<PAGE>
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 [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BANC ONE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BANC ONE CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF BANC ONE CORPORATION]
March 8, 1995
Dear Shareholders:
It is my pleasure to invite you to the Annual Meeting of BANC ONE CORPORATION
Shareholders. This year the meeting will be held on Tuesday, April 18 at 9:00
A.M. at the Hyatt Regency Columbus at the Greater Columbus Convention Center,
350 North High Street, Union Room, Columbus, Ohio. A map showing the location
of the meeting has been provided on the back cover of the attached Proxy
Statement. Your Board of Directors and Management look forward to greeting
those shareholders able to attend.
We are asking you to vote for the election of Directors, the approval of the
1995 Stock Incentive Plan (including concurrent termination of the 1989 Stock
Incentive Plan), and the amendment of the 1994 Key Executive Management
Incentive Compensation Plan, as described in the attached Notice of Meeting and
Proxy Statement.
For the reasons set forth in the Proxy Statement, your Board of Directors
unanimously recommends a vote FOR Items 1, 2 and 3 as set forth on the enclosed
Proxy Card.
It is important that your shares be represented at the meeting whether or not
you are able to attend personally. Accordingly, I urge you to sign and date the
enclosed Proxy Card and return it in the enclosed envelope as promptly as
possible.
Thank you for your interest and participation in the affairs of BANC ONE.
Sincerely,
/s/ John B. McCoy
-----------------
John B. McCoy
Chairman and Chief Executive Officer
<PAGE>
[LOGO OF BANC ONE CORPORATION]
BANC ONE CORPORATION
NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
Columbus, Ohio
March 8, 1995
To the Shareholders of BANC ONE CORPORATION:
Notice is hereby given that the Annual Meeting of Shareholders of BANC ONE
CORPORATION will be held at the Hyatt Regency Columbus at the Greater Columbus
Convention Center, 350 North High Street, Union Room, Columbus, Ohio, on
Tuesday, April 18, 1995, 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 1995 STOCK INCENTIVE PLAN--Approval of the 1995
Stock Incentive Plan for the employees and directors of BANC ONE
CORPORATION.
PROPOSAL TO APPROVE AN AMENDMENT OF THE 1994 KEY EXECUTIVE INCENTIVE
COMPENSATION PLAN--Approval of an Amendment of the 1994 Key Executive
Management Incentive Compensation Plan for the Chairman and 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 24, 1995 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:
/s/ Roman J. Gerber
----------------------------
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.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GENERAL INFORMATION....................................................... 1
ELECTION OF DIRECTORS..................................................... 1
DIRECTORS FEES AND COMPENSATION........................................... 4
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION............... 5
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......................... 14
Savings Plan............................................................ 14
Retirement Benefits..................................................... 15
CERTAIN REPORTS........................................................... 16
TRANSACTIONS WITH MANAGEMENT AND OTHERS................................... 16
OWNERSHIP OF SHARES....................................................... 16
APPROVAL OF 1995 STOCK INCENTIVE PLAN..................................... 17
APPROVAL OF AMENDMENT OF 1994 KEY EXECUTIVE MANAGEMENT INCENTIVE COMPENSA-
TION PLAN................................................................ 26
INDEPENDENT PUBLIC ACCOUNTANTS............................................ 27
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING............................. 27
ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS................................ 27
OTHER BUSINESS............................................................ 28
</TABLE>
<PAGE>
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 18, 1995. The enclosed proxy is solicited by the Board of Directors of
BANC ONE. This Proxy Statement is being mailed on or about March 8, 1995.
The close of business on February 24, 1995, 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 24, 1995, BANC
ONE had outstanding and entitled to vote 393,684,469 shares of Common Stock
without par value ("Common Stock"), each of which is entitled to one vote. The
4,997,999 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, for
the 1995 Stock Incentive Plan and for amendment of the 1994 Key Executive
Management Incentive Compensation Plan.
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, the 1995 Stock Incentive Plan
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 D. F. King & Co., Inc. to
assist in such solicitation for a fee of $8,500 plus expenses.
ELECTION OF DIRECTORS
The number of Directors to be elected at the Annual Meeting has been fixed by
the Board of Directors at twelve. Each Director will hold office until the 1996
Annual Meeting of Shareholders or until a successor
<PAGE>
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 twelve 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.
With the exception of Richard J. Lehmann, who will take office as the
President of BANC ONE following the Annual Meeting, each of the nominees for
election as Director is currently a Director of BANC ONE. Each of BANC ONE's
present Directors was elected by the shareholders at the 1994 Annual Meeting,
except for Richard M. Scott, who was elected by the Board on October 18,
1994.(1) 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, if applicable, 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, 1995.
<TABLE>
<CAPTION>
SHARES OF
NAME, AGE, POSITIONS BANC ONE
AND OFFICES WITH COMMON STOCK
BANC ONE AND YEAR PRINCIPAL OCCUPATIONS FOR PAST BENEFICIALLY
BECAME DIRECTOR FIVE YEARS AND OTHER INFORMATION(2) OWNED(3)
-------------------- ----------------------------------- ------------
<C> <S> <C>
Charles E. Exley--65 Corporate Director. Chairman and 7,500(4)
Director--1992 Chief 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.
E. Gordon Gee--51 President, The Ohio State University, 10,313(4)
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., The Limited, Inc., and
Glimcher Realty Trust.
John R. Hall--62 Chairman and Chief Executive Officer, 32,181(4)
Director--1987 Ashland, Inc. (oil refiner,
manufacturer and distributor of
chemicals). Mr. Hall serves as a
director of Reynolds Metals Company,
Humana Inc. and CSX Corporation.
Laban P. Jackson, Jr.--52 Chairman and Chief Executive Officer, 13,458(4)
Director--1993 Clear Creek Properties, Inc. (real
estate development), January 1989 to
present; prior thereto, Chairman and
Chief Executive Officer,
International Spike, Inc.
Richard J. Lehmann--50 Chairman and Chief Executive Officer, 144,356(5)
Banc One Arizona Corporation
(formerly, Valley National
Corporation), and Bank One, Arizona,
N.A. (formerly Valley National Bank),
January 1990 to present.
John B. McCoy--51 Chairman, BANC ONE, January 1987 to 523,184(6)
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.
</TABLE>
(1) Incumbent directors Rene C. McPherson, Donald L. McWhorter and Romeo J.
Ventres are not standing for re-election.
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
NAME, AGE, POSITIONS BANC ONE
AND OFFICES WITH COMMON STOCK
BANC ONE AND YEAR PRINCIPAL OCCUPATIONS FOR PAST BENEFICIALLY
BECAME DIRECTOR FIVE YEARS AND OTHER INFORMATION(2) OWNED(3)
-------------------- ----------------------------------- ------------
<C> <S> <C>
John G. McCoy--82 Chairman, BANC ONE Executive 506,510
Director--1967 Committee, May 1984 to present;
prior thereto, Vice Chairman and
President, BANC ONE.(7)
Richard L. Scott--42 President and Chief Executive 5,000(8)
Director--1994 Officer, Columbia/HCA Healthcare
Corporation (healthcare
provider), September, 1993 to
present; Chairman and Chief
Executive Officer, Columbia/HCA
Healthcare Corporation, 1987 to
September, 1993.
Thekla R. Shackelford--60 Education consultant. Ms. 158,430(4)
Director--1993 Shackelford 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.
and Fiserve Inc.
Alex Shumate--44 Office Managing Partner, Squire, 4,460(4)
Director--1993 Sanders & 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.
Frederick P. Stratton, Jr.--55 Chairman and Chief Executive 30,128(4)
Director--1988 Officer, Briggs & Stratton
Corporation (manufacturer of
small gasoline engines and
automotive locking devices),
November 1986 to present; prior
thereto, President and Chief
Executive Officer of Briggs &
Stratton. Mr. Stratton serves as
a Director of Weyco Group, Inc.,
Wisconsin Electric Power Company
and Wisconsin Energy
Corporation.
Robert D. Walter--49 Chairman and Chief Executive 80,547(4)
Director--1987 Officer, Cardinal Health, Inc.
(wholesale distributor of drug
and related health products).
Mr. Walter is a director of
Columbia/HCA Healthcare
Corporation and Westinghouse
Electric Corporation
</TABLE>
- --------
(2) Unless otherwise indicated, the nominee 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.
(3) Included in the shares set forth in the table above are shares owned by the
nominee, the nominee'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, 1995. 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 nominee.
(4) Share amount shown excludes unexercisable option on 1,000 shares of BANC
ONE Common Stock granted in 1994 to directors who are not employees of BANC
ONE or one of its affiliates as Director Stock Options pursuant to the 1989
Stock Incentive Plan. Share amounts shown include exercisable
(footnotes continued on the next page)
3
<PAGE>
options on shares of BANC ONE Common Stock granted to directors who are not
employees of BANC ONE or one of its affiliates as Director Stock Options
pursuant to the 1989 Stock Incentive Plan. The number of shares so-included
total 5,500 shares for each of Ms. Shackelford and Messrs. Exley and
Jackson; 8,801 shares for Dr. Gee; 10,768 shares for each of Messrs. Hall,
Stratton and Walter; and 3,300 shares for Mr. Shumate.
(5) Share amount shown excludes options to purchase 23,256 shares of BANC ONE
Common Stock pursuant to the 1989 Stock Incentive Plan, which options are
not currently exercisable. Includes 7,132 shares of BANC ONE Common Stock
awarded to Mr. Lehmann 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.
(6) Share amount shown excludes options to purchase 370,903 shares of BANC ONE
Common Stock pursuant to the 1989 Stock Incentive Plan, which options are
not presently exercisable. Includes (a) 165,997 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, and (b) exercisable options on 45,421
shares of BANC ONE Common Stock pursuant to the 1989 Stock Incentive Plan.
(7) John G. McCoy is John B. McCoy's father.
(8) Share amount shown excludes unexercisable option on 3,000 shares of BANC
ONE Common Stock granted to Mr. Scott in 1994 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, Thekla R.
Shackelford and Alex Shumate, held four meetings during 1994. This Committee
fixes the compensation, including salaries, bonuses and stock incentives, of
the chairman, president and other executive officers of BANC ONE, establishes,
as appropriate performance goals with respect to compensation plans and serves
as the committee which nominates directors for election. 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, Jr., John R. Hall, Charles E. Exley and Laban P. Jackson, Jr. held
four meetings during 1994. 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
Board in the management of BANC ONE, did not meet in 1994. During 1994, there
were five meetings of BANC ONE's Board of Directors. All 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.
BANC ONE has established a voluntary deferred compensation plan for non-
employee Directors. Under that plan, a non-employee Director may elect, on or
before December 31 of any year (or, in the case of a new Director, before such
Director's term begins), to defer payment of all retainer, meeting and
committee fees
4
<PAGE>
earned during the calendar year following such election and, unless such
election is subsequently terminated, all succeeding calendar years. Fees
deferred at the election of a Director are credited to an account established
by BANC ONE in the Director's name and invested, at the Director's election, in
the interest program and/or the BANC ONE stock program. Amounts invested in the
interest program accrue interest at the average interest rate paid on money
market deposit accounts or equivalent deposit accounts by Bank One, Columbus,
N.A. Amounts invested in the BANC ONE stock program are invested in BANC ONE
Common Stock and cash or cash equivalent securities, and cash dividends paid on
shares in the BANC ONE stock program are reinvested in additional BANC ONE
Common Stock. With certain limited exceptions, deferred amounts are paid in
cash in a lump sum payment or in approximately equal annual installments over a
five or ten-year period at the election of the Director, commencing 30 days
after the first business day of the calendar year following the date the plan
administrator is notified that the Director has ceased to be a Director. No
shares of BANC ONE Common Stock are distributed to Directors under the plan. At
the present time nine current non-employee Directors participate in the
deferred compensation plan.
Under 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 ("Director Stock Option"). In 1994, each
of BANC ONE's re-elected non-employee Directors received an option on 1,000
shares of BANC ONE Common Stock at an exercise price of $33.875 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. Upon his election to the
Board in October, 1994, Mr. Scott received an option on 3,000 shares of BANC
ONE Common Stock at an exercise price of $28.00 per share, the market value of
a share of BANC ONE Common Stock as of the date of grant. Contingent upon
shareholder approval of the 1995 Stock Incentive Plan, as described elsewhere
in this Proxy Statement, the 1989 Stock Incentive Plan was terminated by the
Board of Directors effective April 17, 1995. Outstanding options under the 1989
Stock Incentive Plan will remain in effect under the terms of their respective
grants. If not terminated and replaced by the 1995 Stock Incentive Plan, the
1989 Stock Incentive Plan would provide automatic option grants to non-employee
Directors in 1995.
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, McPherson and Shumate, none of whom is now or in the past was an
officer of BANC ONE or any of its subsidiaries.
Members of the Committee 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
5
<PAGE>
legal services in 1994 and will utilize the law firm in 1995. Payments paid to
Squire, Sanders & Dempsey by BANC ONE and its affiliates in 1994 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. John B. McCoy serves as Chairman of
the Compensation Committee of Cardinal Health, Inc., whose Chairman and Chief
Executive Officer, Robert D. Walter, is a director of BANC ONE.
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.
Each year the Committee conducts a thorough review of its executive
compensation program. This review includes a comprehensive analysis provided by
an independent, 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").
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 represented by a broader
grouping of companies that offer diversified investment alternatives. Thus, the
Peer Group used for compensation purposes is not the same as the peer group
index set forth and used 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
salary, 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 compensation, as discussed
below, the Committee balances the need to provide a compensation opportunity
that is competitive with the Peer Group, with its desire to pay for performance
in both the short- and long-term, with its goal to promote long-term equity
ownership and with the need to comply with complex tax and accounting rules.
Each component of executive compensation 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 per executive,
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 proposed regulations issued under
the new tax provisions.
6
<PAGE>
In 1994, the Committee 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 BANC ONE's Chairman and President (the "1994
EMIC Plan") and (b) establishing performance criteria under the 1989 Stock
Incentive Plan for granting restricted stock awards to BANC ONE's Chairman and
President in 1995. The Committee has also recommended and the Board has
adopted, subject to shareholder approval, a new stock incentive plan that has
been structured with the requirements of Section 162(m) in mind and amendments
to the 1994 EMIC Plan which, in addition to providing greater flexibility with
respect to the establishment of performance thresholds, modifies the 1994 EMIC
to meet requirements of proposed Internal Revenue Service changes to the
proposed regulations.
It is the Committee's policy to maximize the effectiveness, as well as the
tax-efficiency, of BANC ONE's executive compensation plans. In that regard, the
Committee intends to maintain flexibility to take actions which it deems to be
in the best interests of BANC ONE and its shareholders but which may not
qualify for tax deductibility under Section 162(m) or other sections of the
Code.
BASE SALARIES
Base salaries for executive officers are established at levels considered
appropriate in view of the duties and scope of responsibilities of each
officer's position. The Committee has established a goal of providing base
salaries for executives at approximately the 50th percentile of the Peer Group.
In determining base salaries, the Committee takes into account external pay
practices of the Peer Group, individual performance, special assignments or
responsibilities, level of responsibility, time in position, prior experience
and knowledge. The Committee uses broad discretion when setting base salary
levels and considers all of the above criteria. No specific weighting is
assigned to these criteria. Mr. McCoy's current base salary of $995,000, which
was set by the Committee in July 1993, was established on the basis of these
principles.
ANNUAL INCENTIVE OPPORTUNITY
In 1994, BANC ONE's Chairman and President were eligible to participate in
the 1994 EMIC Plan, while all other executive officers participated in the Key
Management Incentive Compensation Plan ("KMIC"). Both the 1994 EMIC Plan and
KMIC established incentive award opportunities for each participant based on
his or her level of responsibility. The Committee has established a goal of
targeting annual incentive opportunities to the 75th percentile of the Peer
Group, for superior performance.
The 1994 EMIC Plan, covering Mr. McCoy and Mr. McWhorter, established
specific performance targets of at least a 5% increase in earnings from the
previous year and a return on assets of not less than 1.15%, and provided for
award opportunities based upon achieving these goals as set forth in a matrix
established by the Committee. The target award levels for Mr. McCoy and Mr.
McWhorter are fixed by the 1994 EMIC Plan at 60% and 55%, respectively, of
annual base salary. Because the performance targets were not achieved in 1994,
no awards were earned by Mr. McCoy or Mr. McWhorter under the 1994 EMIC Plan.
KMIC awards to all other executive officers are based upon a formula which
gives 25% consideration to a discretionary evaluation of the individual's
contribution and are 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 and, as in the case with respect to the 1994 EMIC
Plan, KMIC performance thresholds focus solely upon the financial performance
of BANC ONE without regard to an executive officer's individual contribution to
BANC ONE or, where relevant, a particular BANC ONE affiliate. In general,
target award levels for
7
<PAGE>
executive officers under KMIC ranged from 25% to 50% of annual base salary.
Because the performance targets were not achieved in 1994, no awards were
earned by executive officers under KMIC and, accordingly, no KMIC awards were
granted in 1994. However, in recognition of the significant individual
contributions made by certain executive officers in 1994, the Committee made
discretionary cash awards to such executive officers (including Mr. McCoy)
outside of the 1994 EMIC Plan and KMIC. The Committee based such awards on the
same criteria utilized by the Committee in determining base salaries. No
specific weighting was assigned to these criteria. Mr. McCoy's discretionary
cash award of $510,000 was established on the basis of these principles.
Discretionary cash awards for executive officers were, however, significantly
less in 1994 than awards granted in 1993 under KMIC.
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. Equity-based awards for executive
officers are intended to be at a level somewhat above the median of Peer Group
practice. 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 (the "1989 Plan")
which provides for the grant of several types of equity-based awards, including
stock options and restricted stock awards. Although the 1989 Plan authorizes
the Committee to grant stock appreciation rights, performance shares or
performance awards, such awards have not been granted by the Committee for 1994
or any earlier year.
No restricted stock awards were granted to Mr. McCoy or to Mr. McWhorter in
1994 since, because of the belated adoption of Section 162(m) of the Internal
Revenue Code and proposed regulations related thereto, the Committee was not
able to establish on a timely basis the performance targets required in order
for such stock awards to be deductible by BANC ONE in 1994 for federal income
tax purposes. With respect to executive officers other than the Chairman and
the President, the Committee considered each individual's overall past and
expected future contribution to BANC ONE as well as the amount and nature of
similar awards granted by the Peer Group. The Committee has broad discretion in
granting restricted stock awards and considers all of the above criteria; no
specific weighting is assigned to these criteria. Based on this criteria and on
a discretionary basis, the Committee made restricted stock awards to other BANC
ONE executive officers.
In 1994, the Committee granted stock options to its key executives based upon
a subjective evaluation of each individual's past and expected future
contribution to BANC ONE, with consideration also having been given to 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. In 1994, Mr. McCoy
received options to purchase 179,783 shares of Common Stock with an exercise
price of $32.25 per share. This award reflected the Committee's assessment of
Mr. McCoy's outstanding leadership and contribution to BANC ONE's premier
position in its industry.
In connection with the grant of stock options in 1994, the Committee awarded
dividend equivalent rights to a portion of the options granted to Mr. McCoy and
Mr. McWhorter, as discussed in the footnote to the Option Grant Table.
OTHER COMPENSATION
In 1994, a "Split Dollar" life insurance plan was introduced covering, among
others, the executive officers. Under this plan, which replaced the employee
life insurance plan for covered officers, BANC ONE will be reimbursed for its
contributions to premium costs from each policy's cash value or death benefit.
8
<PAGE>
CONCLUSION
Through the plans described above, a significant portion of BANC ONE's
executive compensation is linked directly to individual and corporate
performance and long-term stock price appreciation. The Committee will continue
to review all elements of executive compensation to ensure that they continue
to meet BANC ONE's business objectives.
THE PERSONNEL AND COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Romeo J. Ventres, Chairman
E. Gordon Gee
Rene C. McPherson
Thekla R. Shackelford
Alex Shumate
EXECUTIVE COMPENSATION
Summary Annual Compensation
The following Summary Annual Compensation Table sets forth the individual
compensation paid to BANC ONE's Chief Executive Officer and each of the four
other most highly compensated executive officers for services rendered in all
capacities during the fiscal years ended December 31, 1992, December 31, 1993
and December 31, 1994.
9
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION (1) COMPENSATION
------------------------------ -----------------------------
AWARDS
---------------------
OTHER
ANNUAL RESTRICTED STOCK LTIP
SALARY BONUS COMPENSATION STOCK(3) OPTIONS(4) PAYOUTS
NAME PRINCIPAL POSITION YEAR ($) ($) ($) ($) (SHARES) ($)
---- ------------------------------- ---- ------- --------- ------------ ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John B. McCoy... Chairman and CEO, BANC ONE 1994 995,000 510,000 148,863(2) 0 179,783
Chairman and CEO, BANC ONE 1993 972,500 1,020,000 70,531(2) 708,129 58,336
Chairman and CEO, BANC ONE 1992 907,000 980,000 62,611(2) 460,100 37,799
Donald L. Mc- President/COO, BANC ONE 1994 745,000 285,000 84,590(2) 0 113,752
Whorter........
President/COO, BANC ONE 1993 592,500 570,000 31,410(2) 432,006 27,364
President/COO, BANC ONE 1992 523,564 511,300 26,289 279,930 22,385
Richard J. Leh- Chairman, Banc One Arizona Corp 1994 457,000 234,200 86,744(2) 230,007 23,256
mann (7).......
Chairman, Banc One Arizona Corp 1993 450,000 337,500 12,665 -- --
Thomas E. Chairman, Banc One Ohio Corp 1994 424,500 231,300 12,891 250,002 26,357
Hoaglin........
Chairman, Banc One Ohio Corp 1993 406,000 295,000 6,900 181,293 10,815
Chairman, Banc One Ohio Corp 1992 370,500 256,800 4,442 132,010 9,914
Joseph D. Bar- Chairman, Banc One Indiana Corp 1994 414,500 209,800 16,282 235,006 23,256
nette, Jr. ....
Chairman, Banc One Indiana Corp 1993 398,000 289,000 13,016 175,063 10,505
Chairman, Banc One Indiana Corp 1992 377,000 264,400 11,955 125,130 9,268
<CAPTION>
ALL OTHER
COMPENSATION(5)
NAME ($)
---- ---------------
<S> <C>
John B. McCoy... 108,093
13,333
11,818
Donald L. Mc- 20,265
Whorter........
13,333
11,818
Richard J. Leh- 11,124
mann (7).......
Thomas E. 10,801
Hoaglin........
13,333
228,873(6)
Joseph D. Bar- 10,465
nette, Jr. ....
7,195
5,673
</TABLE>
- -------
(1)Includes amounts earned in fiscal year, whether or not deferred.
(2)Amounts included which exceed 25% of total:
<TABLE>
<CAPTION>
EXECUTIVE DESCRIPTION 1994 1993 1992
- --------- ----------- ------- ------- -------
<S> <C> <C> <C> <C>
John B. McCoy........... Personal use of company aircraft as required for security $63,498 $45,317 $37,984
reasons
by Board of Directors
Deferred 1994 payment under Dividend Equivalent Unit plan. $45,471
Donald L. McWhorter..... Personal use of company aircraft as required for security $11,062 $ 7,926
reasons by Board of Directors
Deferred 1994 payment under Dividend Equivalent Unit plan. $31,221
Richard J. Lehmann...... Net payment and tax gross-up for terminated supplemental $73,610
excess retirement plan
</TABLE>
(3) The restrictions on shares of restricted stock expire as to one-third of
the shares on 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, 1994, the total number of shares of restricted stock and the
value of said shares (based upon the closing market value of $25.375 per
share on said date) awarded to each of the persons listed above, are as
follows:
<TABLE>
<S> <C> <C>
John B. McCoy.......................................... 165,997 $4,212,174
Donald L. McWhorter.................................... 78,989 $2,004,346
Richard J. Lehmann..................................... 7,132 $ 180,975
Thomas E. Hoaglin...................................... 35,247 $ 894,393
Joseph D. Barnette, Jr................................. 28,098 $ 712,987
</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 Common Stock on the
date of grant and vest after five years.
(5) Includes employer matching contributions to the 401(k) Plan and the
Supplemental 401(k) Plan and, for the year 1994, includes the values of
the split-dollar arrangement with BANC ONE in the amount of $103,093;
$15,265; $9,324; $5,801; $8,665 for Messrs. McCoy, McWhorter, Lehmann,
Hoaglin, and Barnette, respectively. The split-dollar insurance program is
structured so that all premium payments are returned to BANC ONE at the
later of (i) the executive attaining the age of 65 or (ii) the expiration
of 15 policy years. In addition to the executive split-dollar policy, Mr.
McCoy is covered by a split-dollar arrangement that insures the lives of
Mr. McCoy and his wife.
(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 1994 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 was 1994.
10
<PAGE>
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. If approved by shareholders, the 1995 Stock
Incentive Plan will replace the 1989 Plan. The 1989 Plan is administered by the
five-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 1994, 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 1994 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
1994 expire as to one-third of the shares in 1998, one-third in 2000, and one-
third in 2002. No grants or awards of Stock Appreciation Rights, Performance
Shares or Performance Awards were made under the 1989 Stock Incentive Plan
during 1994.
The following tables set forth (i) the number and value of options granted in
fiscal year 1994 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 1994.
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (2)
-------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES UNDERLYING OPTIONS GRANT DATE
OPTIONS GRANTED GRANTED EXERCISE PRESENT
----------------------- EMPLOYEES PRICE EXPIRATION VALUE (6)
NAME NUMBER IN 1993 (4) ($ PER SHARE) DATE (5) ($)
---- TYPE (3) ----------- ----------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
John B. McCoy (7)....... ISO 3,100 0.16% May 2, 2004 18,414
NQSO 176,683 8.96% $32.25 May 2, 2014 1,098,968
--------- ----------- ---- ---------
Total 179,783 9.12% 1,117,382
Donald L. McWhorter (7). ISO 3,100 0.16% May 2, 2004 18,414
NQSO 110,652 5.61% $32.25 May 2, 2014 688,255
--------- ----------- ---- ---------
Total 113,752 5.77% 706,669
Richard J. Lehmann...... ISO 3,100 0.16% May 2, 2004 18,414
NQSO 20,156 1.02% $32.25 May 2, 2014 125,370
--------- ----------- ---- ---------
Total 23,256 1.18% 143,784
Thomas E. Hoaglin....... ISO 3,100 0.16% May 2, 2004 18,414
NQSO 23,257 1.18% $32.25 May 2, 2014 144,659
--------- ----------- ---- ---------
Total 26,357 1.34% 163,073
Joseph D. Barnette,
Jr. ................... ISO 3,100 0.16% May 2, 2004 18,414
NQSO 20,156 1.02% $32.25 May 2, 2014 125,370
--------- ----------- ---- ---------
Total 23,256 1.18% 143,784
</TABLE>
- --------
(1) The exercise of any stock option set forth above
is conditional upon the grantee being employed
by BANC ONE at the time of exercise.
(2) All share amounts and dollar amounts have been Black-Scholes
adjusted, as appropriate, for stock splits and Assumptions
stock dividends paid on BANC ONE common stock
through December 31, 1994. Duration: ISO: 10 years
(3) Incentive Stock Options (ISO) or Non-Qualified NQSO: 20 years
Stock Options (NQSO). Vesting: 100% at 5 years
(4) Based on 1,972,168 stock options granted to Exercise at ISO: 3 months
all employees during 1994.) Retirement: NQSO: 12 months
(5) Stock options become exercisable on the fifth Interest: 7.18%
anniversary of the date of grant if executive Dividends: $1.180
is still employed. Volatility: 23.043%
(6) Grant date present value is determined using Reduction
the Black-Scholes Model. This is a theoretical for 37.69% ISO
value for the stock options. The amount Turnover: 37.57% NQSO
realized from a stock option ultimately depends
on the market value of BANC ONE stock at a
future date.
(7) These executives received Dividend Equivalent
Units (DEUs) in 1994. These units provide the
basis for a quarterly cash payment which equals
the amount of the dividend times the number of
units. In 1994, Mr. McCoy received 73,341 DEUs
and Mr. McWhorter received 50,357 DEUs. The
dividend for each of the 3rd and 4th quarters,
for which payments were made in 1994, was $0.31.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED OPTIONS HELD UNEXERCISED OPTIONS HELD
AT FISCAL YEAR END AT FISCAL YEAR END (3)
------------------------- -------------------------
NUMBER OF
SHARES VALUE
ACQUIRED ON REALIZED (2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME EXERCISE (1) ($) (SHARES) (SHARES) ($) ($)
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John B. McCoy........... 0 0 45,421 370,903 166,331 341,421
Donald L. McWhorter..... 0 0 13,310 198,439 48,741 118,045
Richard J. Lehmann...... 0 0 0 23,256 0 0
Thomas E. Hoaglin....... 0 0 7,487 73,101 27,417 97,080
Joseph D. Barnette,
Jr. ................... 0 0 16,804 72,069 61,536 115,590
</TABLE>
- --------
(1) No options exercised in 1994.
(2) Fair market value at exercise minus the exercise price.
(3) Based on a fair market value of BANC ONE Common Stock of $25.375 on
December 31, 1994.
13
<PAGE>
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/)
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG BANC ONE, S&P 500 INDEX AND SALOMON 50(/2/) INDEX
<CAPTION>
Measurement Period BANC ONE S&P SALOMON 50
(Fiscal Year Covered) CORPORATION 500 INDEX INDEX
- ------------------- ----------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-
12/31/89 $100.00 $100.00 $100.00
FYE 12/31/90 $ 98.00 $ 96.89 $ 77.54
FYE 12/31/91 $191.06 $126.28 $126.62
FYE 12/31/92 $217.70 $135.88 $166.05
FYE 12/31/93 $206.02 $149.52 $178.66
FYE 12/31/94 $153.10 $151.55 $170.57
</TABLE>
- --------
(1) The Salomon 50 is comprised of 50 prominent banks, U.S. 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, 1989 in each of BANC ONE common
stock, the S&P 500 Index and the Salomon 50. Total return assumes dividends
are reinvested.
Savings Plan
In 1986, BANC ONE adopted the BANC ONE Security Savings Plan (the "401(k)
Plan"), a tax deferred savings and profit sharing plan under Section 401(k) of
the Internal Revenue Code (the "Code"). 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 12% (maximum 10% prior to January 1, 1995) of the employee's
eligible earnings (base salary, overtime and commissions). 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 (R) Income Bond Fund, The One Group (R) Equity
14
<PAGE>
Index Fund and/or The One Group (R) Large Company Growth 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>
ORIGINALLY REPORTED TOTAL MATCHING
EPS INCREASE CONTRIBUTION
OVER PRECEDING YEAR (BASIC & SUPPLEMENTAL)
- ------------------- ----------------------
<S> <C>
Less than 11% (20% + 0%) = 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% or more (20% + 60%) = 80%
</TABLE>
Based upon this formula, no supplemental contribution was made by BANC ONE
for 1994. 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 1994 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 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. 35 YRS.
- --------------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 $ 89,500 $134,300 $179,000 $223,800 $268,500 $ 313,300
600,000 107,400 161,100 214,800 268,500 322,200 375,900
700,000 125,300 188,000 250,600 313,300 375,900 438,600
800,000 143,200 214,800 286,400 358,000 429,600 501,200
1,000,000 179,000 268,500 358,000 447,500 537,000 626,500
1,200,000 214,800 322,200 429,600 537,000 644,400 751,800
1,400,000 250,600 375,900 501,200 626,500 751,800 877,100
1,600,000 286,400 429,600 572,800 716,000 859,200 1,002,400
</TABLE>
- --------
(1) The current Eligible Compensation that would be used in calculating the
final average compensation for Messrs. John B. McCoy, McWhorter, Lehmann,
Hoaglin and Barnette is $1,235,000, $887,000, $574,000, $540,150 and
$519,400, respectively.
(2) As of January 1, 1995, the credited years of service for Messrs. McCoy,
McWhorter, Lehmann, Hoaglin and Barnette were approximately 28, 34, 6, 21
and 13 years, respectively.
(3) Annual benefits are limited by (i) the Tax Equity and Financial
Responsibility Act to a maximum benefit of $118,800 in 1994 and (ii) the
Tax Reform Act of 1986 with regard to current covered compensation to
$150,000 in 1994. 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.
15
<PAGE>
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.
CERTAIN REPORTS
Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act")
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 1994 all such reports
were filed on a timely basis except that Senior Vice President Julia F. Johnson
did not timely report the sale of 12 shares, acquired in the Dividend
Reinvestment Plan, and Charles W. Sulerzyski, Chief Executive Officer of the
BANC ONE Trust Group, did not timely report the vesting of 1,056 shares
previously awarded as Restricted Stock awards, a portion of which were
surrendered in payment of related federal income taxes.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
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.
See also "Compensation Committee Interlocks and Insider Participation."
OWNERSHIP OF SHARES
As of January 1, 1995, the Capital Group Companies, Inc., 333 South Hope
Street, Los Angeles, California 90071, the parent company of six investment
management companies, together with its subsidiaries, beneficially owned
29,489,260 shares of BANC ONE Common Stock representing 7.44% of the
outstanding shares of BANC ONE Common Stock. With respect to such shares, the
Capital Group Companies, Inc. and its subsidiaries in the aggregate had the
sole power to vote 2,453,010 of such shares and had sole dispositive power with
respect to all 29,489,260 shares. In addition thereto, Bank One Trust Company,
N.A., 100 East Broad Street, Columbus, Ohio 43271, and other BANC ONE
affiliates which have trust powers and which hold shares in various agency and
trust accounts, in the aggregate, held 22,764,518 shares of BANC ONE Common
Stock, representing 5.73% of the class. With respect to those accounts, the
BANC ONE affiliates have the sole power to vote approximately 10,952,723 of
such shares, shared power to vote approximately 4,128,408 of such shares, sole
power to dispose of approximately 9,841,462 of such shares and shared power to
dispose of approximately 4,830,050 of such shares. All the stock of such BANC
ONE affiliates is owned by BANC ONE.
16
<PAGE>
Set forth below is information concerning the number of shares of BANC ONE
Common Stock(1) owned beneficially by all BANC ONE directors and executive
officers (30 individuals) as a group as of January 1, 1995 and by the executive
officers of BANC ONE named in the Summary Compensation Table, except with
respect to Messrs. John B. McCoy and Lehmann whose share ownership is reported
in the information on nominees for election as directors under "Election of
Directors":
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
------------------------ -------------------- ----------
<S> <C> <C>
All Directors and Executive Officers as a group
(30 individuals).............................. 1,759,567(2) (3)
Donald L. McWhorter............................ 301,259(4) (3)
Thomas E. Hoaglin.............................. 92,827(5) (3)
Joseph D. Barnette, Jr......................... 251,115(6) (3)
</TABLE>
- --------
(1) 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.
(2) Includes options, which were, or within 60 days became, exercisable to
purchase 457,961 shares of BANC ONE Common Stock, but does not include
options to purchase 1,157,079 shares of BANC ONE Common Stock which options
are not presently exercisable. Includes 545,037 shares of BANC ONE Common
Stock awarded as restricted stock which may be voted by the recipients.
(3) 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.
(4) Excludes options on 198,439 shares which were not exercisable on or within
60 days of January 1, 1995. Includes restricted stock awards for 78,989
shares of BANC ONE Common Stock which may be voted by Mr. McWhorter.
(5) Excludes options on 73,101 shares which were not exercisable on or within
60 days of January 1, 1995. Includes restricted stock awards for 35,247
shares which may be voted by Mr. Hoaglin and exercisable options on 7,487
shares of BANC ONE Common Stock.
(6) Excludes options on 72,069 shares which were not exercisable on or within
60 days of January 1, 1995. Includes restricted stock awards for 28,098
shares which may be voted by Mr. Barnette and exercisable options on 16,804
shares of BANC ONE Common Stock.
APPROVAL OF 1995 STOCK INCENTIVE PLAN
Subject to shareholder approval, on January 24, 1995, the Board of Directors
adopted the BANC ONE CORPORATION 1995 Stock Incentive Plan (the "1995 Plan").
The Board of Directors believes that in order to attract, retain and reward
valuable personnel, it is important for BANC ONE to adopt a more flexible,
long-term, stock-based incentive plan, which is both competitive with, and
responsive to, rapidly changing financial services industry standards. In
recent years, innovative and sophisticated types of incentive awards have been
created and utilized by other companies to enhance the effectiveness of their
compensation programs. The 1995 Plan will provide BANC ONE with the ability to
devise incentive programs which are responsive to the demands of the
marketplace without unduly diluting shareholder interests.
17
<PAGE>
The 1995 Plan authorizes the grant of any of the following awards
(hereinafter "Employee Awards") to employees of BANC ONE or its subsidiaries
("Employees"): (i) stock options which do not constitute "incentive stock
options" within the meaning of Section 422 of the Code ("nonqualified stock
options"); (ii) incentive stock options; (iii) stock appreciation rights
("SARs"); (iv) restricted shares or units; (v) performance shares or units;
(vi) Performance Stock Awards (as defined below); (vii) dividend or equivalent
rights; and (vii) other similar stock-based types of grants based in whole or
in part by reference to BANC ONE Common Stock, any of which may be granted on a
stand alone, combination or tandem basis. The 1995 Plan also authorizes the
automatic grant of nonqualified stock options ("Director Stock Options") to
non-employee Directors ("Eligible Directors") upon the terms and conditions set
forth in the 1995 Plan.
The description of the 1995 Plan set forth below is a summary, does not
purport to be complete and is qualified in its entirety by reference to the
provisions of the 1995 Plan, a copy of which is attached hereto as Annex I.
PURPOSE
The 1995 Plan is intended to provide incentives and rewards for Employees and
Eligible Directors (i) to support the execution of BANC ONE's business and
human resource strategies and the achievement of its goals and (ii) to
associate the interests of Employees and Eligible Directors with those of BANC
ONE's shareholders.
ADMINISTRATION
The 1995 Plan will be administered by the Committee. In administering the
1995 Plan, the Committee will determine, among other things (i) the Employees
to whom grants of Employee Awards will be made; (ii) the type of Employee
Award; (iii) the grant terms of an Employee Award including, but not limited
to, vesting schedule, grant price, performance standards, length of relevant
performance, restriction or option period, dividend rights, post-retirement and
termination rights, payment alternatives, such as cash, stock, contingent
awards or other means of payment consistent with the purposes of the 1995 Plan,
and (iv) such other terms and conditions as the Committee deems appropriate.
The Committee may designate other persons to carry out its responsibilities
under such conditions and limitations as it may set, other than its authority
with regard to awards granted to employees who are officers or directors of
BANC ONE subject to the reporting requirements of Section 16 of the Exchange
Act ("Reporting Persons").
PARTICIPATION
The Committee may grant Employee Awards under the 1995 Plan to any Employee.
In practice, Employee Awards are made to a group of approximately 450
management Employees. The 1995 Plan provides that in any year the total number
of shares of BANC ONE Common Stock as to which awards may be granted to any
participant may not exceed one-half of one percent of the outstanding BANC ONE
Common Stock as reported in BANC ONE's Annual Report on Form 10-K for the year
ending immediately prior to such year; however, the total number of shares of
BANC ONE Common Stock available for grants of restricted shares to be issued
pursuant to Performance Stock Awards in any year shall not exceed one eighth of
one percent of the outstanding BANC ONE Common Stock as so reported. For 1995,
based upon the number of outstanding shares of BANC ONE Common Stock at year-
end 1994, a maximum of 2,044,928 shares of BANC ONE Common Stock are available
for grant to any participant under the 1995 Plan, of which 1,022,464 shares may
be awards of restricted shares. Of the maximum number of restricted shares
which may be awarded in 1995, 511,232 may be issued as Performance Stock
Awards.
Eligible Directors are entitled to participate in the 1995 Plan solely with
respect to the grant of Director Stock Options and may not receive any other
awards under the 1995 Plan. The selection of Eligible Directors is not subject
to the discretion of the Committee. Persons serving on the Committee who are
Eligible Directors may receive grants of Director Stock Options.
18
<PAGE>
SHARES AVAILABLE FOR ISSUANCE
The stock subject to the provisions of the 1995 Plan shall either be shares
of authorized but unissued BANC ONE Common Stock, shares of BANC ONE Common
Stock held as treasury stock or previously issued shares of BANC ONE Common
Stock reacquired by BANC ONE, including shares purchased on the open market.
The 1995 Plan provides that in any year the total number of shares of BANC
ONE Common Stock as to which awards may be granted may not exceed one percent
of the outstanding BANC ONE Common Stock as reported in BANC ONE's Annual
Report on Form 10-K for the year ending immediately prior to such year;
however, the total number of shares of BANC ONE Common Stock available for
grants of restricted and performance shares (including restricted shares to be
issued pursuant to Performance Stock Awards) in any year shall not exceed one
fourth of one percent of the outstanding BANC ONE Common Stock as so reported.
The 1995 Plan provides that there shall be carried forward and be available for
awards under the 1995 Plan in each succeeding year, in addition to shares of
BANC ONE Common Stock available for grant as described in the preceding
sentence, all of the following: (i) any unused portion of the limit set forth
in the preceding sentence for the two immediately preceding years; (ii) shares
of BANC ONE Common Stock represented by awards under the 1995 Plan which are
cancelled, forfeited, surrendered, terminated or expire unexercised during the
current or two immediately preceding years; (iii) the excess amount of variable
awards under the 1995 Plan which become fixed at less than their maximum
limitations; (iv) authorized shares of BANC ONE Common Stock as to which stock
options, stock appreciation rights, restricted stock awards, performance shares
or performance awards were not granted under the BANC ONE CORPORATION 1989
Plan; and (v) shares of BANC ONE Common Stock under the 1989 Plan subject to
stock options, stock appreciation rights, restricted stock awards, performance
shares or performance awards which are cancelled, forfeited, surrendered,
terminated or expire unexercised during the current or two immediately
preceding years.
For 1995, 4,089,856 shares of BANC ONE Common Stock will be available for
grant under the 1995 Plan, together with those shares remaining available for
grant under the 1989 Plan and those shares subject to grants under the 1989
Plan which are cancelled, forfeited, surrendered, terminated or expire
unexercised during the current or two immediately preceding years. As of
January 1, 1995, approximately 1,994,503 shares were available for grant, and
8,662,500 shares were subject to grants under the 1989 Plan. BANC ONE
anticipates that, in the event of shareholder approval of the 1995 Plan, grants
of shares of BANC ONE Common Stock will be made in 1995 in an amount
substantially less than the maximum permitted for the year.
For purposes of calculating the total number of shares of BANC ONE Common
Stock available for grants of awards, the grant of a performance or restricted
share unit award is deemed to be equal to the maximum number of shares of BANC
ONE Common Stock which may be issued under the award, and where the value of an
award is variable on the date it is granted, the value is deemed to be the
maximum limitation of the award. Awards payable solely in cash will not reduce
the number of shares of BANC ONE Common Stock available for awards granted
under the 1995 Plan.
STOCK OPTIONS
The Committee may grant a stock option to an Employee in the form of an
incentive stock option or a nonqualified stock option. The exercise period for
any stock option granted will be determined by the Committee at the time of
grant. The exercise price per share of BANC ONE Common Stock covered by a stock
option may not be less than the fair market value of a share of BANC ONE Common
Stock on the date of grant. The exercise price is payable, at the Committee's
discretion, in cash, in shares of already owned BANC ONE Common Stock or in any
combination of cash and shares. Each option grant may be exercised in whole, at
any time, or in part, from time to time, after the grant becomes exercisable.
19
<PAGE>
STOCK APPRECIATION RIGHTS
SARs may be granted independently of any stock option or in tandem with all
or any part of a stock option granted under the 1995 Plan, upon such terms and
conditions as the Committee may determine. Upon exercise, a SAR entitles a
participant to receive the excess of the fair market value of a share of BANC
ONE Common Stock on the date the SAR is exercised over the fair market value
of a share of BANC ONE Common Stock on the date the SAR was granted. The
Committee will determine whether the SAR shall be settled in cash, BANC ONE
Common Stock or a combination of cash and BANC ONE Common Stock.
RESTRICTED AND PERFORMANCE SHARES
Subject to the limitations of the 1995 Plan, the Committee may grant
restricted or performance shares to Employees. Restricted and performance
shares are shares of BANC ONE Common Stock that are subject to restrictions on
transfer or other incidents of ownership, or subject to specified performance
standards, for such periods of time as the Committee may determine. Restricted
shares and performance shares may be voted by the recipient who is also
entitled to receive dividends thereon unless the Committee otherwise
determines. Dividends may be paid in cash or in additional restricted or
performance shares. Restricted and performance shares are legended and
deposited with BANC ONE until the end of the restricted period.
RESTRICTED AND PERFORMANCE SHARE UNITS
Subject to the limitations of the 1995 Plan, the Committee may grant
restricted or performance share units to Employees. Restricted and performance
share units are fixed or variable share or dollar denominated units subject to
conditions of vesting, performance and time of payment as the Committee may
determine, which may be paid in shares of BANC ONE Common Stock, cash or a
combination of both.
DIVIDEND OR EQUIVALENT RIGHTS
Subject to the limitations of the 1995 Plan, the Committee may grant
dividend or equivalent rights with respect to any new or previously existing
Employee Award. Dividend or equivalent rights are rights to receive dividends
or their equivalent in value in shares of BANC ONE Common Stock, cash or in a
combination of both.
PERFORMANCE STOCK AWARDS
The 1995 Plan provides for the grant to Employees of rights to receive
restricted shares that are not to be issued to the Employee until after the
end of the related performance period, subject to satisfaction of the
Performance Goals (as defined below) for such period of time as is designated
by the Committee ("Performance Stock Awards").
For purposes of the 1995 Plan, "Performance Goals" means, with respect to
any performance period, performance goals based on any of the following
criteria and established by the Committee prior to the beginning of such
performance period or performance goals based on any of the following criteria
and established by the Committee after the beginning of such performance
period that meet the requirements to be considered pre-established performance
goals under Section 162(m) of the Code: earnings or earnings growth; return on
equity, assets or investment; revenues; expenses; stock price; market share;
charge-offs; or reductions in non-performing assets. Such Performance Goals
may be particular to an Employee or the division, department, branch, line of
business, subsidiary or other unit in which the Employee works, or may be
based on the performance of BANC ONE generally.
Performance Stock Awards may be granted to Employees either alone or in
addition to other Employee Awards granted under the 1995 Plan. The Committee
shall determine the Employees to whom Performance Stock Awards shall be
awarded for any performance period, the duration of the applicable performance
20
<PAGE>
period, the number of restricted shares to be awarded at the end of a
performance period to Employees if the Performance Goals are met or exceeded
and the other terms and conditions of the Performance Stock Award.
After the end of a performance period, the financial performance of BANC ONE
during such performance period shall be measured against the Performance Goals.
If the Performance Goals are not met, no restricted shares shall be issued
pursuant to the Performance Stock Award. If the Performance Goals are met or
exceeded, the Committee shall certify that fact in writing in the Committee
minutes or elsewhere and certify the number of restricted shares to be issued
under each Performance Stock Award in accordance with the related award
agreement.
The Committee may, in its sole discretion, apply Negative Discretion to
reduce the number of restricted shares to be issued under a Performance Stock
Award. For purposes of the 1995 Plan, "Negative Discretion" means other factors
to be applied by the Committee in reducing the number of restricted shares to
be issued pursuant to a Performance Stock Award if the Performance Goals have
been met or exceeded if, in the Committee's sole judgment, such application is
appropriate in order to act in the best interest of BANC ONE and its
shareholders. The Negative Discretion factors include, but are not limited to,
the achievement of measurable individual performance objectives established by
the Committee and communicated to the Employee in advance of the Performance
Period, and competitive pay practices.
To be entitled to receive a Performance Stock Award, an Employee must remain
in the employment of BANC ONE through the end of the Performance Period, except
that the Committee may provide for partial or complete exceptions to this
requirement as it deems equitable in its sole discretion.
OTHER STOCK-BASED AWARDS
The Committee may grant other types of awards of BANC ONE Common Stock, or
awards based in whole or in part by reference to BANC ONE Common Stock ("Other
Stock-based Awards"). The Committee shall determine the time at which grants of
such Other Stock-based Awards are to be made, the size of such awards, and all
other conditions of such awards, including any restrictions, deferral periods
or performance requirements.
DIRECTOR STOCK OPTIONS
Each person who is first elected or appointed to serve as a Director after
the effective date of the 1995 Plan and who is an Eligible Director shall, upon
such person's initial appointment or election as an Eligible Director,
automatically be granted Director Stock Options for that number of shares of
BANC ONE Common Stock having a fair market value of $100,000 on the date the
Director Stock Options are granted. Commencing immediately after the
adjournment of the Annual Meeting and immediately after the adjournment of the
BANC ONE annual meeting each year thereafter, each Eligible Director who was an
Eligible Director immediately preceding such annual meeting and who has been
elected as a director at such annual meeting shall automatically be granted
Director Stock Options for that number of shares of BANC ONE Common Stock
having a fair market value of $60,000 on the date the Director Stock Options
are granted if, but only if, the return on common equity of BANC ONE as set
forth in BANC ONE's annual report to shareholders for the immediately preceding
fiscal year is equal to or greater than 10%.
Each Director Stock Option shall become exercisable on and after the first
anniversary of the date of the grant. Director Stock Options shall have an
exercise price that is equal to the fair market value of BANC ONE Common Stock
on the date of grant. The option price upon exercise of any Director Stock
Option shall be paid to BANC ONE in full either in cash, in shares of already
owned BANC ONE Common Stock or in any combination of cash or shares. No
Director Stock Option may be exercisable later than twenty years and one day
from the date of its grant. However, if an Eligible Director ceases to be an
Eligible Director for any reason, all Director Stock Options which are
otherwise exercisable shall terminate on the earlier of three years after such
cessation date or the expiration date, whichever first occurs.
21
<PAGE>
ASSIGNMENT
Except to the extent, if any, as may be permitted by the Code and rules
promulgated under Section 16 of the Exchange Act, (i) no award under the 1995
Plan shall be assignable or transferable except by will, by the laws of descent
and distribution or pursuant to a qualified domestic relations order as defined
by the Code and (ii) during the lifetime of a participant, the award shall be
exercisable only by such participant or such participant's guardian, legal
representative or assignee pursuant to a qualified domestic relations order.
ADJUSTMENTS
The 1995 Plan provides that the aggregate number of shares of BANC ONE Common
Stock as to which awards may be granted to participants, the number of shares
thereof covered by each outstanding award, and the price per share thereof in
each such award, shall all be proportionately adjusted for any increase or
decrease in the number of issued shares of BANC ONE Common Stock resulting from
a stock split, stock dividend, combination or exchange of shares, exchange for
other securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization or other such change. Any such adjustment may
provide for the elimination of fractional shares.
CHANGE OF CONTROL
If there is a change of control (as defined in the 1995 Plan) of BANC ONE,
the following (a) may, in the sole discretion of the Committee, occur with
respect to any Employee Awards outstanding as of such change of control and (b)
shall occur with respect to any Director Stock Options outstanding as of such
change of control: (i) the time period for exercising or realizing and all
vesting periods of awards will be accelerated, all restrictions will lapse and
all performance standards will be deemed to have been attained; (ii)
performance shares or performance units will be paid entirely in cash; (iii)
with respect to stock options, during the 60-day period following a change of
control, a participant may elect to receive, in lieu of shares of BANC ONE
Common Stock, cash equal to the excess of the fair market value of the shares
of BANC ONE Common Stock over the price at which the option was exercisable;
(iv) all awards become noncancellable; and (v) if a participant's employment
terminates for any reason other than retirement or death following a change of
control, stock options held by the participant may be exercised until the
earlier of three months after the termination date or the normal expiration
date of the stock options.
GRANTS TO REPORTING PERSONS
With respect to Reporting Persons, and if required to comply with rules
promulgated under Section 16 of the Exchange Act, (i) no award providing for
exercise, a vesting period, a restriction period or the attainment of
performance standards shall permit unrestricted ownership of shares of BANC ONE
Common Stock by the participant for at least six months from the date of grant,
and (ii) shares of BANC ONE Common Stock acquired pursuant to the 1995 Plan
(other than shares of BANC ONE Common Stock acquired as a result of the
granting of a "derivative security") may not be sold or otherwise disposed of
for at least six months after acquisition.
AMENDMENTS AND TERMINATION
The Board of Directors may at any time terminate and, from time to time, may
amend or modify the 1995 Plan. Any such action of the Board of Directors may be
taken without the approval of BANC ONE's shareholders, but only to the extent
that such shareholder approval is not required by applicable law or regulation.
There is no set termination date for the 1995 Plan.
Except to the extent, if any, as may be permitted by rules promulgated under
Section 16 of the Exchange Act, the provisions of the 1995 Plan relating to the
amount, price and timing of Director Stock Options may not be amended more than
once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974 or the rules thereunder.
22
<PAGE>
FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes the Federal income tax consequences to
participants who may receive grants of awards under the 1995 Plan. The
discussion is based upon interpretations of the Code in effect as of January 1,
1995, and regulations promulgated thereunder as of such date.
Nonqualified Stock Options. For Federal income tax purposes, no income is
recognized by a participant upon the grant of a nonqualified stock option under
the 1995 Plan. Upon the exercise of an option, however, compensation taxable as
ordinary income will be realized by the participant in an amount equal to the
excess of the fair market value of a share of BANC ONE Common Stock on the date
of such exercise over the exercise price. A subsequent sale or exchange of such
shares will result in gain or loss measured by the difference between (i) the
exercise price, increased by any compensation reported upon the participant's
exercise of the option, and (ii) the amount realized on such sale or exchange.
Such gain or loss will be capital in nature if the shares were held as a
capital asset and will be long-term if such shares were held for more than one
year.
BANC ONE is entitled to a deduction (subject to the provisions of Section
162(m) of the Code) for compensation paid to a participant at the same time and
in the same amount as the participant is considered to have realized
compensation by reason of the exercise of an option.
Incentive Stock Options. No taxable income is realized by the participant
upon the grant or exercise of an incentive stock option. If shares of BANC ONE
Common Stock are issued to a participant pursuant to the exercise of an
incentive stock option granted under the 1995 Plan, and if no disqualifying
disposition of such shares is made by such participant within two years after
the date of grant or within one year after the transfer of such shares to a
participant, then (a) upon sale of such shares, any amount realized in excess
of the option price will be taxed to such participant as a long-term capital
gain and any loss sustained will be a long-term capital loss, and (b) no
deduction will be allowed to BANC ONE for Federal income tax purposes. Upon
exercise of an incentive stock option, the participant may be subject to
alternative minimum tax on certain items of tax preference.
If shares of BANC ONE Common Stock acquired upon the exercise of an incentive
stock option are disposed of prior to the expiration of the two-years-from-
grant/one-year-from-transfer holding period, generally (a) the participant will
realize ordinary income in the year of disposition in the amount equal to the
excess (if any) of the fair market value of the shares at exercise (or, if
less, the amount realized on the disposition of the shares) over the option
price thereof, and (b) BANC ONE will be entitled to deduct such amount (subject
to the provisions of Section 162(m) of the Code). Any further gain or loss
realized will be taxed as short-term capital gain or loss, as the case may be,
and will not result in any deduction by BANC ONE.
If an incentive stock option is exercised at a time when it no longer
qualifies as an incentive stock option, the option is treated as a nonqualified
stock option.
Stock Appreciation Rights. No taxable income is recognized by a participant
upon the grant of a SAR under the 1995 Plan. Upon the exercise of a SAR,
however, compensation taxable as ordinary income will be realized by the
participant in an amount equal to the cash received upon exercise, plus the
fair market value on the date of exercise of any shares of BANC ONE Common
Stock received upon exercise. Shares of BANC ONE Common Stock received on the
exercise of a SAR will be eligible for capital gain treatment, with the capital
gain holding period commencing on the date of exercise of the SAR.
BANC ONE is entitled to a deduction (subject to the provisions of Section
162(m) of the Code) for compensation paid to a participant at the same time and
in the same amount as the participant is considered to have realized
compensation by reason of the exercise of a SAR.
23
<PAGE>
Restricted and Performance Shares; Performance Stock Awards. Similar to SARs,
awards of restricted or performance shares will not result in taxable income to
the Employee or a tax deduction to BANC ONE for Federal income tax purposes at
the time of grant. A recipient of restricted or performance shares generally
will be subject to tax at ordinary income rates on the fair market value of the
BANC ONE Common Stock at the time the restricted or performance shares are no
longer subject to forfeiture. However, a recipient who so elects under Section
83(b) of the Code within 30 days of the date of the grant will have ordinary
taxable income on the date of the grant equal to the fair market value of the
restricted or performance shares as if such shares were unrestricted and could
be sold immediately. If the restricted or performance shares subject to such
election are forfeited, the recipient will not be entitled to any deduction,
refund or loss for tax purposes with respect to the forfeited shares. Upon sale
of the restricted or performance shares after the forfeiture period has
expired, the holding period to determine whether the recipient has long-term or
short-term capital gain or loss begins when the restriction period expires.
However, if the recipient timely elects to be taxed as of the date of the
grant, the holding period commences on the date of the grant and the tax basis
will be equal to the fair market value of the restricted or performance shares
on the date of the grant as if such shares were then unrestricted and could be
sold immediately.
The award of a Performance Stock Award will not result in taxable income to
the Employee or a tax deduction to BANC ONE for Federal income tax purposes at
the time of grant. A recipient of a Performance Stock Award generally will be
subject to tax at the same time and in the same manner as applicable to
recipients of restricted and performance shares as described above.
BANC ONE is entitled to a deduction (subject to the provisions of Section
162(m) of the Code) for compensation paid to a participant at the same time and
in the same amount as the participant is considered to have realized
compensation by reason of the lapse of restrictions on an award of restricted
or performance shares or a Performance Stock Award.
Restricted and Performance Share Units, Dividend or Equivalent Rights and
Other Stock-based Awards. The Federal income tax consequence of restricted and
performance share units, dividend or equivalent rights and Other Stock-based
Awards will depend on how such awards are structured. Generally, BANC ONE will
be entitled to a deduction (subject to the provisions of Section 162(m) of the
Code) with respect to such awards only to the extent that the recipient
realizes compensation income in connection with such awards. It is anticipated
that such awards will usually result in compensation income to the recipient in
some amount. However, some forms of such awards may not result in any
compensation income to the recipient or any income tax deduction for BANC ONE.
Limits on Deductions. Under Section 162(m) of the Code, the amount of
compensation paid to the Chief Executive Officer and the four other most highly
paid executive officers of BANC ONE in the year for which a deduction is
claimed by BANC ONE (including its subsidiaries) is limited to $1,000,000 per
person, except that compensation that is performance-based will be excluded for
purposes of calculating the amount of compensation subject to this $1,000,000
limitation. The ability of BANC ONE to claim a deduction for compensation paid
to any other executive officer or employee of BANC ONE (including its
subsidiaries) is not affected by this provision.
BANC ONE has structured the 1995 Plan so that any compensation for which BANC
ONE may claim a deduction in connection with the exercise of nonqualified stock
options and SARs, the disposition by an optionee of shares acquired upon the
exercise of incentive stock options and the lapse of restrictions on restricted
shares received pursuant to Performance Stock Awards will be performance-based
within the meaning of Section 162(m) of the Code. All other awards under the
1995 Plan are not performance-based and therefore any amounts for which BANC
ONE may claim a deduction will be subject to the limitations on deductibility
in Section 162(m) of the Code.
24
<PAGE>
EFFECT ON 1989 STOCK INCENTIVE PLAN
Contingent upon shareholder approval of the 1995 Plan, the 1989 Stock
Incentive Plan was terminated by the Board of Directors effective April 17,
1995. Outstanding awards under the 1989 Plan will remain in effect under the
terms of their respective grants.
NEW PLAN BENEFITS
As described above, the selection of the Employees who will receive awards
under the 1995 Plan, if it is approved by shareholders, and the size and type
of awards is generally to be determined by the Committee in its discretion. No
awards have been made under the 1995 Plan, nor are any such awards now
determinable. Thus, it is not possible to predict the benefits or amounts that
will be received by or allocated to particular individuals or groups of
Employees in 1995.
For the year 1995, the Committee has established a performance matrix for the
grant of Restricted Share Awards applicable to BANC ONE's Chairman and
President which incorporates performance thresholds requiring a return on
assets of not less than 1.15% for the year and no decrease in earnings from the
previous year. Based upon these performance goals, no Restricted Share awards
would have been paid in 1994 to the Chairman and President under the 1995 Plan.
The participation of Eligible Directors in the 1995 Plan is limited to
certain automatic grants of Director Stock Options. If the 1995 Plan is
approved by shareholders, on and after the date of the 1995 Annual Meeting,
each person elected or appointed to the Board for the first time will receive
an automatic grant of Director Stock Options for that number of shares of BANC
ONE Common Stock having a fair market value of $100,000 on that date.
Additionally, because BANC ONE's return on common equity for calendar year 1994
was in excess of 10%, each incumbent Eligible Director who is elected at the
Annual Meeting will receive a grant of Director Stock Options for that number
of shares of BANC ONE Common Stock having a fair market value of $60,000 on the
date of the Annual Meeting.
As indicated above, no determination has been made as to the nature and
amount of any awards which may be granted in the future under the 1995 Plan if
it is approved by shareholders. However, in 1994, stock options were granted
under the 1989 Plan to the named executive officers as set forth on the table
on page 12 entitled "Option Grants in Last Fiscal Year." Also during 1994, the
Committee granted stock options under the 1989 Plan for 533,281 shares to all
executive officers as a group at a weighted average exercise price of $32.25
per share, 1,438,896 shares to non-executive officer employees as a group at a
weighted average exercise price of $32.25 per share and 13,000 shares to non-
executive officer directors at a weighted average exercise price of $32.52 per
share. The Committee has made no determination regarding the award of
restricted stock grants under the 1995 Plan. However, in 1994, the Committee
granted restricted stock grants under the 1989 Plan for an aggregate of 271,785
shares to non-executive officer employees and 69,849 shares to executive
officers. The only executive officers among those set forth on the table
appearing on page 10 to receive restricted stock awards were Messrs. Lehmann,
Hoaglin and Barnette in the amounts as set forth in the table appearing on page
10 entitled "Summary Compensation Table."
MISCELLANEOUS
The closing price per share of BANC ONE Common Stock on February 24, 1995, as
reported in The Wall Street Journal, was $29.75.
Approval of the 1995 Plan requires the affirmative vote of the holders of a
majority of the outstanding shares of BANC ONE Common Stock.
FOR THE REASONS STATED HEREIN, THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR APPROVAL OF THE 1995 PLAN.
25
<PAGE>
APPROVAL OF AMENDMENT OF THE 1994 KEY
EXECUTIVE MANAGEMENT INCENTIVE COMPENSATION PLAN
In 1994, BANC ONE adopted, and shareholders approved, the 1994 EMIC Plan. The
1994 EMIC Plan has been designed so as to preserve the full tax deductibility
of amounts payable under the 1994 EMIC Plan in conformance with Section 162(m)
of the Code and the regulations promulgated thereunder.
In light of recent proposed amendments to the proposed regulations
promulgated under Section 162(m), and to provide the Committee the flexibility
to establish performance thresholds and targets which are in the best interests
of BANC ONE, the Board of Directors recommends that BANC ONE's shareholders
approve the amendments to the 1994 EMIC Plan.
The proposed regulations under Section 162(m) were recently amended to
clarify that a maximum dollar limit payable to any one participant under the
1994 EMIC Plan must be established if an award is based on a percentage of
salary. Accordingly, this amendment to the 1994 EMIC Plan (the "Amended EMIC
Plan") provides that the maximum amount which any one participant may receive
in any one year under the Amended EMIC Plan is $3,000,000.
Amounts payable to participants under the Amended EMIC Plan will be based
upon the achievement of performance objectives or goals approved by the
Committee, which is comprised solely of outside directors of BANC ONE. The
performance objectives or goals applicable for each fiscal year under the
Amended EMIC Plan will be established by the Committee, in writing, within the
time period required by Section 162(m). The performance measures which will be
used to determine the amount of the incentive bonus awards for each such
performance period under the Amended EMIC Plan will be chosen from among: (i)
earnings growth and (ii) return on assets.
To provide flexibility to the Committee to determine the targeted awards
levels with respect to any performance period, the amount of awards payable
under the Amended EMIC Plan will be calculated based on the attainment of the
applicable performance goals established by the Committee, in its sole
discretion, in the manner and within the time period required by Section
162(m). Pursuant to this amendment, such performance goals and corresponding
payment schedules may change from year to year at the sole discretion of the
Committee.
The description set forth herein of the Amended EMIC Plan is a summary, does
not purport to be complete and is qualified in its entirety by reference to the
provisions of the Amended EMIC Plan, a copy of which is attached hereto as
Annex II.
AMENDED EMIC PLAN BENEFITS
No determination has been made as to the amount of any compensation which
will be paid in the future to the Chairman or President of BANC ONE under the
Amended EMIC Plan if it is approved by shareholders. During 1994, no payments
were made to any person under the 1994 EMIC Plan. The Committee has, for the
year 1995, adopted performance goals which have been incorporated into a
performance matrix which require a return on assets of not less than 1.15% and
no decrease in earnings from the previous year. Based upon the 1995 performance
goals, no award would have been payable in 1994 under the Amended EMIC Plan.
MISCELLANEOUS
Approval of amendments to the 1994 EMIC Plan requires the affirmative vote of
a majority of the outstanding shares of BANC ONE Common Stock.
FOR THE REASONS STATED HEREIN, THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR APPROVAL OF AMENDMENT OF THE 1994 EMIC PLAN.
26
<PAGE>
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 1995. 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 FOR 1996
In order for shareholder proposals to be considered for presentation at the
1996 Annual Meeting of Shareholders, such proposals must be received by BANC
ONE not later than November 10, 1995.
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 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.
27
<PAGE>
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
/s/ Roman J. Gerber
- ------------------------
Roman J. Gerber
Executive Vice President
and Secretary
Columbus, Ohio
March 8, 1995
28
<PAGE>
ANNEX I
BANC ONE CORPORATION
1995 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of the BANC ONE CORPORATION 1995 Stock Incentive Plan is to
provide incentives and rewards for Employees and Eligible Directors of the
Corporation and its Subsidiaries (i) to support the execution of the
Corporation's business and human resource strategies and the achievement of its
goals and (ii) to associate the interests of Employees and Eligible Directors
with those of the Corporation's shareholders.
2. DEFINITIONS
"Award" includes, without limitation, stock options (including incentive
stock options under Section 422 of the Code and Director Stock Options), stock
appreciation rights, restricted and performance shares, restricted and
performance share units, Performance Stock Awards, dividend or equivalent
rights, or other awards that are valued in whole or in part by reference to, or
are otherwise based on, the Common Stock ("other Common Stock-based Awards"),
all on a stand alone, combination or tandem basis, as described in or granted
under this Plan.
"Award Agreement" means a written agreement entered into between the
Corporation and a Participant setting forth the terms and conditions of an
Award made to such Participant under this Plan, in the form prescribed by the
Committee.
"Board" means the Board of Directors of the Corporation.
"Change of Control" shall have the meaning specified in Section 12(b).
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Committee" means the Committee appointed by the Board, each member of which
shall be a "disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act and shall be an "outside director" within the meaning of Section
162(m) of the Code. The Committee shall be composed of no fewer than the
minimum number of disinterested persons as may be required by Rule 16b-3.
"Common Stock" means the common stock of the Corporation, without par value.
"Corporation" means BANC ONE CORPORATION, a bank holding company under the
Bank Holding Company Act of 1956 headquartered in Columbus, Ohio.
"Director Stock Option" means the right, granted to an Eligible Director, to
purchase Common Stock at a stated price for a specified period of time. Each
Director Stock Option shall be a nonqualified stock option whose grant is not
intended to comply with the requirements of Section 422 of the Code or any
successor Section as it may be amended from time to time.
"Eligible Director" means any statutory director of the Corporation who is
not an employee of the Corporation or any Subsidiary.
"Employee" means an employee of the Corporation or a Subsidiary.
"Employee Award" means an Award (other than a Director Stock Option) to an
Employee under this Plan.
I-1
<PAGE>
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means the closing price of the Common Stock as reported
on the New York Stock Exchange Composite Transactions Tape on the relevant
valuation date or, if there were no Common Stock transactions on the valuation
date, on the next preceding date on which there were Common Stock transactions;
provided, however, that the Committee may specify some other definition of Fair
Market Value with respect to any particular Employee Award.
"Negative Discretion" means other factors to be applied by the Committee in
reducing the number of restricted shares to be issued pursuant to a Performance
Stock Award if the Performance Goals have been met or exceeded if, in the
Committee's sole judgment, such application is appropriate in order to act in
the best interest of the Corporation and its shareholders. The Negative
Discretion factors include, but are not limited to, the achievement of
measurable individual performance objectives established by the Committee and
communicated to the Employee in advance of the Performance Period, and
competitive pay practices.
"Participant" means an Employee or an Eligible Director who has been granted
an Award under this Plan.
"Performance Goals" means, with respect to any Performance Period,
performance goals based on any of the following criteria and established by the
Committee prior to the beginning of such Performance Period or performance
goals based on any of the following criteria and established by the Committee
after the beginning of such Performance Period that meet the requirements to be
considered pre-established performance goals under Section 162(m) of the Code:
earnings or earnings growth; return on equity, assets or investment; revenues;
expenses; stock price; market share; charge-offs; or reductions in non-
performing assets. Such Performance Goals may be particular to an Employee or
the division, department, branch, line of business, Subsidiary or other unit in
which the Employee works, or may be based on the performance of the Corporation
generally.
"Performance Period" means the period of time designated by the Committee
applicable to a Performance Stock Award during which the Performance Goals
shall be measured.
"Performance Stock Award" shall have the meaning specified in Section 6(g).
"Plan" means this BANC ONE CORPORATION 1995 Stock Incentive Plan.
"Plan Year" means a twelve-month period beginning with January 1 of each
year.
"Reporting Person" means an officer or director of the Corporation subject to
the reporting requirements of Section 16 of the Exchange Act.
"Subsidiary" means any corporation or other entity, whether domestic or
foreign, in which the Corporation has or obtains, directly or indirectly, a
proprietary interest of more than 50% by reason of stock ownership or
otherwise.
3. ELIGIBILITY
(a) Any Employee selected by the Committee is eligible to receive an Employee
Award.
(b) Eligible Directors are entitled to participate in this Plan solely with
respect to the grant of Director Stock Options and may not receive any other
Awards under this Plan. The selection of Eligible Directors is not subject to
the discretion of the Committee. Persons serving on the Committee who are
Eligible Directors may receive grants of Director Stock Options.
I-2
<PAGE>
4. PLAN ADMINISTRATION
(a) This Plan shall be administered by the Committee. The Committee shall
periodically make determinations with respect to the participation of Employees
in this Plan and, except as otherwise required by law or this Plan, the grant
terms of Awards including vesting schedules, price, performance standards
(including Performance Goals), length of relevant performance, restriction or
option period, dividend rights, post-retirement and termination rights, payment
alternatives such as cash, stock, contingent awards or other means of payment
consistent with the purposes of this Plan, and such other terms and conditions
as the Committee deems appropriate. Except as otherwise required by this Plan,
the Committee shall have authority to interpret and construe the provisions of
this Plan and the Award Agreements and make determinations pursuant to any Plan
provision or Award Agreement which shall be final and binding on all persons.
(b) The Committee may designate persons other than its members to carry out
its responsibilities under such conditions or limitations as it may set, other
than its authority with regard to Awards granted to Reporting Persons.
5. STOCK SUBJECT TO THE PROVISIONS OF THIS PLAN
(a) The stock subject to the provisions of this Plan shall either be shares
of authorized but unissued Common Stock, shares of Common Stock held as
treasury stock or previously issued shares of Common Stock reacquired by the
Corporation, including shares purchased on the open market. Subject to
adjustment in accordance with the provisions of Section 11, and subject to
Section 5(d), (i) the total number of shares of Common Stock available for
grants of Awards (including, without limitation, Awards of restricted and
performance shares) in any Plan Year shall not exceed one percent of the
outstanding Common Stock as reported in the Corporation's Annual Report on Form
10-K for the fiscal year ending immediately prior to such Plan Year and (ii)
the total number of shares of Common Stock available for grants of restricted
and performance shares (including restricted shares to be issued pursuant to
Performance Stock Awards) in any Plan Year shall not exceed one fourth of one
percent of the outstanding Common Stock as reported in the Corporation's Annual
Report on form 10-K for the fiscal year ending immediately prior to such Plan
Year.
(b) Subject to adjustment in accordance with Section 11, and subject to
Section 5(a), (i) the total number of shares of Common Stock available for
grants of Awards in any Plan Year to any Participant shall not exceed one half
of one percent of the outstanding Common Stock as reported in the Corporation's
Annual Report on Form 10-K for the fiscal year ending immediately prior to such
Plan Year and (ii) the total number of shares of Common Stock available for
grants of restricted shares to be issued pursuant to Performance Stock Awards
in any Plan Year to any Employee shall not exceed one eighth of one percent of
the outstanding Common Stock as reported in the Corporation's Annual Report on
form 10-K for the fiscal year ending immediately prior to such Plan Year.
(c) For purposes of calculating the total number of shares of Common Stock
available for grants of Awards, (i) the grant of a performance or restricted
share unit Award shall be deemed to be equal to the maximum number of shares of
Common Stock which may be issued under the Award and (ii) where the value of an
Award is variable on the date it is granted, the value shall be deemed to be
the maximum limitation of the Award. Awards payable solely in cash will not
reduce the number of shares of Common Stock available for Awards granted under
this Plan.
(d) There shall be carried forward and be available for Awards under this
Plan in each succeeding Plan Year, in addition to shares of Common Stock
available for grant under paragraph (a) of this Section 5, all of the
following: (i) any unused portion of the limit set forth in paragraph (a) of
this Section 5 for the two immediately preceding Plan Years; (ii) shares of
Common Stock represented by Awards which have been cancelled, forfeited,
surrendered, terminated or expire unexercised during that Plan Year or the two
immediately preceding Plan Years; (iii) the excess amount of variable Awards
which become fixed at less than their maximum limitations; (iv) authorized
shares of Common Stock as to which stock options, stock appreciation rights,
restricted stock awards, performance shares or performance awards were not
granted
I-3
<PAGE>
under the BANC ONE CORPORATION 1989 Stock Incentive Plan; and (v) shares of
Common Stock under the BANC ONE CORPORATION 1989 Stock Incentive Plan subject
to stock options, stock appreciation rights, restricted stock awards,
performance shares or performance awards which have been cancelled, forfeited,
surrendered, terminated or expire unexercised during that Plan Year or the two
immediately preceding Plan Years.
6. EMPLOYEE AWARDS UNDER THIS PLAN
As the Committee may determine, the following types of Employee Awards may be
granted under this Plan to Employees on a stand alone, combination or tandem
basis:
(a) Stock Option. A right to buy a specified number of shares of Common Stock
at a fixed exercise price during a specified time, all as the Committee may
determine; provided that the exercise price of any option shall not be less
than 100% of the Fair Market Value of the Common Stock on the date of grant of
the Award.
(b) Incentive Stock Option. An award in the form of a stock option which
shall comply with the requirements of Section 422 of the Code or any successor
Section as it may be amended from time to time.
(c) Stock Appreciation Right. A right to receive the excess of the Fair
Market Value of a share of Common Stock on the date the stock appreciation
right is exercised over the Fair Market Value of a share of Common Stock on the
date the stock appreciation right was granted.
(d) Restricted and Performance Shares. A transfer of shares of Common Stock
to a Participant, subject to such restrictions on transfer or other incidents
of ownership, or subject to specified performance standards, for such periods
of time as the Committee may determine.
(e) Restricted and Performance Share Unit. A fixed or variable share or
dollar denominated unit subject to conditions of vesting, performance and time
of payment as the Committee may determine, which may be paid in shares of
Common Stock, cash or a combination of both.
(f) Dividend Or Equivalent Right. A right to receive dividends or their
equivalent in value in shares of Common Stock, cash or in a combination of both
with respect to any new or previously existing Employee Award.
(g) Performance Stock Awards. A right, granted to an Employee, to receive
restricted shares (as defined in Section 6(d) hereof) that are not to be issued
to the Employee until after the end of the related Performance Period, subject
to satisfaction of the Performance Goals for such Performance Period.
(h) Other Common Stock-Based Awards. Other Common Stock-based Awards which
are related to or serve a similar function to those Employee Awards set forth
in this Section 6.
In addition to granting Employee Awards for purposes of incentive
compensation, Employee Awards may also be made in tandem with or in lieu of
current or deferred Employee compensation.
7. PERFORMANCE STOCK AWARDS.
(a) Administration. Performance Stock Awards may be granted to Employees
either alone or in addition to other Employee Awards granted under this Plan.
The Committee shall determine the Employees to whom Performance Stock Awards
shall be awarded for any Performance Period, the duration of the applicable
Performance Period, the number of restricted shares to be awarded at the end of
a Performance Period to Employees if the Performance Goals are met or exceeded
and the terms and conditions of the Performance Stock Award in addition to
those contained in this Section 7.
I-4
<PAGE>
(b) Payment of Award. After the end of a Performance Period, the financial
performance of the Corporation during such Performance Period shall be measured
against the Performance Goals. If the Performance Goals are not met, no
restricted shares shall be issued pursuant to the Performance Stock Award. If
the Performance Goals are met or exceeded, the Committee shall certify that
fact in writing in the Committee minutes or elsewhere and certify the number of
restricted shares to be issued under each Performance Stock Award in accordance
with the related Award Agreement. The Committee may, in its sole discretion,
apply Negative Discretion to reduce the number of restricted shares to be
issued under a Performance Stock Award.
(c) Requirement of Employment. To be entitled to receive a Performance Stock
Award, an Employee must remain in the employment of the Corporation through the
end of the Performance Period, except that the Committee may provide for
partial or complete exceptions to this requirement as it deems equitable in its
sole discretion.
8. DIRECTOR STOCK OPTIONS
Subject to the provisions of Section 5, Director Stock Options shall be
granted to Eligible Directors as provided in this Section 8 and the Committee
shall have no discretion with respect to any matters set forth in this Section
8.
(a) Vesting. Each Director Stock Option shall become exercisable on and after
the first anniversary of the date of the grant.
(b) Number of Shares. Director Stock Options shall be granted as follows:
(i) Each person who is first elected or appointed to serve as a director
of the Corporation after the effective date of this Plan and who is an
Eligible Director shall, upon such person's initial appointment or election
as an Eligible Director, automatically be granted Director Stock Options
for that number of shares of Common Stock having a Fair Market Value of
$100,000 on the date the Director Stock Options are granted; and
(ii) Commencing immediately after the adjournment of the Corporation's
annual meeting of shareholders (an "Annual Meeting") in 1995 and
immediately after the adjournment of the Annual Meeting each year
thereafter, each Eligible Director who was an Eligible Director immediately
preceding such Annual Meeting and who has been elected as a director at
such Annual Meeting shall automatically be granted Director Stock Options
for that number of shares of Common Stock having a Fair Market Value of
$60,000 on the date the Director Stock Options are granted if, but only if,
the return on common equity of the Corporation as set forth in the
Corporation's annual report to shareholders for the immediately preceding
fiscal year is equal to or greater than 10%.
(c) Option Price. Each Director Stock Option shall have an option price
("Option Price") that is equal to the Fair Market Value of the Common Stock on
the date the Director Stock Option is granted.
(d) Duration of Options. No Director Stock Option may be exercisable later
than twenty years and one day from the date of its grant.
(e) Payment. The Option Price upon exercise of any Director Stock Option
shall be payable to the Corporation in full either (i) in U.S. dollars by
personal check, bank draft or money order payable to the order of the
Corporation, by money transfers or direct account debits, (ii) through the
delivery or deemed delivery based on attestation of ownership of shares of
Common Stock with a Fair Market Value at the time of exercise equal to the
total Option Price or (iii) by a combination of the methods described in items
(i) and (ii) above.
(f) Termination of Director Stock Options. If an Eligible Director ceases to
be an Eligible Director for any reason, the rights under any then outstanding
Director Stock Option granted pursuant to this Plan which
I-5
<PAGE>
are exercisable as of the date such person ceases to be an Eligible Director
shall terminate upon the date determined as provided in Section 8(d), above, or
three years after such cessation date, whichever first occurs. Any then
outstanding Director Stock Option granted to such Eligible Director which is
not exercisable as of the date such person ceases to be an Eligible Director
shall terminate on and as of such date.
9. OTHER TERMS AND CONDITIONS
(a) Assignability. Except to the extent, if any, as may be permitted by the
Code and rules promulgated under Section 16 of the Exchange Act, (i) no Award
shall be assignable or transferable except by will, by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code and (ii) during the lifetime of a Participant, the Award shall be
exercisable only by such Participant or such Participant's guardian, legal
representative or assignee pursuant to a qualified domestic relations order.
(b) Award Agreement. Each Award under this Plan shall be evidenced by an
Award Agreement.
(c) Rights As A Shareholder. Except as otherwise provided herein or in any
Award Agreement, a Participant shall have no rights as a shareholder with
respect to shares of Common Stock covered by an Award until the date the
Participant or his nominee (which, for purposes of this Plan, shall include any
third party agent selected by the Committee to hold such shares on behalf of a
Participant), guardian or legal representative is the holder of record of such
shares.
(d) No Obligation to Exercise. The grant of an Award shall impose no
obligation upon the Participant to exercise the Award.
(e) Payments by Participants. The Committee may determine that Employee
Awards for which a payment is due from a Participant may be payable: (i) in
U.S. dollars by personal check, bank draft or money order payable to the order
of the Corporation, by money transfers or direct account debits; (ii) through
the delivery or deemed delivery based on attestation to the ownership of shares
of Common Stock with a Fair Market Value equal to the total payment due from
the Participant; (iii) by a combination of the methods described in (i) and
(ii) above; or (iv) by such other methods as the Committee may deem
appropriate.
(f) Tax Withholding. The Corporation shall have the right to withhold from
any payments made under this Plan, or to collect as a condition of payment, any
taxes required by law to be withheld. At any time when a Participant is
required to pay to the Corporation an amount required to be withheld under
applicable income tax laws in connection with a distribution of shares of
Common Stock pursuant to this Plan, the Participant may satisfy this obligation
in whole or in part by electing to have the Corporation withhold from such
distribution shares of Common Stock having a value equal to the amount required
to be withheld. The value of the shares of Common Stock to be withheld shall be
based on the Fair Market Value of the Common Stock on the date that the amount
of tax to be withheld shall be determined (the "Tax Date"). Any such election
is subject to the following restrictions: (i) the election must be made on or
prior to the Tax Date; (ii) the election must be irrevocable; and (iii) the
election must be subject to the disapproval of the Committee. To the extent
required to comply with rules promulgated under Section 16 of the Exchange Act,
elections by Reporting Persons are subject to the following additional
restrictions: (i) no election shall be effective for a Tax Date which occurs
within six months of the grant of the award; and (ii) the election must be made
either (A) six months or more prior to the Tax Date or (B) during a period
beginning on the third business day following the date of release for
publication of the Corporation's quarterly or annual summary statements of
sales and earnings and ending on the twelfth business day following such date.
(g) Restrictions On Sale and Exercise. With respect to Reporting Persons, and
if required to comply with rules promulgated under Section 16 of the Exchange
Act, (i) no Award providing for exercise, a vesting period, a restriction
period or the attainment of performance standards shall permit unrestricted
ownership of shares of Common Stock by the Participant for at least six months
from the date of grant, and (ii) shares of Common Stock acquired pursuant to
this Plan (other than shares of Common Stock acquired as a result
I-6
<PAGE>
of the granting of a "derivative security") may not be sold or otherwise
disposed of for at least six months after acquisition.
(h) Requirements of Law. The granting of Awards and the issuance of shares of
Common Stock upon the exercise of Awards shall be subject to all applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any
stock exchanges upon which the Common Stock may be listed. As a condition
precedent to the issuer of shares of Common Stock pursuant to the grant or
exercise of an Award, the Corporation may require the Participant to take any
reasonable action to meet such requirements.
10. AMENDMENTS
(a) Except as otherwise provided in this Plan, the Board may at any time
terminate and, from time to time, may amend or modify this Plan. Any such
action of the Board may be taken without the approval of the Corporation's
shareholders, but only to the extent that such shareholder approval is not
required by applicable law or regulation, including specifically Rule 16b-3
under the Exchange Act.
(b) Except to the extent, if any, as may be permitted by rules promulgated
under Section 16 of the Exchange Act, the provisions of this Plan relating to
the amount, price and timing of Director Stock Options may not be amended more
than once every six months, other than to comport with changes in the Code,
ERISA or the rules thereunder.
(c) No amendment, modification or termination of this Plan shall in any
manner adversely affect any Awards theretofore granted to a Participant under
this Plan without the consent of such Participant.
11. RECAPITALIZATION
The aggregate number of shares of Common Stock as to which Awards may be
granted to Participants, the number of shares thereof covered by each
outstanding Award, and the price per share thereof in each such Award, shall
all be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, stock dividend,
combination or exchange of shares, exchange for other securities,
reclassification, reorganization, redesignation, merger, consolidation,
recapitalization or other such change. Any such adjustment may provide for the
elimination of fractional shares.
12. NO RIGHT TO EMPLOYMENT
No person shall have any claim or right to be granted an Award, and the grant
of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Corporation or a Subsidiary. Nothing in this Plan
shall interfere with or limit in any way the right of the Corporation or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Corporation or
any Subsidiary.
13. CHANGE OF CONTROL
(a) Notwithstanding anything contained in this Plan or any Award Agreement to
the contrary, in the event of a Change of Control, as defined below, the
following (i) may, in the sole discretion of the Committee, occur with respect
to any and all Employee Awards outstanding as of such Change of Control and
(ii) shall occur with respect to any and all Director Stock Options outstanding
as of such Change of Control:
(i) automatic maximization of performance standards, lapse of all
restrictions and acceleration of any time periods relating to the exercise,
realization or vesting of such Awards so that such Awards may be
immediately exercised, realized or vested in full on or before the relevant
date fixed in the Award Agreement;
(ii) performance shares or performance units shall be paid entirely in
cash;
I-7
<PAGE>
(iii) upon exercise of a stock option or an incentive stock option
(collectively, an "Option") during the 60-day period from and after the
date of a Change of Control, the Participant exercising the Option may in
lieu of the receipt of Common Stock upon the exercise of the Option, elect
by written notice to the Corporation to receive an amount in cash equal to
the excess of the aggregate Value (as defined below) of the shares of
Common Stock covered by the Option or portion thereof surrendered
determined on the date the Option is exercised, over the aggregate exercise
price of the Option (such excess is referred to herein as the "Aggregate
Spread"); provided, however, and notwithstanding any other provision of
this Plan, if the end of such 60-day period from and after the date of a
Change of Control is within six months of the date of grant of an Option
held by a Participant who is a Reporting Person, such Option shall be
cancelled in exchange for a cash payment to the Participant equal to the
Aggregate Spread on the day which is six months and one day after the date
of grant of such Option. As used in this Section 13(a)(iii) the term
"Value" means the higher of (i) the highest Fair Market Value during the
60-day period from and after the date of a Change of Control and (ii) if
the Change of Control is the result of a transaction or series of
transactions described in paragraphs (i) or (iii) of the definition of
Change of Control, the highest price per share of the Common Stock paid in
such transaction or series of transactions (which in the case of paragraph
(i) shall be the highest price per share of the Common Stock as reflected
in a Schedule 13D filed by the person having made the acquisition);
(iv) if a Participant's employment terminates for any reason other than
retirement or death following a Change of Control, any Options held by such
Participant may be exercised by such Participant until the earlier of three
months after the termination of employment or the expiration date of such
Options; and
(v) all Awards become non-cancellable.
(b) A "Change of Control" of the Corporation shall be deemed to have occurred
upon the happening of any of the following events:
(i) the acquisition, other than from the Corporation, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership of 20% or more of either the then
outstanding shares of Common Stock of the Corporation or the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors; provided, however,
that any acquisition by the Corporation or any of its Subsidiaries, or any
employee benefit plan (or related trust) of the Corporation or its
Subsidiaries, or any corporation with respect to which, following such
acquisition, more than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Common Stock and
voting securities of the Corporation immediately prior to such acquisition
in substantially the same proportion as their ownership, immediately prior
to such acquisition, of the then outstanding shares of Common Stock of the
Corporation or the combined voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the election of
directors, as the case may be, shall not constitute a Change of Control;
(ii) individuals who, as of January 1, 1995, constitute the Board as of
the date hereof the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any individual becoming a
director subsequent to such date whose election, or nomination for election
by the Corporation's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Corporation (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
I-8
<PAGE>
(iii) approval by the shareholders of the Corporation of a
reorganization, merger or consolidation of the Corporation, in each case,
with respect to which the individuals and entities who were the respective
beneficial owners of the Common Stock and voting securities of the
Corporation immediately prior to such reorganization, merger or
consolidation do not, following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of Common Stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
corporation resulting from such reorganization, merger or consolidation, or
a complete liquidation or dissolution of the Corporation or of the sale or
other disposition of all or substantially all of the assets of the
Corporation.
14. GOVERNING LAW
To the extent that federal laws do not otherwise control, this Plan shall be
construed in accordance with and governed by the law of the State of Ohio.
15. INDEMNIFICATION
Each person who is or shall have been a member of the Committee or of the
Board shall be indemnified and held harmless by the Corporation against and
from any loss, cost, liability or expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any claim,
action, suit or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under this Plan and
against and from any and all amounts paid by him in settlement thereof, with
the Corporation's approval, or paid by him in satisfaction of any judgment in
any such action, suit or proceeding against him, provided he shall give the
Corporation an opportunity, at its own expense, to handle and defend the same
before he undertakes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Corporation's
Articles of Incorporation or Code of Regulations, as a matter of law, or
otherwise, or any power that the Corporation may have to indemnify them or hold
them harmless.
16. SAVINGS CLAUSE
This Plan is intended to comply in all aspects with applicable law and
regulation, including, with respect to those Employees who are Reporting
Persons, Rule 16b-3 under the Exchange Act. In case any one or more of the
provisions of this Plan shall be held invalid, illegal or unenforceable in any
respect under applicable law and regulation (including Rule 16b-3), the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and the invalid, illegal or
unenforceable provision shall be deemed null and void; however, to the extent
permissible by laws, any provision which could be deemed null and void shall
first be construed, interpreted or revised retroactively to permit this Plan to
be construed in compliance with all applicable laws (including Rule 16b-3) so
as to foster the intent of this Plan. Notwithstanding anything in this Plan to
the contrary, the Committee, in its sole and absolute discretion, may bifurcate
this Plan so as to restrict, limit or condition the use of any provision of
this Plan to Participants who are Reporting Persons without so restricting,
limiting or conditioning this Plan with respect to other Participants.
17. EFFECTIVE DATE AND TERM
The effective date of this Plan is April 17, 1995 subject to its approval by
the Corporation's shareholders at their next annual meeting or at any
adjournment thereof, within twelve months following the date of its adoption by
the Board. This Plan shall remain in effect until terminated by the Board.
I-9
<PAGE>
ANNEX II
BANC ONE CORPORATION
AMENDED 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 "Amended 1994 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 amended effective as of January 1, 1995, by
action of the Personnel and Compensation Committee of the CORPORATION (the
"Committee") on January 23, 1995, subject to the approval of the amendment by
the shareholders of the CORPORATION prior to the payment of any awards for the
year 1995. The Plan was originally established on December 23, 1993 by the
Committee and approved by shareholders on April 19, 1994.
SECTION 2. PLAN ADMINISTRATION
2.1 Plan Administration. The Plan is administered by the Personnel and
Compensation Committee of the Board of Directors of the 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 upon the achievement of
performance goals as established by the Committee as authorized by the
Plan.
(b) "Committee" means the committee appointed by the Board of Directors
of the CORPORATION to administer the Plan. The 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.
(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.
II-1
<PAGE>
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 the
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 a designated Plan Year. The Target Award levels for the Chairman
and President, respectively, will be established by the Committee from year to
year pursuant to the provisions of this Plan within the time period required by
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder ("Section 162(m)").
5.2 Maximum Award Level. The maximum amount payable under the Plan is defined
as a percentage of the Target Award as established by the Committee for a
designated Plan Year within the time period required by Section 162(m);
provided, however, that the maximum payment for any one Plan Year hereunder to
any participant under the Plan is $3,000,000.
5.3 Corporate Performance Measure. The Corporate Performance Thresholds for a
Plan Year shall be established by the Committee within the time period required
by Section 162(m) and shall be based upon the achievement of designated
performance objectives or goals. The performance measures to be used to
establish such objectives or goals shall be (i) earnings growth for the
CORPORATION for the Plan Year as compared with the prior year and (ii) Return
on Assets of the CORPORATION for the Plan Year as compared with the previous
year. The established performance thresholds as established by this Committee
based on such goals or objectives 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 based upon the goals established for the Plan
Year. 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 and, if and as applicable, the shareholders. The existence of the
Plan does not obligate or bind the 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
II-2
<PAGE>
[MAP OF LOCATION OF BANC ONE ANNUAL MEETING OF SHAREHOLDERS]
Please be sure to bring your Parking Ticket from the Columbus Convention
Center Garage, North Lot or East Lot for free parking validation at the Welcome
Desks on April 18, 1995.
NOTICE
ADMITTANCE TO THE ANNUAL MEETING
In order to accommodate our shareholders, admission to the Annual Meeting
must be limited to shareholders, proxies, press and meeting staff. Two Welcome
Desks will be set up to greet meeting attendees. If you hold stock in your own
name, please proceed to the RECORD HOLDER Welcome Desk when you arrive. If you
hold stock through a bank, broker or otherwise, please proceed to the STREET
NAME Welcome Desk and please be prepared to furnish an account statement from
your bank or broker, a copy of a proxy card mailed to you, or other proof of
ownership of BANC ONE Common Stock. THOSE PERSONS WITHOUT SUCH PROOF WILL BE
DELAYED UNTIL THE MEETING STAFF DETERMINES THERE IS ADEQUATE SEATING FOR ALL
ATTENDEES AND MAY BE DENIED ADMITTANCE ALTOGETHER IF SEATING SPACE IS JUDGED
INADEQUATE.
<PAGE>
BANC ONE CORPORATION
PROXY FOR SHARES OF COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING ON APRIL 18, 1995
----------------------------------------
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 24, 1995 at the Annual Meeting of Shareholders to be held on
April 18, 1995 or any adjournment thereof.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR
- --------------------------------------------------------------------------------
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.,
Richard J. Lehmann, John B. McCoy, John G. McCoy, Richard L. Scott, Thekla
R. Shackelford, Alex Shumate, Frederick P. Stratton, Jr. 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 1995 Stock Incentive Plan.
For [_] Against [_] Abstain [_]
3. Proposal to approve amendment of the 1994 Key Executive Management Incentive
Compensation Plan.
For [_] Against [_] Abstain [_]
<PAGE>
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, FOR PROPOSAL 3 AND ACCORDING TO THE JUDGMENT OF THE
PROXIES WITH RESPECT TO ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE
MEETING.
The undersigned hereby acknowledges receipt of the Notice of Meeting and Proxy
Statement, each dated March 8, 1995. Please sign exactly as name appears
hereon. When shares are held by joint tenants, both should sign.
Date: ______________________, 1995 ______________________________
(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 partnership,
please sign in partnership name
by authorized person.)
Please sign, date and return this Proxy promptly using the enclosed envelope.
<PAGE>
BANC ONE CORPORATION
100 East Broad Street
Columbus, Ohio 43271
March 7, 1995
__________________
__________________
__________________
__________________
Dear _____________:
In order to keep you informed of the matters to be voted upon at BANC ONE
CORPORATION's Annual Meeting of Shareholders scheduled to be held on April 18,
1995, I have enclosed a copy of the 1994 Annual Report and Proxy Statement.
In view of the indirect process by which nominee-registered securities are
voted, we encourage you and your associates to give this year's proxy materials
early attention. We would appreciate if you would see that your vote is cast
promptly when the proxy card reaches your firm through the normal channels.
We invite you to discuss with us, prior to voting, the agenda for the meeting.
Please feel free to call me directly 614/248-5908.
On behalf of BANC ONE CORPORATION'S Board of Directors, thank you for your
consideration. We look forward to your continued interest in and support of BANC
ONE.
Very truly yours,
/s/ GEORGE R. L. MEILING
George R. L. Meiling
Treasurer
