<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
BANC ONE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
CHARLES F. ANDREWS, ASSISTANT GENERAL COUNSEL
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by 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:
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1Set forth the amount on which the filing fee is calculated and state how it
was determined.
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[Paste-up Logo here]
BANC ONE CORPORATION
NOTICE OF 1994 ANNUAL MEETING OF SHAREHOLDERS
Columbus, Ohio
March 11, 1994
To the Shareholders of
BANC ONE CORPORATION:
Notice is hereby given that the Annual Meeting of Shareholders of BANC ONE
CORPORATION will be held on the main floor of the Greater Columbus Convention
Center, 400 North High Street, Room D-130, Columbus, Ohio, on Tuesday, April 19,
1994, at 9:00 A.M., Columbus Time, for the purpose of considering and voting
upon the following matters, all as set forth in the accompanying Proxy
Statement.
ELECTION OF DIRECTORS -- Election of a Board of Directors to hold office
until the next Annual Meeting of Shareholders.
PROPOSAL TO APPROVE THE 1994 KEY EXECUTIVE MANAGEMENT INCENTIVE
COMPENSATION PLAN -- Approval of the 1994 Key Executive Management
Incentive Compensation Plan for the Chairman and the President of BANC ONE
CORPORATION.
OTHER BUSINESS -- Transaction of such other business as may properly come
before the meeting.
The close of business on February 25, 1994 has been fixed as the date of
record for those shareholders entitled to vote at the Annual Meeting. The stock
transfer books of BANC ONE CORPORATION will not be closed.
By Order of the Board of Directors:
ROMAN J. GERBER
Executive Vice President
and Secretary
YOU ARE REQUESTED TO EXECUTE, DATE AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED POST-PAID ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION
WILL BE APPRECIATED.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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GENERAL INFORMATION................................................................... 1
ELECTION OF DIRECTORS................................................................. 2
DIRECTORS FEES AND COMPENSATION....................................................... 6
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION........................... 6
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION......................... 6
EXECUTIVE COMPENSATION................................................................ 9
Summary Annual Compensation...................................................... 9
1989 Stock Incentive Plan........................................................ 11
Comparison of Five-Year Cumulative Total Return.................................. 13
Savings Plan..................................................................... 14
Retirement Benefits.............................................................. 14
CERTAIN REPORTS....................................................................... 15
TRANSACTIONS WITH MANAGEMENT AND OWNERS............................................... 16
OWNERSHIP OF SHARES................................................................... 16
APPROVAL OF 1994 KEY EXECUTIVE MANAGEMENT INCENTIVE COMPENSATION PLAN FOR THE CHAIRMAN
AND PRESIDENT OF BANC ONE CORPORATION............................................... 17
INDEPENDENT PUBLIC ACCOUNTANTS........................................................ 19
SHAREHOLDER PROPOSALS................................................................. 19
ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS............................................ 19
OTHER BUSINESS........................................................................ 20
</TABLE>
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BANC ONE CORPORATION
100 EAST BROAD STREET
COLUMBUS, OHIO 43271
PROXY STATEMENT
GENERAL INFORMATION
BANC ONE CORPORATION, hereinafter referred to as "BANC ONE," is furnishing
this Proxy Statement to its shareholders in connection with the solicitation of
proxies for use in voting at the Annual Meeting of Shareholders on Tuesday,
April 19, 1994. The enclosed proxy is solicited by the Board of Directors of
BANC ONE. This Proxy Statement is being mailed on or about March 11, 1994.
The close of business on February 25, 1994, has been fixed as the date of
record for those shareholders entitled to vote at the Annual Meeting. The stock
transfer books of BANC ONE will not be closed. As of February 25, 1994, BANC ONE
had outstanding and entitled to vote 346,829,498 shares of Common Stock without
par value ("Common Stock"), each of which is entitled to one vote. The 4,998,000
outstanding shares of Class C Preferred Stock ("Preferred Stock"), BANC ONE's
only issue of preferred stock, are not entitled to a vote at the Annual Meeting.
Any shareholder giving the enclosed proxy has the power to revoke it at any
time before it is voted if notice of revocation is given to BANC ONE in writing
or at the Annual Meeting. The shares represented by the enclosed proxy will be
voted as specified by the shareholders. If no choice is specified, the proxy
will be voted for the election as Directors of the nominees named herein, and
for the 1994 Key Executive Management Incentive Compensation Plan, as
hereinafter described.
The presence of a majority of the outstanding shares of BANC ONE Common
Stock in person or by proxy is necessary to constitute a quorum of shareholders
for all matters to be considered at the Annual Meeting.
Votes, whether in person or by proxy, will be counted and tabulated by
judges of election appointed by the Board of Directors of BANC ONE. With respect
to all matters to be considered, abstentions and broker non-votes will not be
counted as votes either "for" or "against" any matters coming before the Annual
Meeting. Under Ohio law and BANC ONE's Articles of Incorporation and
Regulations, such abstentions and broker non-votes have the effect of a "no"
vote with respect to the election of Directors and the 1994 Key Executive
Management Incentive Compensation Plan, each of which matters requires the
affirmative vote of not less than a majority of the outstanding voting power of
BANC ONE, rather than a majority of that voting power actually voting for
election or approval.
The solicitation of proxies will be made by mail except for any incidental
solicitation on the part of Directors and Officers of BANC ONE and of its
affiliates by personal interviews, by telephone, or by telegraph. BANC ONE will
bear the cost of the solicitation of proxies and it may reimburse brokers and
others for their expenses in forwarding solicitation material to beneficial
owners of BANC ONE stock. BANC ONE has retained W. F. Doring & Co. to assist in
such solicitation for a fee of $5,000 plus expenses.
<PAGE> 5
ELECTION OF DIRECTORS
The number of Directors to be elected at the Annual Meeting has been fixed
by the Board of Directors at thirteen. Each Director will hold office until the
1995 Annual Meeting of Shareholders or until a successor is elected and
qualified. Except as otherwise specified in the proxy, the shares represented by
the enclosed proxy will be voted for the election as Directors of the thirteen
nominees named below. If a nominee should become unavailable to serve, which is
not anticipated, proxies will be voted for election of such person, if any, as
shall be designated by the Board of Directors.
Each of the nominees for election as Director is currently a Director of
BANC ONE. The information which follows includes, as to each such nominee, the
nominee's age, the year in which service was commenced as a Director of BANC
ONE, the nominee's current positions and offices held with BANC ONE, if
applicable, the nominee's business experience during the past five years, and
certain other information, together with the nominee's beneficial ownership of
and option rights regarding BANC ONE stock as of January 1, 1994.
<TABLE>
<CAPTION>
SHARES OF
BANC ONE
COMMON STOCK
NAME, AGE, POSITIONS AND OFFICES WITH PRINCIPAL OCCUPATIONS FOR PAST BENEFICIALLY
BANC ONE AND YEAR BECAME DIRECTOR FIVE YEARS AND OTHER INFORMATION(1) OWNED(2)
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Charles E. Exley -- 64 Corporate Director. Chairman and Chief 3,750(3)(4)
Director -- 1992 Executive Officer, NCR Corporation
(manufacturer and sales of computers and
related products) January 1988 to
September 1991; prior thereto, President
of NCR Corporation. Mr. Exley is a
director of Merck & Co., Inc. and
Owens-Corning Fiberglas Corporation.
E. Gordon Gee -- 50 President, The Ohio State University, 8,125(3)(5)
Director -- 1990 September 1990 to present; prior thereto,
President of the University of Colorado
(1985-90) and of the University of West
Virginia (1981-85). Dr. Gee serves as a
director of ASARCO, Inc. and The Limited,
Inc.
John R. Hall -- 61 Chairman & Chief Executive Officer, 28,005(3)(6)
Director -- 1987 Ashland Oil, Inc. (oil refiner,
manufacturer and distributor of
chemicals). Mr. Hall serves as a director
of Reynolds Metals Company and Humana Inc.
Laban P. Jackson, Jr. -- 51 Chairman and Chief Executive Officer, 7,117(3)(7)
Director -- 1993 Clear Creek Properties, Inc. (real estate
development), January 1989 to present;
prior thereto, Chairman and Chief
Executive Officer, International Spike,
Inc.
</TABLE>
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<TABLE>
<CAPTION>
SHARES OF
BANC ONE
COMMON STOCK
NAME, AGE, POSITIONS AND OFFICES WITH PRINCIPAL OCCUPATIONS FOR PAST BENEFICIALLY
BANC ONE AND YEAR BECAME DIRECTOR FIVE YEARS AND OTHER INFORMATION(1) OWNED(2)
- --------------------------------------- ------------------------------------------ ------------
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John B. McCoy -- 50 Chairman, BANC ONE, January 1987 to 432,351(8)
Chairman, Director -- 1983 present; President, BANC ONE, January 1983
to January 1987. Mr. McCoy serves as a
director of Cardinal Health, Inc.,
Ameritech Corporation, Federal Home Loan
Mortgage Corporation and Tenneco, Inc.
John G. McCoy -- 81 Chairman, BANC ONE Executive Committee, 456,714
Director -- 1967 May 1984 to present; prior thereto, Vice
Chairman and President, BANC ONE.(9)
Rene C. McPherson -- 69 Corporate Director. Prior to 1983, Dean of 16,754(3)(10)
Director -- 1986 the Stanford University School of Business
and prior to 1981, Chairman & Chief
Executive Officer of Dana Corporation,
Toledo, Ohio (a manufacturer of vehicular
and industrial components). Mr. McPherson
serves as a director of Dow Jones &
Company, Inc., Mercantile Stores, Inc.,
Milliken & Company, Westinghouse Electric
Corporation and The Andersons.
Donald L. McWhorter -- 58 President, BANC ONE, April 1992 to 267,835(11)
Director -- 1992 present; Chairman, Banc One Ohio
Corporation, July 1989 to April 1992; and
Chairman, Banc One Services Corporation,
January 1988 to July 1989.
Thekla R. Shackelford -- 59 Education consultant. Ms. Shackelford 139,028(3)(7)
Director -- 1993 founded School Selection Consulting, an
admissions service for independent
secondary schools and colleges, in 1978.
Ms. Shackelford serves as a director of
Wendy's International, Inc.
Alex Shumate -- 43 Managing Partner, Squire, Sanders & 1,055(12)
Director -- 1993 Dempsey (attorneys-at-law), Columbus, Ohio
since 1991. Mr. Shumate, who joined
Squire, Sanders & Dempsey in 1988, served
as Chief Counsel and Deputy Chief of Staff
to the Governor of Ohio from 1985 to 1988.
</TABLE>
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<TABLE>
<CAPTION>
SHARES OF
BANC ONE
COMMON STOCK
NAME, AGE, POSITIONS AND OFFICES WITH PRINCIPAL OCCUPATIONS FOR PAST BENEFICIALLY
BANC ONE AND YEAR BECAME DIRECTOR FIVE YEARS AND OTHER INFORMATION(1) OWNED(2)
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Frederick P. Stratton, Jr. -- 54 Chairman & Chief Executive Officer, Briggs 25,338(3)(6)
Director -- 1988 & Stratton Corporation (manufacturer of
small gasoline engines and automotive
locking devices), November 1986 to
present; prior thereto, President & Chief
Executive Officer of Briggs & Stratton.
Mr. Stratton serves as a Director of Weyco
Group, Inc., Wisconsin Electric Power
Company, and Wisconsin Energy Corporation.
Romeo J. Ventres -- 69 Corporate Director. Former Chairman, 14,399(3)(6)
Director -- 1988 Borden, Inc. (worldwide producer of foods
and non-food consumer and industrial
products), February 1987 to March 1992;
Chief Executive Officer, Borden, November
1986 to November 1991; President & Chief
Operating Officer, Borden, July 1985 to
November 1986. Mr. Ventres is a director
of Marsh & McLennan Companies, Inc., and
Schering Plough Corp.
Robert D. Walter -- 48 Chairman & Chief Executive Officer, 56,065(3)(6)
Director -- 1987 Cardinal Health, Inc. (wholesale
distributor of drug & related health
products). Mr. Walter is a director of
Cardinal Health, Inc. and Columbia
Healthcare Corporation.
</TABLE>
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(1) Unless otherwise indicated, the director has had the same principal
occupation for the past five years. Only directorships in companies with a
class of equity securities registered pursuant to the Securities Exchange
Act of 1934, or otherwise subject to its periodic reporting requirements,
are listed.
(2) Included in the shares set forth in the table above are shares owned by the
director, the director's spouse, minor children, and certain other family
members, and shares over which they have full voting control and power of
disposition, except as otherwise indicated. Share amounts are reported and
percentages of share ownership are calculated based upon the shares of BANC
ONE Common Stock outstanding as of January 1, 1994 and, accordingly, do not
reflect shares issued March 4, 1994 as a result of the 10% stock dividend
declared by the Board of Directors on January 25, 1994 to Shareholders of
record as of the close of business on February 16, 1994. The percentage of
shares of BANC ONE Common Stock beneficially owned by each person is less
than 1%. No shares of BANC ONE Preferred Stock are beneficially owned by
any BANC ONE director.
(3) Share amount shown excludes unexercisable option on 1,250 shares of BANC
ONE Common Stock granted to directors who are not employees of BANC ONE or
one of its affiliates as Directors Stock Options pursuant to the 1989 Stock
Incentive Plan.
(4) Share amount shown includes exercisable option on 3,750 shares of BANC ONE
Common Stock granted to Mr. Exley in 1992 as a new director pursuant to the
1989 Stock Incentive Plan.
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<PAGE> 8
(5) Share amount shown includes exercisable options on 6,750 shares of BANC ONE
Common Stock granted to directors who are not employees of BANC ONE or one
of its affiliates as Directors Stock Options pursuant to the 1989 Stock
Incentive Plan.
(6) Share amounts shown include exercisable options on 8,538 shares of BANC ONE
Common Stock granted to directors who are not employees of BANC ONE or one
of its affiliates as Directors Stock Options pursuant to the 1989 Stock
Incentive Plan.
(7) Share amount shown excludes unexercisable option on 3,750 shares of BANC
ONE Common Stock granted to each of Ms. Shackelford and Mr. Jackson in 1993
as new directors pursuant to the 1989 Stock Incentive Plan.
(8) Share amount shown excludes options to purchase 215,035 shares of BANC ONE
Common Stock pursuant to the 1989 Stock Incentive Plan, which options are
not presently exercisable. Includes 161,940 shares of BANC ONE Common Stock
awarded to Mr. McCoy which may be voted by him but which, during a
restricted period, may not be transferred and are subject to forfeiture in
the event of employment termination.
(9) John G. McCoy is John B. McCoy's father.
(10) Share amount shown includes exercisable options on 5,225 shares of BANC ONE
Common Stock granted to directors who are not employees of BANC ONE or one
of its affiliates as Directors Stock Options pursuant to the 1989 Stock
Incentive Plan.
(11) Does not include options to purchase 89,088 shares of BANC ONE Common Stock
pursuant to the 1989 Stock Incentive Plan, which options are not presently
exercisable. Includes 75,118 shares of BANC ONE Common Stock awarded to Mr.
McWhorter which may be voted by him but which, during a restricted period,
may not be transferred and are subject to forfeiture in the event of
employment termination.
(12) Share amount shown excludes unexercisable option on 3,000 shares of BANC
ONE Common Stock granted to Mr. Shumate in 1993 as a new director pursuant
to the 1989 Stock Incentive Plan.
Committees. BANC ONE has three standing committees of the Board of
Directors. The Personnel and Compensation Committee, which currently consists of
Romeo J. Ventres (committee chairman), E. Gordon Gee, Rene C. McPherson and
Thekla R. Shackelford, held four meetings during 1993. In addition to reporting
to the Board on the selection of BANC ONE's principal officers, including its
chairman, president and other executive officers, and the fixing of their
salaries, this Committee determines the amount of bonus paid to principal
officers of BANC ONE and its affiliates, approves the salaries and bonus
received by the principal officers of BANC ONE affiliates and serves as the
Board of Directors' nominating committee. The Personnel and Compensation
Committee, which recommends to the Board of Directors nominees for election or
re-election as directors at the annual meeting of shareholders, will consider
nominees recommended by shareholders as set forth hereinafter under "Annual
Meeting Advance Notice Requirements." The Audit Committee, which currently
consists of Robert D. Walter (committee chairman), Frederick P. Stratton, John
R. Hall, Charles E. Exley and Laban P. Jackson held four meetings during 1993.
The Audit Committee meets with BANC ONE's independent public accountants and
internal auditors, reviews the scope and results of their audits, reviews
management response to audit reports and inquires into various matters such as
adequacy of internal controls and security, application of new regulatory
policies and accounting rules and other issues that may from time to time be of
concern to the Committee or its members. The Executive Committee, which
currently consists of John G. McCoy (committee chairman), Romeo J. Ventres, John
B. McCoy and Robert D. Walter, which is empowered, between Board meetings, to
exercise all the powers of the
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<PAGE> 9
Board in the management of BANC ONE, did not meet in 1993. During 1993, there
were four meetings of BANC ONE's Board of Directors. All incumbent Directors
attended at least 75% of the total number of meetings of the Board and
committees on which they served.
DIRECTORS FEES AND COMPENSATION
Directors who are not officers of BANC ONE or one of its affiliates receive
$2,500 as a monthly retainer, $1,500 for each Board meeting attended, and $1,200
for each Board committee meeting attended. Committee chairmen receive an
additional $1,000 for each committee meeting chaired. Pursuant to the 1989 Stock
Incentive Plan, if the return on common equity of BANC ONE for the preceding
fiscal year is equal to or greater than 10%, each Director, who is not an
employee of BANC ONE or one of its affiliates, who is re-elected as a director,
automatically, following the Annual Meeting of Shareholders, is granted an
option to purchase 1,000 shares of BANC ONE Common Stock at an exercise price
not less than the fair market value of BANC ONE Common Stock on the date of the
grant ("Directors Stock Option"). In 1993, after adjustment for the August 5 for
4 Stock Split in BANC ONE Common Stock, each of BANC ONE's re-elected
non-employee Directors received an option on 1,250 shares of BANC ONE Common
Stock at an exercise price of $46.00 per share, the adjusted market value of a
share of BANC ONE Common Stock as of the date of grant. Under the 1989 Stock
Incentive Plan, each person who is not an employee of BANC ONE or any of its
affiliates is, when first elected or appointed to serve as a director,
automatically granted an option to purchase 3,000 shares of BANC ONE Common
Stock at an exercise price not less than the fair market value of BANC ONE
Common Stock on the date of grant.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
BANC ONE's Personnel and Compensation Committee (the "Committee"), which
has responsibility for reviewing all aspects of the compensation program for key
executive officers of BANC ONE, is comprised of Ms. Shackelford and Messrs.
Ventres, Gee and McPherson, none of whom is now or in the past was an officer of
BANC ONE or any of its subsidiaries.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE POLICIES
The Committee's primary objective in the area of compensation is to attract
and retain executives with the experience and capabilities of providing
outstanding leadership to BANC ONE's employees and excellent returns for BANC
ONE's shareholders. To this end, BANC ONE has developed an overall compensation
strategy and specific compensation plans that tie a significant portion of
executive compensation to BANC ONE's success in meeting specified performance
goals and to the appreciation in BANC ONE's Common Stock price.
Each year the Committee conducts a thorough review of its executive
compensation program. This review includes a comprehensive analysis provided by
an independent, internationally recognized compensation and benefits consulting
firm covering the design and competitiveness of the compensation program. BANC
ONE's executive compensation program is reviewed and analyzed with respect to
the components of compensation and also with respect to aggregate total
compensation to ensure its competitiveness against other major U.S. bank holding
companies and selected, diversified financial businesses (the "Peer Group").
6
<PAGE> 10
Each year, the Committee reviews the selection of peer companies used for
compensation comparison purposes. The Committee believes that BANC ONE's most
direct competitors for executive talent are not necessarily all of the companies
that would be included in a peer group established to compare shareholder
returns. To determine competitive executive compensation, a group of financial
institutions which approximate the financial characteristics of BANC ONE is
required; shareholder returns are better presented by a broader grouping of
companies that offer legitimate investment alternatives. Thus, the Peer Group
used for compensation purposes is not the same as the peer group index set forth
and utilized in the Comparison of Five-Year Cumulative Total Return graph
included elsewhere in this Proxy Statement.
The key components of BANC ONE's executive compensation program are base
pay, annual incentive opportunity, and equity-based compensation since the
program is designed to provide competitive compensation as well as opportunities
to earn above-average compensation when BANC ONE's performance warrants it.
The program is also designed to recognize meaningful differences in
individual performance and contribution to the long-term creation of shareholder
value. In each component of executive pay, as discussed below, the Committee
balances the need to provide a compensation opportunity that is competitive in
BANC ONE's national marketplace, its desire to pay for performance in both the
short-and long-term, its goal to promote long-term equity ownership and the need
to comply with complex tax, accounting and Securities and Exchange Commission
rules. Each component of pay is discussed below.
CORPORATE TAX DEDUCTION FOR EXECUTIVE COMPENSATION
During 1993, Section 162(m) of the Internal Revenue Code was enacted to
limit the corporate deduction for compensation paid to a corporation's five most
highly compensated executive officers to $1 million per year, unless certain
requirements are met. The Committee carefully reviewed the impact of this
legislation on the cost of BANC ONE's current executive compensation plans.
Although the objectives of the legislation to ensure performance based
compensation were being met, certain administrative aspects of the plans did not
precisely parallel the regulations issued under the new tax provision. For 1994,
the compensation paid to the Chairman and President of BANC ONE could
potentially be subject to the $1 million limitation on deductibility. The
Committee has responded by (a) conforming criteria for the annual incentive plan
with the new timing requirements of the regulations and requesting shareholder
approval of a new 1994 Key Executive Management Incentive Compensation Plan for
Mr. McCoy and Mr. McWhorter (which plan is discussed in greater detail elsewhere
in this Proxy Statement) and (b) establishing performance criteria for granting
restricted stock awards to key executives of BANC ONE in 1995. Given the
immediate application of the new tax law, restricted stock grants which were
made in April 1993 or which may be made in April 1994 are not tax deductible.
The Committee will continue to take the deductibility of executive compensation
into consideration while ensuring that BANC ONE maintains the leadership it
requires to further the interests of its shareholders.
BASE SALARIES
The Committee has established a goal of providing base pay for executives
at approximately the 50th percentile of BANC ONE's national marketplace. In
addition, annual and long term incentive opportunities (as described below) are
targeted to the 75th percentile of BANC ONE's national marketplace for superior
performance. Base pay increases are provided to executives based on an
evaluation of each executive's performance, as well as the performance of BANC
ONE and, where relevant, the performance of a particular BANC ONE affiliate.
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<PAGE> 11
The Committee reviews relevant financial results including growth in
earnings, the rate of return on assets, and various measures of productivity and
efficiency. The Committee also evaluates the success of the management team in
areas of performance that cannot be captured by accounting measures. These areas
include the development and execution of business strategies, the identification
and implementation of acquisition plans, and the introduction of new
technologies, products and services.
With respect to the base salary granted to Mr. McCoy in 1993, the Committee
took into account a comparison of base salaries of chief executive officers in
the Peer Group companies, BANC ONE's success in meeting its financial and
nonfinancial performance goals, and an overall assessment of Mr. McCoy's
contribution to BANC ONE's outstanding performance. Mr. McCoy earned a base
salary of $972,500 during 1993.
ANNUAL INCENTIVE OPPORTUNITY
During 1993, each of BANC ONE's executive officers participated in the Key
Management Incentive Compensation Plan (the "Existing Plan") which established
incentive award opportunities for each participant based on his or her level of
responsibility. Awards were based upon a formula which gave 25% consideration to
a discretionary evaluation of the individual's contribution and was otherwise
based upon pre-established performance objectives established for BANC ONE and
for each BANC ONE affiliate. These objectives included specific targets for
earnings growth and, where applicable, return on assets. The relationship of
earnings growth and return on assets is set forth in a matrix wherein the
relative importance of these two components to each other vary above the
performance threshold of a 5% increase in earnings for BANC ONE and a minimum
1.15% return on assets; below these levels incentive payments would not be paid.
In 1993, BANC ONE substantially exceeded its performance thresholds as to both
earnings growth and return on assets.
For 1993, each of BANC ONE's executive officers including Mr. McCoy
received incentive cash compensation under the guidelines of the Existing Plan.
Mr. McCoy's final annual incentive compensation was discretionarily determined
by the Committee based upon a review of Mr. McCoy's performance. Based upon Mr.
McCoy's individual performance, his contribution to BANC ONE's outstanding
performance, and BANC ONE's success in meeting its performance goals, the amount
of incentive cash compensation earned by Mr. McCoy for 1993 was $1,020,000.
For 1994, the Committee established, subject to shareholder approval as set
forth elsewhere in this Proxy Statement, the 1994 Key Executive Management
Incentive Compensation Plan to provide an incentive award opportunity for the
Chairman and President conditioned upon BANC ONE achieving annual increases in
earnings and a superior return-on-assets. Mr. McCoy has a target incentive award
of 60% of salary and Mr. McWhorter has a target award of 55% of salary. The
final award will be from 0% to 200% of target as determined by the percentage
increase in BANC ONE earnings over 1993 and the return-on-assets figure based on
the performance matrix adopted by the Committee in December 1993.
EQUITY BASED COMPENSATION
Each year, the Committee reviews competitive data based on BANC ONE's Peer
Group to determine the level of equity-based awards to be granted to executive
officers and other members of key management. BANC ONE has included stock
options and restricted stock awards as key elements in its total compensation
package for many years. Equity-based compensation provides a long-term link
between the results achieved for shareholders and the rewards provided to key
executive officers. In 1989, shareholders approved the 1989 Stock Incentive Plan
which provides for the grant of several types of equity-based awards including
stock
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options and restricted stock awards. Although the 1989 Stock Incentive Plan (the
"1989 Plan") authorizes the Committee to grant stock appreciation rights,
performance shares or performance awards, the Committee has not granted these
types of awards.
Restricted Stock. In 1995, restricted stock awards will be determined by
applying 1994 financial performance against a performance matrix adopted by the
Committee during the first quarter of 1994; however, in 1993, grants were based
upon an overall assessment of BANC ONE's performance and individual contribution
thereto with consideration given to the amount and nature of similar awards
granted by the Peer Group companies. Under the 1989 Plan, the executive officers
receiving restricted stock awards are issued shares subject to restrictions on
the disposition of the stock during a period determined by the Committee.
Restricted stock awards are forfeited if the recipient terminates employment
with BANC ONE (or an affiliate) prior to the expiration of the restriction
period. In April 1993, all of BANC ONE's eligible executive officers were
granted restricted stock awards effective in May, 1993. Mr. McCoy was awarded
15,913 shares of restricted stock. The restrictions on the shares awarded each
executive officer, including Mr. McCoy in 1993, expire as to one-third of the
shares in each of the years 1997, 1999 and 2001.
Stock Options. Like the restricted stock award, each year the Committee
reviews the overall performance of BANC ONE against its Peer Group and takes
into consideration the grants of stock options by Peer Group competitors. In
1993, the Committee granted stock awards to its key executives based upon an
overall evaluation of BANC ONE's performance, individual contribution thereto
and the amount and nature of similar awards granted by the Peer Group. Stock
options are granted with an exercise price equal to the market price of BANC
ONE's Common Stock on the date of grant and vest after five years. The options
granted to BANC ONE's named executive officers as compared with those granted by
comparable companies fall within the low or medium range. In 1993, Mr. McCoy
received options to purchase 53,032 shares of Common Stock with an exercise
price of $44.50 per share. As of January, 1994, Mr. McCoy owned 432,351 shares
of BANC ONE's Common Stock, including 161,940 shares of restricted stock, and
with the 1993 grant, holds unexercisable options to purchase an additional
215,035 shares.
CONCLUSION
Through the programs described above, a significant portion of BANC ONE's
executive compensation program is linked directly to individual and corporate
performance and long-term stock price appreciation. The Committee will continue
to review all elements of executive compensation to ensure that the total
compensation program, and each element therein, meets BANC ONE's business
objectives and philosophy, as discussed above.
THE PERSONNEL AND COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Romeo J. Ventres, Chairman
E. Gordon Gee
Rene C. McPherson
Thekla R. Shackelford
EXECUTIVE COMPENSATION
SUMMARY ANNUAL COMPENSATION
The following Summary Annual Compensation Table sets forth the individual
compensation paid to BANC ONE's Chief Executive Officer and each of the four
other most highly compensated executive officers for services rendered in all
capacities during the fiscal years ended December 31, 1991; December 31, 1992;
and December 31, 1993.
9
<PAGE> 13
SUMMARY ANNUAL COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION(1)
---------------------------------- AWARDS
OTHER ------------------------
ANNUAL RESTRICTED STOCK LTIP
SALARY BONUS COMPENSATION STOCK OPTIONS(4) PAYOUTS
NAME PRINCIPAL POSITION YEAR ($) ($) ($) (3)($) (SHARES) ($)
- ----------- ------------------------------------- ----- ------- --------- ------------ ---------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John B.
McCoy......Chairman and CEO, BANC ONE 1993 972,500 1,020,000 70,531(2) 708,129 53,032
Chairman and CEO, BANC ONE 1992 907,000 980,000 62,611(2) 460,100 34,362
Chairman and CEO, BANC ONE 1991 832,000 750,000 388,825 38,225
Donald L.
McWhorter..President/COO, BANC ONE 1993 592,500 570,000 31,410(2) 432,006 24,876
President/COO, BANC ONE 1992 523,564 511,300 26,289 279,930 20,350
Chairman, Banc One Ohio Corp 1991 382,500 287,000 162,325 15,263
Richard J.
Lehmann(7).Chairman, Banc One Arizona Corp 1993 450,000 337,500 12,665
Thomas E.
Hoaglin....Chairman, Banc One Ohio Corp 1993 406,000 295,000 6,900 181,293 9,831
Chairman, Banc One Ohio Corp 1992 370,500 256,800 4,442 132,010 9,013
President/COO, Bank One, Texas, N.A. 1991 333,000 216,500 120,800 9,900
Joseph D.
Barnette,
Jr.........Chairman, Banc One Indiana Corp 1993 398,000 289,000 13,016 175,063 9,550
Chairman, Banc One Indiana Corp 1992 377,000 264,400 11,955 125,130 8,425
Chairman, Banc One Indiana Corp 1991 354,629 200,000 120,800 9,900
<CAPTION>
ALL OTHER
COMPENSATION
NAME (5)($)
- ----------- ------------
<S> <C>
John B.
McCoy.... 13,333
11,818
Donald L.
McWhorter.. 13,333
11,818
Richard J.
Lehmann(7) 22,229
Thomas E.
Hoaglin... 13,333
228,873(6)
Joseph D.
Barnette,
Jr....... 7,195
5,673
</TABLE>
- ---------------
(1) Includes amounts earned in fiscal year, whether or not deferred.
(2) Includes use of company aircraft for security reasons as required by the
Board of Directors:
<TABLE>
<S> <C> <C>
John B. McCoy..................................................... 1993 = $ 45,317
1992 = $ 37,984
Donald L. McWhorter............................................... 1993 = $ 7,926
</TABLE>
(3) The restrictions on shares of restricted stock expire as to one-third of the
shares in each of the fourth, sixth, and eighth anniversaries of the award
date. Dividends on restricted stock are paid to the grantees. As of December
31, 1993, the total number of shares of restricted stock and the value of
said shares (based upon the closing market value of $39.125 per share on
said date) awarded to each of the persons listed above, are as follows:
<TABLE>
<S> <C> <C>
John B. McCoy.............................................. 161,940 $ 6,335,903
Donald L. McWhorter........................................ 75,118 $ 2,938,992
Thomas E. Hoaglin.......................................... 27,383 $ 1,071,360
Joseph D. Barnette, Jr..................................... 20,981 $ 820,882
Richard J. Lehmann......................................... 0 $ 0
</TABLE>
(4) Stock Option grants include Incentive Stock Options up to the $100,000
annual limit, remainder were Non-Qualified Stock Options. All Stock Options
are granted at the market price of BANC ONE's Common Stock on the date of
grant and vest after five years.
(5) Employer matching contributions to the 401(k) Plan and the Supplemental
401(k) Plan. The 1992 figures were revised to exclude the employee's pre-tax
contributions.
(6) Includes $223,200 for expenses related to relocation from position as
President, Bank One, Texas, NA, in Dallas, Texas, to Chairman, Banc One Ohio
Corporation, in Columbus, Ohio.
(7) No compensation is reported prior to 1993 because Valley National
Corporation, now Banc One Arizona Corporation, merged with BANC ONE on March
31, 1993. Mr. Lehmann's first year of eligibility for participation in the
1989 Stock Incentive Plan is 1994.
10
<PAGE> 14
1989 STOCK INCENTIVE PLAN
The 1989 Plan provides for the grant of Director Stock Options to Directors
of BANC ONE and the grant of Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, Performance Shares and Performance
Awards, or combinations of the foregoing to key employees of BANC ONE and its
affiliates. The 1989 Plan is administered by the four-member Committee, each of
whom is ineligible to participate in the 1989 Plan except with respect to
Director Stock Options. The Committee selects employees from BANC ONE and its
affiliates and determines when awards are to be made, conditions attached to
awards and rules for administration.
During 1993, Stock Options and Nonqualified Stock Options were granted by
the Committee on shares of BANC ONE Common Stock to the individuals named in the
Summary Annual Compensation Table, to Executive Officers of BANC ONE and to
other employees of BANC ONE and its affiliates. During 1993 the Committee
awarded shares of BANC ONE Common Stock as Restricted Stock Awards pursuant to
the 1989 Plan to the individuals named in the Summary Annual Compensation Table,
to Executive Officers of BANC ONE and to other employees of BANC ONE and its
affiliates. Employees receiving Restricted Stock Awards were issued shares
subject to restrictions on disposition during a period determined by the
Committee during which the recipient may vote and receive dividends and
distributions thereon. Restricted Stock Awards may be forfeited if the recipient
terminates employment with BANC ONE prior to expiration of the restricted
period. Recipients may not transfer the shares received during the restrictive
period. The restrictions on the shares awarded each individual in 1993 expire as
to one-third of the shares in 1997, one-third in 1999, and one-third in 2001. No
grants or awards of Stock Appreciation Rights, Performance Shares or Performance
Awards were made under the 1989 Stock Incentive Plan during 1993.
The following tables set forth (i) the number and value of options granted
in fiscal year 1993 to the individuals named in the Summary Annual Compensation
Table; and (ii) the aggregated exercises of options by the individuals named in
the Summary Annual Compensation Table during fiscal year 1993.
11
<PAGE> 15
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(2)
------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED GRANTED PRICE GRANT DATE
------------------ EMPLOYEES ($ PER EXPIRATION PRESENT
NAME TYPE(3) NUMBER IN 1993(4) SHARE)(5) DATE VALUE($)(6)
- --------------------------------- ------- ------ ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
John B. McCoy.................... ISO 2,246 0.29% May 3, 2003 17,721
NQSO 50,786 6.59% May 3, 2013 433,712
------------------ ---- -----------
Total 53,032 6.88% $44.50 451,433
Donald L. McWhorter.............. ISO 2,246 0.29% May 3, 2003 17,721
NQSO 22,630 2.94% May 3, 2013 193,260
------------------ ---- -----------
Total 24,876 3.23% $44.50 210,981
Richard J. Lehmann............... ISO 0 0.00%
NQSO 0 0.00%
------------------ ----
Total 0 0.00% $44.50
Thomas E. Hoaglin................ ISO 2,246 0.29% May 3, 2003 17,721
NQSO 7,585 0.98% May 3, 2013 64,776
------------------ ---- -----------
Total 9,831 1.28% $44.50 82,497
Joseph D. Barnette, Jr. ......... ISO 2,246 0.29% May 3, 2003 17,721
NQSO 7,304 0.95% May 3, 2013 62,376
------------------ ---- -----------
Total 9,550 1.24% $44.50 80,097
</TABLE>
- --------------------------------------------
<TABLE>
<S> <C> <C> <C>
(1) The exercise of any stock option set forth above is conditional upon the BLACK -- SCHOLES ASSUMPTIONS
grantee being employed by BANC ONE at the time of exercise.
Duration: ISO: 10 years
(2) All share amounts and dollar amounts have been adjusted, as appropriate, for NQSO: 20 years
stock splits and stock dividends paid on BANC ONE common stock through Vesting: 100% at 5 years
Dececember 31, 1993. Exercise at
Retirement: ISO: 12 months
(3) Incentive Stock Options (ISO) or Non-Qualified Stock Options (NQSO). NQSO: 3 months
Interest: 6.04%
(4) Based on 770,661 stock options granted to all employees during 1993. Dividends: $1.24
Volatility: 18.55%
(5) Exercise price is equal to the market value of the underlying stock on the Reduction for
date of grant. Turnover: 36.12% ISO
39.15% NQSO
(6) Grant date present value is determined using the Black-Scholes Model. This
is a theoretical value for the stock options. The amount realized from a
stock option ultimately depends on the market value of BANC ONE stock at a
future date.
</TABLE>
12
<PAGE> 16
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED OPTIONS HELD UNEXERCISED OPTIONS HELD
NUMBER OF AT FISCAL YEAR END AT FISCAL YEAR END(3)
SHARES VALUE -------------------------- ---------------------------
ACQUIRED ON REALIZED(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME EXERCISE(1) ($) (SHARES) (SHARES) ($) ($)
- ----------------------------- ----------- ----------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John B. McCoy................ 0 0 0 215,035 0 2,101,282
Donald L. McWhorter.......... 0 0 0 89,088 0 754,743
Richard J. Lehmann........... 0 0 0 0 0 0
Thomas E. Hoaglin............ 0 0 0 49,299 0 508,566
Joseph D. Barnette, Jr. ..... 0 0 0 59,651 0 684,225
</TABLE>
- ---------------
(1) No options exercised in 1993.
(2) Fair market value at exercise minus the exercise price.
(3) Based on a fair market value of BANC ONE Common Stock of $39.125 on December
31, 1993.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following graph demonstrates a five year comparison of cumulative total
return for BANC ONE, the Standard & Poor's 500 Index (S&P 500) and an index with
respect to the performance of the banks comprising the Salomon Brothers, Inc. 50
bank composite ("Salomon 50"). (1)
COMPARISON OF 5-YEAR
CUMULATIVE TOTAL RETURN(2) FOR BANC ONE,
THE S&P 500 INDEX AND SALOMON 50
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P 500 SALOMON 50 BANC ONE
<S> <C> <C> <C>
1988 $100.00 $100.00 $100.00
1989 $131.59 $123.45 $150.47
1990 $127.49 $ 95.60 $147.45
1991 $166.17 $156.27 $287.47
1992 $178.81 $205.54 $327.54
1993 $196.75 $221.46 $309.56
</TABLE>
- ---------------
(1)The Salomon 50 is comprised of 50 prominent U.S. banks, bank holding
companies and similar institutions selected by Salomon Brothers, Inc.
Shareholders may obtain more information on the Salomon 50 and the composition
of the entities comprising the 50 institutions therein represented by contacting
Jeffrey Naschek of Salomon Brothers, Inc. at 212/783-7887.
(2)Assumes $100 invested on December 31, 1988 in each of BANC ONE Common
Stock, the S&P 500 Index and the Salomon 50. Total return assumes dividends are
reinvested.
13
<PAGE> 17
SAVINGS PLAN
In 1986, BANC ONE adopted the BANC ONE Security Savings Plan, a tax
deferred savings and profit sharing plan under Section 401(k) of the Internal
Revenue Code (the "401(k) Plan"). Employees who have completed six months or
more of continuous employment with BANC ONE or its affiliates and are 20 years
of age or older may participate in the 401(k) Plan by directing their employer
to make salary deferred contributions to the 401(k) Plan for their account up to
10% of the employee's base salary. The employee's salary deferred contributions
may be invested in the BANC ONE Common Stock Fund, a Bank One, Columbus, N.A.
Money Market Deposit Account, The One Group Income Fund and/or The One Group
Equity Index Fund. In addition to an automatic 20% annual matching contribution,
BANC ONE will make a supplemental employer matching contribution based on the
percentage increase over the preceding year of BANC ONE's annual originally
reported earnings per share ("EPS") as follows:
<TABLE>
<CAPTION>
TOTAL MATCHING
ORIGINALLY REPORTED CONTRIBUTION
EPS INCREASE (BASIC &
OVER PRECEDING YEAR SUPPLEMENTAL)
----------------------------------------------- ------------------
<S> <C>
Less than 11% (20% + 00%) = 20%
11%.......................................... (20% + 15%) = 35%
12%.......................................... (20% + 20%) = 40%
13%.......................................... (20% + 25%) = 45%
14%.......................................... (20% + 30%) = 50%
15%.......................................... (20% + 35%) = 55%
16%.......................................... (20% + 40%) = 60%
17%.......................................... (20% + 45%) = 65%
18%.......................................... (20% + 50%) = 70%
19%.......................................... (20% + 55%) = 75%
20%.......................................... (20% + 60%) = 80%
</TABLE>
Based upon this formula, a 60% supplemental contribution was made by BANC
ONE for 1993. Employer matching contributions vest upon the employee's
completion of five years of service with BANC ONE or one of its affiliates.
Employer matching contributions for 1993 for the account of the individuals
named in the Summary Annual Compensation Table are included in that table under
the column "All Other Compensation."
RETIREMENT BENEFITS
BANC ONE has a Retirement Plan (the "Plan") for its employees.
Contributions to the Plan are determined on an actuarial basis for all employees
as a group and not individually. The Plan benefits are based upon a percentage
of final average compensation which is defined as the average of the highest
consecutive five years Eligible Compensation (as described below) out of the
last ten full Plan years multiplied by the employee's years of credited service,
to a maximum of 35 years. The following table illustrates the
14
<PAGE> 18
approximate maximum benefits of an employee at various levels of Eligible
Compensation assuming continuation of the present plan and employment until age
65.
<TABLE>
<CAPTION>
CREDITED YEARS OF SERVICE AT AGE 65(2)(3)(4)
FINAL AVERAGE -----------------------------------------------------------------------------------------------
COMPENSATION(1) 10 YRS. 15 YRS. 20 YRS. 25 YRS. 30 YRS.
- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ 500,000 $ 88,100 $ 132,200 $ 176,200 $ 220,300 $ 264,400
600,000 106,000 159,000 212,000 265,100 318,100
700,000 123,900 185,900 247,800 309,800 371,800
800,000 141,800 212,700 283,600 354,600 425,500
1,000,000 177,600 266,400 355,200 444,100 532,900
1,200,000 213,400 320,100 426,800 533,600 640,300
1,400,000 249,200 373,800 498,400 623,100 747,700
1,600,000 284,923 427,385 569,847 712,309 854,770
<CAPTION>
FINAL AVERAGE
COMPENSATION(1) 35 YRS.
- --------------- ---------------
<S> <C>
$ 500,000 $ 308,400
600,000 371,100
700,000 433,700
800,000 496,400
1,000,000 621,700
1,200,000 747,000
1,400,000 872,300
1,600,000 997,232
</TABLE>
The Eligible Compensation for each employee under the Plan equals the base
salary, plus 50% of bonuses, overtime, commissions, shift differential and
incentive pay paid to each such person, including executive officers, covered by
the Plan.
- ---------------
(1) The current Eligible Compensation which would be used in calculating the
final average compensation for Messrs. John B. McCoy, McWhorter, Lehmann,
Hoaglin and Barnette is $1,482,500, $877,500, $618,750, $553,500 and
$542,500, respectively.
(2) As of January 1, 1994, the credited years of service for Messrs. McCoy,
McWhorter, Lehmann, Hoaglin and Barnette were approximately 27, 33, 4, 20
and 12 years, respectively.
(3) Annual benefits are limited by (i) the Tax Equity and Financial
Responsibility Act to a maximum benefit of $115,641 in 1993 and (ii) the Tax
Reform Act of 1986 with regard to current covered compensation to $235,840
in 1993. The benefit amount in excess of such limitations will be paid
through a separate excess benefit plan adopted by BANC ONE.
(4) Benefits set forth in the table are straight life annuity amounts and are
not subject to deductions for Social Security or other offset amounts.
CERTAIN REPORTS
Section 16 of the Securities Exchange Act of 1934 requires BANC ONE's
directors, executive officers and persons who own more than ten percent of a
registered class of BANC ONE's equity securities (currently, to the best of BANC
ONE's knowledge, there are no such persons) to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Based upon a
review of such reports and representations from BANC ONE directors and officers,
BANC ONE believes that during 1993 all such reports were filed on a timely basis
except that one report covering one transaction was filed late by Director Rene
C. McPherson (who did not report the purchase of 325 shares in April 1993 until
after May 1993); John W. Westman (formerly BANC ONE's Chief Financial Officer)
did not timely file a report of one transaction related to shares of BANC ONE
Common Stock acquired in March, 1993 in exchange for shares of an entity
acquired by BANC ONE; Senior Vice President Richard D. Lodge did not timely file
one report for a transaction related to a non-sale disposition of shares of BANC
ONE Common Stock; reports of Banc One Ohio Corporation Chairman Thomas E.
Hoaglin filed during the last two years, although timely, included one
mechanical mathematical error and one terminology error for which corrective
reports have been filed; and former executive officer, David M. Van Lear, filed
a Form 5 for the year 1991 which, although timely, contained a reporting error
for which a correcting report has been filed.
15
<PAGE> 19
TRANSACTIONS WITH MANAGEMENT AND OWNERS
All Directors, including members of the Committee, and Executive Officers
of BANC ONE and their associates are at present, as in the past, customers of
the banks and other companies affiliated with BANC ONE and have transactions
with such banks and other companies in the ordinary course of business.
Additional transactions may be expected to take place with banks and other
companies affiliated with BANC ONE in the ordinary course of business. Such
transactions have been and will continue to be on the same terms, including
interest rates and collateral on loans, as those prevailing at the time for
comparable transactions with other persons. Such transactions did not, and will
not, involve more than normal risk of collectibility or present other
unfavorable features.
Alex Shumate, a director of BANC ONE, is Managing Partner of the Columbus,
Ohio office of Squire, Sanders & Dempsey, attorneys. BANC ONE and its
subsidiaries retained Squire, Sanders & Dempsey for legal services in 1993 and
will utilize the law firm in 1994. Payments paid to Squire, Sanders & Dempsey by
BANC ONE and its affiliates in 1993 did not exceed 5% of the law firm's gross
revenues for the year and were comparable to payments that would have been paid
by BANC ONE and its affiliates to non-affiliated persons for similar services.
OWNERSHIP OF SHARES
No person is known to BANC ONE to be the beneficial owner of more than 5%
of any class of BANC ONE shares at January 1, 1994, except as follows:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------- ---------------------------------- ----------------- --------
<S> <C> <C> <C>
Common Stock.. BANK ONE OHIO TRUST COMPANY, N.A. 32,125,711 9.26%
100 East Broad Street shares(1)
Columbus, Ohio 43271
</TABLE>
Set forth below is information concerning the number of shares of BANC ONE
Common Stock(2) owned beneficially by all BANC ONE directors and executive
officers (40 individuals) as a group as of January 1, 1994 and by the executive
officers of BANC ONE named in the Summary Compensation Table on page 9, except
with respect to Messrs. John B. McCoy and McWhorter whose share ownership is
reported in the information on directors under "Election of Directors":
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
--------------------------------------------------- -------------------- ----------------
<S> <C> <C>
All Directors and Executive Officers as a group
(40 individuals)................................. 3,311,736(3) (4)
Richard J. Lehmann................................. 124,520 (4)
Thomas E. Hoaglin.................................. 70,881(5) (4)
Joseph D. Barnette, Jr. ........................... 206,253(6) (4)
</TABLE>
- ---------------
(1) Includes shares held by BANC ONE affiliates which have trust powers and
which hold shares in various agency and trust accounts. With respect to
those accounts, the BANC ONE affiliates have the sole power to vote
approximately 19,850,824 of such shares, shared power to vote approximately
1,334,630 of such shares, sole power to dispose of approximately 11,317,584
of such shares and shared power to dispose of approximately 4,902,519 of
such shares. All of the stock of the BANC ONE affiliates is owned by BANC
ONE.
(2) No shares of BANC ONE Preferred Stock are beneficially owned by any BANC ONE
director or executive officer, except for the 600 shares of BANC ONE
Preferred Stock owned by one executive officer and constituting less than 1%
of all the outstanding shares of BANC ONE Preferred Stock.
16
<PAGE> 20
(3) Includes options, which were, or within 60 days became, exercisable to
purchase 121,705 shares of BANC ONE Common Stock, but does not include
options to purchase 965,127 shares of BANC ONE Common Stock which options
are not presently exercisable. Includes 544,618 shares of BANC ONE Common
Stock awarded as restricted stock which may be voted by the recipients.
(4) Directors and executive officers of BANC ONE, individually and in the
aggregate, beneficially own less than 1% of the outstanding shares of BANC
ONE Common Stock.
(5) Excludes options on 49,299 shares which were not exercisable on or within 60
days of January 1, 1994. Includes restricted stock awards for 27,383 shares
which may be voted by Mr. Hoaglin.
(6) Excludes options on 59,651 shares which were not exercisable on or within 60
days of January 1, 1994. Includes restricted stock awards for 20,981 shares
which may be voted by Mr. Barnette.
APPROVAL OF 1994 KEY EXECUTIVE MANAGEMENT INCENTIVE COMPENSATION PLAN
FOR THE CHAIRMAN AND PRESIDENT OF BANC ONE CORPORATION
At the present time, as in previous years, to further incent selected
officers of BANC ONE and its subsidiaries to achieve corporate and individual
goals, such individuals have been eligible for cash bonus awards pursuant to
BANC ONE's existing Key Management Incentive Compensation Plan (the "Existing
Plan"). Until 1994, all cash payments made pursuant to the Existing Plan have
been deductible by BANC ONE for federal income tax purposes. However, as a
result of recent changes in federal tax laws (specifically, the Omnibus
Reconciliation Act of 1993 (the "Act")), some payments, if made under the
Existing Plan to BANC ONE's Chairman or President in 1994 or subsequent years,
would not be deductible by BANC ONE and BANC ONE would lose the tax benefits of
such payments.
In order that BANC ONE might continue to provide incentive compensation to
its Chairman and President and retain the tax benefits associated therewith, on
December 23, 1993 the Committee established, subject to shareholder approval,
the 1994 Key Executive Management Incentive Compensation Plan (the "1994 Plan"),
effective as of January 1, 1994. If the 1994 Plan is approved by shareholders
and otherwise complies with the Act, this substitution of the 1994 Plan for the
Existing Plan for the Chairman and President will allow BANC ONE to continue to
avail itself of federal tax deductions with respect to certain payments made
pursuant to the 1994 Plan which would not be available as deductions if paid
under the Existing Plan. Like the Existing Plan, which will remain in place with
respect to other officers of BANC ONE and its affiliates, the 1994 Plan provides
for cash award opportunities based upon the level of performance of each of the
participants.
The Act added a new Section 162(m) to the Internal Revenue Code of 1986, as
amended, (the "Code") which no longer permits publicly held corporations, such
as BANC ONE, to deduct as compensation "applicable employee remuneration" paid
to "covered employees" to the extent that the remuneration paid to a "covered
employee" exceeds $1 million for a taxable year. "Covered employees" is defined
in the Code by reference to Securities and Exchange Commission rules governing
disclosure of compensation paid to certain executive officers. As a result,
"covered employees" for purposes of the Code is effectively defined to include a
public company's chief executive officer and four most highly compensated
officers (other than the chief executive officer) at the end of the
corporation's fiscal year.
In order that BANC ONE may continue to deduct certain components of amounts
paid to its Chairman and President (the only employees impacted by the
limitation impacting "covered employees" with total compensation exceeding $1
million), pursuant to new Section 162(m), such compensation (i) must be payable
on account of the obtainment of one or more pre-established performance goals;
(ii) the performance
17
<PAGE> 21
goals must be established by a compensation committee of the Board of Directors
comprised solely of two or more outside directors; (iii) the material terms of
the compensation and the performance goals must be disclosed to and approved by
the shareholders before payments are made; and (iv) the compensation committee
must certify that the performance goals have been satisfied before payment is
actually made.
The performance objectives or goals for the Chairman and President pursuant
to the 1994 Plan have been approved and adopted for BANC ONE by the Committee,
which is comprised solely of outside directors of BANC ONE CORPORATION. These
objectives or performance goals include specific targets for earnings growth and
return on assets and provide for awards based upon achieving these goals as set
forth in a matrix established by the Committee. The 1994 Plan specifies that the
"target award level" for the Chairman and President of BANC ONE are 60% and 55%,
respectively, of the base pay of each for the year. These target award levels
are at the same level as established under the Existing Plan in effect during
1993.
More specifically, the performance goals include (i) increasing BANC ONE's
earnings over the prior calendar year and (ii) achieving a high return on
assets. Established performance thresholds (at least a 5% increase in earnings
from the previous year and a return of assets of not less than 1.15%) must be
met by BANC ONE prior to any award being paid under the 1994 Plan. The
performance matrix specifying the actual award payment for the plan year (for
1994) as a percentage of the target award level as established by the Committee
is based upon the relationship between return on assets and earnings growth as
set forth in the matrix.
Calculation of the bonus to be paid under the 1994 Plan for BANC ONE's
Chairman will be calculated by (x) multiplying the Chairman's base pay by (y)
0.60 (the target level for the Chairman) times (z) the percentage set forth in
the matrix which, provided earnings for the year exceed earnings for the
preceding year by at least 5% and return on assets for the year is not less than
1.15%, range from 50% to 200% based upon the return on assets and earnings
growth as set forth in the matrix. The formula for the calculation of the
President's 1994 award under the 1994 Plan would be identical to that of the
Chairman's except that the base pay would be multiplied by 0.55 (the President's
target level).
Pro forma benefits for 1994 Plan. The following table sets forth the awards
that would have been paid under the 1994 Plan had the 1994 Plan been in effect
during 1993.
<TABLE>
<CAPTION>
DOLLAR NUMBER
NAME PRINCIPAL POSITION VALUE OF UNITS
- -------------------------------- --------------------------------- ---------- ---------
<S> <C> <C> <C>
John B. McCoy................... Chairman and CEO, BANC ONE $1,167,200 N/A
Donald L. McWhorter............. President/COO, BANC ONE $ 652,000 N/A
Richard J. Lehmann.............. Chairman, Banc One Arizona Corp N/A N/A
Thomas E. Hoaglin............... Chairman, Banc One Ohio Corp N/A N/A
Joseph D. Barnette, Jr.......... Chairman, Banc One Indiana Corp N/A N/A
Total for Executive
Group.................... $1,819,200 N/A
Total for Non-Executive
Director Group........... N/A N/A
Total for Non-Executive
Officer Employee Group... N/A N/A
</TABLE>
Following year-end 1994, prior to any payment being made under the 1994
Plan, the Committee must certify to the Board of Directors that the performance
goals, as described above, have been satisfied.
18
<PAGE> 22
If the 1994 Plan is approved by the Shareholders and the other conditions
as set forth above are satisfied, payments made to BANC ONE's Chairman and
President under the 1994 Plan will be ordinary income to such individuals and
will be deductible by BANC ONE as compensation expense. Payments will be made in
cash in the calendar year following performance or, if requested by a recipient
on a timely basis, an award or a portion thereof may be deferred until the
participant's retirement. Such deferred payments will be invested by BANC ONE in
one or more funds for the benefit of the employee until the time of
distribution. This deferral option has also been available under the Existing
Plan for many years.
The Committee may amend the 1994 Plan or the performance criterion at any
time; however, in doing so, the requirements of Section 162(m) must be met in
order that payments made to the Chairman and President thereunder remain
eligible as deductible compensation expenses to BANC ONE CORPORATION for federal
tax purposes.
The Board of Directors continues to believe that incentive compensation is
an important component of total compensation for its Chairman and President.
Such compensation is intended to incent these executives to ensure that BANC ONE
achieves specified earnings growth and return on assets. Given the fact that
both BANC ONE's earnings growth and return on assets are annually among the
highest in the industry, sustaining such results year after year is an important
goal to both BANC ONE and its shareholders. The attainment of such goals are
integrally linked to BANC ONE's favorable market value to book value, which the
Board of Directors believes to be important to all BANC ONE shareholders.
Conditioning awards under the 1994 Plan for the Chairman and President on or
upon the achievement of goals related to earnings growth and return on assets is
regarded as important to the realization of those goals. Substitution of the
1994 Plan for the Existing Plan with respect to BANC ONE's Chairman and
President will allow BANC ONE to continue to deduct such payments under the new
tax law.
Approval of the 1994 Plan requires the affirmative vote of the holders of
the majority of outstanding shares of BANC ONE CORPORATION Common Stock.
FOR THE REASONS STATED HEREIN, THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR APPROVAL OF THE 1994 PLAN AND THE PERFORMANCE GOALS
ESTABLISHED BY THE COMMITTEE.
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand, which has served as independent certified public
accountants to BANC ONE since its formation, has been selected by the Board of
Directors to serve in that capacity in 1994. A representative of Coopers &
Lybrand will be present at the Annual Meeting of Shareholders in order to
respond to questions and to make any other statement he deems appropriate.
SHAREHOLDER PROPOSALS
In order for shareholder proposals to be considered for presentation at the
1995 Annual Meeting of Shareholders, such proposals must be received by BANC ONE
not later than November 12, 1994.
ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS
BANC ONE's Regulations provide that shareholder nominations for election as
directors may be made in compliance with certain advance notice, informational
and other applicable requirements. In order to be considered, a shareholder's
notice of director nomination must be delivered to or mailed and received by the
19
<PAGE> 23
Secretary of BANC ONE at 100 East Broad Street, Columbus, Ohio 43271 not less
than 60 or more than 90 days prior to BANC ONE's Annual Meeting; provided,
however, that if the Annual Meeting is called and less than 75 days prior public
disclosure of the date of the meeting is given, timely notice by the shareholder
must be delivered to or mailed and received by the Secretary of BANC ONE at the
above address not later than the close of business on the earlier of the 15th
day following the day on which public disclosure of the date of the meeting was
made or the 15th day following the date that notice of the meeting was mailed.
BANC ONE's Annual Meeting is traditionally held on the third Tuesday of April of
each year. A shareholder's notice of director nominations must contain certain
information required by the Regulations of BANC ONE. Copies of the Regulations
are available upon request made to the Secretary of BANC ONE at the above
address. The requirements described above do not supersede the requirements or
conditions established by the Securities and Exchange Commission for shareholder
proposals to be included in BANC ONE's proxy materials for a meeting of
shareholders.
OTHER BUSINESS
As of the date of the Proxy Statement, the Board of Directors and
management are not aware of any other matter which will come before the Annual
Meeting of Shareholders. Should any other matter requiring a vote of the
shareholders arise, the proxy in the enclosed form confers upon the person or
persons entitled to vote the shares represented by such proxy discretionary
authority to vote the same with regard to any other matter in accordance with
their best judgment in the interest of BANC ONE.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS.
ALTHOUGH YOU MAY PLAN TO ATTEND THE MEETING, IT IS IMPORTANT THAT YOU EXECUTE,
DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED POST-PAID ENVELOPE.
YOU MAY WITHDRAW YOUR PROXY PRIOR TO ITS BEING VOTED.
By Order of the Board of Directors
ROMAN J. GERBER
Executive Vice President
and Secretary
Columbus, Ohio
March 11, 1994
20
<PAGE> 24
BANC ONE CORPORATION
PROXY FOR SHARES OF COMMON STOCK
Annual Meeting of Shareholders
April 19, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
-----------------------------------------------------------
The undersigned hereby appoints John R. Hall, Frederick P. Stratton, Jr. and
Robert D. Walter, and each of them, Proxies, with power of substitution to
each, for and in the name of the undersigned to vote, as designated below, all
the shares of Common Stock of BANC ONE CORPORATION held of record by the
undersigned as of February 25, 1994 at the Annual Meeting of Shareholders to be
held on April 19, 1994 or any adjournment thereof.
1. ELECTION OF DIRECTORS
FOR all nominees listed below / / WITHHOLD AUTHORITY / /
(except as marked to the to vote for all
contrary below) nominees listed below
Charles E. Exley, E. Gordon Gee, John R. Hall, Laban P. Jackson, Jr.,
John B. McCoy, John G. McCoy, Rene C. McPherson, Donald L. McWhorter, Thekla R.
Shackelford, Alex Shumate, Frederick P. Stratton, Jr., Romeo J. Ventres, and
Robert D. Walter.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
_____________________________________________________________________________
2. Proposal to approve the 1994 Key Executive Management Incentive
Compensation Plan
For / / Against / / Abstain / /
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(PLEASE SEE REVERSE SIDE)
<PAGE> 25
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED IN THE PROXY
STATEMENT, FOR PROPOSAL 2, AND ACCORDING TO THE JUDGMENT OF THE PROXIES WITH
RESPECT TO PROPOSAL 3.
The undersigned hereby acknowledges receipt of the Notice of Meeting and Proxy
Statement, each dated March 11, 1994. Please sign exactly as name appears
hereon. When shares are held by joint tenants, both should sign.
Date: ______________________ , 1994 ____________________________________
(Signature)
____________________________________
(Signature)
(When signing as attorney, as
executor, administrator, trustee or
guardian, please give full title as
such. If a corporation, please sign
in full corporate name by President
or other authorized officer. If a
partnerhsip, please sign in
partnership name by authorized
person.)
Please mark, sign, date and return this Proxy promptly
using the exclosed envelope.
<PAGE> 26
BANC ONE CORPORATION
1994 KEY EXECUTIVE MANAGEMENT INCENTIVE COMPENSATION PLAN
SECTION 1. Establishment, Purpose, and Effective Date of Plan
1.1 Establishment. BANC ONE CORPORATION (the CORPORATION) hereby
establishes the "Key Executive Management Incentive Compensation Plan" (the
Plan) for the Chairman and the President of the CORPORATION.
1.2 Purpose. The purpose of the Plan is to promote the interest of
the CORPORATION and its shareholders by strengthening its ability to attract
and retain executive key management talent and to motivate superior levels of
performance.
1.3 Effective Date. The Plan is effective as of January 1, 1994. The
Plan was established on December 23, 1993 by the Personnel and Compensation
Committee of the Board of Directors of the CORPORATION, subject to the approval
by the shareholders of the CORPORATION prior to the payment of any awards.
SECTION 2. Plan Administration
2.1 Plan Administration. The Plan is administered by the Personnel
and Compensation Committee of the Board of Directors of BANC ONE CORPORATION.
Its findings and determinations regarding this Plan are official and final.
SECTION 3. Definitions
3.1 Definitions. Whenever used herein, the following terms shall have
their respective meanings set forth below:
(a) "Award" means the cash amount payable from the
achievement of performance goals as stated in the
Plan.
(b) "Committee" means the Committee appointed by the
Board of Directors of the CORPORATION to administer
the Plan. This Committee shall consist of two (2) or
more outside directors as defined by Section 162(m)
of the Internal Revenue Code of 1986 as amended from
time to time.
(c) "Corporation" means BANC ONE CORPORATION, a bank
holding company under the Bank Holding Company Act of
1956, headquartered in Columbus, Ohio.
I-1
<PAGE> 27
(d) "Disability" means disability as determined by the
Committee in good faith upon receipt of and in
reliance on sufficient competent medical advice from
one or more individuals, selected by the Committee,
who are qualified to give professional medical
advice.
(e) "Plan Year" means the one year period beginning
January 1 and ending on December 31 of each
calendar year.
3.2 Gender and Number. Except when otherwise indicated by the
context, words in the masculine gender when used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.
SECTION 4. Eligibility and Participation
4.1 Eligibility and Participation. Participation in the Plan is
limited to the employees holding the positions of Chairman and President of
BANC ONE CORPORATION. Participation may be revoked at any time by the
Committee. An employee whose participation is revoked will be notified, in
writing, of such revocation as soon as practicable following such action. An
individual who becomes eligible to participate in the Plan during the Plan Year
may be approved by the Committee for a partial year of participation. In such
case, the participant's award shall be prorated based on the number of full
months of participation.
SECTION 5. Award Determination
5.1 Target Award Level. Target Award levels are expressed in terms of
a percentage of Base Pay. Base Pay is the salary earned while participating in
the Plan in the current Plan Year. The Target Award level for the Chairman is
60% of Base Pay. The Target Award for the President is 55% of Base Pay.
5.2 Maximum Award Level. The maximum amount payable under the Plan is
defined as a percentage of the Target Award. The 1994 Maximum Award level is
200% of the Target Award. This results in a Maximum Award of 120% of Base Pay
for the Chairman and 110% of Base Pay for the President.
I-2
<PAGE> 28
5.3 Corporate Performance Measure. The Corporate Performance
Thresholds for the Plan Year shall be a minimum increase in earnings over the
prior calendar year and a minimum Return on Assets (ROA), as established by the
Committee. The established performance thresholds must be met by the
CORPORATION prior to any incentive awards being paid. A performance matrix
specifying the actual award payments for the Plan Year as a percentage of
Target Award Level will be established by the Committee for each Plan Year, and
will be based on the relationship between ROA and Earnings Growth. The matrix
will determine the award payment.
5.4 Payment of Awards. At the end of each Plan Year, awards will be
computed for each participant. Award amounts may vary above or below the
Target Award level based on the determination of Corporate performance results.
Payment of Awards will be made in cash, subject to applicable tax withholding,
as soon as practicable after the achievement of performance measures and other
material terms of the Plan is certified, and individual awards are approved,
by the Committee, provided, however that the Committee may in its sole
discretion reduce individual awards determined by the performance matrix.
5.5 Modification, Amendment, and Termination of the Plan. The Plan
may be modified, amended, or terminated at any time by the Board of Directors
of the CORPORATION. The existence of the Plan does not obligate or bind BANC
ONE CORPORATION to pay an award to any participant (or beneficiary) nor does
any participant (or beneficiary) attain any vested, non-forfeitable right to an
award until the award has been finalized and approved for payment by the
Committee.
SECTION 6. Termination of Employment
6.1 Termination of Employment. In the event a participant's
employment is terminated due to death or Disability, the participant's award
will be reduced to reflect the partial year of participation. This reduction
will be determined by multiplying the award by a fraction, the numerator of
which is the Participant's total months of participation in the current Plan
Year through the date of termination rounded up to whole months, and the
denominator of which is twelve (12). The participant's award will be paid as
soon as practicable following the end of the Plan Year and after the attainment
of the Performance Measures is certified by the Committee. In the event a
participant's employment is terminated for reasons other than death or
disability, all rights to an award for the Plan Year will be forfeited.
I-3
<PAGE> 29
6.2 Beneficiary Designation. Each Participant under the Plan may,
from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his death before he receives any or all of such benefit. Each
designation will revoke all prior designations by the same Participant, shall
be in a form prescribed by the Committee, and will be effective only when filed
by the Participant in writing with the Committee during his lifetime. In the
absence of any such designation, or if for any reason such designation is
ineffective, in whole or in part, benefits remaining unpaid at the
Participant's death shall be paid to his estate.
SECTION 7. General Provisions
7.1 Tax Withholding. Any and all payments made under the Plan shall
be subject to applicable federal, state, or local taxes required by the law to
be withheld.
7.2 Benefit Plans Treatment of Award as Compensation. Amounts paid
under this Plan will not be considered compensation for purposes of other BANC
ONE Qualified Benefit Plans unless specifically provided for in such plans.
The treatment of these amounts under any non-qualified benefit plans will be
determined according to the provisions of such plans.
7.3 Deferral of Award. If a participant has been designated as
eligible to participate in the BANC ONE CORPORATION Incentive Compensation
Deferral Plan, an award or portion thereof granted under the Plan may be
deferred pursuant to the terms of that plan, provided a timely deferral
election is made by the participant.
7.4 Nontransferability. Except as specifically provided herein or as
may otherwise be required by law, no undistributed bonus amount payable to the
participant may be sold, transferred, or assign or encumbered, in whole or in
part, by a participant, and any attempt to so alienate or subject any such
amount shall be void.
I-4
