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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
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BANC ONE CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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: ...........................................................
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Bank One Logo
March 11, 1997
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
15, 1997 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.
For the reasons set forth in the Proxy Statement, your Board of Directors
unanimously recommends a vote FOR Item 1, the election of directors, as set
forth on the enclosed Proxy Card. This matter is more fully described in the
accompanying Notice of Meeting and Proxy Statement.
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
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Bank One Logo
BANC ONE CORPORATION
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
Columbus, Ohio
March 11, 1997
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 15, 1997, 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.
OTHER BUSINESS--Transaction of such other business as may properly come
before the meeting.
The close of business on February 24, 1997 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.
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TABLE OF CONTENTS
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GENERAL INFORMATION................................................................... 1
ELECTION OF DIRECTORS................................................................. 1
DIRECTORS FEES AND COMPENSATION....................................................... 5
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION........................... 6
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION......................... 6
EXECUTIVE COMPENSATION................................................................ 9
Summary Annual Compensation......................................................... 9
Stock Incentive Plans............................................................... 11
Comparison of Five Year Cumulative Total Return..................................... 12
Savings Plan........................................................................ 13
Retirement Benefits................................................................. 13
CERTAIN REPORTS....................................................................... 15
TRANSACTIONS WITH MANAGEMENT AND OTHERS............................................... 15
OWNERSHIP OF SHARES................................................................... 15
INDEPENDENT PUBLIC ACCOUNTANTS........................................................ 16
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING......................................... 17
ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS............................................ 17
OTHER BUSINESS........................................................................ 17
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BANC ONE CORPORATION
100 East Broad Street
Columbus, Ohio 43271
PROXY STATEMENT
GENERAL INFORMATION
BANC ONE CORPORATION, hereinafter referred to as "BANC ONE," is furnishing
this Proxy Statement to its shareholders in connection with the solicitation of
proxies for use in voting at the Annual Meeting of Shareholders on Tuesday,
April 15, 1997. The enclosed proxy is solicited by the Board of Directors of
BANC ONE (the "BANC ONE Board"). This Proxy Statement is being mailed on or
about March 11, 1997.
The close of business on February 24, 1997, 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, 1997, BANC ONE
had outstanding and entitled to vote 419,531,088 shares of Common Stock without
par value ("Common Stock"), each of which is entitled to one vote. The 4,026,484
outstanding shares of Class C Preferred Stock ("Preferred Stock"), BANC ONE's
only issue of preferred stock, are not entitled to 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 as
hereinafter described.
The presence of a majority of the outstanding shares of BANC ONE Common
Stock in person or by proxy is necessary to constitute a quorum of shareholders
for all matters to be considered at the Annual Meeting. A plurality of the votes
cast at the meeting is required to elect directors.
Votes, whether in person or by proxy, will be counted and tabulated by
judges of election appointed by the BANC ONE Board. 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.
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 Georgeson & Company 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 BANC ONE Annual Meeting has
been fixed by the BANC ONE Board at thirteen. Each Director will hold office
until the 1998 BANC ONE Annual Meeting or until a successor is elected and
qualified. Except as otherwise specified in the proxy, the shares represented by
the enclosed proxy will be voted for the election as Directors of the thirteen
nominees named below. If a nominee should become unavailable to serve, which is
not anticipated, proxies will be voted for election of such person, if any, as
shall be designated by the BANC ONE Board.
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 1996 BANC ONE Annual Meeting, except for Bennett Dorrance, who was
elected by the Board on July 15, 1996. The information which follows includes,
as to each such nominee, the nominee's age, the year in which service was
commenced as a Director of BANC ONE, the nominee's current positions and offices
held with BANC ONE, if applicable, the nominee's business experience during the
past five years, and certain other information, together with the nominee's
beneficial ownership of BANC ONE Common Stock as of January 1, 1997.(1)(2)
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Bennett Dorrance Bennett Dorrance, 51, Director since 1996. 7,000 Shares(3)
Private investor and Chairman and Managing Director of DMB
Associates, Phoenix, Arizona (real estate investment and
development). Mr. Dorrance serves as Vice Chairman of Campbell Soup
Company, Inc. and is a director of UDC Homes, Inc.
Charles E. Exley, Charles E. Exley, Jr., 67, Director since 1992. 11,497 Shares(4)
Jr. Corporate Director. Chairman and Chief Executive Officer, NCR
Corporation (manufacturing 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 E. Gordon Gee, 53, Director since 1990. 14,861 Shares(4)
President, The Ohio State University, 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 Abercrombie & Fitch, Inc., ASARCO, Inc., Columbia Gas
of Ohio, Glimcher Realty Trust, Intimate Brands, Inc. and The
Limited, Inc.
John R. Hall John R. Hall, 64, Director since 1987. 38,664 Shares(4)
Retired Chairman & Chief Executive Officer, Ashland, Inc. (oil
refiner, manufacturer and distributor of chemicals. Mr. Hall served
as Chairman and Chief Executive Officer of Ashland, Inc. from
January 1992 to October 1996. Mr. Hall serves as a director of
Reynolds Metals Company, Humana Inc., CSX Corporation and UCAR
International, Inc.
Laban P. Jackson, Laban P. Jackson, Jr., 54, Director since 1993. 18,049 Shares(4)
Jr. Chairman and Chief Executive Officer, Clear Creek Properties, Inc.
(real estate development), January 1989 to present; prior thereto,
Chairman and Chief Executive Officer, International Spike, Inc.
John W. Kessler John W. Kessler, 61, Director since 1995 21,099 Shares(4)
Chairman, The New Albany Company (real estate development), 1988 to
present, Chairman, Marsh & McLennan Real Estate Advisors, Inc.
(real estate development), 1980 to present and Chairman, John W.
Kessler Company (real estate development), 1975 to present. Mr.
Kessler served as a director of BANC ONE from 1986 to 1992.
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Richard J. Lehmann Richard J. Lehmann, 52, Director since 1995. 172,398 Shares(5)
President, BANC ONE, April 1995 to present, and Chief Operating
Officer, BANC ONE, January 1996 to present; Chairman and Chief
Executive Officer, Banc One Arizona Corporation (formerly, Valley
National Corporation) and Bank One, Arizona, N.A. (formerly Valley
National Bank), January 1991 to April 1995.
John B. McCoy John B. McCoy, 53, Chairman and Director since 1983 661,778 Shares(6)
Chairman, BANC ONE, January 1987 to present; President, BANC ONE,
January 1983 to January 1987. Mr. McCoy serves as a director of
Cardinal Health, Inc., Ameritech Corporation, Federal Home Loan
Mortgage Corporation and Tenneco, Inc.
John G. McCoy John G. McCoy, 84, Director since 1967 543,772 Shares
Chairman, BANC ONE Executive Committee, May 1984 to present; prior
thereto, Chairman and Chief Executive Officer of BANC ONE. Mr.
McCoy was a founder of BANC ONE.(7)
Thekla R. Thekla R. Shackelford, 62, Director since 1993 177,520 Shares(4)
Shackelford Education consultant. Ms. 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 Fiserv Inc.
Alex Shumate Alex Shumate, 46, Director since 1993 8,152 Shares(4)
Office Managing Partner, Squire, 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. Mr. Shumate serves as a director of Intimate Brands, Inc.
Frederick P. Frederick P. Stratton, Jr., 57, Director since 1988 36,719 Shares(4)
Stratton, Jr. Chairman and Chief Executive Officer, Briggs & Stratton Corporation
(manufacturer of air cooled gasoline engines for outdoor power
equipment). Mr. Stratton serves as a Director of Midwest Express
Holdings, Inc., Weyco Group, Inc., Wisconsin Electric Power Company
and Wisconsin Energy Corporation.
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Robert D. Walter Robert D. Walter, 51, Director since 1987 91,847 Shares(4)
Chairman and Chief Executive Officer, Cardinal Health, Inc.
(wholesale distributor of pharmaceuticals and related health care
products). Mr. Walter is a director of Karrington Health, Inc. and
Westinghouse Electric Corporation.
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(1) 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.
(2) 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, 1997. 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.
(3) Share amount shown excludes options on 3,112 shares of BANC ONE Common Stock
granted to Mr. Dorrance in 1996 as a new director pursuant to the 1995 Stock
Incentive Plan, which option was not exercisable on or within 60 days of
January 1, 1997.
(4) Share amount shown excludes options on 1,739 shares of BANC ONE Common
Stock, which options were not exercisable on or within 60 days of January 1,
1997. Share amounts shown include exercisable options on shares of BANC ONE
Common Stock granted to directors who are not employees of BANC ONE or one
of its affiliates pursuant to the 1989 and 1995 Stock Incentive Plans. The
number of shares so-included total 9,297 shares for each of Ms. Shackelford
and Messrs. Exley and Jackson; 13,198 shares for Dr. Gee; 15,091 shares for
each of Messrs. Hall, Stratton and Walter; 6,876 shares for Mr. Shumate; and
2,894 shares for Mr. Kessler.
(5) Share amount shown excludes options to purchase 133,214 shares of BANC ONE
Common Stock, which options were not exercisable on or within 60 days of
January 1, 1997. Share amount shown includes 40,286 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 610,407 shares of BANC ONE
Common Stock, which options were not exercisable on or within 60 days of
January 1, 1997. Share amount shown includes (a) 132,992 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 143,671 shares of BANC ONE Common Stock.
(7) John G. McCoy is John B. McCoy's father.
COMMITTEES
BANC ONE has three standing committees of the BANC ONE Board. The Personnel
and Compensation Committee, which currently consists of John R. Hall (committee
chairman), Bennett Dorrance, E. Gordon Gee, John W. Kessler and Thekla R.
Shackelford, held five meetings during 1996. In addition to reporting to the
Board on the selection of BANC ONE's principal officers, including its chairman,
president and other executive officers, and the fixing of their salaries, this
committee determines the amount of bonus paid to principal officers of BANC ONE
and its affiliates, approves the salaries and bonus received by the principal
officers of BANC ONE affiliates, administers certain BANC ONE employee benefit
plans and serves as the
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BANC ONE Board's nominating committee. The Personnel and Compensation Committee,
which recommends to the BANC ONE Board nominees for election or re-election as
directors at the Annual Meeting, will consider nominees recommended by
shareholders as set forth under "Annual Meeting Advance Notice Requirements."
The Audit Committee, which currently consists of Robert D. Walter
(committee chairman), Charles E. Exley, Jr., Laban P. Jackson, Jr., Alex Shumate
and Frederick P. Stratton, Jr. held four meetings during 1996. The Audit
Committee meets with BANC ONE's independent public accountants and internal
auditors, reviews the scope and results of their audits, reviews management
responses 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), John R. Hall, John B. McCoy and Robert D. Walter, did not
meet in 1996. The Executive Committee is empowered, between Board meetings, to
exercise all the powers of the BANC ONE Board in the management of BANC ONE.
During 1996, there were four meetings of the BANC ONE Board. All Directors
attended at least 75% of the total number of meetings of the BANC ONE 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
$2,700 as a monthly retainer, $2,500 for each Board meeting attended and $1,600
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 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 One Group(R) Prime Money Market Fund and/or the BANC ONE
stock program. 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 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 eight current non-employee Directors participate in the
deferred compensation plan.
The 1995 Stock Incentive Plan (the "1995 Plan") provides for the automatic
grant of nonqualified stock options ("Director Stock Options") to each Director
who is not an employee of BANC ONE or one of its affiliates (an "Eligible
Director") upon the terms and conditions set forth in the 1995 Plan (including
the condition that each Director Stock Option has an option price that is equal
to the fair market value of BANC ONE Common Stock on the date of grant).
Commencing immediately after the adjournment of the BANC ONE Annual Meeting each
year, each Eligible Director who was an Eligible Director immediately preceding
such BANC ONE Annual Meeting and who has been elected as a director at such BANC
ONE Annual Meeting is automatically 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 of grant 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%. In 1996, each of BANC
ONE's re-elected non-employee Directors received an option on 1,739 shares of
BANC ONE Common Stock at an exercise price of $34.50 per share. The 1995 Plan
further provides that each person who is first elected or appointed to serve as
a Director and
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who is an Eligible Director is, upon such person's initial appointment or
election as an Eligible Director, automatically 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 of grant. Upon his election to the BANC ONE Board in July
1996, Mr. Dorrance received an option on 3,112 shares of BANC ONE Common Stock
at an exercise price of $32.125 per share.
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.
Dorrance, Gee, Hall and Kessler, none of whom is now or in the past was an
officer of BANC ONE or any of its affiliates.
Members of the Committee and their associates are at present, as in the
past, customers of the banks and broker-dealers affiliated with BANC ONE and
have lending transactions with such banks and broker-dealers in the ordinary
course of business. Additional lending transactions may be expected to take
place with banks and broker-dealers affiliated with BANC ONE in the ordinary
course of business. Such lending transactions have been and will continue to be
on substantially the same terms, including interest rates and collateral on
loans, as those prevailing at the time for comparable lending transactions with
other persons. Such lending transactions did not, and will not, involve more
than normal risk of collectibility or present other unfavorable features.
John B. McCoy serves as Chairman of the Compensation and Personnel
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 for 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 BANC ONE's 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 each of the
components of compensation, and also with respect to aggregate total
compensation to ensure competitiveness against other major U.S. bank holding
companies and selected diversified financial services 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. 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 compensation and stock-based compensation. The program
is designed to provide competitive and performance-contingent current
compensation, as well as opportunities to earn above-average longer-term rewards
aligned with BANC ONE's shareholder value created.
Each component of executive compensation is discussed below.
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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 and, where appropriate, has brought executive compensation plans into
compliance with the requirements of Section 162(m). 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 COMPENSATION
In 1996, BANC ONE's Chairman and President were eligible to participate in
the 1994 Key Executive Management Incentive Compensation Plan, as amended (the
"EMIC Plan"), while all other executive officers participated in the Key
Management Incentive Compensation Plan ("KMIC"). Both the 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 between the 50th and 75th percentiles of the
Peer Group, with commensurate performance targets set at high performance
levels.
Under the terms of the EMIC Plan, covering Mr. McCoy and Mr. Lehmann, the
Committee established specific performance targets of an increase in earnings
from the previous year and a return on assets of not less than 1.15% to generate
a minimum threshold award. Award opportunities are provided based upon achieving
these goals as set forth in a matrix established by the Committee. The target
award levels for Mr. McCoy and Mr. Lehmann were fixed by the Committee at the
beginning of the performance period at $1,124,500 and $560,000, respectively. In
1996, BANC ONE substantially exceeded its performance thresholds as to both
earnings growth and return on assets. As a result, Mr. McCoy and Mr. Lehmann
received awards of $1,250,000 and $625,000, respectively.
KMIC awards to all other executive officers are based upon a formula which
provides reasonable 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 business.
These objectives included specific targets for earnings growth. KMIC performance
thresholds apply both to the BANC ONE corporate level of consolidation and to
each respective business. On average, target award levels for executive officers
under KMIC were set at 50% of annual base salary. Commensurate with BANC ONE's
performance relative to its peer group and its business expectations, awards
under KMIC for 1996 were generally slightly above the target award level.
STOCK-BASED COMPENSATION
Each year, the Committee reviews competitive data based on BANC ONE's Peer
Group to determine the level of stock-based awards to be granted to executive
officers and other members of key management. Stock-based awards for executive
officers are intended to be at a level somewhat above the median of Peer
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Group award levels. BANC ONE has included stock options and restricted stock
awards as key elements in its total compensation package for many years.
Stock-based compensation provides a long-term link between the results
achieved for shareholders and the rewards provided to key executive officers. In
1995, shareholders approved the 1995 Plan which provides for the grant of many
types of stock-based awards, including stock options, restricted stock awards,
stock appreciation rights, performance shares, performance awards, performance
share units, dividend or equivalent rights or performance stock awards.
In 1996, the Committee granted stock options and restricted stock awards to
BANC ONE's key executives based upon a subjective evaluation of each
individual's performance and expected future contribution to BANC ONE. In
granting stock-based awards the Committee also gave consideration to the amount
and nature of similar awards granted by the Peer Group. All stock options were
granted with an exercise price equal to the market price of BANC ONE Common
Stock on the date of grant, with a five year vesting period. Restricted stock
was granted with vesting as to one-third of the shares on each of the fourth,
sixth and eighth anniversaries of the date of grant.
In 1996, the Committee made stock option awards to BANC ONE's Chairman and
President based on a subjective evaluation of BANC ONE's performance, similar
awards granted by the peer group and BANC ONE's past grant practices. As a
result, in 1996 Mr. McCoy and Mr. Lehmann received incentive stock option awards
and non-qualified stock option awards totalling 108,518 shares and 61,218
shares, respectively.
Restricted stock awards made during 1996 to BANC ONE's Chairman and
President were based on a matrix of specific 1995 performance measures
established by the Committee in January 1995. The performance measures were an
increase in earnings from the previous year and return on assets of not less
than 1.15% to generate a minimum award. At the beginning of the performance
period the Committee established restricted stock award targets for Mr. McCoy
and Mr. Lehmann with grant values (number of shares multiplied by stock price on
the date of grant) of $987,300 and $510,000, respectively. In 1995, BANC ONE
exceeded its performance targets as to both earnings growth and return on
assets. As a result, in 1996 Mr. McCoy and Mr. Lehmann received restricted stock
awards with grant values of $1,017,897 and $613,416, respectively.
In addition, in 1996 the Committee made grants under a 3-year performance
stock award program whose future value is contingent upon the achievement of
sustained, significant increases in earnings per share (EPS) and share value
over the three year period of 1996-1998. The one-time grants will also foster
management continuity during this critical period. Participation is limited to
those senior executives who are expected to make critical contributions to the
organization over the performance period, and included 50 participants at
December 31, 1996. At the conclusion of the 3-year performance period,
participants' awards will be determined based on a pre-established scale of
compounded EPS growth for BANC ONE over the performance period. Awards will be
capped at 200% of target unless BANC ONE's compounded EPS growth rate ranks in
the top one-third of the fifty largest United States banks. In general, target
award levels were set at 100% of each participant's January 1, 1996 base salary.
The target award levels for Mr. McCoy and Mr. Lehmann were fixed by the
Committee at the beginning of the performance period at $1,097,000 and $700,000,
respectively. Awards will be paid in restricted shares of BANC ONE Common Stock
with a six month vesting period.
OTHER COMPENSATION
In 1994, a "Split Dollar" life insurance plan was introduced covering,
among others, the executive officers. Under this plan, which replaced the
employee life insurance plan for covered officers, BANC ONE will be reimbursed
for its contributions to premium costs from each policy's cash value or death
benefit.
8
<PAGE> 14
CONCLUSION
Through the plans described above, a significant portion of BANC ONE's
executive compensation is linked directly to individual and corporate
performance and long-term stock price appreciation. The Committee will continue
to review all elements of executive compensation to ensure that they continue to
meet BANC ONE's business objectives.
THE PERSONNEL AND COMPENSATION COMMITTEE OF THE BANC ONE BOARD
Bennett Dorrance
E. Gordon Gee
John R. Hall, Chairman
John W. Kessler
Thekla R. Shackelford
EXECUTIVE COMPENSATION
SUMMARY ANNUAL COMPENSATION
The following Summary Compensation Table sets forth the individual
compensation paid to BANC ONE's Chief Executive Officer and each of the four
other most highly compensated executive officers for services rendered in all
capacities during the fiscal years ended December 31, 1994, December 31, 1995
and December 31, 1996.
9
<PAGE> 15
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS
-------------------------------- ----------------------
OTHER ANNUAL RESTRICTED STOCK LTIP ALL OTHER
SALARY BONUS COMPENSATION STOCK(3) OPTIONS(4) PAYOUTS(5) COMPENSATION
NAME PRINCIPAL POSITION YEAR ($) ($) ($) ($) (SHARES) ($) (6)($)
- ------------------ -------------------- ---- ------ ---------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
John B. McCoy..... Chairman and CEO,
BANC ONE 1996 995,000 1,250,000 334,769(2) 1,017,897 108,518 -- 116,217
Chairman and CEO,
BANC ONE 1995 995,000 1,124,400 275,100(2) 0 200,579 -- 114,385
Chairman and CEO,
BANC ONE 1994 995,000 510,000 148,863(2) 0 197,761 -- 114,750
Richard J.
Lehmann......... President, BANC ONE 1996 700,000 625,000 125,381(2) 613,416 61,218 -- 21,844
President, BANC ONE 1995 578,254 556,600 62,503 399,997 46,414 -- 17,315
Chairman, Banc One
Arizona Corp. 1994 457,000 234,200 86,744(2) 230,007 25,582 -- 11,515
Thomas E.
Hoaglin......... Chairman, Banc One
Ohio Corp. 1996 460,000 250,000 21,633 299,995 27,240 -- 13,767
Chairman, Banc One
Ohio Corp. 1995 441,000 235,000 27,577 264,996 33,232 -- 10,908
Chairman, Banc One
Ohio Corp. 1994 424,500 231,300 12,891 250,002 28,993 -- 10,801
Joseph D.
Barnette, Jr.... Chairman, Banc One
Indiana Corp. 1996 445,000 250,000 23,335 249,984 24,372 -- 11,814
Chairman, Banc One
Indiana Corp. 1995 430,500 250,000 20,370 249,976 29,705 -- 10,486
Chairman, Banc One
Indiana Corp. 1994 414,500 209,800 16,282 235,006 25,582 -- 10,465
Ronald G.
Steinhart....... Chairman, Banc One
Texas Corp. 1996 407,483 250,000 11,343 249,984 24,372 -- 15,530
Chairman, Banc One
Texas Corp. 1995 395,000 240,000 11,618 214,989 36,991 -- 12,518
Chairman, Banc One
Texas Corp. 1994 382,500 0 10,388 179,987 15,348 -- 12,429
</TABLE>
- ------------------------------
(1) Includes amounts earned in 1996, whether or not deferred.
(2) Amounts included which exceed 25% of the total perquisites and other
personal benefits reported:
<TABLE>
<CAPTION>
EXECUTIVE 1996 1995 1994
- ---------------------- -------- -------- -------
<S> <C> <C> <C> <C>
John B. McCoy......... Deferred payments under Dividend Equivalent Unit Plan $213,286 $146,874 $45,471
Personal use of company aircraft as required for security
reasons by Board of Directors $ 68,939 $ 62,897 $63,498
Richard J. Lehmann.... One-time club initiation fees and annual club dues $ 76,390
Net payment and tax gross-up for terminated supplemental
excess retirement plan $73,610
</TABLE>
(3) BANC ONE Common Stock closed at $34.875 per share on May 1, 1996, the date
of grant for all 1996 restricted stock awards to the executive officers
listed above. 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 grant date. Dividends on restricted stock are paid to
the grantees. As of December 31, 1996, the total number of shares of
restricted stock and the value of said shares (based upon the closing market
value of $43.000 per share on said date) outstanding to each of the persons
listed above, are as follows:
<TABLE>
<CAPTION>
12/31/96
SHARES VALUE
------- ----------
<S> <C> <C>
John B. McCoy.................................................................. 132,992 $5,718,656
Richard J. Lehmann............................................................. 40,286 $1,732,298
Thomas E. Hoaglin.............................................................. 46,217 $1,987,331
Joseph D. Barnette, Jr......................................................... 39,912 $1,716,216
Ronald G. Steinhart............................................................ 21,289 $ 915,427
</TABLE>
(4) Incentive Stock Options are granted up to an annual face value limit (number
of shares multiplied by the exercise price) of $100,000. Non-Qualified Stock
Options are used for the portion of face value amounts above this limit. All
BANC ONE Stock Options are granted at the market price of BANC ONE Common
Stock on the date of grant and are adjusted for stock splits and stock
dividends.
(5) In 1996 each of the above executive officers participated in a three year
Performance Stock Plan covering the performance period of 1996-1998.
Payouts, if any, will be based on the compounded EPS growth rate for BANC
ONE during the performance period and will be made in shares of restricted
stock in 1999 with a six month vesting period. Awards will be capped at 200%
of target unless BANC ONE's compounded EPS growth rate ranks in the top
one-third of the 50 largest US banks.
(6) Includes employer matching contributions to the BANC ONE Security Savings
Plan and the BANC ONE Supplemental Executive Security Savings Plan. Also
includes the values of split-dollar life insurance arrangements with BANC
ONE in the amount of $108,439, $14,066, $5,989, $8,664 and $7,752 for 1996;
$109,385, $12,315, $5,908, $8,686 and $7,778 for 1995; and $109,750, $9,715,
$5,801, $8,665 and $7,764 for 1994 for Messrs. McCoy, Lehmann, Hoaglin,
Barnette and Steinhart, respectively. The split dollar life 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
policies, Mr. McCoy is covered by a split-dollar arrangement that insures
the lives of Mr. McCoy and his wife.
10
<PAGE> 16
STOCK INCENTIVE PLANS
The 1995 Plan authorizes the grant of Director Stock Options to BANC ONE
Directors and the grant of incentive stock options, nonqualified stock options,
stock appreciation rights, restricted shares or units, performance shares or
units, Performance Stock Awards (as defined in the 1995 Plan), dividend
equivalent rights and other similar stock-based types of grants based in whole
or in part by reference to BANC ONE Common Stock to key employees of BANC ONE
and its affiliates. The 1995 Plan is administered by the Committee, the members
of which are ineligible to participate in the 1995 Plan except with respect to
Director Stock Options. In administering the 1995 Plan, the Committee will
determine, among other things, the employees to whom grants of awards are to be
made, the type of awards to be made, the grant terms of awards and such other
terms and conditions as the Committee deems appropriate. The 1989 Stock
Incentive Plan (the "1989 Plan"), which was terminated by the BANC ONE Board
effective April 17, 1995, provided for the grant of similar awards to BANC ONE
directors and to key employees of BANC ONE and its affiliates. Outstanding
awards under the 1989 Plan remain in effect under the terms of their respective
grants.
The following tables set forth (i) the number and value of options granted
in fiscal year 1996 to the individuals named in the Summary Compensation Table;
and (ii) the aggregated option exercises and fiscal year-end values for the
individuals named in the Summary Compensation Table for fiscal year 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANT DATE
OPTIONS GRANTED GRANTED EXERCISE PRESENT
------------------ EMPLOYEES PRICE EXPIRATION VALUE(4)
NAME TYPE(1) NUMBER IN 1996(2) ($/SHARE) DATE(3) ($)
- ------------------------------ ------- ------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
John B. McCoy................. ISO 2,867 0.13% $34.875 May 1, 2006 16,199
NQSO 105,651 4.88% $34.875 May 1, 2016 653,980
------- ------- ---------- ----------
Total 108,518 5.01% 670,178
Richard J. Lehmann............ ISO 2,867 0.13% $34.875 May 1, 2006 16,199
NQSO 58,351 2.70% $34.875 May 1, 2016 361,193
------- ------- ---------- ----------
Total 61,218 2.83% 377,391
Thomas E. Hoaglin............. ISO 2,867 0.13% $34.875 May 1, 2006 16,199
NQSO 24,373 1.13% $34.875 May 1, 2016 150,869
------- ------- ---------- ----------
Total 27,240 1.26% 167,067
Joseph D. Barnette, Jr........ ISO 2,867 0.13% $34.875 May 1, 2006 16,199
NQSO 21,505 0.99% $34.875 May 1, 2016 133,116
------- ------- ---------- ----------
Total 24,372 1.13% 149,315
Ronald G. Steinhart........... ISO 2,867 0.13% $34.875 May 1, 2006 16,199
NQSO 21,505 0.99% $34.875 May 1, 2016 133,116
------- ------- ---------- ----------
Total 24,372 1.13% 149,315
</TABLE>
BLACK-SCHOLES ASSUMPTIONS
<TABLE>
<CAPTION>
EXERCISE AT REDUCTION FOR RISK-FREE
OPTION TYPE DURATION VESTING RETIREMENT TURNOVER RATE OF RETURN DIVIDENDS VOLATILITY
- ---------------------- -------- --------------- ----------- ------------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ISO................... 10 years 100% at 5 years 3 months 39.53% 6.74% $1.36 23.439%
NQSO.................. 20 years 100% at 5 years 36 months 35.62% 6.74% $1.36 23.439%
</TABLE>
- ------------------------------
(1) Incentive Stock Options (ISO) or Non-Qualified Stock Options (NQSO).
(2) Based on 2,164,889 stock options granted to all employees during 1996.
(3) All stock options become exercisable on the fifth anniversary of the date of
grant if the executive is still employed by BANC ONE.
(4) Grant date present value is determined using a Black-Scholes model modified
to reflect the provisions of BANC ONE's stock options. This is a theoretical
value for stock options. The amount realized from a stock option ultimately
depends on the market value of BANC ONE Common Stock at a future date.
11
<PAGE> 17
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)(2)
EXERCISE REALIZED (1) ---------------------------- ----------------------------
(#) $ EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John B. McCoy.............. 0 0 145,871 610,407 3,361,101 7,783,190
Richard J. Lehmann......... 0 0 0 133,214 0 1,593,193
Thomas E. Hoaglin.......... 5,066 107,074 31,787 112,267 741,205 1,384,915
Joseph D. Barnette, Jr..... 0 0 39,653 101,409 918,853 1,245,789
Ronald G. Steinhart........ 0 0 22,602 71,211 631,238 921,514
</TABLE>
- ------------------------------
(1) Fair market value at exercise minus the exercise price.
(2) Based on the fair market value of BANC ONE Common Stock of $43.00 on
December 31, 1996.
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 institutions comprising the Salomon
Brothers Inc 50 composite ("Salomon 50").(1)(2)
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) BANC One S&P 500 Salomon 50
<S> <C> <C> <C>
12/91 $100.00 $100.00 $100.00
12/92 $113.94 $107.61 $131.19
12/93 $107.83 $118.41 $141.57
12/94 $ 80.13 $120.01 $135.99
12/95 $123.74 $164.95 $210.44
12/96 $161.19 $202.73 $295.67
</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 Carole S. Berger of Salomon Brothers Inc at (212)
783-7893.
(2) Assumes $100 invested on December 31, 1991 in each of BANC ONE Common Stock,
the S&P 500 and the Salomon 50. Total return assumes dividends are
reinvested.
12
<PAGE> 18
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 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 pre-tax
salary contributions to the 401(k) Plan for their account up to 12% of the
employee's base salary. The employee's pre-tax salary 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 Index Fund and/or The One Group(R) Large Company Growth Fund. In
addition to an automatic 20% annual matching contribution, BANC ONE may make a
supplemental employer matching contribution based on the percentage increase
over the preceding year of BANC ONE's annual earnings per share (as originally
reported with adjustments for stock splits and dividends) as follows:
<TABLE>
<CAPTION>
EARNINGS PER SHARE INCREASE TOTAL MATCHING 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>
The Committee may from time to time and without the consent of any employee
or participant establish different criteria for which supplemental matching
contributions may be made.
Based upon the above formula, a 15% supplemental contribution was made by
BANC ONE for 1996. 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 1996 for the account of the individuals
named in the Summary 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 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. The
13
<PAGE> 19
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 $ 87,700 $131,600 $175,400 $219,300 $263,100 $ 307,000
600,000 105,600 158,400 211,200 264,000 316,800 369,600
700,000 123,500 185,300 247,000 308,800 370,500 432,300
800,000 141,400 212,100 282,800 353,500 424,200 494,900
1,000,000 177,200 265,800 354,400 443,000 531,600 620,200
1,200,000 213,000 319,500 426,000 532,500 639,000 745,500
1,400,000 248,800 373,200 497,600 622,000 746,400 870,800
1,600,000 284,600 426,900 569,200 711,500 853,800 996,100
1,800,000 320,400 480,600 640,800 801,000 961,200 1,121,400
</TABLE>
- ------------------------------
(1) The current Eligible Compensation that would be used in calculating the
final average compensation for Messrs. John B. McCoy, Lehmann, Hoaglin,
Barnette and Steinhart is $1,749,413, $1,012,500, $585,000, $570,000 and
$532,483, respectively.
(2) As of January 1, 1997, the credited years of service for Messrs. John B.
McCoy, Lehmann, Hoaglin, Barnette and Steinhart were approximately 30, 27,
23, 15 and 4 years, respectively. For purposes of the Plan and the
Supplemental Employees Retirement Plan (the "SERP"), the credited years of
service for Mr. Lehmann include all of his service with BANC ONE and certain
previous employers.
(3) In 1996, annual benefits were limited by (i) the Tax Equity and Financial
Responsibility Act to a maximum benefit of $120,000 and (ii) the Tax Reform
Act of 1986 with regard to current covered compensation to $150,000. The
benefit amount in excess of such limitations will be paid through the SERP.
(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 and
includes benefits from the SERP to qualifying executive officers. As a
result of the expanding role of incentive compensation at BANC ONE, the SERP
has been amended so that, by 1998, 100% of certain bonuses paid to an
employee who (i) is eligible for the SERP and (ii) has an annual base salary
that exceeds the amount calculated and adjusted as set forth in Section
401(a)(17) of the Internal Revenue Code will be included in the calculation
of the employee's Eligible Compensation.
BANC ONE and Mr. Lehmann are parties to an agreement relating to Mr.
Lehmann's benefits under the Plan and the SERP, the terms of which were
originally set forth in an agreement (the "VNB Agreement") between Mr. Lehmann
and Valley National Bank of Arizona (now Bank One, Arizona, N.A.). The agreement
provides that, consistent with the VNB Agreement, Mr. Lehmann's retirement
benefits under the Plan will be the greater benefit as between: (a) the sum of
(i) the frozen accrued benefit under the Retirement Plan for Employees of the
Valley National Bank of Arizona plus (ii) the benefit accrued under the Plan,
recognizing credited service from and after January 1, 1994, or (b) the benefit
accrued under the Plan recognizing credited service for all eligible periods of
employment. Mr. Lehmann's benefits under the SERP will, consistent with the VNB
Agreement, be calculated using credited service for all eligible periods of
employment, less the amount payable under the Plan as calculated in the
preceding sentence, and offset by the actual retirement benefits to be received
under the Citicorp retirement plan(s). Under certain circumstances, Mr. Lehmann
will, consistent with the VNB Agreement, be entitled to receive the greater of
the benefit described in the preceding sentence or the benefit calculated and
payable under the Valley National Supplemental Retirement Plan. If Mr. Lehmann's
employment is terminated due to death or retirement or is terminated by BANC ONE
for any reason other than gross negligence or malfeasance, Mr. Lehmann will be
fully vested in the benefits described in the Agreement. The estimated annual
benefits payable to Mr. Lehmann pursuant to the agreement upon retirement at
normal retirement age is $345,937, reduced by the annual retirement benefits
received by Mr. Lehmann under the Citicorp retirement plan(s).
14
<PAGE> 20
CERTAIN REPORTS
Section 16 of the Securities Exchange Act of 1934 requires BANC ONE's
Directors, executive officers and persons who own more than ten percent of a
registered class of BANC ONE's equity securities to file reports of ownership
and changes in ownership with the Commission. Based solely upon a review of such
reports and representations from BANC ONE Directors and executive officers, BANC
ONE believes that during 1996 all such reports were filed on a timely basis
except that Michael J. McMennamin was late in filing two reports, neither of
which involved a purchase or sale of shares, and Mr. Dorrance was late in filing
one report reflecting his purchase of shares on the day following his election
as a Director.
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 broker-dealers affiliated with BANC ONE and have entered into
lending transactions with such banks and broker-dealers in the ordinary course
of business. Additional lending transactions may be expected to take place with
banks and broker-dealers affiliated with BANC ONE in the ordinary course of
business. Such lending transactions have been and will continue to be on
substantially the same terms, including interest rates and collateral on loans,
as those prevailing at the time for comparable lending transactions with other
persons. Such lending transactions did not, and will not, involve more than
normal risk of collectibility or present other unfavorable features.
Alex Shumate, a director of BANC ONE, is Managing Partner of the Columbus,
Ohio office of Squire, Sanders & Dempsey, attorneys. BANC ONE and its
subsidiaries retained Squire, Sanders & Dempsey for legal services in 1996 and
will utilize the law firm in 1997. Payments paid to Squire, Sanders & Dempsey by
BANC ONE and its affiliates in 1996 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.
See also "Compensation Committee Interlocks and Insider Participation."
OWNERSHIP OF SHARES
No person is known to BANC ONE to be the beneficial owner of more than 5%
of any class of equity securities of BANC ONE at January 1, 1997, except as
follows:
<TABLE>
<CAPTION>
AMOUNT & NATURE
TITLE OF OF BENEFICIAL PERCENT
CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP (1) OF CLASS
- ------------- ---------------------------------------- --------------- --------
<S> <C> <C> <C>
Common Stock BANK ONE TRUST COMPANY, N.A. 35,531,330 8.2%
100 East Broad Street shares(2)
Columbus, Ohio 43271
</TABLE>
In connection with the execution of the Agreement and Plan of Merger dated
as of January 19, 1997 between BANC ONE and First USA, Inc. ("First USA"), BANC
ONE granted to First USA an option to purchase up to 85,025,391 shares of BANC
ONE Common Stock (or approximately 16.6% of the BANC ONE Common Stock
outstanding, after giving effect to exercise of the option) upon the occurrence
of certain events, none of which has occurred as of the date hereof. Because the
option is not currently exercisable, First USA has disclaimed beneficial
ownership of the shares of BANC ONE Common Stock subject thereto.
Set forth below is information as of January 1, 1997 concerning the number
of shares of BANC ONE Common Stock(3) owned beneficially by all BANC ONE
Directors and executive officers (31 individuals) as a group 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":
15
<PAGE> 21
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS
---------------------------------------------- ------------------------ ----------------
<S> <C> <C>
All Directors and Executive Officers as a
group (31 individuals)...................... 3,053,764(4) (5)
Thomas E. Hoaglin............................. 142,057(6) (5)
Joseph D. Barnette, Jr........................ 299,524(7) (5)
Ronald G. Steinhart........................... 59,200(8) (5)
</TABLE>
- ------------------------------
(1) 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,
1997.
(2) Includes shares held by BANC ONE affiliates which have trust powers and
which hold shares in various agency and trust accounts. With respect to
those accounts, the BANC ONE affiliates have the sole power to vote
approximately 16,211,703 of such shares, shared power to vote approximately
282,618 of such shares, sole power to dispose of approximately 11,313,994 of
such shares and shared power to dispose of approximately 4,929,927 of such
shares. All of the stock of the BANC ONE affiliates is owned by BANC ONE.
(3) 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.
(4) Share amount shown excludes options to purchase 1,754,185 shares of BANC ONE
Common Stock, which options were not exercisable on or within 60 days of
January 1, 1997. Share amount shown includes (a) 592,827 shares of BANC ONE
Common Stock which may be voted by the recipients 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 452,204
shares of BANC ONE Common Stock.
(5) 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.
(6) Share amount shown excludes options to purchase 112,267 shares of BANC ONE
Common Stock, which options were not exercisable on or within 60 days of
January 1, 1997. Share amount shown includes (a) 46,217 shares of BANC ONE
Common Stock 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 31,787 shares of BANC
ONE Common Stock.
(7) Share amount shown excludes options to purchase 101,409 shares of BANC ONE
Common Stock, which options were not exercisable on or within 60 days of
January 1, 1997. Share amount shown includes (a) 39,912 shares of BANC ONE
Common Stock 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 39,653 shares of BANC
ONE Common Stock.
(8) Share amount shown excludes options to purchase 71,211 shares of BANC ONE
Common Stock, which options were not exercisable on or within 60 days of
January 1, 1997. Share amount shown includes (a) 21,289 shares of BANC ONE
Common Stock 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 22,602 shares of BANC
ONE Common Stock.
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P., which has served as independent certified public
accountants to BANC ONE since its formation, has been selected by the BANC ONE
Board to serve in that capacity in 1997. Representatives of Coopers & Lybrand
L.L.P. will be present at the Annual Meeting in order to respond to questions
and to make any statement such representative deems appropriate.
16
<PAGE> 22
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
In order for shareholder proposals to be considered for presentation at the
1998 Annual Meeting of Shareholders, such proposals must be received by BANC ONE
not later than November 4, 1997.
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.
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. 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. ALTHOUGH YOU MAY
PLAN TO ATTEND THE ANNUAL 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 11, 1997
17
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<PAGE> 24
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<PAGE> 25
[MAP 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 15, 1997.
NOTICE
ADMISSION 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 that there is adequate seating for
all attendees and may be denied admittance if seating space is judged
inadequate.
<PAGE> 26
PROXY BANC ONE CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS, APRIL 15, 1997
The undersigned shareholder of BANC ONE CORPORATION 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 on the reverse side hereof, all the shares of BANC ONE
CORPORATION Common Stock held of record by the undersigned as of February 24,
1997 at the Annual Meeting of Shareholders to be held on April 15, 1997 or any
adjournment thereof. 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 Proposal 1 and according to the judgment of the
proxies with respect to any other business that may come before the meeting or
any adjournment thereof.
PLEASE VOTE, SIGN AND DATE, AND RETURN THIS PROXY CARD PROMPTLY
IN THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side)
<PAGE> 27
BANC ONE CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
<TABLE>
<CAPTION>
<S> <C>
(This Proxy is continued from other side)
1. Election of Directors - NOMINEES: Bennett Dorrance, Charles E.
Exley, Jr., E. Gordon Gee, John R. Hall, Laban P. Jackson, Jr.,
John W. Kessler, Richard J. Lehmann, John B. McCoy, John G. For Withhold For All
McCoy, Thekla R. Shackelford, Alex Shumate, Frederick P. All All Except -----------------
Stratton, Jr., and Robert D. Walter. [ ] [ ] [ ] (Except nominees
written above.)
The undersigned hereby acknowledges
receipt of the Notice of Annual
Meeting and the Proxy Statement,
each dated March 11, 1997.
Dated:____________________,1997
----------------------------------
Signature(s)
Please mark, date and sign exactly as your name appears above and return in the
enclosed envelope. Joint owners should each sign personally. Where applicable,
indicate your official position or representation capacity. If acting as ---------------------------------
executor, administrator, trustee, guardian, etc., you should so indicate when
signing. If the signer is a corporation, please sign in full corporate name by
duly authorized officer.
</TABLE>
