SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant | |
Check the appropriate box:
|X| Preliminary Proxy Statement
| | Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
FIRST SECURITY CORPORATION
(Name of Registrant as Specified In Its Charter)
(same)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
| | $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
| | $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies: 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:(1) n/a
4) Proposed maximum aggregate value of transaction:
------------------
(1)Set forth the amount on which the filing fee is calculated and state how it
was determined.
| | 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>
FIRST SECURITY CORPORATION
79 South Main Street
Salt Lake City, Utah 84111
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held Monday, April 27, 1998 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 27 1998, 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 300,000,000 shares to a new level of
600,000,000 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 9, 1998, 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 1998 Annual Meeting. In accordance with
Delaware law, a list of the Company's Shareholders entitled to vote at the 1998
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 1998 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 is 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 resolict the Shareholders for a new Meeting date.
Sent to you with this Notice and the accompanying Proxy Statement is
the Company's 1997 Annual Report to Shareholders, which contains the audited
financial statements of the Company and certain other information about the
Company and its 1997 operating results.
BY ORDER OF THE BOARD OF DIRECTORS
Dated: March 15, 1998
/s/ BRAD D. HARDY
-------------------------------
BRAD D. HARDY
Executive Vice President, General
Counsel and Secretary of the Company
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PROXY STATEMENT
March 15, 1998
TABLE OF CONTENTS
Page
GENERAL INFORMATION FOR SHAREHOLDERS........................................ 1
LAST YEAR'S (April 21, 1997) ANNUAL MEETING................................. 4
INDEPENDENT AUDITORS........................................................ 4
MANAGEMENT OF THE COMPANY................................................... 4
Board of Directors................................................. 4
Executive Officers................................................. 5
COMPENSATION OF MANAGEMENT.................................................. 7
Director Compensation.............................................. 7
Summary of Compensation To Certain Executive Officers.............. 9
Company Contributions to Employee Savings
Plan and Salary Deferral Agreements.................................9
Stock Options and Similar Awards to Management.....................10
Retirement Benefits................................................12
Compensation Committee Report on Executive Compensation............12
Compensation Committee Interlocks and Insider Participation........14
CERTAIN TRANSACTIONS BY AND WITH MANAGEMENT AND OTHERS......................15
Directors' and Officers' Liability Insurance.......................15
Credit Extensions..................................................15
Compliance with Section 16 Reporting Obligations...................15
Employment Agreements..............................................16
PRINCIPAL SHAREHOLDERS......................................................16
COMPARATIVE PERFORMANCE OF THE COMPANY'S COMMON STOCK.......................17
PROPOSALS FOR SHAREHOLDER ACTION............................................19
1.Election of Directors............................................19
2.Proposed Increase in the number of authorized shares.............22
OTHER BUSINESS..............................................................2?
DEADLINE FOR SHAREHOLDER PROPOSALS..........................................2?
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 27, 1998 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 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.
1
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Voting Securities
The Board of Directors has fixed the close of business on March 9, 1998
as the Record Date for determination of shareholders entitled to notice of and
to vote at the 1998 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. All share numbers and all
other share numbers used in this Proxy Statement, reflect the three-for-two
stock split effected by means of a stock dividend of one new share for each two
shares held as of February 12, 1998.
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 $19.75 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; and, in the discretion of the
designated Proxy holders, as to any other matters that 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 (a) by notifying the
Secretary of the Company in writing prior to 3:00 p.m. M.S.T. on April 27, 1998,
(b) by signing and dating a later Proxy and submitting the new Proxy in time to
be counted for the Annual Meeting, or (c) by attending the Annual Meeting and
voting contrary to the submitted Proxy at the time votes are requested.
2
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A Shareholder may designate someone other than the designated person(s)
named on the Proxy Card as his authorized agent to vote at the 1998 Annual
Meeting, by crossing out the names of all of the designated person(s) printed on
the Proxy Card and by writing in the name of another person or persons (not more
than two) to act as agent for the Shareholder in voting his shares. Such a
special designation signed by the Shareholder(s) must be presented at the Annual
Meeting by the person or persons 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 that
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 1998
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 16, 1998. Mailed together with this Proxy
Statement is a copy of the Company's 1997 Annual Report to Shareholders.
Shareholders who do not receive a copy of the 1997 Annual Report with this Proxy
Statement, or who desire extra copies, should contact the Company at (801)
246-5048.
Votes Required For Action to be Taken at the 1998 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 twenty (20) nominees receiving the
highest number of votes cast in their favor will be elected as the Board of
Directors of the Company for the 1998-99 period until the 1999 Annual
Shareholders' Meeting. Accordingly, abstentions and broker non-votes will not
affect the outcome of the election of Directors. In voting on the proposed
amenment to the certificate of incorporation to increase number of authorized
common shares, a Majority of the shareholders present at the meeting must vote
in favor of the plan. Abstentions and broker non-votes will have the effect of a
"no" vote.
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.
3
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LAST YEAR'S (April 21, 1997) ANNUAL MEETING
The 1997 Annual Meeting of the Shareholders was held on April 21, 1997
in Salt Lake City, Utah. There were ##,###,### shares of Common Stock and #,###
shares of Preferred Stock represented at the 1997 Annual Meeting in person or by
proxy, which shares constituted a legal quorum. Each of the nominees to the
Board of Directors presented to the 1997 Annual Meeting was voted upon
separately, and each was elected by the affirmative vote of more than ##% of the
shares present and voting. The proposal for shareholder action set out in last
year's Proxy Statement was also approved by the vote of more than ##% of the
shares present and voting at the 1997 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 1998 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 seven
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 1998 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, at year end the current Directors of the
company (including any new nominees to be voted on for the first time at the
1998 Annual Meeting) beneficially owned as a group ___________ shares, or
approximately ____% of the Company's outstanding Common Stock, including
#,###.### option shares exercisable within 60 days but which were unexercised,
and including ___________ shares beneficially owned by Dr. Chase Peterson,the
Company's Honorary Director,and ______ stock equivalency units held in his
deferred compensation account. All share numbers, and all other share numbers
used in this Proxy statement, reflect the three-for-two stock split effected by
means of a stock dividend of one new share for each two shares held as of
February 12, 1998.
The Board of Directors held four (4) meetings during 1997. All
Directors attended all of the Board meetings except Messrs. Evans, Parker and
Mrs. Huntsman, who each attended three (3) of the meetings, and Mr. Maloof, who
attended two (2) of the meetings.
4
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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 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 1997. Messrs. Brady,
Eccles and Heiner attended all of the meetings; Messrs. Beardall, Dee attended
eleven; Mr. Evans attended ten; and Mr. Parker attended eight.
The Audit Committee of the Board, which met four (4) times during 1997,
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, except Mr. Parker who attended three (3) of the 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. Caughlin, Eccles,
Evans, Hardy, Howell, McMurray, Nelson and Ulbrich). The Compensation Committee
met three times during 1997. All members of the Committee attended all of these
meetings except Dr. Smith, who attended two (2) of the meetings.
The Nominating Committee selects and nominates candidates to fill
vacancies on the Board of Directors and proposes these nominees to the Board of
Directors and to the Shareholders. This Committee is willing to consider
nominees for future election to the Board of Directors, and Shareholders may
submit in writing the names and qualifications of proposed nominees to the
Secretary of the Company. The Nominating Committee meets as needed. The
membership in the Nominating Committee is the same as for the Executive
Committee. The Nominating Committee met for the first time in January, 1998.
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 Dr. Chase N. Petersen is serving as Honorary Director of the
Company. He beneficially owned 758 shares, respectively, of the Company's Common
Stock at year-end 1997.
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,
1997) 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
All share numbers, and all other share numbers used in this Proxy
statement, reflect the three-for-two stock split effected by means of a stock
dividend of one new share for each two shares held as of February 12, 1998.
Jay S. Bachman, 47, is a Senior Vice President for the Company. Previously Mr.
Bachman held the title of Treasurer. At year-end 1997, Mr. Bachman was the
beneficial owner of 37,895 shares of Common Stock, including 31,060 option
shares exercisable within 60 days, but not yet exercised, 4,231 shares held in
his account in the Company's Incentive Savings Plan and 504 stock equivalency
units held in his deferred compensation account.
Michael S. Caughlin, 44, is Executive Vice President-Technology and Processing
Services of the Company, member of the Company's Management Committee and is a
Director of First Security Bank, N.A. At year-end 1997, Mr. Caughlin
beneficially owned 78,312 shares of Common Stock, including 7,261 option shares
exercisable within 60 days, but not yet exercised, and 0 stock equivalency units
held in his deferred compensation account.
David R. Golden, 40, is Executive Vice President of Risk Management of the
Company. Previously, Mr. Golden was a Vice President and Manager of
Administration of First Security Bank of Utah, N.A. At year-end 1997, Mr. Golden
beneficially owned 8,073 shares of Common Stock, including 4,500 option shares
exercisable within 60 days, but not yet exercised, and 3573 shares held by him
in the Company's Incentive Savings Plan and 0 stock equivalency units held in
his deferred compensation account.
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Brad D. Hardy, 43, is Executive Vice President-Corporate Services, General
Counsel, Secretary of the Company, member of the Company's Management Committee
and a Director of First Security Bank, N.A. Previously, Mr. Hardy was a
shareholder and Director of Ray, Quinney & Nebeker (law firm). At year-end 1997,
Mr. Hardy beneficially owned 67,344 shares of Common Stock, including 64,998
option shares exercisable within 60 days, but not yet exercised, and 1,395
shares held by him in the Company's Incentive Savings Plan and ### stock
equivalency units held in his deferred compensation account.
Mark D. Howell, 44, is Executive Vice President-Business Lending Services of the
Company, member of the Company's Management Committee and a Director of First
Security Bank, N.A. At year-end 1997, Mr. Howell beneficially owned 145,933
shares of Common Stock, including 140,314 option shares exercisable within 60
days, but not yet exercised, and 5,005 shares held in his account in the
Company's Incentive Savings Plan and 613 stock equivalency units held in his
deferred compensation account. These share numbers do not include 17,922 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.
Kelly K. Matthews, 52, is Executive Vice President (Economist). At year-end
1997, Mr. Matthews was the beneficial owner of 39,307 shares of Common Stock,
including 31,069 option shares exercisable within 60 days, but not yet
exercised, and 28,294 shares held in his account in the Company's Incentive
Savings Plan and 0 stock equivalency units held in his deferred compensation
account.
J. Patrick McMurray, 49, is Executive Vice President-Community Banking Services
of the Company, and also serves as President and Chief Executive Officer of
First Security of Idaho, as Chairman of First Security Bank of Nevada , and as a
member of the Company's Management Committee. At year-end 1997, he was the
beneficial owner of 385,985 shares of Common Stock, including 324,628 option
shares exercisable within sixty days of the Record Date, but not yet exercised,
and 28,834 shares held in his account in the Company's Incentive Savings Plan
(401K) and 0 stock equivalency units held in his deferred compensation account.
This number of shares is approximately ##% of the total outstanding shares of
Common Stock at the Record Date.
L. Scott Nelson, 58, is Executive Vice President-Retail Lending Services of the
Company, and also serves as Chairman of First Security Bank, N.A. and of First
Security Bank of New Mexico, N.A., and as a member of the Company's Management
Committee. At year-end 1997, he was the beneficial owner of 629,609 shares of
Common Stock including certain shares held by Mr. Nelson's spouse in her own
name, and including 596,538 option shares exercisable within 60 days, but not
yet exercised, and 11,748 shares held in his account in the Company's Incentive
Savings Plan and 0 stock equivalency units held in his deferred compensation
account. This total number of shares is approximately 0.4% of the total
outstanding shares of Common Stock at the Record Date.
Leslie F. Paskett, 52, is Senior Vice President and Comptroller. At year-end
1997, he was the beneficial owner of 74,840 shares of Common Stock, including
62,077 option shares exercisable within 60 days, but not yet exercised, and
8,170 shares held in his account in the Company's Incentive Savings Plan and 211
stock equivalency units held in his deferred compensation account.
Dennis G. Reeves, 57, is Senior Vice President and Chief Auditor of the Company.
At year-end 1997, Mr. Reeves was the beneficial owner of 19,695 shares of Common
Stock, including 16,866 option shares exercisable within 60 days, but not yet
exercised, and 1311 shares held in his account in the Company's Incentive
Savings Plan and 168 stock equivalency units held in his deferred compensation
account.
Scott C. Ulbrich, 42, is Executive Vice President-Finance and Capital Markets,
is Chief Financial Officer of the Company, member of the Company's Management
Committee and is a Director and Cashier of First Security Bank N.A. At year-end
1997, he was the beneficial owner of 203,256 shares of Common Stock, including
189,569 option shares exercisable within 60 days, but not yet exercised, and
2,158 shares held in his account in the Company's Incentive Savings Plan and 0
stock equivalency units held in his deferred compensation account.
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Alonzo W. Watson, Jr., 74, is Assistant Secretary of the Company, and is a
shareholder and Director of Ray, Quinney & Nebeker (law firm). At year-end 1997,
he was the beneficial owner of 2,216.90 shares of Common Stock, which does not
include ________ 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 1,566,137 shares held by the George S. and Dolores Dore Eccles
Foundation, of which Mr. Watson is a director; does not include 91,175 shares
held by the Marriner S. Eccles Charitable Trust, of which Mr. Watson is an
Advisory Director; and does not include 222,000 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. Mr. Watson held
_____ stock equivalency units in his deferred compensation account.
David R. Wilson, 57, is an Executive Vice President of the Company's Capital
Markets and Treasury operations. At year-end 1997, he was the beneficial owner
of 99,563 shares of Common Stock including 86,551 option shares exercisable
within 60 days, but not yet exercised, and 8097 shares held in his account in
the Company's Incentive Savings Plan and 1,513 stock equivalency units held in
his deferred compensation account.
Based on their disclosed share holdings at December 31, 1997, 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 1,789,789 shares
subject to unexercised options exercisable within 60 days), ________ shares held
in accounts in the Company's Incentive Savings Plan, and _____ shares, or
approximately ____%, of the Company's Preferred Stock, and _______ stock
equivalency units held in their deferred compensation account, or approximately
__% or the Company's Common Stock.
COMPENSATION OF MANAGEMENT
Director Compensation
Cash Compensation. During 1997, 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 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.
7
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Additional per meeting fees of $1,000 were paid in 1997 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. 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,
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.
Once vested, lifetime transfers of options are allowed, subject to
approval of legal counsel to the Company; options are transferred by will or
laws of descent and distribution.
8
<PAGE>
The exercise price per share of an Option will be equal to the fair
market value per share of Common Stock on 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 earned during 1997 and during the previous two
years by the Company's Chief Executive Officer and the next five highest paid
Executive Officers (whose compensation for each year was determined for this
purpose on the same basis as for the Chief Executive Officer):
All share numbers, and all other share numbers used in this Proxy
statement, reflect the three-for-two stock split effected by means of a stock
dividend of one new share for each two shares held as of February 12, 1998.
<TABLE>
<CAPTION>
Table 2
Summary Compensation Table
=========================================================================== ====================================================
ANNUAL COMPENSATION LONG-TERM COMPENSATION
AWARDS
=========================================================================== ====================================================
- ------------------------------------- --------- ------------- ------------- ------------------ ------------ ====================
Name and Year Salary(1) Bonus(2) Restricted Options/ All Other
Principal Position ($) ($) Stock SARs(3) Compensation(4)
Award(s) (#) ($)
($)
- ------------------------------------- --------- ------------- ------------- ------------------ ------------ ====================
<S> <C> <C> <C> <C> <C> <C>
Spencer F. Eccles, 1997 550,015 218,858 -0- 106,704 8,655
Chairman and Chief Executive Officer 1996 539,215 165,105 -0- 152,496 12,057
1995 543,715 162,785 -0- -0- 33,437
- ------------------------------------- --------- ------------- ------------- ------------------ ------------ ====================
Morgan J. Evans, President and 1997 435,301 133,563 -0- 84,240 19,532
Chief Operating Officer 1996 409,451 102,259 -0- 107,856 19,890
1995 382,901 98,724 -0- -0- 29,679
- ------------------------------------- --------- ------------- ------------- ------------------ ------------ ====================
L. Scott Nelson, 1997 320,206 98,751 -0- 61,632 15,665
Executive Vice President-Retail 1996 308,456 96,582 -0- 58,896 15,318
Lending Services 1995 297,006 99,438 -0- -0- 15,496
- ------------------------------------- --------- ------------- ------------- ------------------ ------------ ====================
J. Patrick McMurray, 1997 278,917 85,944 -0- 61,632 15,344
Executive Vice President-Community 1996 266,117 79,816 -0- 42,336 20,251
Bank Services 1995 251,417 68,665 -0- -0- 13,654
- ------------------------------------- --------- ------------- ------------- ------------------ ------------ ====================
Brad D. Hardy, 1997 219,450 74,379 -0- 61,632 12,817
Executive Vice President- 1996 204,250 77,554 -0- 31,680 7,501
Corporate Services, and General 1995 95,000 43,783 -0- 33,750 2,855
Counsel
- ------------------------------------- --------- ------------- ------------- ------------------ ------------ ====================
Scott C. Ulbrich, 1997 219,450 74,679 -0- 61,632 12,513
Executive Vice President- 1996 204,260 72,103 -0- 31,680 9,642
Finance and Capital Markets, and 1995 190,010 69,765 -0- -0- 7,884
Chief Financial Officer
- ------------------------------------- --------- ------------- ------------- ------------------ ------------ ====================
</TABLE>
(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) The Company has never issued SARs to Executive Officers.
(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.
Company Contributions to Employee Savings Plan and Salary Deferral Agreements.
Executive Officers, together with all full time employees of the
Company, are permitted to participate in the Incentive Savings Plan, whereby a
portion of an employee's compensation may be contributed on a pre-tax basis to a
investment account in the employee's name, and that account can be invested at
the direction of the employee into one of several investment funds, including a
9
<PAGE>
First Security Stock Fund composed of the Company's common stock and other
Company securities. The Company contributes an amount equal to 50% of the
participating employee's contribution to the plan, up to a maximum of 3% of
compensation. The employer contribution is separately invested for the
employee's benefit in an Employee Stock Ownership Plan (ESOP) which is a part of
the Incentive Savings Plan.
Executive Officers also may enter into a compensation deferral
agreement with the Company, separate and apart from the Incentive Savings Plan
described above, 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. 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 (less any employer
contribution to the Executive Officer's Incentive Savings Plan). 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, 1997, the named Executive Officers had the following
balances in their deferred income accounts: Mr. Eccles, $0.00; Mr. Evans, $00;
Mr. Nelson, $00; Mr. McMurray, $00; Mr. Hardy, $00 and Mr. Ulbrich, $00.
Stock Options and Similar Awards To Management
The following two tables provide information concerning the stock
options and similar awards provided to the Executive Officers listed in Table 2
during 1997 (Table 3) and exercises of stock options and similar awards by these
listed Executive Officers during 1997 (Table 4):
All share numbers, and all other share numbers used in this Proxy
statement, reflect the three-for-two stock split effected by means of a stock
dividend of one new share for each two shares held as of February 12, 1998.
<TABLE>
<CAPTION>
Table 3
Options Granted to Certain Executive Officers During 1997
================================================================================================================================
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------------------================================
% of
Total
Options/SARs Black-
Options/SARs Granted to Exercise Scholes
Granted All Employees Base Price Expiration Method Grant
Name (#)(1) in Fiscal Year ($/Sh) (2) Date Date Value(3)($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Spencer F. Eccles 106,704 7.2 14.38 01/27/07 877,107
- --------------------------------------------------------------------------------------------------------------------------------
Morgan J. Evans 84,240 5.6 14.38 01/27/07 692,453
- --------------------------------------------------------------------------------------------------------------------------------
L. Scott Nelson 61,632 4.1 14.38 01/27/07 506,615
- --------------------------------------------------------------------------------------------------------------------------------
J. Patrick McMurray 61,632 4.1 14.38 01/27/07 506,615
- --------------------------------------------------------------------------------------------------------------------------------
Brad D. Hardy 61,632 4.1 14.38 01/27/07 506,615
- --------------------------------------------------------------------------------------------------------------------------------
Scott C. Ulbrich 61,632 4.1 14.38 01/27/07 506,615
================================================================================================================================
</TABLE>
(1) The Company has never issued SARs to Executive Officers. Options granted in
1997 vest in four equal increments on January 15 of 1998, 1999, 2000 and
2001.
(2) The 1997 Options were awarded by the Compensation Committee on January
27, 1997. The exercise price is the "last sale" price quotation for the
Company's common stock on the last business day prior to the date of grant.
(3) The Black-Scholes model assumes (a) stock volatility of 0.3727; (b) a
risk-free interest rate of 6.56%; (c) a dividend yield of 3.4%; (d) a full
10-year term; and (e) no discount for the risk of forfeiture or
restrictions on transferability.
10
<PAGE>
<TABLE>
<CAPTION>
Table 4
Options Exercised by Certain Executive Officers During 1997
and Year-End Options Values
================================================================================================================================
VALUE OF UNEXERCISED
UNEXERCISED SHARE OPTIONS IN-THE-MONEY SHARE OPTIONS
- --------------------------------------------------------------------------------------------------------------------------------
Shares
Acquired on
Name Exercise Value Realized Exercised Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Spencer F. Eccles 160,607 2,548,426 1,739,780 362,448 ($)40,217,926 ($)6,175,660
- --------------------------------------------------------------------------------------------------------------------------------
Morgan J. Evans 71,153 804,086 550,873 239,652 12,091,977 3,961,981
- --------------------------------------------------------------------------------------------------------------------------------
L. Scott Nelson 88,846 1,201,094 524,284 167,148 11,799,047 2,800,327
- --------------------------------------------------------------------------------------------------------------------------------
J. Patrick McMurray 0 0 261,970 146,790 5,642,950 2,439,142
- --------------------------------------------------------------------------------------------------------------------------------
Brad D. Hardy 0 0 41,670 85,392 788,247 1,211,924
- --------------------------------------------------------------------------------------------------------------------------------
Scott C. Ulbrich 15,187 182,875 144,965 116,226 3,115,190 1,847,025
================================================================================================================================
</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"). 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, shares of "Restricted Stock" may be granted to
employees of the Company and its subsidiaries, including the six (6) Executive
Officers named in Table 2, above. Shares of Restricted Stock have been awarded
to Executive Officers of the Company in the past under the CMIP and its
predecessor plans. As of December 31, 1997, Messrs. Eccles, Evans, Nelson,
McMurray, Hardy and Ulbrich held no shares of Restricted Stock.
11
<PAGE>
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 that 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 that 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>
<CAPTION>
Table 5
Pension Plan Table
====================================== ================== =================== ==============================================
Final Average Earnings 15 Years of 20 Years of 24 or More Years of Service
Service 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 1997 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: 38 years
for Mr. Eccles, 39 years for Mr. Evans, 34 years for Mr. Nelson, 42 years for
Mr. McMurray, 23 years for Mr. Hardy, and 35 years for Mr. Ulbrich.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors currently consists
of four 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 six named officers in Table 2, above. The Committee met on
December 16, 1997 and January 26, 1998 to discuss and adopt resolutions
affecting base salary and both short-term and long-term incentive compensation
for these Executive Officers.
To the Shareholders of First Security Corporation:
The Compensation Committee annually reviews the elements of
compensation for the Executive Officers of the Company who are members
of the Company's Management Committee, and sets the level of
compensation for these Executive Officers. The Committee is provided
with detailed information and proposals from independent compensation
consultants as well as from internal compensation specialists. The
Committee's decisions are made within the context of a uniform
structure and set of compensation principles which apply to all of the
Company's executives, including the Executive Officers subject to the
Committee's review.
Chief among these principles is that First Security will
provide total compensation opportunities that are competitive with
those provided by comparable financial institutions and commensurate
with First Security's overall performance. The three main elements of
the compensation package are base salary, short-term (annual)
incentives, and long-term incentives. Total compensation for Executive
Officers can be described as consisting of an average or below-average
base salary, an average annual cash incentive opportunity based on
performance, and an above-average long-term equity-based incentive
opportunity tied to increases in Shareholder value. The Committee
believes that this compensation mix is in the best interests of the
Shareholders and supports the business and financial objectives of the
Company.
12
<PAGE>
BASE SALARY. Executive Officer base salaries at First Security are
managed using a structured approach. Each year, the Company
participates in formal third-party compensation surveys that provide
compensation statistics from over 100 financial institutions, both
independent and affiliated, nationwide. Salary data from these surveys
are carefully matched by position and adjusted for institutional size,
or other appropriate scope measurement, to provide a reliable measure
of median executive officer salaries for comparable positions at
comparable financial institutions. These market median salaries are
used to establish salary ranges within which the Company's Executive
Officers' base salaries may be periodically increased based on
considerations of performance, experience, and internal equity.
(Participants in the two market surveys relied upon most heavily by the
Company typically include all, or nearly all, of the companies
represented in the KBW index that is used in the cumulative stock
performance comparison shown in Table 7, below.)
The base salary for each Executive Officer is allowed to vary
only within a 23% range determined by the appropriate market median
salary for his/her position. One of the Company's key salary
administration policies is that the market median represents the
maximum base salary that any Executive Officer can be paid. The
Committee believes it is necessary to maintain salaries within the
designated ranges through periods of both strong and weak corporate
performance if the Company is to attract and retain top quality
executives. In times of excellent corporate performance, Executive
Officers may receive substantial supplemental rewards through the
short-term and long-term incentives.
Chief Executive Officer Salary Action. In the January 27, 1998
meeting, the Committee approved an increase in Mr. Eccles'
base salary of 9.1%, to become effective April 1, 1998. The
Committee considered the general financial performance of the
Company and the ongoing success of the Project VISION
initiatives in determining this increase. Mr. Eccles new
salary is well below the appropriate market median as
determined by internal compensation specialists.
Other Named Executive Officers. The other five Executive
Officers named in Table 2 received increases averaging 5.5%,
also effective April 1, 1998. These increases were based on an
examination of incumbents' current salaries relative to their
salary-range midpoints and our judgment of these Executive
Officers' contributions and worth to the Company.
SHORT-TERM INCENTIVES. All the named Executive Officers participate in
the Management Annual Cash Incentive Bonus Plan (MACIBP), which pays
the named Executive Officers for the achievement pre-set corporate
goals. In 1997, these corporate objectives comprised growth in the
Company's net income and performance relative to a peer group for the
Company's return on average assets (ROAA) and total shareholder return
(TSR).
After review and discussion on the merits of the existing
plan, the Committee has approved the continuation of MACIBP in 1998,
with the following changes.
Growth in earnings per share (EPS) replaces total shareholder
return (TSR). After reviewing a year's experience with TSR,
the Committee is not convinced that any method of calculating
TSR provides a reliable and incentive-worthy performance
indicator. Additionally, the accurate measurement and tracking
of TSR relative to a broad peer group is difficult and
administratively burdensome. The Committee believes that using
EPS, relative to the peer group, will capture the Executive
Officers' greatest controllable influence on Shareholder
return while providing a more stable, easily monitored
measurement.
13
<PAGE>
A broader peer group will be used for the relative
measurements, ROAA and EPS. The Committee believes that an
improved measurement of relative performance will attained by
including a greater number of large banking companies in the
peer group. Consequently, the companies in the KBW index,
which are already utilized in the cumulative stock performance
comparison (Table 7, below) and which collectively provide
much of the market data used for compensation comparisons,
will now be used as the peer group for the MACIBP relative
performance measurements. Threshold and Target performance
goals for 1998 have been established as the 40th and 60th
percentiles, respectively, of the peer group result.
As in recent years, Target performance for net income will
represent full achievement of the annual business plan, Threshold
performance is set at 90% of target. Except with specific approval by
the Compensation Committee, no bonus will be paid in any category for
performance which is below threshold.
Chief Executive Officer Bonus. Mr. Eccles is eligible to
receive a bonus of up to 75% of his salary-range midpoint for
outstanding performance under the MACIBP. Mr. Eccles' bonus is
based entirely on the Company's results in the 1997 corporate
performance categories outlined above. In 1997 the Company's
performance for both net income and ROAA fell between the
threshold and target objectives established by this Committee,
while the result for TSR was above the target objective but
less than the maximum.
Accordingly, Mr. Eccles' earned a 1997 bonus equal to 47.1% of
his maximum bonus opportunity, the bonus amount begin entirely
determined by the relationship of the performance results to
the performance targets as stipulated by the terms of the
MACIBP.
Other Named Executive Officers. The other named Executive
Officers were eligible in 1997 to earn bonuses of up to 65% of
their salary-range midpoints for outstanding performance under
MACIBP, with the bonus amounts being entirely determined by
the Company's results in the 1997 corporate performance
categories outlined above. These five named Executive Officers
earned bonuses equal to 47.5% of their maximum bonus
opportunities.
LONG-TERM INCENTIVES. On January 26,1998 the Committee awarded
Non-Statutory Stock Options (NSO's) as the only long-term incentive
award for Executive Officers. The Company has made these awards to a
group comprising all Executive Officers and up to 85 other key
executives every year since 1987, with the exception of 1995. The
Committee determines the number of NSO's to be granted to this group
under the terms of the Comprehensive Management Incentive Plan (CMIP).
The size of these awards is determined by: 1) using information
obtained from compensation surveys of comparable financial institutions
to assign relative award levels between the different grades, or
groups; 2) obtaining an approximate value for each option share awarded
using the Black-Scholes model; and 3) adjusting the total number of
options awarded until the total direct compensation (salary, bonus, and
options) of this entire group approaches the 60th percentile of the
appropriate market comparison group.
Broad-Based Awards. In both 1996 and 1997 the Committee has granted
small NSO awards, consisting of 512 option-shares, to an additional
group of key employees as identified by Management. In 1996 this group
comprised about 75 additional employees; in 1997, there were about 300
recipients. For 1998, these awards have been extended to approximately
650 employees. We remain convinced that it is in the Company's best
interest to expand the influence of equity-based compensation to valued
contributors in management, sales and staff positions. We fully expect
returns in the form of team building, motivation, and retention to far
outweigh the cost of these awards.
Repricing of Options. The Company has never repriced options.
The Compensation Committee has no such intention at this time.
/s/ Thomas D. Dee II, Chair
/s/ Rodney H. Brady
/s/ James Wilson
/s/ G. Frank Joklik
Compensation Committee Interlocks and Insider Participation
Messrs. Wilson and Brady, members of the Company's Board of Directors'
Compensation Committee, through companies with whom each of these Directors is
affiliated, had borrowing and other credit transactions with one or more of the
Company's subsidiary banks during 1997. The terms of each of these transactions
14
<PAGE>
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. Brady (or his affiliates) had credit extensions and/or credit
commitments during 1997 of approximately $45,000,000; Mr. J. Wilson (or his
affiliates) had credit extensions and/or credit commitments during 1997 of
approximately $15,000,000.
CERTAIN TRANSACTIONS BY AND WITH MANAGEMENT AND OTHERS
Directors' and Officers' Liability Insurance
The Company has purchased directors' and officers' liability insurance,
including corporate reimbursement, on behalf of the Directors and Officers of
the Company, as well as the officers' and directors of the Company's
subsidiaries. The policy was effective on September 30, 1997 and expires on
September 30, 1998, was purchased from Executive Risk Indemnity Company, Inc.
Management believes the premium expense for this policy to be worth the
protection afforded to its officers and directors.
This policy will indemnify, Officers and Directors of the Company in
connection with claims made against them by third parties, including certain
claims by Shareholders'.
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 1997, 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. Caughlin, Evans, Hardy, Howell, Matthews, McMurray,
Peterson, Reeves, Ulbrich and D. Wilson (or their affiliates) had credit
extensions and/or credit commitments during 1997 in excess of $60,000 but less
than $500,000; Messrs. Garff, Kastler, Maloof and Watson (or their affiliates)
had credit extensions and/or credit commitments during 1997 of $500,000 or more
but not in excess of $10,000,000; Messrs. Harris, J. Wilson and Parker (or their
affiliates) had credit extensions and/or credit commitments during 1997 of
$10,000,000 or more but less than $20,000,000; Messrs. Brady, Heiner, and Smith
(or their affiliates) had credit extensions and/or credit commitments during
1997 of $20,000,000 or more but less than $50,000,000; and Mrs. Huntsman, Mr.
Beardall, Mr. Eccles, Mr. Steele and Mr. Garff (or their affiliates) had credit
extensions and/or credit commitments during 1997 of $50,000,000 or more but less
than $100,000,000. None of these outstanding loans or credit commitments are in
default, and all are current in all respects as of the date of this Proxy
Statement. 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.
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 1997.
15
<PAGE>
Employment Agreements
Messrs. Caughlin, Eccles, Evans, Hardy, Howell, McMurray, Nelson
and Ulbrich have entered into agreements with the Company providing for the
terms of their compensation and providing that in the event of a "change of
control" of the Company, or the Executive Officer's 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 special severance
compensation. Such agreements are for three (3) year initial terms with
automatic renewals for additional three (3) year 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. The complete
text of these agreements is on file with the Securities and Exchange Commission.
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.
Other Transactions
During 1997, the Company paid approximately $2.4 million in legal
fees to Ray Quinney & Nebeker, a law firm of which Mr. Alonzo Watson, Assistant
Secretary of the Company, is a shareholder and director.
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:
16
<PAGE>
All share numbers, and all other share numbers used in this Proxy
statement, reflect the three-for-two stock split effected by means of a stock
dividend of one new share for each two shares held as of February 12, 1998.
<TABLE>
<CAPTION>
Table 6
Principal Shareholders of the Company
======================================= ============= ========================================================== =============
Title of Amount and Nature of Percent
Name and Address Class Beneficial Ownership of Class
======================================= ============= ========================================================== =============
<S> <C> <C> <C>
First Security Bank, N.A.
Trust Group Common 7,779,208 shares,(1) as Trustee of separate trust accounts 10.28%
79 South Main Street Stock
Salt Lake City, UT 84111
==============================================================================================================================
(1) Of the 7,779,208 shares which the Trust Group of First Security Bank of Utah, N.A. holds in various fiduciary capacities,
it has voting power over 7,029,667 shares (9.29% of the total outstanding shares) and no power to vote the
remaining 749,541 shares.
==============================================================================================================================
</TABLE>
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, 1992 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:
<TABLE>
<CAPTION>
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)
====================================== ============ =============== =============== =========== ============= ============
INDEX 1992 1993 1994 1995 1996 1997
====================================== ============ =============== =============== =========== ============= ============
<S> <C> <C> <C> <C> <C> <C>
First Security Corporation 100 144.00 131.95 229.07 318.32
NASDAQ Broad Mkt. Index 100 134.32 130.28 182.96 224.06
KBW 50 Index 100 134.48 127.62 204.40 289.14
</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.
17
<PAGE>
5-YEAR CUMULATIVE MARKET INDEX COMPARATIVE GRAPH
(omitted graph)
18
<PAGE>
PROPOSALS FOR SHAREHOLDER ACTION
Item No. 1: Election of Directors
The Nominating Committee of the Board has nominated the Directors standing
for election. Nominations for election as a Director also will be accepted from
any Shareholder at the 1998 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 Nominating Committee, Shareholders are free to
write to the Nominating 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 twenty (20) persons named in Table 8, below, have been nominated as
Directors by the Board's Nominating Committee for election at the 1998 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 20 members, subject to amendment of such provision by the
Directors.
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 1998
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 twenty (20) nominees, listed below, are elected at the 1998 Annual
Meeting, the composition of the new Board will be sixteen (16) 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, except Dr. Machen and Dr. Papin-Daniel, were elected
to their present term of office by a vote of the Shareholders at the 1998 Annual
Meeting. Mr. Wilson was elected by the Board of Directors in July 1996.
There is set forth below a Table 8 as to each of the twenty (20) nominees
of the Nominating 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, 1997. Directors
serving on the Executive(*), Audit(+), Compensation(#), or Nominating (@)
Committees of the Board of Directors are also so identified:
Table 8
NOMINEES FOR DIRECTOR
All share numbers, and all other share numbers used in this Proxy
statement, reflect the three-for-two stock split effected by means of a stock
dividend of one new share for each two shares held as of February 12, 1998.
JAMES C. BEARDALL, 58, 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, and also serves as Chair of the
Audit Committee of the Salt Lake Olympics Organizing Committee. At year-end
1997, Mr. Beardall was the beneficial owner of 2850 shares of the Company's
Common Stock, including 6,750 option shares exercisable within 60 days, but not
yet exercised, and 33,000 stock equivalency units held in his deferred
compensation account.
19
<PAGE>
RODNEY H. BRADY, 65, has been a Director of the Company since 1985. He is
President and Chief Executive Officer of Deseret Management Corporation (private
holding company for several different businesses). Mr. Brady is 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 1997, he beneficially owned 46,300
shares of the Company's Common Stock, including 6,700 option shares exercisable
within 60 days, but not yet exercised, and 39,339 stock equivalency units held
in his deferred compensation account.
JAMES E. BRUCE, 77, has been a Director of the Company since 1983. He is a
retired Chairman and Chief Executive Officer of Idaho Power Company. At year-end
1997, Mr. Bruce beneficially owned 23,062 shares of the Company's Common Stock,
including 3,375 option shares exercisable within 60 days, but not yet exercised,
and no stock equivalency units held in his deferred compensation account.
THOMAS D. DEE II, 77, 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 1997, Mr. Dee beneficially owned 103,250
shares of the Company's Common Stock, including no option shares exercisable
within 60 days, but not yet exercised(1), and no stock equivalency units held in
his deferred compensation account.
SPENCER F. ECCLES, 63, 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 also serves as a
Director of ZCMI (department store chains), Anderson Lumber Company, and Union
Pacific Corporation (railroad and operations); and at year-end 1997, he was the
beneficial owner of _________ shares of the Company's Common Stock(2,3),
including 844,617 option shares exercisable within 60 days but not yet exercised
and 28675 shares held in his account in the Company's Incentive Savings Plan,
and 63 shares of the Company's Preferred Stock, and ______ stock equivalency
units held in his deferred compensation account.
MORGAN J. EVANS, 60, 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. Mr. Evans also serves as a Director of First Security Bank, N.A. At
year-end 1997, Mr. Evans was the beneficial owner of 309,028 shares of the
Company's Common Stock, including 276,457 option shares exercisable within 60
days, but not yet exercised, and 8,009 shares held in his account in the
Company's Incentive Savings Plan, and ______ stock equivalency units held in his
deferred compensation account.
DR. DAVID P. GARDNER, 64, has been a Director of the Company since 1976. He is a
former President of the University of California System, 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
(philanthropy). Dr. Gardner is also a Director of Fluor Corporation
(construction) and of John Alden Financial Corporation. At year-end 1997, Dr.
Gardner beneficially owned 3,288 shares of the Company's Common Stock, which
number includes 1,500 shares held in a trust established by his deceased spouse
as to which Dr. Gardner acts as trustee, and which number includes 6,750 option
shares exercisable within 60 days, but not yet exercised(1,3), and 5,034 stock
equivalency units held in his deferred compensation account.
ROBERT H. GARFF, 53, has been a Director of the Company since 1996. He is Chief
Executive Officer of Garff Enterprises, Inc. (management of a number of
automobile dealerships and other enterprises). At year-end 1997, Mr. Garff
beneficially owned 2,512 shares of the Company's Common Stock, including 6,750
option shares exercisable within 60 days, but not yet exercised, and 6,445 stock
equivalency units held in his deferred compensation account.
JAY DEE HARRIS, 80, has been a Director of the Company since 1975. He is the
President and a Director of Harris Truck and Equipment, Inc.(construction
equipment). At year-end 1997, Mr. Harris beneficially owned 2,625 shares of the
Company's Common Stock, including 6,750 option shares exercisable within 60
days, but not yet exercised, and 12,723 stock equivalency units held in his
deferred compensation account.
20
<PAGE>
ROBERT T. HEINER, 73, has been a Director of the Company since 1981. He is a
retired President and Chief Administrative Officer of the Company. Mr. Heiner is
a Director of Management Training Corporation (operator of training centers). At
year-end 1997, Mr. Heiner was the beneficial owner of 39,000 shares of the
Company's Common Stock, including 6,750 option shares exercisable within 60
days, but not yet exercised, and 22,627 stock equivalency units held in his
deferred compensation account.
KAREN H. HUNTSMAN, 60, has been a Director of the Company since 1992. She is a
Director and Executive Officer of Huntsman Chemical Corporation (private
diversified chemical company). At year-end 1997, Mrs. Huntsman beneficially
owned 6,500 shares of the Company's Common Stock, including 6,750 option shares
exercisable within 60 days, but not yet exercised, and no stock equivalency
units held in his deferred compensation account.
G. FRANK JOKLIK, 70, 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
1997, Mr. Joklik beneficially owned 6,750 shares of the Company's Common Stock,
including 1,500 option shares exercisable within 60 days, but not yet exercised,
and no stock equivalency units held in his deferred compensation account.
B.Z. KASTLER, 77, has been a Director of the Company since 1979. Mr. Kastler is
a retired Chairman, Chief Executive Officer and Director of Questar Corporation
(integrated oil and gas company). He is a Director of Bonneville International
Corporation (broadcasting). At year-end 1997, Mr. Kastler beneficially owned no
shares of the Company's Common Stock, including no option shares exercisable
within 60 days, but not yet exercised, and no stock equivalency units held in
his deferred compensation account.
JOSEPH G. MALOOF, 42, has been a Director of the Company since 1996. Mr. Maloof
is President and Chief Executive Officer of the Maloof Companies of Albuquerque,
New Mexico (diversified investments-entertainment). At year-end 1997, Mr. Maloof
beneficially owned 3,377,180 shares of the Company's Common Stock, including
6,750 option shares exercisable within 60 days, but not yet exercised, and no
stock equivalency units held in his deferred compensation account.
DR. BERNARD D. MACHEN,
MICHELE PAPEN-DANIEL, PH.D,
SCOTT S. PARKER, 63, has been a Director of the Company since 1985. He is
President of Intermountain Health Care, Inc. (integrated health care provider).
At year-end 1997, Mr. Parker beneficially owned 2,680 shares of the Company's
Common Stock, including 6,750 option shares exercisable within 60 days, but not
yet exercised, and 40,647 stock equivalency units held in his deferred
compensation account.
JAMES L SORENSON, 74, 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 1997, Mr. Sorenson Beneficially owned
_____ shares of the Company's Common Stock, consisting of no option shares
exercisable with 60 days , but not yet exercised, and no stock equivalency units
held in his deferred compensation account.
HAROLD J. STEELE, 84, has been a Director of the Company since 1959. He is a
retired President of First Security Bank of Utah, and is a Director of Anderson
Lumber Company. Mr. Steele is married to a cousin of Spencer F. Eccles. At
year-end 1997, Mr. Steele beneficially owned 165,874 shares of the Company's
Common Stock, including 6,750 option shares exercisable within 60 days, but not
yet exercised(5), and no stock equivalency units held in his deferred
compensation account.
21
<PAGE>
JAMES R. WILSON, 57 has been a Director of the Company since 1996. He is
Chairman, President and Chief Executive Officer and a Director of Thiokol
Corporation (aerospace and industrial manufacturing), having been elected
President, CEO and a Director in 1993 and Chairman in 1995. Previously he was
Executive Vice President of Thiokol. In addition to the Company, Mr. Wilson is
also a director of Cooper Industries Inc. (industrial manufacturing), The B.F.
Goodrich Company (aerospace and chemicals) and Howmet International Inc.
(aerospace and industrial). At year-end 1997, Mr. Wilson beneficially
owned_______ shares of the Company's Common Stock, including no option shares
exercisable within 60 days, but not yet exercised, and 2,335 stock equivalency
units held in his deferred compensation account.
(1) A daughter of Dr. Gardner is married to a son of Mr. Dee.
(2) Includes _______ 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 91,125 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 250,324 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 not include 222,000
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 _________ 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) Includes 144,145 shares of Common Stock owned by Mr. Steele's spouse for
which Mr. Steele has voting power, but does not include 91,125 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.
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 300,000,000 shares of Common Stock with a par value
of $1.25 per share, of which there were ##, ###, ### shares issued and
outstanding as of the Record Date. It is proposed that the authorized Common
Stock be increased to 600,000,000 shares, with a par value of $1.25 each. The
Certificate of Incorporation also authorizes the issuance of 400,000 shares of
Preferred Stock, ________ 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 at
the record date, ______________ shares are reserved for use under the CMIP plan,
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 or in other publicly
announced transactions.
The Corporation has had two recent three-for two stock splits (1996 and
1997) 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 1990-1997, 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.
22
<PAGE>
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 600,000,000 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 share of 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 authorized
shares of Common Stock. This action will provide the Corporation with
flexibility in the future by assuring that there 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 APPROVING THE
INCREASE IN THE AUTHORIZED COMMON 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
statement 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 Leslie R. Nelson, Senior Vice President, First
Security Service Company, P.O. Box 30006, Salt Lake City, Utah 84130,
801/246-5044.
DEADLINE FOR SHAREHOLDER PROPOSALS
If any Shareholder wishes to present a proposal for action at the 1999
Annual Meeting of the Shareholders, the Shareholder must comply with applicable
Securities and Exchanges 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,
79 South Main Street, Salt Lake City, Utah 84111, on or before December 31,
1998.
23
