination and Board
Affairs Committee.
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HELENE L. KAPLAN (AGE 61)
Counsel to the firm of Skadden, Arps, Slate, Meagher &
Flom since December 1990. Mrs. Kaplan was previously
counsel to Webster & Sheffield. She is also a Director
(PHOTO) of The May Department Stores Company, Metropolitan Life
Insurance Company, Mobil Corporation and NYNEX
Corporation. Mrs. Kaplan became a Director of the
Corporation in 1987, and serves on the Audit and
Examining Committees and the Public Policy
Committee.
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5
<PAGE> 10
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RANDOLPH W. BROMERY (AGE 69)
President of Springfield College since February 1992
and President of Geoscience Engineering Corporation.
Doctor Bromery was Chancellor of the University of
Massachusetts/Amherst from October 1971 until September
1979 and Chancellor of the Massachusetts Board of
(PHOTO) Regents for Higher Education from April 1990 until
April 1991. He is a Director of Exxon Corporation, John
Hancock Mutual Life Insurance Company and NYNEX
Corporation. Doctor Bromery became a Director of the
Corporation in 1988, and serves on the Audit and
Examining Committees and the Public Policy
Committee.
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EDWARD D. MILLER (AGE 54)
President of the Corporation since January 1, 1994,
having served as Vice Chairman of the Board since
December 31, 1991. From December 1988 until the Merger,
(PHOTO) Mr. Miller served as Vice Chairman and a Director of
MHC. He became a Director of the Corporation on
December 31, 1991. Mr. Miller is responsible for
tri-state regional banking, nationwide consumer banking
and operating services. He is also a Director of The
Brooklyn Union Gas Company.
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J. BRUCE LLEWELLYN (AGE 67)
Chairman of the Boards of The Philadelphia Coca-Cola
Bottling Company, The Coca-Cola Bottling Company of
Wilmington, Inc. and Queen City Broadcasting, Inc. Mr.
Llewellyn is a Director of Coors Incorporated, Essence
(PHOTO) Magazine and QVC Network, Inc. He had been a Director
of MHC since 1989, became a Director of the Corporation
on December 31, 1991, and serves on the Compensation
and Benefits Committee and the Public Policy
Committee.
--------------------------------------------------------------------------------
WILLIAM B. HARRISON JR. (AGE 51)
Vice Chairman and Director of the Corporation since
December 31, 1991. Mr. Harrison is responsible for
(PHOTO) corporate and institutional banking worldwide. He is
also a Director of Dillard Department Stores, Freeport-
McMoRan, Inc. and McMoRan Oil & Gas Co.
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<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of January 1, 1995, or such later date for which information is
available, each Director-nominee, each executive officer named in the Summary
Compensation Table and all such Directors and executive officers as a group
beneficially owned the number of shares of Common Stock set forth in the
following table. Unless otherwise indicated, each of the named individuals and
each person in the group has sole voting power and sole investment power with
respect to the shares shown. These shares include shares of Common Stock
currently subject to acquisition and represent less than 1% of the total shares
of Common Stock outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF INDIVIDUAL BENEFICIAL OWNERSHIP
-------------------------------------------- --------------------
<S> <C>
Frank A. Bennack Jr. 956
Michel C. Bergerac 12,356
Randolph W. Bromery 1,486(a)
Charles W. Duncan Jr. 3,147(a)(e)
Melvin R. Goodes 2,200
George V. Grune 2,226(a)
William B. Harrison Jr. 262,683(b)(c)(d)
Harold S. Hook 13,908(a)(f)
Helene L. Kaplan 2,000
William C. Langley 117,002(b)(d)
J. Bruce Llewellyn 3,117(a)
John P. Mascotte 1,529
John F. McGillicuddy 329,355(b)(d)
Edward D. Miller 231,073(b)(d)
Walter V. Shipley 551,950(b)(c)(d)
Andrew C. Sigler 2,275
Michael I. Sovern 5,775(a)
John R. Stafford 2,624(a)(g)
W. Bruce Thomas 33,545(a)
Peter J. Tobin 146,300(b)(d)
Marina v.N. Whitman 1,868
Richard D. Wood 2,656(a)
All above Directors and
Executive Officers as a group 1,730,031
</TABLE>
---------------
(a) The amounts reported include shares of Common Stock, receipt of which has
been deferred under the Deferred Compensation Plan for Non-Employee
Directors of the Corporation and Chemical Bank (the "Directors' Deferred
Compensation Plan") as follows: Dr. Bromery 1,026 shares; Mr. Duncan 1,187
shares; Mr. Grune 332 shares; Mr. Hook 1,187 shares; Mr. Llewellyn 409
shares; Mr. Sovern 2,009 shares; Mr. Stafford 200 shares; Mr. Thomas 517
shares; and Mr. Wood 1,740 shares. Each of the aforementioned has an
unsecured claim against the Corporation for payment of such shares.
(b) The amounts reported include shares currently subject to acquisition through
the exercise of stock options and stock appreciation rights ("SARs") as
follows: Mr. Harrison 187,500 shares; Mr. Langley 82,458 shares; Mr.
McGillicuddy 211,443 shares; Mr. Miller 161,157 shares; Mr. Shipley 380,750
shares; and Mr. Tobin 116,361 shares; and shares which may be received at
the end of a restricted period as a result of awards of restricted stock and
restricted stock units as follows: Mr. Harrison 25,000 units; Mr. Langley
9,138 units; Mr. Miller 35,985 units; Mr. Shipley 40,000 units; and Mr.
Tobin 14,136 units.
(c) The amounts reported include shares of Common Stock, receipt of which has
been deferred as follows: Mr. Harrison 27,830 shares and Mr. Shipley 55,479
shares. Each of the aforementioned has an unsecured claim against the
Corporation for payment of such shares.
(d) The amounts include shares of Common Stock owned by certain of the
aforementioned and allocated to their accounts in the Chemical Savings
Incentive Plan as follows: Mr. Harrison 4,828 shares; Mr. Langley 13,333
shares; Mr. McGillicuddy 52,689 shares; Mr. Miller 15,672 shares; Mr.
Shipley 24,640 shares; and Mr. Tobin 8,146 shares.
7
<PAGE> 12
(e) Includes beneficial ownership of 300 shares of Common Stock owned by a
partnership of which Mr. Duncan is a general partner. Also includes 120
shares of Common Stock owned by The Anne and C. W. Duncan, Jr. Foundation as
to which Mr. Duncan disclaims beneficial ownership.
(f) Includes beneficial ownership of 92 shares of Common Stock owned through a
controlled corporation.
(g) Includes 300 shares of Common Stock owned by Mr. Stafford's spouse as to
which Mr. Stafford disclaims beneficial ownership.
As of January 1, 1995, none of the Directors of the Corporation
beneficially owned shares of the Corporation's Preferred Stock. Mr. Thomas
disclaims beneficial ownership of 3,000 shares of the Corporation's 8 3/8%
Preferred Stock owned by his spouse.
All Directors and executive officers of the Corporation as a group own in
the aggregate less than 1% of the outstanding Preferred Stock of the
Corporation.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's executive officers, directors and
persons who own more than ten percent of a registered class of the Corporation's
equity securities ("Reporting Persons") to file reports of ownership and changes
in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission
(the "SEC") and the New York Stock Exchange (the "NYSE"). These Reporting
Persons are required by SEC regulation to furnish the Corporation with copies of
all Forms 3, 4 and 5 they file with the SEC and NYSE.
Based solely on the Corporation's review of the copies of the forms it has
received and written representations from certain Reporting Persons, the
Corporation believes that all of its Reporting Persons complied with all filing
requirements applicable to them with respect to transactions during fiscal year
1994.
BOARD MEETINGS, COMMITTEES AND ATTENDANCE
In 1994, thirteen meetings of the Board of Directors were held. Each
Director of the Corporation attended 75% or more of the aggregate number of such
meetings and meetings of the committees of which such Director was a member. It
should be noted that the Corporation's Directors discharge their
responsibilities throughout the year not only at such Board of Directors and
committee meetings, but through personal meetings and other communications,
including considerable telephone contact, with the Chairman and others regarding
matters of interest and concern to the Corporation.
The Audit and Examining Committees of the Boards of Directors of the
Corporation and Chemical Bank met nine times in 1994. The functions of the
Committees are to examine the affairs of the Corporation and the Bank as the
Committees deem necessary, and to report the results to the Boards of Directors.
Its duties include the annual review of the audit services provided by the
independent accountants and the making of recommendations to the Boards of
Directors with respect to the selection of independent accountants.
The Compensation and Benefits Committee of the Board of Directors (the
"Compensation Committee") met six times during 1994. Its functions are to
determine the compensation and benefits policies and procedures of the
Corporation. No member of the Compensation Committee may be an executive officer
of the Corporation and no executive officer of the Corporation may be a member
of the parallel committee of a corporation of which any of the Corporation's
outside Directors is an officer or director. No executive officer of the
Corporation is a Director of another entity having an executive officer who is a
member of the Compensation Committee.
The Nomination and Board Affairs Committee of the Board of Directors (the
"Nomination and Board Affairs Committee") met twice in 1994. The functions of
the Committee include the authority to consider and recommend to the Board of
Directors nominees for election to the Board of
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<PAGE> 13
Directors and to counsel on other Board related matters. The Nomination and
Board Affairs Committee will consider any written recommendations by
stockholders for nominees for election to the Board mailed to the attention of
the Secretary of the Corporation.
The Public Policy Committee of the Board of Directors (the "Public Policy
Committee") met three times in 1994. The Public Policy Committee reviews
charitable and community oriented activities of the Corporation and its
subsidiaries. The Committee makes specific recommendations regarding projects
undertaken to improve the communities served by Chemical Bank. The Public Policy
Committee also reviews the community reinvestment activities of the Corporation
and its subsidiaries.
DIRECTORS' COMPENSATION
Directors who are officers of the Corporation do not receive any fees for
their services as Directors. Each outside Director receives an annual retainer
of approximately $40,000 in value in the form of cash and 200 shares of Common
Stock, in addition to $1,250 for each meeting of the Board of Directors
attended. The Chairman and members, respectively, of the Audit and Examining and
Compensation and Benefits Committees each receives an additional fee of $8,000
and $6,500 per year. The Chairman of the Nomination and Board Affairs Committee
and of the Public Policy Committee each receives an additional fee of $3,000 per
year. Members of all committees of the Board of Directors of the Corporation and
Chemical Bank receive fees of $1,250 for each committee meeting attended. During
1994, outside Directors of the Corporation were included in a group term life
insurance policy for which the Corporation paid an average premium of
approximately $1,600 per Director.
Outside Directors of the Corporation are eligible to participate in the
Directors' Deferred Compensation Plan. Prior to the beginning of each year, each
eligible Director may elect to defer all or a specified portion of his or her
cash compensation during such year or all stock compensation or both. No payment
may be made until termination of service as a Director, and then only in
accordance with the method selected by the participant prior to termination. The
right to receive future payments under the Directors' Deferred Compensation Plan
is an unsecured claim against the general assets of the Corporation.
The Corporation has a Post-Retirement Compensation Plan for Non-Employee
Directors (the "Post-Retirement Plan") for outside Directors who retire from, or
otherwise cease to be a member of, the Board of Directors. The annual amount of
such compensation payable under the Post-Retirement Plan is equal to the
approximate dollar value of the Director's annual retainer in effect at the time
the Director leaves the Board. Currently, upon retirement outside Directors who
have served for at least ten years will be paid $40,000 per annum thereunder,
set and fixed for life. Such amount is prorated for outside Directors who have
served less than ten years. Each Director of the Corporation who was a former
director of MHC received full credit under the Post-Retirement Plan for the
number of years such Director was a director of MHC.
DIRECTOR AND OFFICER TRANSACTIONS
The Corporation's subsidiaries, including Chemical Bank, Texas Commerce
Bank National Association and Chemical Bank New Jersey National Association,
have made loans and extended credit, and expect in the future to make loans and
extend credit, in the ordinary course of business to the Directors and officers
of the Corporation and their associates, including corporations of which a
Director of the Corporation is a director, officer or both, on substantially the
same terms (including interest rates and collateral) as those prevailing for
comparable transactions with others. No such loans or extensions of credit are
nonperforming. All such loans involve only the normal risk of collectibility and
are not otherwise unfavorable.
9
<PAGE> 14
EXECUTIVE COMPENSATION
COMPENSATION AND BENEFITS COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, which consists solely of disinterested and
outside Directors, administers the compensation and benefits programs of the
Corporation and Chemical Bank and determines the compensation of senior
management.
The Corporation's compensation strategy is to (1) emphasize variable and
performance-based pay over fixed and salary-based pay, and (2) align the
interests of senior management and the Corporation's stockholders through the
use of long-term equity-based pay.
The overall program is designed to attract, retain and motivate top quality
and experienced professionals, recognizing the diversity of market influences
among the various businesses in which the Corporation chooses to compete.
Accordingly, one of the program's objectives is to provide cash and stock
compensation levels which are competitive with various peer groups comprised of
financial institutions in each of various businesses and markets in which the
Corporation competes.
Inasmuch as every financial institution does not compete in every
marketplace or with the same grouping of financial services and products, peer
groups will differ for each of the businesses headed by members of the senior
management team and, therefore, cannot be compared against the complete list of
institutions which make up the Keefe, Bruyette & Woods (KBW) 50 and the KBW
Money Center Banks Indices, which are used in the Performance Graph below.
In 1994, the Corporation's stockholders approved the Key Executive
Performance Plan ("KEPP") which will allow the Corporation a tax deduction for
the compensation costs of its Chief Executive Officer and the Corporation's
other four most highly compensated executive officers in excess of $1 million
annually under the 1993 amendments to the Internal Revenue Code. In
administering this plan, the Compensation Committee will promote its policy of
maximizing corporate tax deductions, wherever feasible. KEPP requires that the
Compensation Committee prescribe an objective formula pursuant to which a pool
of funds (i.e., "bonus pool") will be created for that year. Coincident with the
establishment of the bonus pool, the Compensation Committee is also required to
allocate to each participant a share of such bonus pool. These individual
allocations represent a limitation on the amount of incentive compensation (that
is, annual performance bonuses and grants of stock-based awards other than
options made under the Corporation's Long-Term Stock Incentive Plan) and do not
represent target awards. In addition, there is a further limitation that no
participant may receive an award under the Plan in excess of .002 of the
Corporation's income before income tax expense, extraordinary items and the
effect of accounting changes for the relevant calendar year (as reflected in the
Corporation's Consolidated Statements of Income) plus 50% of an amount carried
over from the prior plan year. The Compensation Committee retains the discretion
to reduce these formula-determined amounts based on its evaluation of other
factors. Such other factors include: (a) the Corporation's strategic progress
and profit performance including income before income tax expense, net income
and return on equity relative to the Corporation's profit plan, (b) the
performance of each executive's business group relative to the business group's
profit plan, (c) the organizational role, current performance and future
potential of the individual executive, and (d) a review of the ranges of
competitive practices by and performance of the applicable peer groups.
CASH COMPENSATION: Cash compensation includes base salary and an annual
performance bonus. The base salary of each member of senior management is set at
an amount within a predetermined salary range which reflects the level of
responsibility and competitive salaries paid to similarly situated executives in
a peer group consisting of six other United States bank holding companies. Mr.
Tobin's minimum base salary of $350,000 and Mr. Langley's minimum base salary of
$300,000 are provided for in their respective employment agreements with the
Corporation through December 31, 1995 (see "Employment Contracts and Termination
of Employment
10
<PAGE> 15
Arrangements"). The exact amount paid to each executive is a function of
performance, level of experience and the desire of the Corporation to emphasize
variable compensation rather than salary-based compensation. In general, these
base salaries are reviewed no more frequently than every 24 months.
Annual performance bonuses, which are awarded on a discretionary basis by
the Committee, reflect the degree of success achieved in the attainment of
corporate, business unit and individual performance goals as well as competitive
market data and trends within the appropriate peer group. Performance measures
used in determining incentive awards would include qualitative as well as
quantitative measures. While the measures used may differ from year to year,
examples of quantitative measures would include income before income tax
expense, return on common equity, earnings per share growth, loan charge-offs
and the ratio of non-performing assets to total assets. Qualitative measures
would include the Committee's assessment of the executives' achievements in
carrying out the Corporation's mission statement. While 1994 awards were
discretionary, the Committee gave primary consideration to the Corporation's
income before income tax expense.
Individual awards to members of the Office of the Chairman (i.e., the
Chairman, President and Vice Chairman) are based solely on corporate
performance. With respect to other members of the Management Committee, 50
percent of their individual awards reflect their personal performance and that
of their business units and 50 percent reflects the performance of the
Corporation. The Corporation's annual incentive program incorporates a mandatory
deferral component whereby a portion of each bonus award which exceeds the
executive's annual base salary is deferred and paid out over a multi-year
payment schedule or at retirement, if sooner. The deferred amount is subject to
forfeiture provisions to further link senior management to longer term
stockholder horizons.
STOCK COMPENSATION: The primary objective of the long-term stock
compensation program is to link the interests of senior management and
stockholders through the grant of significant annual equity awards to members of
senior management. Targeted award ranges are based on award practices of a peer
group consisting of six other United States bank holding companies, while actual
awards reflect an individual's current and expected contribution to the success
of the Corporation. From time to time, the Committee is updated with information
by independent consultants to ensure that the program continues to be
competitive and meets its stated objectives. During 1994, shares of restricted
stock (or, for a few executives, restricted stock units) were granted as well as
options in order to align total compensation with competitive practice. The
restricted stock and units will vest when the Common Stock price reaches and
sustains targeted prices for a minimum period of time. In the event that the
first target is not attained before January 1, 1999, one half of the 1994 awards
would vest on that date and the remaining one half would be forfeited. An
independent consultant assisted in developing this new award program and
confirmed that targeted award levels are within the median range of the peer
group's long-term incentive plan award granting practices.
1994 COMPENSATION ACTIONS: While competitive compensation data is not yet
available for the 1994 calendar year, it is believed that based upon
year-to-year trends, the total compensation levels awarded to executive
officers -- base, bonus and option awards -- fall between the 50th and 75th
percentiles of the applicable peer groups. The 1994 awards of restricted stock,
restricted stock units and options were based on an independent consultant's
analysis of long-term incentive award practices within the peer group as well as
the Committee's assessment of each individual's contribution to the
Corporation's success.
In keeping with the Corporation's strategy of maintaining stable base
compensation and emphasizing variable reward opportunities, Mr. Shipley did not
receive an increase in base salary in 1994. In December 1993, the Compensation
Committee granted Mr. Shipley an increase in base salary to $850,000 effective
January 1, 1994 in recognition of his promotion to Chairman and Chief Executive
Officer on that date. This increase was the first granted to Mr. Shipley since
May 1990.
11
<PAGE> 16
For 1994, the Compensation Committee, with the approval of the Board of
Directors, awarded Mr. Shipley a discretionary cash performance bonus of
$1,650,000 (a portion of which was mandatorily deferred pursuant to the
Corporation's annual bonus plan). This award reflects the achievement of an
increase of 9.1% in income before income tax expense in a difficult operating
environment and a continued improvement in credit quality and the overall risk
profile of the Corporation. Income before income tax expense was $2,473 million
in 1994 before a $260 million restructuring charge compared to $2,266 million
before a $158 million restructuring charge in 1993. During 1994, non-performing
assets declined 68 percent, or $2,591 million. Mr. Shipley had been awarded
$1,500,000 for 1993 and $1,250,000 for 1992 performance.
In June 1994, the Compensation Committee, with the approval of the Board of
Directors, awarded Mr. Shipley 40,000 restricted stock units and options to
purchase 120,000 shares of Common Stock with an exercise price per share of
$38.9375 (the average market price per share of the Common Stock on the date of
grant). As mentioned above, the restricted stock units will vest when the Common
Stock price reaches and sustains targeted prices for a minimum period of time.
In the event that the first target is not attained before January 1, 1999, one
half of the 1994 awards would vest on that date and the remaining one half would
be forfeited.
COMPENSATION AND BENEFITS COMMITTEE
Frank A. Bennack Jr. J. Bruce Llewellyn
Michel C. Bergerac John R. Stafford
Melvin R. Goodes Marina v.N. Whitman
Harold S. Hook Richard D. Wood
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
<TABLE>
<CAPTION>
CHEMICAL
MEASUREMENT PERIOD BANKING KBW MONEY
(FISCAL YEAR COVERED) CORPORATION S&P 500 KBW 50 CENTER BANKS
<S> <C> <C> <C> <C>
1989 100.00 100.00 100.00 100.00
1990 40.61 96.89 71.81 60.86
1991 84.36 126.42 113.66 99.05
1992 158.65 136.05 144.84 139.32
1993 170.33 149.76 152.86 169.78
1994 159.28 151.74 145.08 167.73
</TABLE>
---------------
* Assumes $100 invested on December 31, 1989. Total return assumes reinvestment
of dividends.
Note: Total returns based on market capitalization.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of the eight above-named outside
Directors, no one of whom was a party to any reportable interlock during 1994.
One member of this Committee received a short-term loan from Chemical Bank
during 1994. Such loan was made in the ordinary course of business on
substantially the same terms as those prevailing for comparable transactions
with others and was repaid.
12
<PAGE> 17
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------------
AWARDS PAYOUTS($)
------------------------- ----------
SECURITIES
ANNUAL COMPENSATION RESTRICTED UNDERLYING
--------------------- STOCK OPTIONS/SARS LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(1) AWARDS(2) GRANTED(#) PAYOUTS($) COMPENSATION(3)
------------------------------- ----- -------- ---------- ---------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Walter V. Shipley.............. 1994 $846,154 $1,650,000 $ 778,750 120,000 0 $ 6,000
Chairman and Chief Executive 1993 750,000 1,500,000 0 90,000 0 8,994
Officer 1992 750,000 1,250,000 0 100,000 0 36,924
Edward D. Miller............... 1994 $696,154 $1,175,000 $ 584,063 90,000 0 $20,214
President 1993 600,000 1,050,000 0 75,000 0 23,746
1992 580,769 900,000 0 60,000 0 47,210
William B. Harrison Jr......... 1994 $596,154 $1,150,000 $ 486,719 75,000 0 $ 6,000
Vice Chairman 1993 500,000 1,050,000 0 75,000 0 8,994
1992 475,000 900,000 0 60,000 0 23,866
Peter J. Tobin................. 1994 $398,077 $ 525,000 $ 214,156 33,000 0 $15,278
Executive Vice President and 1993 350,000 450,000 0 40,000 0 18,680
Chief Financial Officer 1992 342,308 400,000 0 80,000 0 32,201
William C. Langley............. 1994 $325,000 $ 500,000 $ 136,281 21,000 0 $15,357
Executive Vice President and 1993 316,346 400,000 0 30,000 0 18,662
Chief Credit and Risk Policy 1992 300,000 400,000 0 50,000 0 30,686
Officer
</TABLE>
---------------
(1) Includes amounts paid or deferred for each respective year.
(2) The restricted stock units awarded in 1994 are subject to certain vesting
requirements relating to continued employment and the price of the Common
Stock and are valued as of their date of grant. Such units will vest when
the price of the Common Stock is at least $55 for at least 10 consecutive
business days or on January 1, 1999, whichever comes earlier. No restricted
stock or restricted stock units were awarded for 1992 and 1993. The total
restricted stock units held and aggregate market value of those units as of
December 30, 1994 (including those restricted stock units reflected on the
Long-Term Incentive Plan Awards Table) were as follows: Messrs. Shipley:
40,000 ($1,435,000), Miller: 35,985 ($1,290,962), Harrison: 25,000
($896,875), Tobin: 14,136 ($507,129) and Langley: 9,138 ($327,826). Dividend
equivalents are payable on all restricted stock units.
(3) Includes employer contributions under qualified savings plans during 1994,
1993 and 1992, respectively, for the named executive officers as follows:
Messrs. Shipley: $6,000, $8,994, and $6,866; Miller: $6,000, $8,994 and
$17,882; Harrison: $6,000, $8,994 and $6,866; Tobin: $6,000, $8,994 and
$17,882; and Langley: $6,000, $8,994 and $17,882. Includes employer
contributions on behalf of or cash payments made to the named executive
officers during 1994, 1993 and 1992, respectively, under nonqualified
savings plans to compensate for limitations on employer contributions which
can be provided under qualified benefits plans under the Internal Revenue
Code of 1986, as amended, and regulations thereunder, as follows: Messrs.
Shipley: $0, $0 and $15,634; Miller: $0, $0 and $14,076; Harrison: $0, $0
and $7,384; Tobin: $0, $0 and $4,538; and Langley: $0, $0 and $2,846. Also
includes company-paid premiums for split dollar life insurance for 1994,
1993 and 1992 for Messrs. Miller: $14,214, $14,752 and $15,252; Tobin:
$9,278, $9,686 and $9,781; and Langley: $9,357, $9,668 and $9,958 and
additional 1992 payments which resulted from a change in payroll cycles to
Messrs. Shipley: $14,424 and Harrison: $9,616. None of the individuals named
in the above table received perquisites in excess of $50,000 for any of the
indicated years.
13
<PAGE> 18
STOCK OPTION/SAR GRANTS TABLE -- 1994 GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
# OF SECURITIES % OF TOTAL ASSUMED ANNUAL RATE OF STOCK
UNDERLYING OPTIONS/SARS EXERCISE PRICE APPRECIATION
OPTIONS/ GRANTED TO OR BASE FOR OPTION TERM(3)(4)
SARS ALL EMPLOYEES PRICE EXPIRATION --------------------------------------
NAME GRANTED(1) IN 1994 ($/SHARE) DATE 0% 5% 10%
---------------------------- --------------- ------------- --------- ---------- ---- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Walter V. Shipley........... 120,000(2) 0.51% $38.9375 6/21/2004 0 $ 2,938,510 $ 7,446,762
Edward D. Miller............ 90,000(2) 0.39% $38.9375 6/21/2004 0 $ 2,203,883 $ 5,585,072
William B. Harrison Jr...... 75,000(2) 0.32% $38.9375 6/21/2004 0 $ 1,836,569 $ 4,654,226
Peter J. Tobin.............. 33,000(2) 0.14% $38.9375 6/21/2004 0 $ 808,090 $ 2,047,860
William C. Langley.......... 21,000(2) 0.09% $38.9375 6/21/2004 0 $ 514,239 $ 1,303,183
All Common Stockholders..... N/A N/A $35.875 N/A 0 $5,516,571,687 $13,980,078,510
</TABLE>
---------------
(1) All nonqualified stock options; no SARs were granted to any employee during
1994.
(2) All nonqualified stock options which become exercisable in 33 1/3%
installments on each of June 21, 1995, 1996 and 1997.
(3) Net gains from potential stock option exercises are estimated based on the
SEC-provided assumed rates of stock price appreciation over the option's
term and are not intended to forecast possible future appreciation of the
Common Stock. THE ACTUAL NET GAINS, IF ANY, ARE DEPENDENT ON THE ACTUAL
FUTURE PERFORMANCE OF THE COMMON STOCK AND OVERALL STOCK MARKET CONDITIONS.
THERE CAN BE NO ASSURANCE THAT THE ASSUMED RATES OF STOCK PRICE APPRECIATION
UTILIZED IN CALCULATING THE AMOUNTS REFLECTED IN THESE COLUMNS WILL BE
ACHIEVED.
(4) For "All Common Stockholders", the gain is calculated from the closing price
of Common Stock on December 30, 1994, $35.875, based on the outstanding
shares of Common Stock on that date. No gain to the executives to whom stock
options have been granted is possible without an increase in the Common
Stock price. An increase in the Common Stock price will benefit stockholders
and executives commensurately.
AGGREGATED STOCK OPTION/SAR EXERCISES IN 1994 AND
OPTION/SAR VALUES AS OF YEAR-END 1994
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AND
ACQUIRED OPTIONS/SARS SARS
ON VALUE AS OF DECEMBER 31, 1994 AS OF DECEMBER 31, 1994(1)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------------------------- -------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Walter V. Shipley........................ 40,000 $ 492,500 317,416 213,334 $ 4,003,661 $ 277,089
Edward D. Miller......................... 2,850 $ 11,397 116,157 160,000 $ 962,927 $ 166,250
William B. Harrison Jr................... 15,000 $ 166,875 142,500 145,000 $ 1,629,125 $ 166,250
Peter J. Tobin........................... 855 $ 4,328 103,027 73,001 $ 540,598 $ 110,829
William C. Langley....................... 1,140 $ 6,981 74,124 49,334 $ 426,502 $ 69,276
</TABLE>
---------------
(1) Value based on $35.875 per share closing price of Common Stock on December
30, 1994.
14
<PAGE> 19
LONG-TERM INCENTIVE PLAN AWARDS IN 1994
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PAYOUTS UNDER
NON-STOCK PRICE
BASED PLAN(#)(1)
--------------------
PERFORMANCE AT A CHEMICAL COMMON
OR OTHER STOCK PRICE OF
NUMBER OF PERIOD UNTIL --------------------
NAME SHARES(#) MATURATION OR PAYOUT $60 $65
------------------------------- --------- -------------------- ------- -------
<S> <C> <C> <C> <C>
Walter V. Shipley.............. 20,000 6/21/94 - 12/31/98 10,000 10,000
Edward D. Miller............... 15,000 6/21/94 - 12/31/98 7,500 7,500
William B. Harrison Jr......... 12,500 6/21/94 - 12/31/98 6,250 6,250
Peter J. Tobin................. 5,500 6/21/94 - 12/31/98 2,750 2,750
William C. Langley............. 3,500 6/21/94 - 12/31/98 1,750 1,750
</TABLE>
---------------
(1) One half of the restricted stock units shown above under the heading "Number
of Shares (#)" will become non-forfeitable if, prior to January 1, 1999, the
price of the Common Stock is at least $60 for at least 10 consecutive
business days and the remainder will become non-forfeitable if, prior to
January 1, 1999, the price of the Common Stock is at least $65 for at least
10 consecutive business days.
PENSION AND OTHER DEFINED BENEFIT OR ACTUARIAL PLANS
Chemical Bank's Retirement Plan (the "Chemical Retirement Plan") provides
retirement benefits to eligible employees of participating employers, which
includes the Corporation and certain other affiliates of Chemical Bank. Benefits
under the Chemical Retirement Plan become vested after five years of service.
The Chemical Retirement Plan, as amended, provides for benefits pursuant to
both a cash balance feature and a final average pay feature for salaried staff
members who have at least one year of service. Under the cash balance feature,
the accrual of benefits for years of service after December 31, 1992 is
expressed in terms of quarterly credits to a bookkeeping account made at a rate
of four percent of eligible base salary. Participants with 11 years or more of
service receive an additional credit equal to one percent of their base salary,
and those with 21 or more years of service, an additional credit equal to two
percent of their base salary. (The accounts receive quarterly interest credits
at a rate established at the beginning of each Plan year.) The credits to the
account will be converted into annuity benefits or distributed as a single sum
payment after termination of employment.
The final average pay feature provides for accrual of benefits equal to one
percent of a participant's final average pay for each year of participation
after December 31, 1992, payable in the form of a life annuity at age 65. Final
average pay is the highest average base salary received in any five consecutive
12-month periods during the last 10 years of service. If a participant has
attained age 55 and terminates employment with at least 10 years of service,
such participant may elect to receive a reduced benefit commencing at any time
after attaining such age.
Certain benefits accrued under the Chemical Retirement Plan (or the
Retirement Plan of Manufacturers Hanover Trust Company and Certain Affiliated
Companies (the "MHT Retirement Plan") with which it merged in 1993) for service
prior to January 1, 1993 are added to benefits accrued after January 1, 1993.
With respect to an individual covered by the Chemical Retirement Plan on
December 31, 1992, the benefits which are taken into account for service prior
to 1993 include those benefits accrued through 1988 under the Chemical
Retirement Plan formula as in effect at year-end 1988, which were expressed as a
single sum ("prior service balance"). Additionally, they include benefits for
periods of service after 1988 and prior to 1993, which benefits were accrued at
the rate of five percent of eligible base salary. Participants with 11 to 20
years of service received an additional salary credit equal to one percent of
eligible base salary and those with 21 or more years of service received an
additional salary credit of two percent of eligible base
15
<PAGE> 20
salary. (The regular eligible base salary credit and prior service balance
receive interest credits referred to above, with the prior service balance
receiving a credit of 125% of the regular interest credit.) These previously
accrued benefits are part of the cash balance feature under the amended Chemical
Retirement Plan.
With respect to an individual covered by the MHT Retirement Plan on
December 31, 1992, the benefits which are taken into account under the Chemical
Retirement Plan for service prior to 1993, subject to various restrictions, are
based upon 1.25% of final average salary for each of the first 20 years of
service after becoming a participant in the MHT Retirement Plan and .75% of such
final average salary for each additional year of service up to 40 years. These
previously accrued benefits are part of the final average pay feature of the
amended Chemical Retirement Plan. Subject to various restrictions under the
amended Chemical Retirement Plan, for participants hired before 1985, certain
benefits accrued under the MHT Retirement Plan as of year-end 1992, based upon a
formula of two percent of final average salary as of December 31, 1992 for each
of the first 20 years as a participant in that plan and one percent for each
additional year thereafter up to 40 years, reduced by (i) .4% of the final
average salary for each year of service, and (ii) the value of certain benefits
under the qualified Savings Incentive Plan of Chemical Bank and Certain
Affiliated Companies, have become a frozen minimum benefit under the final
average pay feature of the Chemical Retirement Plan.
The Corporation provides supplemental retirement benefits on an unfunded
basis to certain participants. Generally, under one supplemental plan, benefits
are provided to the extent that benefits from the Chemical Retirement Plan are
limited by the Internal Revenue Code ("Code") under provisions governing the
amount and type of benefits that a qualified plan may provide to participants,
such as base salary in excess of the Section 401(a)(17) limitations of $150,000
or the maximum benefits permitted under Section 415. Another supplemental plan
for designated participants provides a fixed retirement benefit per year of
service while a participant in such plan. All named executive officers
participate in and are vested in these supplemental retirement benefits.
Estimated projected annual retirement benefits payable to the executive
officers named in the Summary Compensation Table are as follows:
<TABLE>
<CAPTION>
ESTIMATED ANNUAL
BENEFIT IF
RETIRES
AT NORMAL
YEAR ATTAINS RETIREMENT
AGE 65 AGE(1)
------------ ----------------
<S> <C> <C>
Walter V. Shipley................................. 2000 $791,109
Edward D. Miller.................................. 2005 $724,257
William B. Harrison Jr............................ 2008 $555,107
Peter J. Tobin.................................... 2009 $458,889
William C. Langley................................ 2003 $342,494
</TABLE>
(1) Under the Chemical Retirement Plan and the supplemental retirement plans,
the normal retirement age is 65. The projected estimated annual retirement
benefits (including the final average pay and cash balance features) shown
above reflect the normal form of payment for married employees, i.e., a
qualified joint and fifty percent surviving spouse annuity, and include each
individual's accrued benefits as of December 31, 1994 under the retirement
plans then applicable to the individual. Projected benefits for years of
service after 1994 reflected in the above table have been determined by
assuming no increase in base salaries. With respect to the cash balance
feature, interest credits are projected to be eight percent per annum on
annual salary credits and ten percent per annum on the prior service
balance, if any. The projected benefits assume that the named executive
officers will participate in the supplemental plan providing for a fixed
retirement benefit for each year of service after the date of the Merger.
The projected benefits do not include any amounts described under the
heading "Employment Contracts and Termination of Employment Arrangements".
Benefits are not subject to any deduction for Social Security payments.
16
<PAGE> 21
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
In 1992, Messrs. Shipley, Miller and Harrison voluntarily terminated their
employment-severance arrangements with the Corporation. Each of the terminated
arrangements included the right to receive severance payment equal to three
times annual salary and bonus if employment terminated in certain circumstances
prior to November 1, 1994. In waiving their respective employment/severance
arrangements, each executed a waiver agreement that preserved those protections
described in (i) - (iv) below, most of which represented rights to which they
were previously entitled.
The employment arrangements of each of Messrs. Tobin and Langley were
superseded in 1992 and new agreements entered into with each providing for
employment through December 31, 1995, as senior executives of the Corporation,
at not less than the 1992 base salary of $350,000 for Mr. Tobin and $300,000 for
Mr. Langley and a target bonus for each. Under the new agreements, if such
individual's employment is terminated by the Corporation (other than for cause,
death or disability) prior to December 31, 1995, the Corporation will be
obligated to pay the salary and bonus that would have been paid to him from such
termination date to December 31, 1995 and will be obligated to continue welfare
benefits (i.e., medical and dental insurance, life insurance and disability
coverage) for a three-year period at the Corporation's expense. Like the prior
agreements, the new agreements provide for (i) vesting under various
supplemental retirement plans, (ii) a payment on termination of employment based
upon retirement benefits which would have accrued to him over a five-year period
(commencing November 1, 1991), (iii) a "tax gross-up" if excise taxes are
imposed upon certain payments received by the executive, and (iv) vesting or
exercisability of certain stock options, restricted share units and stock
appreciation rights in the event of death or disability or a termination of
employment by the Corporation without cause. Further, under the new agreements,
if the Corporation terminates employment prior to December 31, 1995 for any
reason (other than cause), or if the respective executive remains employed until
December 31, 1995, he will have the right to a supplemental pension benefit of
$50,000 per year payable for life in the form of a joint and 80% spousal annuity
at age 65.
PROPOSAL 2: APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of Price Waterhouse LLP, 1177 Avenue of the Americas, New York,
New York 10036, has examined the financial statements of the Corporation for the
last 27 years and of Chemical Bank for the last 30 years. The Board of Directors
wishes to utilize its services for the Corporation and its subsidiaries for the
year ending December 31, 1995. A resolution will be presented to the meeting to
ratify the appointment of that firm by the Board of Directors as independent
accountants to examine the financial statements of the Corporation and its
subsidiaries for the year ending December 31, 1995, and to perform other
appropriate accounting services. A member of that firm will be present at the
meeting and will be available to respond to appropriate questions by
stockholders.
If the stockholders do not ratify the selection of Price Waterhouse LLP by
the affirmative vote of a majority of the number of votes entitled to be cast by
the Common Stock represented at the meeting, the selection of independent
accountants will be reconsidered by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION
OF THE APPOINTMENT OF PRICE WATERHOUSE LLP.
PROPOSAL 3: APPROVAL OF AN AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN
The Board has renamed the Chemical Banking Corporation 1983 Employee Stock
Purchase Plan, the Chemical Banking Corporation Employee Stock Purchase Plan
(the "Employee Stock Purchase Plan"), and amended the Employee Stock Purchase
Plan, subject to stockholder approval, to extend the term of such Plan to
December 31, 2001.
17
<PAGE> 22
The Employee Stock Purchase Plan currently provides, as a result of
antidilution adjustments, for the issuance of up to 2,500,000 shares of Common
Stock. As of March 1, 1995, 1,623,590 shares of Common Stock had been issued
under the Employee Stock Purchase Plan. Currently, 6,251 employees participate
in the Employee Stock Purchase Plan, which is scheduled to expire by its present
terms on December 31, 1995.
The Employee Stock Purchase Plan is designed to encourage employees of the
Corporation and its subsidiaries to acquire a proprietary interest in the
Corporation through the purchase of Common Stock by regular payroll deductions.
The Employee Stock Purchase Plan is administered by the Compensation and
Benefits Committee.
Each employee on the payroll of the Corporation or of any of its
subsidiaries who has been employed continuously, at any time, by the Corporation
or a subsidiary for a period of at least one year and who is customarily
employed for 20 or more hours per week is eligible to participate in the
Employee Stock Purchase Plan.
An employee electing to participate in the Employee Stock Purchase Plan may
purchase shares of Common Stock through payroll deductions of up to 20% of the
employee's annual base compensation and through reinvestment of dividends for
each calendar year. During any one calendar year, no participant may acquire
Common Stock having a fair market value in excess of $25,000 as determined on
the first trading day of such calendar year. The participant's price per share
is equal to 95% of the fair market value of a share of Common Stock on the date
of purchase.
Common Stock purchased under the Employee Stock Purchase Plan may consist
of newly-issued shares or treasury shares.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL
TO APPROVE THE AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN.
STOCKHOLDER PROPOSALS
Stockholder proposals for the 1996 Annual Meeting of Stockholders must be
received by the Secretary of the Corporation not later than November 28, 1995.
The affirmative vote of a majority of the total number of votes entitled to be
cast by holders of shares of Common Stock represented at the 1995 Annual Meeting
is needed to approve the following stockholder proposals.
PROPOSAL 4:
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue,
N.W., Suite 215, Washington, D.C. 20037, the holder of record of 314 shares of
Common Stock, has advised the Corporation that she plans to introduce the
following resolution:
"RESOLVED: That the shareholders recommend that the Board direct
management that within five days after approval by the shareholders of this
proposal, the management shall publish in newspapers of general circulation
in the cities of New York, Washington, D.C., Detroit, Chicago, San
Francisco, Los Angeles, Dallas, Houston and Miami, and in the Wall Street
Journal and U.S.A. Today, a detailed statement of each contribution made by
the Company, either directly or indirectly, within the immediately
preceding fiscal year, in respect of a political campaign, political party,
referendum or citizens' initiative, or attempts to influence legislation,
specifying the date and amount of each such contribution, and the person or
organization to whom the contribution was made. Subsequent to this initial
disclosure, the management shall cause like data to be included in each
succeeding report to shareholders." "And if no such disbursements were
made, to have that fact publicized in the same manner."
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<PAGE> 23
The reasons given by the stockholder for such resolution are as follows:
"This proposal, if adopted, would require the management to advise the
shareholders how many corporate dollars are being spent for political
purposes and to specify what political causes the management seeks to
promote with those funds. It is therefore no more than a requirement that
the shareholders be given a more detailed accounting of these special
purpose expenditures that they now receive. These political contributions
are made with dollars that belong to the shareholders as a group and they
are entitled to know how they are being spent."
"If you AGREE, please mark your proxy FOR this resolution."
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Board of Directors believes that it would not be in the best interests
of the Corporation or its stockholders to adopt this proposal. The Corporation
does not, and may not by law, use corporate funds to make political
contributions to candidates for federal office. On a very limited basis,
political contributions are made by the Corporation to candidates for state and
local office, subject to the stringent restrictions and reporting requirements
of applicable law. Chemical Bank sponsors a political action committee called
the Chemical Bank Fund for Good Government which makes political contributions
to candidates for federal, state and local offices. No corporate monies comprise
any part of the Fund's resources; rather, monies in the Fund come solely from
voluntary contributions by Chemical officers.
Political contributions made by the Chemical Bank Fund for Good Government
are determined by a committee comprised of senior officers representing the
major areas of the Bank as well as officers of the Bank's Government Affairs
Department. The committee considers requests and recommendations made by the
Government Affairs Department as well as other interested employees.
Contributions are generally made by the Fund to legislators and other office
holders and candidates who are involved in banking issues or other legislative
matters which directly affect Chemical. These include issues as wideranging as
corporate taxes, employee benefits, international lending, guaranteed student
loans, and interstate banking. As required by law, contributions made by the
Chemical Bank Fund for Good Government are reported on a periodic basis to the
Federal Election Commission and state election authorities. Reports made to
those agencies are a matter of public record.
The Board of Directors believes that disclosures currently being made by
the Corporation and the Chemical Bank Fund for Good Government, as well as by
recipients of political contributions, are adequate and that any additional
disclosures would serve no useful purpose and constitute an unnecessary expense
for the Corporation's stockholders.
PROPOSAL 5:
Mrs. Martha J. Wolff, 1553 So. Carpenter Road, Brunswick, Ohio 44212-3826,
beneficial owner of 300 shares of Common Stock, has advised the Corporation that
she plans to submit the following resolution:
"Throughout corporate America, many stockholder proposals have been
introduced to try to make some changes including the control of
compensation to directors and top management and to try to tie them in with
profits and dividends. Management opposes most of these proposals.... Most
shareholder proposals fail because (1) the investors are not organized and
offer no alternatives (2) management already controls a large number of
votes and then rewards itself with more shares to vote against such
proposals, and (3) we are not playing on a level field, management gets to
count unmarked proxies as voting in favor of their position
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<PAGE> 24
and can solicit proxies at the expense of the company. Some companies even
fail to make complete disclosures, hiding behind the minimum rules of the
S.E.C.
"I feel that many Boards of Directors have lost touch with the
investors and it seems that they are giving more and more rewards for less
and less success. In Junior High School, we learned that there were three
(3) parts to any business; CAPITAL, LABOR, AND MANAGEMENT. The Boards seem
to have forgotten this lesson. The Boards, in general, are self-
perpetuating groups seemingly intent on rewarding themselves and members of
management, at the expense of the investor.
"I am particularly dismayed at the statement on proxies that says (in
essence) 'Proxies signed, but not specifically marked, will be voted as
management has suggested.'
"Management says that stockholders clearly understand how their votes
will be counted if they don't put Xs in the boxes; yet many shareholders
didn't understand THAT (and I have letters about that). They say that this
process allows the stockholder not to be burdened with making FOUR Xs. WOW!
How many shareholders even understand what they are being asked to vote on?
Many times proxies for shares held in street names DO NOT clearly indicate
this procedure.
"When one reviews the results of voting on certain proposals and the
report is incomplete, it is easy to feel that the results might have been
different had the rules been more democratic. Only a few companies
presently reveal totals including the number of unmarked proxies and the
number of shares they represent.
"When I go to the polls and figure there is no clear choice among
candidates and leave that space 'unmarked,' it is not voted in favor of the
incumbent or the incumbent's party; it is merely a non-vote.
"Presently, I have no animosity against the management of Chemical,
but I am dismayed that they use this very undemocratic method to count
proxies.
"Last year, a similar proposal was presented to five corporations in
Ohio. Although the proposal failed, it garnered an average of 25% of the
voted proxies (an unusually high number for a stockholder proposal).
Included in the votes against were the unmarked proxies. Even though this
proposal concerned the counting of unmarked proxies, none of the companies
involved would reveal the numbers to me (one requested a payment of
$10,000). If they didn't count them, how did they know how many to count
against the shareholder proposal?
"Therefore, be it resolved that in future proxies of this company,
there will be no discretionary power of voting by the named proxy-holder on
any issue where no direction has been given, including ANY ISSUE 'WHICH MAY
PROPERLY COME UP AT THE MEETING.' "
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Board of Directors believes that the adoption of this proposal would
not be in the best interests of the stockholders. The Corporation has worked
diligently over the years to report accurately and in great detail all aspects
of stockholder voting at the Corporation's meetings. The Corporation was also
one of the first public corporations to fully set forth in detail at its
meetings the stockholder vote including the number of unmarked proxies returned
for each stockholder proposal. Moreover, the Corporation was one of the first
public corporations to adopt confidential voting procedures which protect the
privacy of both employee and non-employee stockholders.
The Corporation, like many other corporations, provides for unmarked
proxies as a convenience to stockholders and clearly, in bold print on the proxy
card, advises stockholders as to the effect of returning unmarked proxies. In
actuality, very few unmarked proxies are returned, as evidenced by the fact that
unmarked proxies accounted for 1% or less of the votes represented at the 1994
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<PAGE> 25
Annual Meeting and in no instance would the exclusion of such unmarked proxies
have had any effect on the outcome of the vote on any stockholder proposal.
PROPOSAL 6:
The Dominican Sisters of the Sick Poor, Mariandale, Box 1200, Ossining, New
York 10562, the beneficial owners of 3,000 shares of Common Stock; the Sisters
of Charity of Saint Elizabeth, P.O. Box 476, Convent Station, New Jersey
07961-0476, the beneficial owners of 100 shares of Common Stock; the
Congregation of the Sisters of Charity of the Incarnate Word, P.O. Box 230969,
6510 Lawndale, Houston, Texas 77223-0969, the beneficial owners of 10,400 shares
of Common Stock; the Sisters of the Humility of Mary, 1515 Eastern Avenue,
Morgantown, West Virginia 26505, the beneficial owners of 5,400 shares of Common
Stock; the Sisters of Mercy Consolidated Asset Management Program, 20 Washington
Square North, New York, New York 10011, the beneficial owners of 6,000 shares of
Common Stock; the Sisters of Mercy Regional Community of Chicago, 10024 S.
Central Park Avenue, Chicago, Illinois 60642, the beneficial owners of 2,125
shares of Common Stock; the Sisters of Saint Joseph, Office of Financial
Services, Brentwood, New York 11717, the beneficial owners of 1,500 shares of
Common Stock; and Providence Trust, P.O. Box 197, Helotes, Texas 78023-0197, the
beneficial owner of 2,200 shares of Common Stock, have indicated their intention
to sponsor the following resolution:
"WHEREAS, people and institutions of many nations have been undergoing
a contemporary global debt crisis characterized among other things by high
interest rates on outstanding obligations, severe difficulties in repaying
loans, and structural adjustments in emerging economies which appear to
undermine future development potential benefitting the general population.
"Attempts to resolve the crisis have included a variety of approaches
on the part of lending institutions, including debt write-downs and
write-offs, as well as various types of equity swaps.
"We believe that the methods used to resolve the crisis to date will
not prevent such a crisis from recurring, and that fundamental strategic
and structural changes are necessary to establish just and financially
viable investment conducive to appropriate development in the future.
"By appropriate development we mean development which is designed to
meet basic human needs in ways which promote environmental sustainability,
democratic participation, human rights, and the adaptation of technologies
to use by poor communities.
"Such development is part of the international movement to prioritize
social development as a critical component of economic and environmental
planning. In March 1995, the United Nations will convene a World Summit for
Social Development. UN Secretary-General Boutros-Ghali stated:
'The Summit will lay the foundation of the work of the United
Nations in the social development sphere for generations to come . . .
The new approach must be inclusive, must encompass all aspects of
social, economic and environmental life and must seek to promote a
society in which each and every individual has the potential and
opportunity to become involved in development . . . Old notions and old
methods of working will need to be revised and some entirely new
approaches must be created.'
"We believe our bank can enhance its international position by joining
the international community in promoting appropriate development and
establishing new kinds of relationships with emerging economies.
Institutional arrangements which promote appropriate development include
loans and guarantees to responsible intermediary financial institutions in
developing
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<PAGE> 26
countries for the purpose of making credit available for reliable
productive investments at the community level.
"Many such intermediary financial institutions already exist. They are
competent to evaluate and provide technical assistance and credit to
community-based organizations for sustainable democratic development.
"These intermediary institutions are necessary in order to link local
enterprises with international capital resources for appropriate
development.
"Ongoing dialogues between religious communities and large financial
institutions like Bank America have resulted in policies and actions which
promote such an approach. They have also produced agreements that financial
intermediaries in emerging economies must be supported and utilized by
larger financial institutions.
"As shareholders, we believe this strategy is a desirable way to make
loans without losses, strengthen the bank's international markets and
stabilize its lending environments, while laying the groundwork for further
development of emerging economies.
"RESOLVED, that shareholders request our bank to develop criteria for
evaluation, support and utilization of financial intermediaries capable of
promoting appropriate development in emerging economies, and present a
progress report to the 1996 annual meeting; this report shall be prepared
at reasonable cost and may omit proprietary information."
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Board of Directors believes that the adoption of this proposal would
not be in the best interests of the stockholders. The Corporation has cooperated
with international organizations in the restructuring of LDC debt in accordance
with the Brady Plan and has joined in other initiatives as well. In this sense,
it has dealt and continues to deal with international intermediaries. The
Corporation has the internal resources necessary to enable it to evaluate the
borrowing needs and capabilities of developing countries. The Board believes
that the Corporation can continue to be a catalyst for economic growth in these
developing countries, without the use of intermediaries, by dealing directly
with worthy borrowers in those countries, taking into consideration economic,
political and social criteria for the making of loans in such countries using
the facilities of its worldwide network.
PROPOSAL 7:
Mr. John J. Gilbert, 29 East 64th Street, New York, NY 10021-7043, owning
202 shares of Common Stock, and representing an additional family interest of
557 shares of Common Stock, has advised the Corporation that he will cause to be
introduced from the floor the following resolution:
"RESOLVED: That the stockholders of Chemical Banking 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."
The reasons given by the stockholders for such resolution are as follows:
"Continued very strong support along the lines we suggest were shown
at the last annual meeting when 33.2%, an increase over the previous year,
4,339 owners of 61,391,985 shares, were cast in favor of this proposal. The
vote against included 5,393 unmarked proxies.
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<PAGE> 27
"A law enacted in California provides that all state pension holdings
and 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.
"The National Bank Act provides for cumulative voting. Unfortunately,
in many cases companies get around it by forming holding companies without
cumulative voting. Banking authorities have the right to question the
capability of directors to be on banking boards. Unfortunately, in many
cases authorities come in after and say the director or directors were not
qualified. We were delighted to see that the SEC has finally taken action
to prevent bad directors from being on the Board of public companies.
"We think cumulative voting is the answer to find new directors for
various committees, and is especially important with so many mergers going
on. Additionally, some recommendations have been made to carry out the
Valdez 10 points. The 11th should be having cumulative voting and ending
stagger systems of electing directors, in our opinion.
"When Alaska became a State, it took away cumulative voting, over our
objections. The Valdez oil spill might have been prevented if environmental
directors were elected through cumulative voting. Also, the huge derivative
losses might have been prevented with cumulative voting.
"Many successful corporations have cumulative voting. For example,
Pennzoil having cumulative voting defeated Texaco in that famous case.
Another example is Ingersoll-Rand, which has cumulative voting and won two
awards. In Fortune magazine it was ranked second in its industry as
"America's Most Admired Corporations" and the Wall Street Transcript noted
'on almost any criteria used to evaluate management, Ingersoll-Rand
excels.' Also, in 1994 they raised their dividend. We believe Chemical
should follow these examples.
"If you agree, please mark your proxy for this resolution; otherwise
it is automatically cast against it, unless you have marked to abstain."
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL FOR THE FOLLOWING REASONS:
Stockholders have rejected this or similar proposals each year since 1987
and the Board of Directors continues to believe it would not be in the best
interests of the Corporation or its stockholders to adopt this proposal.
The Directors of the Corporation bring to it broad experience and proven
competence in their fields. Seventeen of the Corporation's 20 Board members are
independent non-employee Directors and all are nominated by the Nomination and
Board Affairs Committee of the Board, which consists entirely of outside
independent Directors. Each Director is elected by a plurality of the votes cast
at the annual meeting. In 1993, the Corporation eliminated the classification of
the Board of Directors in the belief that all Directors should be equally
accountable at all times for the Corporation's performance and that the will of
the majority of stockholders should not be impeded by a classified board.
In contrast to this approach, cumulative voting would permit the election
of a Director by relatively small groups of stockholders, and this is made more
likely in the absence of a classified Board. A Director elected by less than a
majority might regard himself or herself as representing only the special
interests of the particular group responsible for such Director's election. This
would introduce the possibility of factionalism and discord, hampering the
ability of the Board to work together and discouraging qualified individuals
from serving on the Board. There should not be a question as to whether a
Director is acting for the benefit of all stockholders or as the representative
of a special group.
The statement in support of this proposal makes reference to Alaska and
California. Both states have eliminated mandatory cumulative voting for large,
publicly held corporations, Alaska doing so
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<PAGE> 28
in 1964 and California in 1989. Their action was reflective of a major trend
among states to eliminate such requirements. The statement also suggests that
cumulative voting might have prevented certain environmental and other losses.
The Board of Directors believes that strong incentives, based on the desired
success of the Corporation, already exist to foster sound management.
The present system of electing Directors has enabled the Board to act for
the benefit of the Corporation and all of the stockholders and should be
retained.
MISCELLANEOUS
The management does not know of any other matters to be brought before the
meeting. A proxy in the accompanying form will confer discretionary authority
with respect to any such other matter. The shares covered by any such proxy
properly executed and received prior to the meeting will be voted and, if the
stockholder who executes such proxy specifies in the manner stated therein how
such shares are to be voted on the proposals which are referred to therein, they
will be voted as so specified.
A stockholder who signs and returns a proxy in such form will have the
power to revoke it by giving written notice of revocation to the Secretary of
the Corporation before the proxy is voted at the meeting, by executing and
delivering a later-dated proxy or by attending the meeting and voting such
shares in person.
The cost of the solicitation of proxies in the accompanying form will be
borne by the Corporation. In addition to the solicitation of proxies in such
form by use of the mails, the Corporation expects that a number of officers and
regular employees of the Corporation and Chemical Bank (none of whom will
receive any compensation therefor in addition to regular compensation) will
solicit proxies in such form personally and by telephone. The Corporation will,
upon request, reimburse brokerage houses and other custodians, nominees and
fiduciaries for their expenses in sending proxy material to their principals and
obtaining their proxies. The Corporation has retained the GEOSERVE Division of
Chemical Bank to assist in the solicitation of proxies.
John B. Wynne
Secretary
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<PAGE> 29
TICKET REQUEST
If you plan to attend the Annual Meeting of Stockholders of Chemical
Banking Corporation to be held on May 16, 1995, in the Texas Commerce
Auditorium, at Texas Commerce Center, 601 Travis Street, Houston, Texas, the
form below should be completed and mailed with your proxy card.
(Cut along dotted line)
...............................................................................
I PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS OF CHEMICAL BANKING
CORPORATION ON MAY 16, 1995, IN HOUSTON, TEXAS.
--------------------------------------------------------------------------------
Name(s) (Please print)
--------------------------------------------------------------------------------
Street Address
--------------------------------------------------------------------------------
City State Zip Code
/ / Check box if you request an assistive listening device.
/ / Check box if you request sign interpretation.
<PAGE> 30
CHEMICAL BANKING CORPORATION
SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING OF
STOCKHOLDERS OF CHEMICAL BANKING CORPORATION ON MAY 16, 1995.
The undersigned stockholder appoints each of David A. Burns, Allene S.
Lucas and Don E. Wood attorney and proxy, with full power of substitution, on
behalf of the undersigned and with all powers the undersigned would possess if
personally present, to vote all shares of Common Stock of Chemical Banking
Corporation that the undersigned would be entitled to vote at the above Annual
Meeting and any adjournment thereof. THE SHARES REPRESENTED BY THIS PROXY WILL
BE VOTED AS SPECIFIED AND IN THE DISCRETION OF THE PROXIES ON ALL OTHER
MATTERS. IF NOT OTHERWISE SPECIFIED, SHARES WILL BE VOTED IN ACCORDANCE WITH
THE RECOMMENDATIONS OF THE DIRECTORS.
Please mark, date and sign your name exactly as it appears on this
proxy and return this proxy in the enclosed envelope. When signing as
attorney, executor, administrator, trustee, guardian or officer of a
corporation, please give your full title as such. For joint accounts, each
owner should sign.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
/X/ Please mark your
votes as this
_______________ _________________________________
COMMON STOCK DIVIDEND REINVESTMENT SHARES
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
Item 1 - ELECTION OF DIRECTORS
Nominees:
John F. McGillicuddy John P. Mascotte
Marina v. N. Whitman Melvin R. Goodes
Richard D. Wood George V. Grune
W. Bruce Thomas Charles W. Duncan Jr.
Michel C. Bergerac Harold S. Hook
Andrew C. Sigler Helene L. Kaplan
Frank A. Bennack Jr. Randolph W. Bromery
Michael I. Sovern Edward D. Miller
Walter V. Shipley J. Bruce Llewellyn
John R. Stafford William B. Harrison Jr.
WITHHELD
FOR FOR ALL
/ / / /
WITHHELD FOR: (Write that nominee's name in the space provided below).
______________________________________________________________________
Item 2 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
FOR AGAINST ABSTAIN
/ / / / / /
Item 3 - APPROVAL OF AN AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4, 5, 6 AND 7.
Item 4 - STOCKHOLDER PROPOSAL-POLITICAL CONTRIBUTIONS
FOR AGAINST ABSTAIN
/ / / / / /
Item 5 - STOCKHOLDER PROPOSAL-UNMARKED PROXIES
FOR AGAINST ABSTAIN
/ / / / / /
Item 6 - STOCKHOLDER PROPOSAL-EMERGING ECONOMIES
FOR AGAINST ABSTAIN
/ / / / / /
Item 7 - STOCKHOLDER PROPOSAL-CUMULATIVE VOTING
FOR AGAINST ABSTAIN
/ / / / / /
RECEIPT IS HEREBY ACKNOWLEDGED OF THE CHEMICAL BANKING CORPORATION NOTICE OF
MEETING AND PROXY STATEMENT.
Signature(s)________________________________________________ Date__________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee, guardian or
officer of a corporation, please give full title as such.
<PAGE> 31
CHEMICAL BANKING CORPORATION
SAVINGS INCENTIVE PLAN OF CHEMICAL BANK
VOTING INSTRUCTIONS TO TRUSTEE
Enclosed is a Notice of the Annual Meeting of Stockholders of Chemical
Banking Corporation to be held on May 16, 1995, together with the Proxy
Statement for such Meeting. The Savings Incentive Plan of Chemical Bank allows
you to instruct the Trustee in writing to vote, as you specify, the number of
shares of Common Stock of Chemical Banking Corporation representing your
proportionate interest in Investment Funds D, X, and Y on March 20, 1995. Your
signature on this instruction card constitutes your instruction to the Trustee
to vote at the Annual Meeting and any adjournment thereof, the number of shares
held by you in those Funds in accordance with your instructions specified on
this card. If you sign and return this card unmarked, the Trustee will vote
shares in accordance with the Savings Incentive Plan.
Please mark, date and sign your name exactly as it appears on this card
and return it in the enclosed envelope.
Employee Benefit Plans Committee
THIS INSTRUCTION CARD IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
/X/ Please mark your
votes as this
_______________
COMMON
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
Item 1 - ELECTION OF DIRECTORS
Nominees:
John F. McGillicuddy John P. Mascotte
Marina v. N. Whitman Melvin R. Goodes
Richard D. Wood George V. Grune
W. Bruce Thomas Charles W. Duncan Jr.
Michel C. Bergerac Harold S. Hook
Andrew C. Sigler Helene L. Kaplan
Frank A. Bennack Jr. Randolph W. Bromery
Michael I. Sovern Edward D. Miller
Walter V. Shipley J. Bruce Llewellyn
John R. Stafford William B. Harrison Jr.
WITHHELD
FOR FOR ALL
/ / / /
WITHHELD FOR: (Write that nominee's name in the space provided below).
______________________________________________________________________
Item 2 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
FOR AGAINST ABSTAIN
/ / / / / /
Item 3 - APPROVAL OF AN AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4, 5, 6 AND 7.
Item 4 - STOCKHOLDER PROPOSAL-POLITICAL CONTRIBUTIONS
FOR AGAINST ABSTAIN
/ / / / / /
Item 5 - STOCKHOLDER PROPOSAL-UNMARKED PROXIES
FOR AGAINST ABSTAIN
/ / / / / /
Item 6 - STOCKHOLDER PROPOSAL-EMERGING ECONOMIES
FOR AGAINST ABSTAIN
/ / / / / /
Item 7 - STOCKHOLDER PROPOSAL-CUMULATIVE VOTING
FOR AGAINST ABSTAIN
/ / / / / /
RECEIPT IS HEREBY ACKNOWLEDGED OF THE CHEMICAL BANKING CORPORATION NOTICE OF
MEETING AND PROXY STATEMENT.
Signature(s)________________________________________________ Date__________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee, guardian or
officer of a corporation, please give full title as such.
