<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
FIRST SECURITY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
FIRST SECURITY CORPORATION
- --------------------------------------------------------------------------------
(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), 14a-6(i)(1), 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:
N/A
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
N/A
------------------------------------------------------------------------
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):
N/A
------------------------------------------------------------------------
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:
N/A
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
N/A
------------------------------------------------------------------------
3) Filing Party:
N/A
------------------------------------------------------------------------
4) Date Filed:
N/A
------------------------------------------------------------------------
<PAGE>
FIRST SECURITY CORPORATION
79 SOUTH MAIN STREET
SALT LAKE CITY, UTAH 84111
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MONDAY, APRIL 22, 1996 AT 3:00 P.M.
Pursuant to the Bylaws of First Security Corporation ("the Company"),
we are pleased to invite all of the Company's Shareholders to the Company's
Annual Shareholders Meeting, which will be held in the Empire Room of the
Joseph Smith Memorial Building located at 15 East South Temple Street, Salt
Lake City, Utah on Monday, April 22, 1996, at 3:00 p.m. for the following
purposes:
1. TO ELECT A BOARD OF DIRECTORS TO SERVE FOR THE ENSUING YEAR;
2. TO CONSIDER AND VOTE ON THE PROPOSED INCREASE IN THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK THAT CAN BE ISSUED BY THE
COMPANY, FROM THE PRESENT 150,000,000 SHARES TO A NEW LEVEL OF
300,000,000 SHARES.
3. TO TRANSACT SUCH OTHER BUSINESS AS MAY BE PROPERLY BROUGHT BEFORE
THE ANNUAL MEETING OR AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
The close of business on Monday, March 4, 1996, was fixed by the Board
of Directors as the Record Date for the determination of the Shareholders
entitled to notice of, and to vote at the 1996 Annual Meeting. In accordance
with Delaware law, a list of the Company's Shareholders entitled to vote at
the 1996 Annual Meeting will be available for examination at the offices of
the Company, 2nd Floor, 79 South Main Street, Salt Lake City, Utah 84111, for
ten business days prior to the Annual Meeting, between the hours of 9:00 a.m.
and 5:00 p.m., and during the Annual Meeting.
The 1996 Annual Meeting is expected to conclude before 4:30 p.m. so
that a Board of Directors meeting can be held in the afternoon. We hope you
will attend the Annual Meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND, PLEASE IMMEDIATELY SIGN AND
COMPLETE THE ENCLOSED PROXY DESIGNATION AND INSTRUCTION CARD ("PROXY") AND
RETURN IT IN THE ENVELOPE PROVIDED SO THAT YOUR SHARES MAY BE REPRESENTED AT
THE ANNUAL MEETING. NO POSTAGE IS REQUIRED IF A PROXY IS MAILED IN THE UNITED
STATES. IF YOU OWN BOTH COMMON STOCK AND CUMULATIVE CONVERTIBLE PREFERRED
STOCK, PLEASE SIGN AND RETURN BOTH PROXIES. IF A MAJORITY OF OUTSTANDING
SHARES ARE NOT PRESENT AT THE MEETING EITHER IN PERSON OR BY PROXY, THE
MEETING MUST BE ADJOURNED WITHOUT CONDUCTING BUSINESS, AND ADDITIONAL EXPENSE
WILL BE INCURRED TO RESOLICIT THE SHAREHOLDERS FOR A NEW MEETING DATE.
Sent to you with this Notice and the accompanying Proxy Statement is
the Company's 1995 Annual Report to Shareholders, which contains the audited
financial statements of the Company and certain other information about the
Company and its 1995 operating results.
BY ORDER OF THE BOARD OF DIRECTORS
Dated: March 15, 1996
/s/ BRAD D. HARDY
----------------------------------
BRAD D. HARDY
Executive Vice President, General
Counsel and Secretary of the Company
<PAGE>
[Logo]
PROXY STATEMENT
March 15, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GENERAL INFORMATION FOR SHAREHOLDERS ..................................... 1
LAST YEAR'S (April 24, 1995) ANNUAL MEETING .............................. 4
INDEPENDENT AUDITORS ..................................................... 4
MANAGEMENT OF THE COMPANY ................................................ 4
Board of Directors .................................................. 4
Executive Officers .................................................. 6
COMPENSATION OF MANAGEMENT ............................................... 8
Non-Employee Director Compensation .................................. 8
Compensation Committee Report on Executive Compensation ............. 8
Summary of Compensation To Certain Executive Officers ............... 10
Stock Options and Similar Awards to Executive Officers .............. 12
Retirement Benefits to Executive Officers ........................... 13
Compensation Committee Interlocks and Insider Participation ......... 14
CERTAIN TRANSACTIONS BY AND WITH MANAGEMENT AND OTHERS ................... 14
Credit Extensions ................................................... 14
Other Transactions .................................................. 15
Severance Agreements ................................................ 15
COMPARATIVE PERFORMANCE OF THE COMPANY'S COMMON STOCK .................... 16
PRINCIPAL SHAREHOLDERS ................................................... 17
PROPOSALS FOR SHAREHOLDER ACTION ......................................... 17
1. Election of Directors ..................................... 17
2. Proposed Increase in the Number of Authorized Shares ...... 21
OTHER BUSINESS ........................................................... 27
DEADLINE FOR SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING ............... 28
</TABLE>
GENERAL INFORMATION FOR SHAREHOLDERS
This Proxy Statement is furnished to its Shareholders by First Security
Corporation, a Delaware corporation (hereinafter called the "Company"), in
connection with the solicitation by the current Board of Directors of proxies
for use at the Annual Meeting of Shareholders to be held in the Empire Room
of the Joseph Smith Memorial Building at 15 East South Temple Street, Salt
Lake City, Utah, on Monday, April 22, 1996 at 3:00 p.m., and at any and all
adjournments thereof.
A Proxy Designation and Instruction Card ("Proxy" "or Proxy Card") for
your use in connection with the Annual Meeting is enclosed. IF you own BOTH
Common Stock and Cumulative Convertible
<PAGE>
Preferred Stock, you should have received TWO Proxy Cards and you are
requested to date and sign BOTH of these Proxy Cards, and return them in the
envelope provided.
VOTING SECURITIES
The Board of Directors has fixed the close of business on March 4, 1996
as the RECORD DATE for determination of shareholders entitled to notice of
and to vote at the 1996 Annual Meeting (the "Record Date"). As of the Record
Date, there were issued and outstanding shares of Common Stock
and shares of $3.15 Series "A" Cumulative Convertible Preferred Stock
("Preferred Stock"). The holders of record of the shares of the Company's
Common Stock and of shares of the Company's Preferred Stock on the Record
Date entitled to be voted at the Annual Meeting are entitled to cast one vote
per share on each matter submitted to a vote at the Annual Meeting. These
share numbers take into account the 3-for-2 stock split effected by means of
a stock dividend of one new share for each two shares held as of February 12,
1996.
As of August 28, 1989, the Company adopted a Shareholder Rights
Agreement ("the Plan") and the Board of Directors of the Company on that date
(a) declared a dividend of one "Right" for each share of Common Stock held of
record as of the close of business on September 8, 1989, and (b) authorized
the issuance of one Right to attach to each share of Common Stock issued
after September 8, 1989, and prior to the occurrence of certain events
described in the Plan. Each Right entitles the registered holder to purchase
from the Company a unit consisting of one-thousandth of a share of Junior
Series B Preferred Stock at a purchase price of $ per unit. The
Rights are attached to all Common Stock certificates that were outstanding on
September 8, 1989, or have been issued since that date, and no separate
Rights Certificates have been or will be distributed until the occurrence of
certain events described in the Rights Agreement. Until such separation, no
Right may be exercised or traded separately from the Common Stock certificate
to which it is attached. Following separation, the Rights may, depending
upon the occurrence of certain events described in the Rights Agreement,
entitle the holders thereof to either purchase or receive additional shares
of Common Stock. The Rights will expire at the close of business on August
28, 1999, unless earlier redeemed by the Company in accordance with the terms
of the Plan.
PROXIES
Shares of Preferred Stock and Common Stock which are entitled to be
voted at the Annual Meeting and which are represented by properly executed
Proxies will be voted in accordance with the instructions indicated on such
Proxies. If no instructions are indicated, such shares will be voted FOR the
election of each of the Director nominees; FOR the approval of the increase
in the number of authorized common shares to 300,000,000; and, in the
discretion of the designated Proxy holders, as to any other matters which may
properly come before the Annual Meeting.
ANY SHAREHOLDER SIGNING AND DELIVERING A PROXY HAS THE POWER TO REVOKE
IT AT ANY TIME BEFORE THE VOTE AT THE ANNUAL MEETING BY NOTIFYING THE
SECRETARY OF THE COMPANY IN WRITING PRIOR TO 3:00 P.M. M.S.T. ON APRIL 22,
1996, BY SIGNING AND DATING A LATER PROXY AND SUBMITTING THE NEW PROXY IN
TIME TO BE COUNTED FOR THE ANNUAL MEETING, OR BY VOICING SUCH REVOCATION IN
PERSON AT THE ANNUAL MEETING AT THE TIME VOTES ARE REQUESTED.
If a Shareholder wishes to designate someone other than the designated
persons named on the Proxy Card as his authorized agent to vote at the 1996
Annual Meeting, you may do so by crossing out the names of all of the
designated persons printed on the Proxy Card and by writing in the name of
another person or persons (not more than 2) to act as agent for the
Shareholder in voting his shares. Such
-2-
<PAGE>
a special designation signed by the Shareholder(s) must be presented at the
Annual Meeting by the person or persons you have designated on the Proxy Card.
For Shareholders participating in the DIVIDEND REINVESTMENT PLAN offered
by the Company, the Plan will vote all shares of First Security Common Stock
that it holds for a participant's account in accordance with the Proxy Card
returned by the participant with respect to the shares of Common Stock which
the participant holds of record. If a participant in the Dividend
Reinvestment Plan fails to sign and return a Proxy Card, the participant's
shares held in the Plan will not be voted at all, nor will they be considered
present at the 1996 Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement and
related materials will be borne by the Company. The solicitation of Proxies
by the Directors is being made by mail, and may also be made by agents of the
Company, in person, by telephone, or by mail. No additional compensation
will be given to employees or Directors for such solicitation. Non-employee
agents may be retained to assist in the Proxy solicitation process at a cost
to the Company, if any, not expected to exceed $30,000. Custodians of
securities held for Shareholders of record (for example, banks, brokers,
etc.) may be paid their reasonable out-of-pocket expenses incurred in
forwarding Proxy Cards and this Proxy Statement to Shareholders.
This Proxy Statement and the enclosed form of Proxy are being mailed to
Shareholders beginning on March 18, 1996. Mailed together with this Proxy
Statement is a copy of the Company's 1995 Annual Report to Shareholders.
SHAREHOLDERS WHO DO NOT RECEIVE A COPY OF THE 1995 ANNUAL REPORT WITH THIS
PROXY STATEMENT, OR WHO DESIRE EXTRA COPIES, SHOULD CONTACT THE COMPANY AT
(801) 246-5706.
VOTES REQUIRED FOR ACTION TO BE TAKEN AT THE 1996 ANNUAL MEETING
A majority of the share votes entitled to be cast at the Annual Meeting
(legal ownership of outstanding shares as of the Record Date) must be present
in person or by Proxy for a quorum to exist at the Annual Meeting.
Abstentions and broker non-votes are counted "present" for determining the
presence or absence of a quorum for the transaction of business.
In the election of Directors, the ( ) nominees receiving the
highest number of votes cast in their favor will be elected as the Board of
Directors of the Company for the 1996-97 period until the 1997 Annual
Meeting. Accordingly, abstentions and broker non-votes will not affect the
outcome of the election of Directors.
The proposed approval of the increase in the authorized common stock to
300,000,000 shares requires that a majority of the shares present and
entitled to vote at the meeting vote in favor. Abstentions and broker
non-votes will be counted as a "no" vote with respect to this proposal, and
could thereby affect the outcome of the vote on this proposal.
Holders of shares of Preferred Stock and Common Stock are entitled to one
vote at the Annual Meeting for each share held of record at the Record Date.
LAST YEAR'S (APRIL 24, 1995) ANNUAL MEETING
The 1995 Annual Meeting of the Shareholders was held on April 24, 1995
in Salt Lake City, Utah. There were 41,293,269.7 shares of Common Stock and
7,441 shares of Preferred Stock represented at the 1995 Annual Meeting in
person or by proxy, which shares constituted a legal quorum.
-3-
<PAGE>
Each of the nominees to the Board of Directors presented to the 1995 Annual
Meeting was voted upon separately, and each was elected by the affirmative
vote of more than 93% of the shares present and voting. The three proposals
for shareholder action set out in last year's Proxy Statement were also
approved by the vote of more than 93% of the shares present and voting at the
1995 Annual Meeting.
INDEPENDENT AUDITORS
The Board of Directors has appointed Deloitte & Touche as the independent
auditors to examine the accounts of the Company and its subsidiaries for the
1996 calendar year. This firm or a predecessor firm has audited the Company's
accounts since at least 1940 and is one of the largest and best known firms of
independent certified public accountants. Deloitte & Touche rotates its
personnel assigned to First Security Corporation at least once every five years,
with assignments beyond three years of supervising partners responsible for the
First Security Corporation engagement reviewed and approved in advance by the
Audit Committee. A partner in Deloitte & Touche will be in attendance at the
1996 Annual Meeting to make a statement on behalf of the firm if he so desires
and to answer appropriate questions, if any, from Shareholders.
MANAGEMENT OF THE COMPANY
BOARD OF DIRECTORS
The business of the Company is managed under the direction of its Board
of Directors. The Board has responsibility for establishing broad corporate
policies, for the overall performance of the Company and for the election and
compensation of officers of the Company. It is not, however, involved in
managing the Company and its operating units on a day-to-day basis. The
Board is kept advised of the Company's operations and results through regular
written reports from, and discussions with, the Chairman, the President, the
Chief Financial Officer and other executive officers of the Company.
The Board of Directors meets regularly during the year to review
significant developments affecting the Company and to act on matters
requiring Board approval. It also holds special meetings when one or more
important matters requires Board action between scheduled meetings.
Executive officers responsible for significant operations or supervisory
activities are frequently invited to meet with the Board of Directors to
discuss their areas of responsibility.
As disclosed to the Company, the Board of Directors as presently
constituted (including any new nominees to be voted on for the first time at
the 1996 Annual Meeting) beneficially own AS A GROUP shares, or
approximately % of the Company's outstanding Common Stock as of the Record
Date, including option shares exercisable within 60 days of the
Record Date but which were unexercised as of the Record Date, and including
shares beneficially owned by the three (3) Honorary Directors as a group.
The Board of Directors held five (5) meetings during 1995. All
Directors attended all of the Board meetings except Messrs. Gardner, Haight,
Joklik, Kastler, Maloof and Mrs. Hunstman, who each attended four (4) of the
meetings.
The Company regrets the decision of U. Edwin Garrison not to stand
for re-election to the Board of Directors of the Company this year. Mr.
Garrison's experience, wise counsel and support will be missed by his fellow
Directors and by Management.
-4-
<PAGE>
The EXECUTIVE COMMITTEE of the Board of Directors exercises the powers of
the Board in the management of the business and affairs of the Company between
Board of Directors meetings or when the Board could not reasonably or timely be
convened. The Executive Committee also serves as the Board's nominating
committee for the election of Directors. The Executive Committee keeps regular
minutes of its meetings and reports to the Board of Directors at the regular
meetings of the Board. The Executive Committee met twelve (12) times during
1995. Messrs. Beardall, Evans and Heiner attended all of the meetings; Messrs.
Brady, Dee, and Eccles attended eleven (11) of the meetings, and Mr. Parker
attended nine (9) of the meetings.
The AUDIT COMMITTEE of the Board, which met four (4) times during 1995,
reports to the Board of Directors with respect to various auditing and
accounting matters, the scope of audit procedures, the performance of the
internal auditors and examiners, and accounting and compliance practices of the
Company. All members of the Audit Committee attended all of the scheduled
meetings.
The COMPENSATION COMMITTEE administers the various incentive award and
equity plans of the Company on behalf of the Board of Directors. The
Compensation Committee also determines compensation for the Executive
Officers of the Company who serve on the Management Committee (Messrs.
Eccles, Evans, Hardy, Howell, King, McMurray, Nelson and Ulbrich). The
Compensation Committee met once during 1995. All members of the Committee
attended this meeting except Mr. Joklik.
HONORARY DIRECTORS are provided information about the Company on the
same basis as regular Directors, and are invited to meetings of the Board of
Directors, although Honorary Directors do not vote on any matter before the
Board. Currently Kendall D. Garff, Dr. Chase N. Petersen, and James E.
Phelps are serving as Honorary Directors of the Company. These persons
beneficially owned [5467.31] shares, [225] shares, and [17,971] shares,
respectively, of the Company's Common Stock at year-end 1995.
EXECUTIVE OFFICERS
Set forth on TABLE 1, below, are the names, ages, primary areas of
responsibility, and economic and beneficial stock ownership (as of December
31, 1995, but adjusted to reflect the effect of the 3-for-2 stock split
effected by means of a stock dividend as of February 12, 1996) of the
Company's Executive Officers EXCEPT Messrs. Eccles (Chairman and Chief
Executive Officer) and Evans (President and Chief Operating Officer), whose
biographical and share ownership information is found with the other Director
nominees later in this Proxy Statement. Executive Officers serve at the
pleasure of the Board of Directors, although as disclosed later in this Proxy
Statement, certain Executive Officers have entered into agreements governing
the termination of their employment with the Company.
TABLE 1
EXECUTIVE OFFICERS OF FIRST SECURITY CORPORATION
JAY S. BACHMAN, 46, is a Senior Vice President and a VISION Coordinator for the
Company. Previously Mr. Bachman held the title of Treasurer, which position was
eliminated as a result of the VISION process. At year end 1995, Mr. Bachman was
the beneficial owner of [9521] shares of Common Stock, including [6739] option
shares exercisable within 60 days of the Record Date, but not yet exercised, and
[1337] shares held in his account in the Company's Incentive Savings Plan.
BRAD D. HARDY, 42, is Executive Vice President-Corporate Services, General
Counsel and Secretary of the Company, and is a member of the Company's
Management Committee. Previously Mr. Hardy was a shareholder and Director of
Ray, Quinney & Nebeker (law firm). At year end 1995, Mr. Hardy beneficially
-5-
<PAGE>
owned [10,300] shares of Common Stock, including [10,000] option shares
exercisable within 60 days of the Record Date, but not yet exercised.
MARK D. HOWELL, __, is Executive Vice President-Business Lending Services of
the Company, and is a member of the Company's Management Committee.
Previously, Mr. Howell was an Executive Vice President of First Security Bank
of Utah. At year end 1995, Mr. Howell beneficially owned 27,848.5 shares of
Common Stock, including 25,999.5 option shares exercisable within 60 days of
the Record Date, but not yet exercised, and [1370] shares held in his account
in the Company's Incentive Savings Plan. These share numbers do not include
[13,561.62] shares of the Company's Common Stock held by a revocable trust as
to which Mr. Howell is a named beneficiary upon the death of the currently
living trustor, and as to which Mr. Howell disclaims any beneficial interest.
T. EUGENE KING, 62, is Executive Vice President-Technology and Processing
Services of the Company and is also Chairman, President and Chief Executive
Officer of First Security Service Company, and is a member of the Company's
Management Committee. At year end 1995, he was the beneficial owner of
[98349.5] shares of Common Stock, including [83,433.5] option shares
exercisable within 60 days of the Record Date, but not yet exercised, and
[4916] shares held in his account in the Company's Incentive Savings Plan.
This number of shares is approximately 0. % of the total outstanding shares
of Common Stock at the Record Date. Mr. King exercised options covering, and
subsequently sold, 17,700 shares of the Company's Common Stock during the
first quarter of 1996 and prior to the Record Date.
KELLY K. MATTHEWS, 51, is Senior Vice President (Economist). At year end
1995, Mr. Matthews was the beneficial owner of 6981 shares of Common Stock,
including 24,527 option shares exercisable within 60 days of the Record Date,
but not yet exercised, and 3541 shares held in his account in the Company's
Incentive Savings Plan.
J. PATRICK MCMURRAY, 47, is Executive Vice President-Community Bank Services
of the Company, and also serves as Chairman, President and Chief Executive
Officer of First Security Bank of Idaho, as Chairman of First Security Bank
of Nevada, and as a member of the Company's Management Committee. At year end
1995, he was the beneficial owner of [15377] shares of Common Stock,
including [125,034???]option shares exercisable within 60 days of the Record
Date, but not yet exercised, and [7651] shares held in his account in the
Company's Incentive Savings Plan. This number of shares is approximately
0. % of the total outstanding shares of Common Stock at the Record Date.
L. SCOTT NELSON, 57, is Executive Vice President-Retail Lending Services of
the Company, and also serves as Chairman, President and Chief Executive
Officer of First Security Bank of Utah, as Chairman of First Security Bank of
New Mexico, and as a member of the Company's Management Committee. At year
end 1995, he was the beneficial owner of [6205.53] shares of Common Stock
including certain shares held by Mr. Nelson's spouse in her own name, and
including [202,345]option shares exercisable within 60 days of the Record
Date, but not yet exercised, and [6,317] shares held in his and his wife's
accounts in the Company's Incentive Savings Plan. This total number of shares
is approximately 0. % of the total outstanding shares of Common Stock at the
Record Date.
LESLIE F. PASKETT, 51, is Senior Vice President and Comptroller. Previously
Mr. Paskett served as Tax Officer of the Company. At year end 1995, he was
the beneficial owner of [18,197.5] shares of Common Stock, including
[14,555.5]option shares exercisable within 60 days of the Record Date, but
not yet exercised, and [2,414] shares held in his account in the Company's
Incentive Savings Plan.
DENNIS G. REEVES, 56, is Senior Vice President and Chief Auditor of the
Company. He previously was a Vice President and Accounting Manager in the
Comptroller's Division of the Company. At year end 1995, Mr. Reeves was the
beneficial owner of [2381] shares of Common Stock, including [1,424] option
shares exercisable within 60 days of the Record Date, but not yet exercised,
and [357] shares held in his account in the Company's Incentive Savings Plan.
JOHN L. RUDISILL, 39, is Senior Vice President and Director of the Company's
Mutual Funds Center. Previously Mr. Rudisill was Executive Vice President and
Manager of the Trust Group at First Security Bank of New Mexico
-6-
<PAGE>
and at its predecessor, The First National Bank in Albuquerque. At year end
1995, Mr. Rudisill was the beneficial owner of [1,543] shares of Common
Stock, including [1,312] option shares exercisable within 60 days of the
Record Date, but not yet exercised, and [148] shares held in his account in
the Company's Incentive Savings Plan.
SCOTT C. ULBRICH, 41, is Executive Vice President-Finance and Capital
Markets, is Chief Financial Officer of the Company, and is a member of the
Company's Management Committee. At year end 1995, he was the beneficial owner
of [33,863]shares of Common Stock, including [29,911] option shares
exercisable within 60 days of the Record Date, but not yet exercised, and
[536] shares held in his account in the Company's Incentive Savings Plan. Mr.
Ulbrich exercised options covering, and subsequently sold, 4,894 shares of
the Company's Common Stock during the first quarter of 1996 and prior to the
Record Date.
GARY R. VANCE, 60, is a Senior Vice President of the Company. Previously Mr.
Vance served as Comptroller of the Company, and has elected to retire
following the Annual Meeting. At year end 1995, he was the beneficial owner
of [31,582.78] shares of Common Stock, including [26,761.5] options shares
exercisable within 60 days of the Record Date, but not yet exercised, and
[3846]shares held in his account in the Company's Incentive Savings Plan.
ALONZO W. WATSON, JR., 73, is Assistant Secretary of the Company, and is a
Director of Ray, Quinney & Nebeker (law firm). At year end 1995, he was the
beneficial owner of [1477.93] shares of Common Stock, which does not include
[198,808.96] shares as to which Mr. Watson holds voting and investment power
as Personal Representative of the Estate of Mrs. George S. Eccles; does not
include [1,044,092] shares held by the George S. and Dolores Dore Eccles
Foundation, of which Mr. Watson is a director; does not include 60,750 shares
held by the Marriner S. Eccles Charitable Trust, of which Mr. Watson is a
Director; and does not include [148,000] shares of the Company's Common Stock
owned by the Nora Eccles Treadwell Foundation, as to which Mr. Watson serves
as a Director and disclaims beneficial ownership; but does include certain
shares held by Mr. Watson's spouse in her own name.
DAVID R. WILSON, 56, is an Executive Vice President and Manager of the
Company's Capital Markets operations. At year end 1995, he was the beneficial
owner of [22,875.5] shares of Common Stock including [19,932.5] option shares
exercisable within 60 days of the Record Date, but not yet exercised, and
[1,935] shares held in his account in the Company's Incentive Savings Plan.
Mr. Wilson exercised options covering, and subsequently sold, 4,500 shares of
the Company's Common Stock during the first quarter of 1996 and prior to the
Record Date.
Based on their disclosed share holdings at December 31, 1995, all of the
Company's Executive Officers as a group ( persons, including Messrs. Eccles
and Evans, whose stock holdings are described in the Election of Directors
section, below), beneficially owned a total of shares, or
approximately %, of the Company's Common Stock (including shares
subject to unexercised options exercisable within 60 days of the Record
Date), shares held in accounts in the Company's Incentive Savings Plan,
and shares, or approximately 0. %, of the Company's Preferred Stock, all
percentages calculated as of the Record Date.
COMPENSATION OF MANAGEMENT
DIRECTOR COMPENSATION
CASH COMPENSATION. During 1995, a cash retainer of $12,000 was paid to
each Director, as well as a $1,000 fee for attendance at each meeting of the
Board of Directors (or a fee of $300.00 for each scheduled meeting not
attended). Director compensation is paid in four quarterly installments in
arrears to those Directors who do not defer their compensation, as described
below, but the full amount of the retainer is paid in advance at the start of
the year for those Directors who defer their compensation as described below.
Messrs. Eccles and Evans do not receive the annual retainer, but they are paid
the per
-7-
<PAGE>
meeting fees. The Bylaws permit payment of Directors' expenses incurred
in travelling to and attending Board of Directors meetings.
Directors of the Company who are not Executive Officers may enter into a
compensation deferral agreement with the Company whereby the payment of
retainers and fees otherwise receivable by a Director for service as a Director
may be deferred and held in an account for the benefit of the Director. The
Director may choose whether this deferred compensation will be invested in
"stock equivalency units" or earn interest at a predetermined rate. A Director
selecting "stock equivalency units" will be credited with that number of stock
equivalency units equal to the result of dividing the total amount of deferred
compensation in the Director's account on the Annual Evaluation Date (usually
May 1) by the market price of the Company's common stock on that date.
Moreover, additions are made to the Director's account to represent the value of
dividends that otherwise would be paid on the stock equivalent units if they
were actual shares of common stock. A Director electing to earn interest only
will have interest added annually on the Valuation Date at a rate equal to the
Company's cost of funds for the applicable period. Directors may choose a lump
sum cash distribution upon retirement from the Board of Directors or a periodic
distribution program which could involve up to ten annual cash payment
installments. Amounts remaining in a Director's deferral account during any
term of periodic distributions will continue to be revalued annually.
Additional per meeting fees of $1,000 were paid in 1995 to Directors who
were members of the Audit Committee and the Compensation Committee, with the
Chairmen of these committees being paid an annual retainer of $2,000 in addition
to the per meeting fees. Directors who were members of the Executive Committee
and who are not Executive Officers of the Company were paid an additional fee of
$15,000 annually. Committee members who do not attend a meeting will get no
compensation for the missed committee meeting. These additional fees for
Directors' committee service may be deferred in the same manner (discussed
above) as are regular Directors' fees.
Honorary Directors are paid $1,000 per Board of Directors' Meeting that
they attend and $300 per Directors' Meeting not attended.
DIRECTOR STOCK OPTIONS. Each Non-Employee Director elected at the 1995
Annual Shareholders Meeting was granted, as of May 1, 1995, an Option to
purchase 3,000 shares of the Company's common stock. (As a result of the
3-for-2 stock split effective as of February 16, 1996, these outstanding stock
options in the hands of non-employee Directors as of May 1, 1995 were
automatically increased to 4,500 shares each.) Thereafter, on May 1 immediately
following the date as of which a new Non-Employee Director is first elected to
the Board of Directors, such new Non-Employee Director will be granted an Option
to purchase a number of shares of Company common stock which corresponds to the
remaining vesting period for any pre-existing as yet unvested Director Options.
If a Non-Employee Director remains a Director through the three-year vesting
period of an Option, that Director automatically will be granted another Option
to purchase an additional 3,000 shares of Company common stock vesting over
another three year period.
Each Option vests 33 1/3% (normally 1,000 shares) per year over a vesting
term of three (3) years from the date of grant. Persons who are first elected
as a Non-Employee Director after the beginning of a three (3) year vesting
period for Options granted to pre-existing Non-Employee Directors will receive
an Option for fewer shares and with a shortened vesting schedule to coincide
with the operation of the then pending three (3) year vesting period applicable
to the pre-existing Non-Employee Directors' Options.
The term of each Option is ten years from the date the Option is granted,
subject to earlier termination under specified circumstances. Options become
immediately exercisable in full for their full term upon (i) the death or
disability of the Director, or (ii) the liquidation, dissolution, merger,
-8-
<PAGE>
consolidation or reorganization of the Company. Upon a Director's retirement
from the Board of Directors or an unsuccessful attempt by a Director to win re-
election to the Board, the Director's Options will be honored strictly according
to their terms.
Options are not transferable other than by will or the laws of descent and
distribution, and may be exercised during a Director's lifetime only by the
Director.
The exercise price per share of an Option will be equal to the fair market
value per share of Common Stock on the date immediately preceding the Grant
Date. The fair market value per share of Common Stock on any date is equal to
the Last Sale price per share of the Company's common stock as reported on the
NASDAQ National Market System on the date immediately preceding such date or, in
the event such immediately preceding date is not a day on which the NASDAQ
National Market System is operating, the next previous date on which the NASDAQ
National Market System was operating.
SUMMARY OF COMPENSATION TO CERTAIN EXECUTIVE OFFICERS
Set out in TABLE 2, below, is a Summary Compensation Table showing the
various elements of compensation paid during 1995 and during the previous two
years to the Company's Chief Executive Officer and to the next four highest paid
Executive Officers (determined by actual compensation received in 1995):
TABLE 2
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
--------------------------------------------
Annual Compensation Long-Term Compensation
Awards
- ------------------------------------------------------------------------------------------------
Name and Year Salary(1) Bonus(2) Restricted Options/ All Other
Principal Position ($) ($) Stock SARs(3) Compensation
Award(s) (#) ($)
($)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SPENCER F. ECCLES, 1995 543,715 162,785 -0- -0- 33,437
Chairman and Chief 1994 515,915 192,941 -0- 53,952 26,564
Executive Officer of the 1993 467,450 280,404 -0- 59,648 20,794
Company
MORGAN J. EVANS, President 1995 382,901 98,724 -0- -0- 29,679
and Chief Operating Officer 1994 344,001 115,587 -0- 28,160 23,894
of the Company 1993 296,736 162,445 -0- 32,000 12,715
L. SCOTT NELSON, 1995 297,006 99,438 -0- -0- 15,496
Executive Vice President- 1994 276,706 115,307 -0- 22,784 15,286
Retail Lending Services 1993 248,641 145,604 -0- 27,136 10,110
J. PATRICK MCMURRAY, 1995 327,017 68,665 -0- -0- 13,654
Executive Vice President- 1994 230,816 60,128 -0- 19,840 13,440
Community Bank Services 1993 209,951 105,607 -0- 23,616 7,576
T. EUGENE KING, 1995 207,000 74,817 -0- -0- 17,564
Executive Vice President- 1994 192,000 72,549 -0- 11,328 9,239
Technology and Processing 1993 177,055 97,456 -0- 13,888 10,079
Services
- ------------------------------------------------------------------------------------------------
</TABLE>
-9-
<PAGE>
(1) INCLUDES DIRECTOR'S FEES PAID BY THE COMPANY OR ITS AFFILIATES, IF
APPLICABLE.
(2) BONUSES ARE LISTED IN THE YEAR EARNED AND NORMALLY ACCRUED, ALTHOUGH SUCH
BONUSES MAY BE PAID IN THE FOLLOWING YEAR. STOCK BONUSES ARE VALUED AT THE
MARKET VALUE ON THE DATE OF RECEIPT.
(3) FIRST SECURITY CORPORATION HAS NEVER ISSUED SARS.
(4) AMOUNTS SHOWN INCLUDE PREMIUMS PAID ON INSURANCE POLICIES, CONTRIBUTIONS
BY THE COMPANY TO THE ACCOUNT OF EACH OF THE NAMED EXECUTIVE OFFICERS IN
THE FIRST SECURITY INCENTIVE SAVINGS PLAN, A 401(K) PLAN OPEN TO ALL FULL
TIME EMPLOYEES OF THE COMPANY, AND CONTRIBUTIONS MADE BY THE COMPANY TO
THE DEFERRED COMPENSATION ACCOUNTS OF THESE EXECUTIVE OFFICERS UNDER A
PROGRAM OPEN TO ALL EXECUTIVE OFFICERS OF THE COMPANY.
Executive Officers may enter into a compensation deferral agreement with
the Company whereby compensation otherwise receivable for service as an
Executive Officer may be deferred and held in an account for the benefit of the
Executive Officer. Under a mechanism substantially similar to that in the
Incentive Savings Plan (see description of this plan at page , below), the
Company will match 50% of the Executive Officer's annual deferred amount up to a
maximum of 3% of total compensation, and will add this amount to the Executive
Officer's deferral account. The Executive Officer may choose whether this
deferred compensation will be invested in "stock equivalency units" or earn
interest at a predetermined rate. An Executive Officer selecting "stock
equivalency units" will be credited with that number of "stock equivalency
units" equal to the result of dividing the total amount of deferred compensation
on the Quarterly Evaluation Date (last day of each quarter) by the market price
of the Company's common stock on that date. Moreover, additions are made to the
Executive Officer's account to represent the value of dividends that otherwise
would be paid on the "stock equivalency units" if they were actual shares of
stock. An Executive Officer electing to earn interest, will have interest added
quarterly on the Valuation Date (last day of the quarter) at a rate equal to the
yield on ten (10) year treasury securities plus 1%. Treasury yields will be
measured as the average monthly yield each December, March, June and September,
as published by the Federal Reserve. Such rate shall be effective for the
quarter commencing three months later. Executive Officers using this deferred
compensation option may choose a lump sum distribution upon death, disability or
retirement, or in quarterly or annual installments over a period of up to twenty
(20) years. Amounts remaining in a deferral account during any term of periodic
distributions will continue to be revalued quarterly. No switching between the
stock equivalency units and the interest rate option will be permitted. All
payouts to employees will be in cash. At December 31, 1995, the named Executive
Officers had the following balances in their deferred income accounts: Mr.
Eccles $ , Mr. Evans, $ , Mr. Nelson $ , Mr.
McMurray $ and Mr. King $ .
STOCK OPTIONS AND SIMILAR AWARDS TO MANAGEMENT.
The following two tables provide information concerning the stock options
and similar awards provided to the Executive Officers listed in TABLE 2 during
1995 (TABLE 3) and exercises of Options and similar awards by these listed
Executive Officers during 1995 (TABLE 4):
-10-
<PAGE>
TABLE 3
OPTION GRANTS TO CERTAIN EXECUTIVE OFFICERS DURING 1995
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------------------------
% OF
TOTAL BLACK-
OPTIONS/SARS SCHOLES
OPTIONS/SARS GRANTED TO EXERCISE OR METHOD
GRANTED ALL EMPLOYEES BASE PRICE EXPIRATION GRANT
NAME (#)(1) IN FISCAL YEAR ($/SH) DATE DATE VALUE
---- ------------ -------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Spencer F. Eccles -0- -0-% -0- -0- -0-
Morgan J. Evans -0- -0-% -0- -0- -0-
L. Scott Nelson -0- -0-% -0- -0- -0-
J. Patrick McMurray -0- -0-% -0- -0- -0-
T. Eugene King -0- -0-% -0- -0- -0-
</TABLE>
(1) AS A CONSEQUENCE OF THE VISION PROCESS UNDERTAKEN IN 1995, NO STOCK OPTIONS
WERE GRANTED TO ANY OF THE NAMED EXECUTIVE OFFICERS DURING 1995. CONSISTENT
WITH THE PURPOSE OF STOCK OPTIONS AS INCENTIVE COMPENSATION TO MANAGEMENT,
MR. ECCLES WILL RECOMMEND TO THE COMPENSATION COMMITTEE, WHICH ADMINISTERS
THE COMPANY'S STOCK OPTION PROGRAM FOR EXECUTIVE OFFICERS, THAT STOCK
OPTIONS BE GRANTED IN 1996 IN AMOUNTS SUFFICIENT TO MAKE UP FOR THE LACK OF
OPTIONS IN 1995.
TABLE 4
OPTION EXERCISES BY CERTAIN EXECUTIVE OFFICERS DURING 1995
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
UNEXERCISED SHARE OPTIONS IN-THE-MONEY SHARE OPTIONS
---------------------------- -------------------------------------
SHARES
ACQUIRED
ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Spencer F. Eccles 0 $ 0 704,841 185,664 $11,468,613.88 $1,636,014.15
Morgan J. Evans 0 $ 0 220,744.50 98,448 $ 3,350,094.08 $ 867,359.26
L. Scott Nelson 6,225 $86,285.42 222,876.75 80,640 $ 3,530,077 $ 710,962.67
J. Patrick McMurray 0 0 122,487 65,064 $ 1,940,326.63 $ 576,546.16
T. Eugene King 0 0 111,902.25 40,200 $ 1,686,263.08 $ 354,697.33
----- ---------- ------------ ------- -------------- -------------
TOTAL 6,225 $86,285.42 1,382,851.50 470,016 $21,975,375.53 $4,145,579.58
----- ---------- ------------ ------- -------------- -------------
----- ---------- ------------ ------- -------------- -------------
</TABLE>
Stock options are awarded to key employees, including the named
Executive Officers, upon recommendation of the Compensation Committee under
the First Security Comprehensive Management Incentive Plan ("CMIP Plan").
Under this plan, the Company may grant key employees bonus shares of common
stock, stock options, stock appreciation rights, and other equity-based
incentive awards. This plan is geared to creating a unity of interest between
management and the Shareholders in looking toward maximizing the share price
of the Company's common stock. The grant of options and bonus shares is also
a key element of the Company's compensation policy for its senior managers.
(SEE "Report of the Compensation Committee", below.)
Under the CMIP Plan, shares of "Restricted Stock" may be granted to
employees of the Company and its subsidiaries, including the five (5)
Executive Officers named in Table 2, above. Shares of Restricted Stock have
been awarded to Executive Officers of the Company in the past under
-11-
<PAGE>
the CMIP Plan and its predecessor plans. As of December 31, 1995, Messrs.
Eccles, Evans, Nelson, McMurray and King held no shares of Restricted Stock.
No shares of Restricted Stock were granted in 1995.
RETIREMENT BENEFITS.
The Company provides a RETIREMENT PLAN to its employees, including to
Executive Officers, that is funded by the Company. The Company also
maintains an ERISA EXCESS PLAN which provides for payment to highly paid
executive officers and their beneficiaries of that portion of otherwise
payable benefits under the terms of the Retirement Plan which cannot be paid
by the Retirement Plan because of benefit restrictions imposed on the
Retirement Plan by Section 415 of the Internal Revenue Code. Executive
Officers also have benefits available under a SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN which provides for the payment of a competitive level of
retirement income to certain key managers in order to attract, retain and
motivate qualified executive officers.
TABLE 5, below, illustrates the estimated annual retirement benefits
payable to the Executive Officers listed in TABLE 2, above, under ALL
applicable retirement plans based on various assumptions of final
compensation levels and service years upon which retirement benefits are
based:
TABLE 5
PENSION PLAN TABLE
<TABLE>
<CAPTION>
FINAL 24 OR MORE
AVERAGE 15 YEARS 20 YEARS YEARS
EARNINGS OF SERVICE OF SERVICE OF SERVICE
-------- ---------- ---------- ----------
<S> <C> <C> <C>
$150,000 $ 56,250 $ 75,000 $ 90,000
200,000 75,000 100,000 120,000
225,000 84,375 112,500 135,000
250,000 93,750 125,000 150,000
300,000 112,500 150,000 180,000
400,000 150,000 200,000 240,000
450,000 168,750 225,000 270,000
500,000 187,500 250,000 300,000
600,000 225,000 300,000 360,000
750,000 281,250 375,000 450,000
</TABLE>
The estimated retirement benefits shown in TABLE 5 are subject to
reduction for Social Security payments received by the retiree and income
from accumulated employer contributions to the Incentive Savings Plan. These
benefits are computed on a joint survivor annuity basis.
Compensation to Executive Officers for 1995 included in the earnings
base for the purpose of calculating total retirement benefits as shown in
TABLE 5 is equal to the three year final average salary including bonus. If
they remain employed until they reach the age of 65, the years of credited
service for the five named Executive Officers in TABLE 2 will be as follows:
39 years for Mr. Eccles, 40 years for Mr. Evans, 35 years for Mr. Nelson, 43
years for Mr. McMurray, and 41 years for Mr. King.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors consists of five
non-employee Directors. The Committee meets one or more times annually to
review and determine matters pertaining to the compensation of the Executive
Officers of the Company who are members of the Company's Management
Committee, including the 5 named officers in TABLE 2, above. The
-12-
<PAGE>
Committee met on January 23, 1995 and on January 29, 1996 to consider actions
which, among other things, affect the short-term incentive program for these
Executive Officers and others.
TO THE SHAREHOLDERS OF FIRST SECURITY CORPORATION:
The Compensation Committee normally performs an annual review of
all major elements of compensation for the Executive Officers of the
Company who are members of the Company's Management Committee, and, if
appropriate, adjusts compensation levels for the following year. During
the second half of 1995 First Security was involved with a corporate
redesign affecting the entire organization. As a result, from early in
the second quarter, the primary focus of the Executive Officers and many
others within the Company was to successfully manage and complete the
reorganization project, VISION. The redesign of First Security included
a new organizational structure and significant changes in the jobs of
many employees. Because of this focus on the corporate redesign and
changes in organizational structure, the Compensation Committee
determined to defer much of its work on Executive Officer Compensation,
which normally would have resulted in a second meeting during the fourth
quarter of 1995, until the first quarter of 1996.
Accordingly, though we have seen some significant changes
(including two additions to the Management Committee), there have been
no increases in the salaries of the Named Executive Officers since our
last report. Also, with the exception of Brad D. Hardy, who joined First
Security in July 1995 as an Executive Vice President and General
Counsel, and a member of the Management Committee, no employee has
received a grant of stock options since our last report.
This Committee will meet one or more times during the first half
of 1996, as needed, to review the entire compensation program for the
Management Committee members and to review long-term incentive proposals
for all Executive Officers and other key employees. We expect to
continue to adhere to the structured approach we have utilized in the
past, whereby an average or below-average base salary is coupled with an
average short-term performance incentive and an above-average long-term
incentive tied to shareholder value. It is probable that at these
meetings in the first half of 1996 we will award stock option grants of
sufficient magnitude to replace all or part of the long term incentive
value that likely would have been conferred if a 1995 stock option award
had taken place.
At the January Compensation Committee meetings of 1995 and 1996,
the discussions considered:
SHORT-TERM INCENTIVES. All the named Executive Officers participate in
the MANAGEMENT ANNUAL CASH INCENTIVE BONUS PLAN (MACIBP), which pays
Executive Officers for achieving pre-set corporate and affiliate
financial goals and, in some cases, for achieving specific individual or
unit goals. In 1994 and 1995, the MACIBP corporate performance
measurement was divided equally between the Company's NET INCOME and the
Company's RETURN ON AVERAGE ASSETS (ROAA).
INCENTIVE TARGETS. For net income, target performance
represents the achievement of the annual business plan. The ROAA
target is relative rather than absolute, and is defined as the mean
ROAA of a select group of peer companies. This peer group,
consisting of approximately a dozen companies with similarities to
the Company in size, lines of business and/or market area, is
proposed annually by the Company's Chief Financial Officer and is
reviewed and approved by this Committee.
IINCENTIVE THRESHOLDS. Threshold performance for both net
income and ROAA is set at 90% of the target, and no bonus is paid
in any category for performance which is below threshold.
At its January, 1996 meeting, the Committee reviewed and validated the 1995
MACIBP performance results and approved the Corporate and Affiliate profit-
plan goals to be used in MACIBP for 1996.
CHIEF EXECUTIVE OFFICER BONUS. Mr. Eccles is eligible to
receive a bonus of up to 75% of his base salary for outstanding
performance under MACIBP. Mr. Eccles' bonus is based entirely on
the company's performance in the two performance measurement
categories listed above.
-13-
<PAGE>
In 1995, performance results for both net income and ROAA fell
between threshold and target. Accordingly, Mr. Eccles' earned a
1995 bonus equal to 40.9% of his maximum bonus opportunity, the
bonus amount being entirely determined by the relationship of the
performance result to the performance target as stipulated by the
terms of the MACIBP.
OTHER NAMED EXECUTIVE OFFICERS. The other named Executive
Officers may receive bonuses of up to 65% of their base salaries
for outstanding performance under MACIBP. A minimum of 80% of each
bonus is derived from some combination of corporate and affiliate
net income and corporate ROAA. In 1995, these other named
Executive Officers earned bonuses ranging from 40.8% to 51.3% of
their maximum bonus opportunities.
/s/ Thomas D. Dee II, Chair
/s/ Rodney H. Brady
/s/ U. Edwin Garrison
/s/ G. Frank Joklik
/s/ Arthur K. Smith
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs Garrison, Brady and Joklik, members of the Company's Board of
Directors' Compensation Committee, through companies with whom each of these
Directors is affiliated, had borrowing and similar credit transactions with
one or more of the Company's subsidiary banks during 1995. The terms of each
of these transactions is believed by the Company to have been done in the
ordinary course of the subsidiary bank's lending business, and on the same
or substantially similar terms to other similar loan or credit transactions
with unrelated persons. Specifically, Mr. , Mr. and
Mr. (through affiliated companies) had credit extensions and/or credit
commitments during 1995 in excess of $ but less than $ .
CERTAIN TRANSACTIONS BY AND WITH MANAGEMENT AND OTHERS
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Company has purchased directors' and officers' liability and
corporate reimbursement insurance on behalf of the Directors and Executive
Officers of the Company, as well for most if not all officers and directors
of the Company's subsidiaries, from Executive Management Associates, Inc. The
current policy was effective on September 30, 1995 and will lapse on
September 30, 1996. The annual premium for this period was $ , which
was paid by the Company.
This policy will indemnify and reimburse attorney fees and other legal
action defense costs to Executive Officers and Directors of the Company in
connection with claims made against them by third parties, including
Shareholders' claims under certain circumstances.
CREDIT EXTENSIONS
Most of the Directors and Executive Officers of the Company, members of
their immediate families, and corporations and other organizations of which they
are affiliates, are borrowers from one or more of the Company's subsidiary
banks. During 1995, these persons, firms and corporations have had loan
transactions with one or more of these banks, all of which were done in the
ordinary course of business and were on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with unaffiliated persons, and did not involve more than the normal
risk of collectability or present other unfavorable features to the Company.
Specifically, Messrs. EVANS, HARDY, HOWELL, MATTHEWS, MCMURRAY, NELSON, ULBRICH,
WATSON and WILSON (or their affiliates) had credit extensions and/or credit
commitments during 1995 in excess of $60,000 but less than $500,000; Messrs.
(or their affiliates) had credit extensions and/or credit commitments of
$500,000 or more but less than 1,000,000; Messrs. BRADY [SMITHS[?],
-14-
<PAGE>
SORENSON (or their affiliates) had credit extensions and/or credit
commitments during 1995 of $1,000,000 or more but not in excess of
$5,000,000; Mrs. HUNSTMAN[HUNTSMAN CHEMICAL;???], and Messrs. HARRIS and
HEINER[???] (or their affiliates) had credit extensions and/or credit
commitments during 1995 of $5,000,000 or more but less than $10,000,000;
Messrs. Maloof and PARKER [IHC????] (or their affiliates) had credit
extensions and/or credit commitments during 1995 of $10,000,000 or more but
less than $20,000,000; Messrs. BEARDALL, BRUCE[ALBERTSONS AND IDAHO POWER[?},
GARFF, Garrison, KASTLER [BONNEVILLE INTERNATIONAL???], and STEELE (or their
affiliates) had credit extensions and/or credit commitments during 1995 of
$20,000,000 or more but less than $50,000,000; and Mr. ECCLES, (or his
affiliates) had credit extensions and/or credit commitments during 1995 of
$50,000,000 or more but less than $100,000,000. The Company's subsidiary
banks expect to continue to have such transactions on similar terms with
Directors and Executive Officers and their affiliates in the future.
OTHER TRANSACTIONS
COMPLIANCE WITH SECTION 16 REPORTING OBLIGATIONS
The Directors and Executive Officers of the Company are required under
the Securities Exchange Act of 1934 to file reports with the Securities and
Exchange Commission evidencing their ownership of, and their current
transactions in, the Company's equity securities. This is a personal
obligation of the Executive Officers and Directors. Based on information
provided to the Company by its Directors and Executive Officers, it appears
that all Directors and Executive Officers have timely filed these reports
during 1995 except Mr. Mark D. Howell, who determined that his timely-filed
December 1995 Form 3 contained an error, and promptly corrected this filing
when the error was noticed during January, 1996.
SEVERANCE AGREEMENTS
Messrs. Eccles, Evans, Hardy, Howell, King, McMurray, Nelson and
Ulbrich have entered into agreements with the Company providing that in the
event of a "change of control" of the Company, or the Executive Officer's
previous employer if different, if the Executive Officer is terminated
without cause; or if the Executive Officer's duties are significantly
changed, he is entitled to a special compensation payment equal to 36
multiplied by a calculation of the Executive Officer's then-regular monthly
compensation plus his derived monthly bonus compensation. Such agreements
are for three (3) year terms with automatic renewals for additional three (3)
year renewal terms. These agreements also deal with any other termination of
the employment of these officers with the Company, other than retirement.
Payments received by these officers under these agreements will be offset by
certain other payments to be received by these Executive Officers through
other plans maintained by the Company.
A SEVERANCE PAY PLAN is available to Executive Officers who do not
have an employment contract providing benefits for certain involuntary
terminations of employment. In case of certain involuntary terminations of
employment, the basic benefit payable under this Plan is one week of pay for
each year of service, up to a maximum of twenty-six weeks of then-current
salary. In the event of a change of control of the Company (as defined in the
Plan), the Board has authority to activate a provision to provide for those
covered employees who have five or more years of service a benefit equal to
two times the regular benefit under the Plan; additionally, certain classes
of senior officers may receive an additional one month of compensation for
each full $10,000 of compensation for a maximum severance payment of
twenty-four months. This Plan is unfunded, and benefits will be paid out of
general corporate funds.
-15-
<PAGE>
PRINCIPAL SHAREHOLDERS
The following TABLE 6 provides information with respect to any person
known to the Company to be the beneficial owner (within the meaning of
applicable governmental regulations) of five percent (5%) or more of any
class of the Company's voting securities as of the Record Date:
TABLE 6
PRINCIPAL SHAREHOLDERS OF THE COMPANY
<TABLE>
<CAPTION>
TITLE OF AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS CLASS BENEFICIAL OWNERSHIP OF CLASS
---------------- -------- -------------------- --------
<S> <C> <C> <C>
The Capital Group Companies, Common 3,362,500 shares,(1) in connection 6.70%
Inc. and Capital Research Stock with managed investment funds
Management Company
- -----------------------------------------------------------------------------------------
First Security Bank of Utah, Common 5,127,659.1 shares,(2) as Trustee 10.27%
N.A. Stock of separate trust accounts
Trust Group
79 South Main Street
Salt Lake City, UT 84111
- -----------------------------------------------------------------------------------------
</TABLE>
(1) Capital Research and Management Company, a registered investment
advisor, and an operating subsidiary of The Capital Group Companies, Inc.,
exercised as of December 31, 1995, investment discretion with respect to
2,938,400 shares, or 5.89% of the outstanding shares of the class, which were
owned by various institutional investors. Said subsidiary has no power to
direct the vote of the above shares.
(2) Of the 5,127,659.1 shares which the Trust Group of First Security Bank
of Utah, N.A. holds in various fiduciary capacities, it has voting power over
4,664,578.9 shares (9.34% of the total outstanding shares) and no power to
vote the remaining 463,080.2 shares.
COMPARATIVE PERFORMANCE OF THE COMPANY'S COMMON STOCK
Set out in TABLE 7, below, is a five year comparison and graphic
display of the relative performance of $100 invested on January 1, 1990 in
the Company's Common Stock and the same amount invested on the same day
in the NASDAQ Broad Market Index and in the KBW 50 Index, respectively:
-16-
<PAGE>
TABLE 7
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(1)
AMONG FIRST SECURITY CORPORATION, THE NASDAQ BROAD MARKET INDEX
AND THE KBW 50 INDEX(2)
<TABLE>
<CAPTION>
INDEX 1990 1991 1992 1993 1994 1995
----- ---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
FIRST SECURITY CORPORATION 100 139.98 206.55 201.50 185.05 320.98
NASDAQ BROAD MKT INDEX 100 159.61 185.20 214.39 207.37 287.97
KBW 50 INDEX 100 158.27 201.68 212.85 201.99 323.52
</TABLE>
(1) Total Return Assumes Quarterly Reinvestment of Dividends.
(2) The KBW 50 Index is published by Keefe, Bruyette & Woods,
Inc., an investment banking firm specializing in the bank and
thrift industry. This index is weighted according to market
capitalization and is made up of 50 of the nation's most important
banking companies, including all money center and most major
regional banks, and is meant to be representative of the price
performance of the nation's large banks. Dividends are assumed to
be reinvested quarterly. First Security Corporation is included
in the KBW 50.
5-YEAR CUMULATIVE MARKET INDEX
-17-
<PAGE>
PROPOSALS FOR SHAREHOLDER ACTION
ITEM NO. 1: ELECTION OF DIRECTORS
The Executive Committee of the Board serves as the nominating
committee for the current Directors. Nominations for election as a Director
also will be accepted from the floor by any Shareholder at the 1996 Annual
Meeting. While no formal procedure exists with respect to nominations for
Director outside of the Annual Meeting other than through the function of the
Executive Committee as the Board's own nominating committee, Shareholders are
free to write to the Executive Committee, c/o Brad D. Hardy, Secretary, First
Security Corporation, 79 South Main Street, Salt Lake City, Utah 84111 with any
suggestions concerning nominations to the Board of Directors.
The eighteen (18) persons named in TABLE 8, below, will be placed in
nomination by the Executive Committee of the Board of Directors for election as
Directors of the Company at the 1996 Annual Meeting, to serve until the next
Annual Meeting or until their successors are elected and qualified. The Bylaws
of the Company provide for a Board of Directors of up to 35 members.
ALL DULY SIGNED AND DELIVERED PROXIES WILL BE VOTED FOR THE ELECTION
OF ALL OF THE NOMINEES LISTED BELOW IN THE ABSENCE OF CONTRARY DIRECTION. The
Directors know of no reason why any nominee listed below may be unable to serve
as a Director. If any nominee is unable to serve, the shares present at the
1996 Annual Meeting through proxies WILL BE VOTED FOR the election of such other
person(s) as the Board of Directors may nominate at the Annual Meeting, or the
current Directors may conclude to reduce the number of Directors to be elected.
If all eighteen (18) nominees, listed below, are elected at the 1996
Annual Meeting, the composition of the new Board will be fourteen (14) Directors
whose principal occupation or employment is and has been outside of First
Security Corporation, two (2) Directors who are retired First Security Executive
Officers, and two (2) Directors who are currently Executive Officers of the
Company.
All of the nominees were elected to their present term of office by a
vote of the Shareholders at the 1995 Annual Meeting.
There is set forth below a Table 8 as to each of the eighteen (18)
nominees of the Executive Committee for election as a Director of the Company,
his/her age, the year he/she first became a Director of the Company, his/her
principal occupation, his/her business experience during the past five years,
other material officerships or directorships in other companies held at this
time, and beneficial stock ownership in the Company as of December 31, 1995,
PROVIDED that the shares shown are adjusted for the 3-FOR-2 STOCK SPLIT,
effected by means of a 50% stock dividend, declared and paid in the first
quarter of 1996. Directors serving on the Executive(*), Audit(+), or
Compensation(#) Committees of the Board of Directors are also so identified:
TABLE 8
NOMINEES FOR DIRECTOR
*+JAMES C. BEARDALL, 56, has been a Director of the Company since 1989 and is
Chairman of the Board's Audit Committee. He is Chairman, President and Chief
Executive Officer of Anderson Lumber Company. At year end 1995, Mr. Beardall
was the beneficial owner of [900] shares of the Company's Common Stock,
including [?] option shares exercisable within 60 days of the Record Date,
but not yet exercised.
*#RODNEY H. BRADY, 63, has been a Director of the Company since 1985. He is
President and Chief Executive Officer of Bonneville International Corporation
(broadcasting, radio and television). Mr. Brady is
-18-
<PAGE>
also a Director of Bergen Brunswig Corporation (pharmaceuticals), Deseret
Mutual Benefit Association (employee benefit insurance) and Management
Training Corporation (operator of training centers). At year end 1995, he
beneficially owned [27,017] shares of the Company's Common Stock, including
[?] option shares exercisable within 60 days of the Record Date, but not
yet exercised.
JAMES E. BRUCE, 75, has been a Director of the Company since 1983. He retired
as Chairman and Chief Executive Officer of Idaho Power Company, and was
formerly a Director of Idaho Power Company and of Albertsons, Inc.
(supermarkets). At year end 1995, Mr. Bruce beneficially owned [11,375]
shares of the Company's Common Stock, including [?] option shares
exercisable within 60 days of the Record Date, but not yet exercised.(7)
*#THOMAS D. DEE II, 75, has been a Director of the Company since 1976, and is
Chairman of the Board's Compensation Committee. He is President of The Dee
Company (investments). At year end 1995, Mr. Dee beneficially owned [67,500]
shares of the Company's Common Stock, including [?] option shares
exercisable within 60 days of the Record Date, but not yet exercised.(1)
*SPENCER F. ECCLES, 61, has been a Director of the Company since 1967. He is
Chairman and Chief Executive Officer of the Company and Chairman of the
Executive Committee and of the Management Committee. Mr. Eccles is a Director
of ZCMI, Anderson Lumber Company, and Union Pacific Corporation; and at year
end 1995, he was the beneficial owner of [1,975,507.641] shares of the
Company's Common Stock (2),(3) (including [593,670] option shares exercisable
within 60 days but not yet exercised and [18,608] shares held in his account
in the Company's Incentive Savings Plan), and 63 shares of the Company's
Preferred Stock.
*MORGAN J. EVANS, 58, has been a director since 1991. He is President and Chief
Operating Officer of the Company and is a member of the Company's Management
Committee. At year end 1995, Mr. Evans was the beneficial owner of [16,375]
shares of the Company's Common Stock, including [?] option shares
exercisable within 60 days of the Record Date, but not yet exercised, and [?]
shares held in his account in the Company's Incentive Savings Plan.(8)
DR. DAVID P. GARDNER, 62, has been a Director of the Company since 1976. He
retired as President of the University of California in 1992, and is presently
President of the William and Flora Hewlett Foundation and Chairman and Chief
Executive Officer of the George S. and Delores Dore Eccles Foundation. Dr.
Gardner is also a Director of Fluor Corporation (construction) and of John Alden
Financial Corporation. At year end 1995, Dr. Gardner beneficially owned [3,350]
shares of the Company's Common Stock, which number includes [1,562] shares held
in a trust established by his deceased spouse as to which Dr. Gardner acts as
trustee, and which number includes [?] option shares exercisable within
60 days of the Record Date, but not yet exercised.(1),(3)
ROBERT H. GARFF, 51, has been a Director of the Company since 1995. He is Chief
Executive Officer of Garff Enterprises, Inc. (management of Garff family
ownership of a number of automobile sale and related enterprises). At year end
1995, Mr. Garff beneficially owned [675] shares of the Company's Common Stock,
including [?] option shares exercisable within 60 days of the Record
Date, but not yet exercised.(6)
DAVID B. HAIGHT, 88, has been a Director of the Company since 1983. He is a
member of the Quorum of the Twelve of The Church of Jesus Christ of Latter-day
Saints, and is a Director of Bonneville International Corporation (broadcasting)
and Huntsman Chemical Corporation (plastics). Elder Haight at year end 1995,
beneficially owned [1,500] shares of the Company's Common Stock, including
[?] option shares exercisable within 60 days of the Record Date, but not yet
exercised.(4) He is the father of Karen H. Huntsman, who also is a Director of
the Company.
JAY DEE HARRIS, 78, has been a Director of the Company since 1975. He is the
President and a Director of Harris Truck and Equipment, Inc. At year end, Mr.
Harris beneficially owned [1,125] shares of the Company's Common Stock,
including [?] option shares exercisable within 60 days of the Record
Date, but not yet exercised.
*+ROBERT T. HEINER, 71, has been a Director of the Company since 1981. He
retired as President and Chief Administrative Officer of the Company. Mr.
Heiner is a Director of [Browning, Inc. (firearms and sporting goods)??????],
and Management Training Corporation (operator of training centers). At year end
1995, Mr. Heiner was the beneficial owner of [25,000] shares of the Company's
Common
-19-
<PAGE>
Stock, including [?] option shares exercisable within 60 days of the
Record Date, but not yet exercised.
KAREN H. HUNTSMAN, 58, has been a Director of the Company since 1992. Since
1982 she has been a Director and Executive Officer of Huntsman Chemical
Corporation. At year end 1995, Mrs. Huntsman beneficially owned [5,000]
shares of the Company's Common Stock, including [?] option shares
exercisable within 60 days of the Record Date, but not yet exercised. Mrs.
Huntsman is the daughter of Elder David B. Haight, also a Director of the
Company.
#G. FRANK JOKLIK, 68, has been a Director of the Company since 1981. Mr.
Joklik is President and Chief Executive Officer of MK Gold Company (gold
exploration and development). He retired as President and Chief Executive
Officer of Kennecott Corporation (mining) in 1994. Mr. Joklik is also a
director of Cleveland Cliffs, Inc., a company engaged in mining and related
businesses, and Chairman of the Board of the Salt Lake Olympic Organizing
Committee. At year end 1995, Mr. Joklik beneficially owned [NO] shares of
the Company's Common Stock, including [?] option shares exercisable within
60 days of the Record Date, but not yet exercised.
+B.Z. KASTLER, 75, has been a Director of the Company since 1979. Mr. Kastler
retired as Chairman, Chief Executive Officer and a Director of Questar
Corporation (integrated oil and gas company). He is a Director of Bonneville
International Corporation (broadcasting). At year end 1995, Mr. Kastler
beneficially owned [3050] shares of the Company's Common Stock, including [?]
option shares exercisable within 60 days of the Record Date, but not yet
exercised.
JOSEPH G. MALOOF, 40, has been a Director of the Company since 1995. Mr.
Maloof is President and Chief Executive Officer of the Maloof Companies of
Albuquerque, New Mexico (diversified operating investments in liquor
distributing, hotels and gaming). At year end 1995, Mr. Maloof beneficially
owned 499,964 shares of the Company's Common Stock, including option
shares exercisable within 60 days of the Record Date, but not yet exercised.
*+SCOTT S. PARKER, 62, has been a Director of the Company since 1985. He is
President of Intermountain Health Care, Inc. (integrated health care
provider). At year end 1995, Mr. Parker beneficially owned
[1,124???? 1,449????] shares of the Company's Common Stock, including [?]
option shares exercisable within 60 days of the Record Date, but not yet
exercised.
#DR. ARTHUR K. SMITH, 58, has been a Director of the Company since 1992. Dr.
Smith is President of the University of Utah. He is a Director of American
Stores Company (retail grocery and drug stores). At year end 1995, Dr. Smith
was the beneficial owner of [400] shares of the Company's Common Stock,
including [?] option shares exercisable within 60 days of the Record Date,
but not yet exercised.
JAMES L. SORENSON, 73, has been a Director of the Company since 1980. He is
Chairman and Chief Executive Officer of Sorenson Development, Inc. (holding
company and investments). At year end 1995, Mr. Sorenson beneficially owned
[NO] shares of the Company's Common Stock, including [?] option shares
exercisable within 60 days of the Record Date, but not yet exercised.
HAROLD J. STEELE, 82, has been a Director of the Company since 1959. He
retired as President of First Security Bank of Utah, and is also a Director
of Anderson Lumber Company. Mr. Steele is married to a cousin of Spencer F.
Eccles. At year end 1995, Mr. Steele beneficially owned [109,583] shares of
the Company's Common Stock, including [?] option shares exercisable within
60 days of the Record Date, but not yet exercised.(5)
(1) A DAUGHTER OF DR. GARDNER IS MARRIED TO A SON OF MR. DEE.
(2) INCLUDES [904413.63] SHARES OF COMMON STOCK AS TO WHICH MR. ECCLES
HAS POWER OF ATTORNEY OR IS TRUSTEE FOR LIVING AND/OR DECEASED FAMILY
MEMBERS AND HAS SHARED VOTING AND INVESTMENT POWERS; BUT DOES NOT
INCLUDE [60,750] SHARES OF THE COMPANY'S COMMON STOCK OWNED BY THE
MARRINER S. ECCLES CHARITABLE TRUST, AS TO WHICH MR. ECCLES SERVES AS
A DIRECTOR AND DISCLAIMS BENEFICIAL OWNERSHIP, DOES NOT INCLUDE
[166,883] SHARES OF THE COMPANY'S COMMON STOCK OWNED BY THE EMMA
ECCLES JONES FOUNDATION, AS TO WHICH MR. ECCLES SERVES AS A TRUSTEE
AND DISCLAIMS BENEFICIAL OWNERSHIP, AND DOES
-20-
<PAGE>
NOT INCLUDE [148,000] SHARES OF THE COMPANY'S COMMON STOCK OWNED BY
THE NORA ECCLES TREADWELL FOUNDATION, AS TO WHICH MR. ECCLES SERVES
AS A DIRECTOR AND DISCLAIMS BENEFICIAL OWNERSHIP.
(3) DOES NOT INCLUDE [1,044,092] SHARES OF THE COMPANY'S COMMON STOCK
HELD OF RECORD BY THE GEORGE S. AND DOLORES DORE ECCLES FOUNDATION AS
TO WHICH MESSRS. ECCLES AND GARDNER SERVE AS DIRECTORS AND DISCLAIM
BENEFICIAL OWNERSHIP.
(4) DOES NOT INCLUDE THE 919,352 SHARES OF THE COMPANY'S COMMON STOCK
OWNED BY THE CORPORATION OF THE PRESIDENT OF THE CHURCH OF JESUS
CHRIST OF LATTER-DAY SAINTS, AS TO WHICH ELDER HAIGHT DISCLAIMS
BENEFICIAL OWNERSHIP.
(5) INCLUDES [96,097] SHARES OF COMMON STOCK OWNED BY MR. STEELE'S SPOUSE
FOR WHICH MR. STEELE HAS VOTING POWER, BUT DOES NOT INCLUDE [60,750]
SHARES OF COMMON STOCK OF THE COMPANY HELD OF RECORD BY THE MARRINER
S. ECCLES CHARITABLE TRUST, OF WHICH MR. STEELE IS A DIRECTOR, AND AS
TO WHICH SHARES MR. STEELE DISCLAIMS BENEFICIAL OWNERSHIP.
(6) MR. GARFF IS THE SON OF KENDALL GARFF, AN HONORARY DIRECTOR OF THE
CORPORATION.
(7) MR. BRUCE HAS INFORMED THE COMPANY THAT HE ACQUIRED AN ADDITIONAL
1000 SHARES OF THE COMPANY'S COMMON STOCK DURING THE FIRST QUARTER OF
1996 WHICH WILL BE ABLE TO BE VOTED AT THE ANNUAL MEETING [SPLIT?????].
(8) MR. EVANS EXERCISED OPTIONS FOR, AND SUBSEQUENTLY SOLD, SHARES OF
THE COMPANY'S COMMON STOCK DURING THE FIRST QUARTER OF 1996, WHICH
REDUCE THE NUMBER OF SHARES HELD AS OF THE END OF THE YEAR AS SHOWN
IN THE BIOGRAPHICAL SECTION ON MR. EVANS.
ITEM NO. 2: PROPOSED INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
Article IV of the Corporation's Certificate of Incorporation currently
authorizes the issuance of 150,000,000 shares of Common Stock with a par
value of $1.25 per share, of which there were __________ shares issued and
outstanding on the Record Date. It is proposed that the authorized common
stock be increased to 300,000,000 shares, with a par value of $1.25 each. The
Certificate of Incorporation also authorizes the issuance of 400,000 shares
of Preferred Stock, 18,052 of which have been designated as Series A
Preferred Stock. There are ______ shares of Series A Preferred Stock
currently issued and outstanding.
In addition to the __________ common shares issued and outstanding,
3,788,931 shares are reserved for exercise of already existing stock options,
conversions of preferred stock, issuances under the Dividend Reinvestment
Plan or the Employee Stock Purchase Plan, or issuance pursuant to existing
agreements for the acquisition of certain designated companies.
The Corporation has had three 3-for-2 stock splits (June 1991, May 1992
and February 1996) which have used a significant number of authorized and
unissued shares. Additionally, the Corporation is continuing its acquisition
strategy and has completed _____ (__) transactions during the period
1990-1996, in which __________ shares of the Corporation's common stock have
been issued. The Corporation has no present plans, agreements or
understandings to issue any of the proposed new authorized Common Stock
except as described elsewhere in this Proxy Statement.
The Board of Directors has unanimously approved an amendment to Article
IV of the Corporation's Certificate of Incorporation to increase the total
authorized common stock of First Security Corporation to 300,000,000 shares.
There would be no change in the authorized preferred stock. All such shares
not heretofore issued and outstanding would be issuable at any time or from
time to time by action of the Board of Directors without further
authorization from the shareholders unless required pursuant to applicable
law or the rules of the National Association of Securities Dealers NASDAQ
National Market System. Each holder of a Common Stock would continue to be
entitled to one vote in respect of each share. As in the past, no holder of
Common Stock has preemptive rights.
The Directors believe it is desirable to increase the number of
authorized shares of Common Stock. This action will provide the Corporation
with flexibility in the future by assuring that there
-21-
<PAGE>
will be sufficient authorized but unissued Common Stock available for
possible stock splits, stock dividends, acquisitions, financing requirements,
and other corporate purposes without the necessity of further shareholder
action at any special or annual meeting.
The Directors do not presently intend to secure any further approval
from the shareholders prior to authorizing or issuing such Common Stock, except
for such approval as required by the NASDAQ National Market System or other
applicable rules or laws.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ADOPTION OF
THE AMENDMENT TO ARTICLE IV OF THE CERTIFICATE OF INCORPORATION AUTHORIZING THE
INCREASE IN THE AUTHORIZED SHARES OF THE CORPORATION.
OTHER BUSINESS
Management does not know of any other business to be presented at the
Meeting. However, if any other business is presented, it is the intention of
the Proxies to vote according to their best judgment with respect to such other
business.
The Company's Annual Report to Shareholders is being sent to you
together with this Proxy Statement. This report includes the Company's
financial statements and the schedules thereto. Any questions regarding the
Annual Report, including a request for the copy that may not have arrived with
this Proxy Statement, may be directed to Scott C. Ulbrich, Executive Vice
President and Chief Financial Officer, P.O. Box 30006, Salt Lake City, Utah
84130.
DEADLINE FOR SHAREHOLDER PROPOSALS
If any Shareholder wishes to present a proposal for action at the 1997
ANNUAL MEETING of the Shareholders, the Shareholder must comply with applicable
Securities and Exchange Commission Regulations, including adequate notice to the
Company. Any proposal must be submitted in writing by Certified Mail -- Return
Receipt Requested, to First Security Corporation, Attention: Secretary of the
Company, 79 South Main Street, Salt Lake City, Utah 84111, on or before
December 31, 1996.
-22-
<PAGE>
FIRST SECURITY CORPORATION PROXY DESIGNATION THIS PROXY
79 SOUTH MAIN STREET AND INSTRUCTION CARD DESIGNATION
SALT LAKE CITY, UTAH 84111 AND INSTRUCTION
IS SOLICITED BY
YOUR BOARD OF
DIRECTORS
The undersigned shareholder of First Security Corporation hereby
appoints SPENCER F. ECCLES, MORGAN J. EVANS and BRAD D. HARDY, or any one or
more of them severally or jointly with full power of substitution, the
attorneys and agents of the undersigned to vote as proxy with respect to all
shares registered in the name of the undersigned, or which the undersigned
would be entitled to vote, at the Annual Meeting of the Shareholders of First
Security Corporation to be held at the Empire Room of the Joseph Smith
Memorial Building 15 E South Temple, Salt Lake City, Salt Lake County, Utah,
on Monday the 22nd day of April, 1996 at 3:00 p.m. and at all adjournments
thereof, provided however, that such vote shall be specified below on the
proposals more fully set forth in the First Security Corporation Proxy
Statement.
1. ELECTION OF DIRECTORS
FOR all Nominees listed below, WITHOLD AUTHORITY from all
(except as marked to the contrary below) nominees listed below
IMPORTANT
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
James C. Beardall Dr. David P. Gardner G. Frank Joklik
Rodney H. Brady Robert H. Garff B.Z.Kastler
James. E. Bruce David B. Haight Joseph G. Maloof
Thomas D. Dee II Jay Dee Harris Scott S. Parker
Spencer F. Eccles Robert T. Heiner Dr. Arthur K. Smith
Morgan J. Evans Karen H. Huntsman James L. Sorenson
Harold J. Steele
FOR AGAINST
2. INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
TO 300,000,000.
FOR AGAINST
(continued and to be SIGNED on the other side)
-23-
<PAGE>
THE SHARES INDICATED ON THIS PROXY INSTRUCTION CARD, WHEN THIS CARD IS PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS MADE ON THE PROXY CARD, THESE SHARES WILL BE
VOTED FOR ALL OF THE LISTED NOMINEES FOR DIRECTORS AND FOR ALL PROPOSALS.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN The undersigned
THIS PROXY INSTRUCTION CARD PROMPTLY acknowledges receipt of
USING THE ENCLOSED ENVELOPE. the Proxy Statement and
the 1995 Annual Report,
and executes this Proxy
Instruction card.
Dated______________, 1996
--------------------------
Signature of Shareholder
-------------------------- Signature of Shareholder
NOTE: (a) Proxy instruction cards for shares registered
in the names of joint tenants must be signed
by each of the joint owners or by the
survivor of them as such.
(b) When signing as attorney, executor,
administrator or guardian, please give
your full title as such.
(c) Proxy instruction cards for shares registered in the names of
trustees must be signed by
all trustees or by one trustee as co-trustee
for self and other trustees.
-24-
