<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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
First Chicago Corporation
.............................................................................
(Name of Registrant as Specified In Its Charter)
First Chicago Corporation
..............................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
.......................................................................
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: _/
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
_/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
......................................................
2) Form, Schedule or Registration Statement No.:
......................................................
3) Filing Party:
......................................................
4) Date Filed:
......................................................
Notes:
<PAGE>
[FIRST CHICAGO LOGO]
Richard L. Thomas
Chairman
and Chief Executive Officer
March 4, 1994
To Our Stockholders:
We are pleased to invite you to attend the Annual Meeting of
Stockholders of First Chicago Corporation, which will be held at 9:30
a.m., Friday, April 8, 1994, at the First Chicago Center located in
the Plaza area adjacent to The First National Bank of Chicago. Please
use the Dearborn Street entrance to the Bank Building.
Matters scheduled for consideration at this Meeting are the election
of 17 directors and ratification of the appointment of Arthur Andersen
& Co. as independent auditors for the Corporation for 1994. The
Meeting will also provide an opportunity to review with you the
business and affairs of the Corporation and its subsidiaries during
1993 and give you a chance to meet your directors.
Whether you plan to attend or not, please date, sign and return the
proxy card in the accompanying envelope. Your vote is important no
matter how many shares you own. If you do attend the Meeting and
desire to vote in person, you may do so even though you have
previously sent in a proxy.
The First Chicago Center offers special access for people in
wheelchairs and headsets for the hearing-impaired. Stockholders who
wish to arrange for either of these services are invited to call (312)
732-3150 by Wednesday, April 6, 1994.
I look forward to seeing you at the Meeting.
Sincerely,
Richard L. Thomas
<PAGE>
[FIRST CHICAGO LOGO]
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
APRIL 8, 1994
To Our Stockholders:
Please take notice that the Annual Meeting of Stockholders of First Chicago
Corporation will be held on Friday, April 8, 1994, at 9:30 a.m., Chicago time,
at the First Chicago Center, One First National Plaza, Chicago, Illinois, for
the purpose of considering and voting upon:
1. The election of 17 directors for a term of one year;
2. The ratification of the appointment of Arthur Andersen & Co. as independent
auditors for the Corporation for 1994; and
3. Such other business as may properly come before the Meeting or any
adjournments thereof.
The record date for determining stockholders entitled to notice of, and to
vote at, such Meeting is the close of business February 16, 1994.
By order of the Board of Directors,
Sherman I. Goldberg
Secretary
March 4, 1994
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED FORM
OF PROXY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
<PAGE>
[FIRST CHICAGO LOGO]
PROXY STATEMENT
FOR
ANNUAL MEETING TO BE HELD APRIL 8, 1994
This proxy statement is furnished in connection with the solicitation on
behalf of the Board of Directors of First Chicago Corporation (the
"Corporation") of proxies for use at the Annual Meeting of Stockholders (the
"Annual Meeting") of the Corporation to be held at 9:30 a.m., on Friday, April
8, 1994, and at any adjournments thereof.
The Board of Directors has fixed the close of business on February 16, 1994,
as the record date for determining stockholders entitled to notice of, and to
vote at, the Annual Meeting. On the record date, the Corporation had
outstanding and entitled to vote 86,456,705 shares of Common Stock (exclusive
of 297,164 shares of treasury stock, which will not be voted). Each share of
Common Stock entitles the holder to one vote. The presence, in person or by
proxy, of the holders of a majority of the shares of Common Stock entitled to
vote at the Annual Meeting shall constitute a quorum.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting; therefore, the 17 nominees who receive the largest number of votes
cast will be elected as directors. Shares represented by proxies marked to
withhold authority to vote with respect to any nominee will be counted for
purposes of establishing a quorum, but will have no effect on the election of
that nominee. An affirmative vote of a majority of the shares present in
person or by proxy and entitled to vote at the Annual Meeting is required for
approval of the ratification of the appointment of independent auditors. Shares
represented by proxies which are marked "abstain" on the ratification of the
appointment of independent auditors will be counted as shares present for
purposes of determining the presence of a quorum; such shares will also be
treated as shares present and entitled to vote, which will have the same effect
as a vote against the ratification of the appointment of independent auditors.
Proxies relating to "street name" shares which are not voted by brokers on one
or more but less than all matters will be treated as shares present for
purposes of determining the presence of a quorum, but will not be treated as
shares represented at the Annual Meeting as to such matter or matters.
The proxy statement, form of proxy and the Corporation's Annual Report for
1993 were mailed to each stockholder at such holder's address of record,
commencing on or about March 4, 1994.
The principal executive offices of the Corporation are located at One First
National Plaza, Chicago, Illinois 60670.
ELECTION OF DIRECTORS
At the Annual Meeting, 17 directors are proposed to be elected to hold office
until the next Annual Meeting of Stockholders and until their successors are
elected and have qualified. Each of the nominees listed below is presently
serving as a director of the Corporation and The First National Bank of Chicago
(the "Bank"), the Corporation's principal subsidiary.
It is intended that shares represented by proxies solicited on behalf of the
Board of Directors will be voted for the nominees listed below. In the event
that any nominee is unable or declines to serve, an event which is not
anticipated, proxies may be voted at the Annual Meeting for another person in
place of such nominee, or the number of directors constituting the full Board
may be reduced.
<PAGE>
The name, principal occupation, period of service as a director, certain
biographical information and Board committee memberships of each nominee are
set forth below.
<TABLE>
<CAPTION>
NAME, PRINCIPAL AGE, BUSINESS BOARD
OCCUPATION AND EXPERIENCE, COMMITTEE
PERIOD OF SERVICE DIRECTORSHIPS AND MEMBERSHIPS
AS A DIRECTOR OTHER INFORMATION (1)
- ------------------- ---------------------- ----------
<S> <C> <C>
Richard L. Thomas Mr. Thomas, 63, joined the Bank Chairman of the
Chairman of the in 1958 and has served as Executive
Board and Chief Chairman of the Board of the Committee.
Executive Officer Corporation and the Bank since
of the Corporation 1992. Mr. Thomas also served as
and the Bank President of the Corporation from
Director since 1974 to November 1993, and of the
4/13/73 Bank from 1975 to November 1993.
Mr. Thomas is a director of CNA
Financial Corporation and Sara
Lee Corporation, and a trustee of
Northwestern University, Kenyon
College and Rush-Presbyterian-St.
Luke's Medical Center. He is also
the former Chairman and a life
trustee of The Orchestral
Association.
Richard M. Morrow Mr. Morrow, 68, joined Amoco Member of the
Retired Chairman Production Company, a subsidiary Examining
of the Board and of Amoco Corporation, in 1948, Committee, the
Chief Executive was elected President of Amoco Executive
Officer Corporation in 1978 and served as Committee and the
Amoco Corporation Chairman of the Board and Chief Trust Review
(diversified Executive Officer from 1983 until Committee.
international his retirement in 1991. From
petroleum January 1993 to June 1993, Mr.
company) Morrow served as Chairman of the
Director since Board of Westinghouse Electric
11/10/78 Corporation. Mr. Morrow is a
director of R. R. Donnelley &
Sons Company, Marsh & McLennan
Companies, Inc., Potlatch
Corporation, Seagull Energy
Corporation and Westinghouse
Electric Corporation. He is also
a trustee of The University of
Chicago and Rush-Presbyterian-St.
Luke's Medical Center and
Chairman of the National Academy
of Engineering.
Donald P. Jacobs Dean Jacobs, 66, was appointed to Member of the
Dean of the J. L. the faculty of Northwestern Organization,
Kellogg Graduate University in 1957 and was Compensation and
School of appointed Dean of the J. L. Nominating
Management Kellogg Graduate School of Committee.
Northwestern Management in 1975. Dean Jacobs
University is a director of Commonwealth
(education and Edison Company, Hartmarx Corp.,
research) Pet Incorporated, UDC Homes,
Director since Inc., Unocal Corp. and Whitman
12/11/81 Corporation.
</TABLE>
- -------
(1) Each committee is a committee of the Board of Directors of both the
Corporation and the Bank.
2
<PAGE>
<TABLE>
<CAPTION>
NAME, PRINCIPAL AGE, BUSINESS BOARD
OCCUPATION AND EXPERIENCE, COMMITTEE
PERIOD OF SERVICE DIRECTORSHIPS AND MEMBERSHIPS
AS A DIRECTOR OTHER INFORMATION
- ------------------- ---------------------- ----------
<S> <C> <C>
John H. Bryan Mr. Bryan, 57, has been Chairman Chairman of the
Chairman of the of the Board and Chief Executive Audit Committee;
Board Officer of Sara Lee Corporation Member of the
and Chief since 1976. In addition to Sara Examining
Executive Officer Lee Corporation, Mr. Bryan is a Committee and the
Sara Lee director of Amoco Corporation and Executive
Corporation General Motors Corporation. Mr. Committee.
(global Bryan is also the past chairman
manufacturer and and a member of the board of
marketer of brand directors of the Grocery
name products) Manufacturers of America, Inc.,
Director since Chairman of the Chicago Council
4/16/82 on Foreign Relations, a member of
the Board of Trustees and Vice
President and Treasurer of The
Art Institute of Chicago, and a
trustee of Rush-Presbyterian-St.
Luke's Medical Center and the
University of Chicago. Mr. Bryan
also is Chairman of Catalyst.
Patrick G. Ryan Mr. Ryan, 56, has been President Chairman of the
President and and Chief Executive Officer of Organization,
Chief Executive Aon Corporation since 1982 and Compensation and
Officer Chairman of the Board of Nominating
Aon Corporation Directors since 1990. Mr. Ryan is Committee.
(a broad-based a director of Aon Corporation and
insurance holding a trustee of the Field Museum of
company) Natural History, Rush-
Director since Presbyterian- St. Luke's Medical
4/08/83 Center and Northwestern
University.
Roger W. Stone Mr. Stone, 59, joined Stone Chairman of the
Chairman of the Container Corporation in 1957, Trust Review
Board, President was elected President in 1975, Committee; member
and Chief Chief Executive Officer in 1979 of the Executive
Executive Officer and Chairman of the Board in Committee.
Stone Container 1983. In addition to Stone
Corporation Container Corporation, Mr. Stone
(manufacturer of is a director of the American
paper, paper- Forest and Paper Association,
related products McDonald's Corporation, Morton
and packaging International, Inc. and Option
systems Care, Inc. He is a member of the
equipment) Advisory Board of the J. L.
Director since Kellogg Graduate School of
4/13/84 Management of Northwestern
University and a trustee of The
Orchestral Association.
Jerry K. Pearlman Mr. Pearlman, 54, joined Zenith Chairman of the
Chairman and Chief Electronics Corporation in 1971, Examining
Executive Officer was elected Chief Executive Committee; member
Zenith Electronics Officer in 1983 and Chairman in of the Executive
Corporation 1984, and also served as Committee and the
(manufacturer and President from 1983 to 1993. In Organization,
distributor of a addition to Zenith Electronics Compensation and
diversified line Corporation, Mr. Pearlman is a Nominating
of electronics director of Stone Container Committee.
products) Corporation and the Northwestern
Director since Healthcare Network and Deputy
9/14/84 Chairman of the Board and a
director of Evanston Hospital
Corporation. He is also a trustee
of Northwestern University and
the Museum of Science and
Industry.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME, PRINCIPAL AGE, BUSINESS BOARD
OCCUPATION AND EXPERIENCE, COMMITTEE
PERIOD OF SERVICE DIRECTORSHIPS AND MEMBERSHIPS
AS A DIRECTOR OTHER INFORMATION
- ------------------- ---------------------- ----------
<S> <C> <C>
James J. O'Connor Mr. O'Connor, 56, joined Member of the
Chairman and Chief Commonwealth Edison Company in Executive
Executive Officer 1963, was elected President in Committee and the
Commonwealth 1977 and became Chairman and Organization,
Edison Company Chief Executive Officer in 1980. Compensation and
(production, Mr. O'Connor is a director of Nominating
distribution and American National Can Company, Committee.
sale of electric Commonwealth Edison Company,
energy) Corning Incorporated, Scotsman
Director since Industries, Inc., Tribune
9/11/87 Company, UAL Corporation, the
Chicago Urban League and the
Chicago Stock Exchange. Mr.
O'Connor is also a trustee of the
Field Museum of Natural History,
the Lyric Opera of Chicago,
Northwestern University, The
Orchestral Association and the
Museum of Science and Industry.
Earl L. Neal Mr. Neal, 65, has been an Member of the
Principal attorney with Earl L. Neal & Audit Committee
Earl L. Neal & Associates since 1955. Mr. Neal and the Examining
Associates is a director of Peoples Energy Committee.
(law firm) Corporation, Chicago Title and
Director since Trust Company, Chicago Title
4/08/88 Insurance Company and Lincoln
National Corporation. He is a
member of the Board of Directors
of the University of Illinois
Foundation, Chairman of the Urban
Health Program--UIC, a fellow of
the International Academy of
Trial Lawyers and a member of the
American College of Trial
Lawyers.
Jack F. Reichert Mr. Reichert, 63, joined Member of the
Chairman of the Brunswick Corporation in 1957, Examining
Board and Chief was elected Chief Executive Committee and the
Executive Officer Officer in 1982 and Chairman of Organization,
Brunswick the Board in 1983, and served as Compensation and
Corporation President from 1982 to 1993. Mr. Nominating
(a multinational Reichert is a director of Committee.
company with Brunswick Corporation, The Dial
leadership Corp, INROADS/ Chicago, Inc. and
positions in a trustee of Carroll College. Mr.
marine power, Reichert is also a member of the
pleasure boating Council of the University of
and recreation) Chicago Graduate School of
Director since Business and the Recreation
4/08/88 Roundtable.
Ms. Simmons, 52, was elected Member of the
Adele Simmons President of The John D. and Examining
President Catherine T. MacArthur Foundation Committee and the
The John D. and in May 1989. She served as Trust Review
Catherine T. President of Hampshire College, Committee.
MacArthur Amherst, Massachusetts, from 1977
Foundation to 1989. Ms. Simmons is a
(philanthropic director of Marsh & McLennan
foundation) Companies, Inc. and is a board
Director since member of the Union of Concerned
11/09/90 Scientists and Synergos.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME, PRINCIPAL AGE, BUSINESS BOARD
OCCUPATION AND EXPERIENCE, COMMITTEE
PERIOD OF SERVICE DIRECTORSHIPS AND MEMBERSHIPS
AS A DIRECTOR OTHER INFORMATION
- ------------------- ---------------------- ----------
<S> <C> <C>
Dean L. Buntrock Mr. Buntrock, 62, founded WMX Member of the
Chairman of the Technologies, Inc., formerly Examining
Board known as Waste Management, Inc., Committee and the
and Chief in 1968 and has served as Trust Review
Executive Chairman of the Board and Chief Committee.
Officer WMX Executive Officer since its
Technologies, Inc. inception. In addition to WMX
(comprehensive Technologies, Inc., Mr. Buntrock
environmental and is a director of Chemical Waste
engineering Management, Inc., Wheelabrator
services company) Technologies Inc., Waste
Director since Management International plc.,
4/12/91 and Rust International Inc.,
subsidiaries of WMX Technologies,
Inc. He is also a director of
Boston Chicken, Inc., Stone
Container Corporation and The
Children's Memorial Hospital,
serves on the Executive Committee
of The Orchestral Association and
is Chairman of the Board of
Regents of St. Olaf College.
James S. Crown Mr. Crown, 40, has been a General Member of the
General Partner Partner of Henry Crown and Examining
Henry Crown and Company (Not Incorporated) since Committee and the
Company (Not 1985. From 1983 to 1985, Mr. Organization,
Incorporated) Crown served as a Vice President Compensation and
(diversified of Salomon Brothers Inc. He is a Nominating
investments) director of General Dynamics Committee.
Director since Corporation and PEC Israel
4/12/91 Economic Corporation. He is also
a trustee of the University of
Chicago, the Museum of Science
and Industry, The Orchestral
Association and the Jewish
Federation of Metropolitan
Chicago.
Leo F. Mullin Mr. Mullin, 51, joined the Bank Member of the
President and in 1981 and was elected President Executive
Chief Operating and Chief Operating Officer of Committee.
Officer of the the Corporation and the Bank in
Corporation and November 1993. Previously, Mr.
the Bank Director Mullin served as an Executive
since 10/8/92 Vice President of the Corporation
from 1984 to April 1991 and from
April 1992 to November 1993, and
as an Executive Vice President of
the Bank from 1984 to April 1991.
Mr. Mullin has also served as
Chairman of the Board of American
National Corporation ("ANC") and
American National Bank and Trust
Company of Chicago ("ANB") since
April 1991 and as Chief Executive
Officer of ANC and ANB from April
1991 to December 1993. Mr. Mullin
is Chairman of the Board of
Trustees of the Field Museum of
Natural History, a director of
The Children's Memorial Hospital
and a trustee of Northwestern
University.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NAME, PRINCIPAL AGE, BUSINESS BOARD
OCCUPATION AND EXPERIENCE, COMMITTEE
PERIOD OF SERVICE DIRECTORSHIPS AND MEMBERSHIPS
AS A DIRECTOR OTHER INFORMATION
- ------------------- ---------------------- ----------
<S> <C> <C>
David J. Vitale Mr. Vitale, 47, joined the Bank Member of the
Vice Chairman of in 1968, and was elected Vice Executive
the Board of the Chairman of the Board of the Committee.
Corporation and Corporation and the Bank in
the Bank Director November 1993. Previously, Mr.
since 10/8/92 Vitale had served as Executive
Vice President of the Corporation
and Bank since 1986. Mr. Vitale
is the Vice Chairman of the Board
and a director of the Student
Loan Marketing Association, a
director of Leadership Greater
Chicago and a trustee of the
Museum of Science and Industry
and the Art Institute of Chicago.
Donald V. Fites Mr. Fites, 60, joined Caterpillar Member of the
Chairman of the Inc. in 1956, was elected Examining
Board and Chief President in 1989 and Chairman of Committee and the
Executive Officer the Board and Chief Executive Trust Review
Caterpillar Inc. Officer in 1990. In addition to Committee.
(manufacturer of Caterpillar Inc., Mr. Fites is
a wide range of Chairman of the Equipment
construction, Manufacturers Institute and a
earthmoving and director of Georgia-Pacific
material handling Corporation, Mobil Corporation,
equipment and Keep America Beautiful and
engines) Valparaiso University. Mr. Fites
Director since is Vice Chairman of the U.S.-
4/16/93 Japan Business Council and a
member of the National Foreign
Trade Council, the Salvation Army
Advisory Board, The Business
Council, the Advisory Committee
for Trade and Policy
Negotiations, and The Business
Roundtable Policy Committee. He
also serves as a trustee of the
Farm Foundation, Knox College and
the Methodist Medical Center of
Illinois.
Andrew J. McKenna Mr. McKenna, 64, has served as Member of the
Chairman of the Chairman of the Board, President Audit Committee
Board, President and Chief Executive Officer of and the Examining
and Chief Schwarz Paper Company since 1964. Committee.
Executive Officer In addition to Schwarz Paper
Schwarz Paper Company, Mr. McKenna is a
Company (printer, director of Aon Corporation, Dean
converter and Foods Company, McDonald's
distributor of Corporation, Skyline Corporation
packaging and Tribune Company. He also
materials) serves as Chairman of the Board
Director since of Trustees of the University of
4/16/93 Notre Dame, a trustee of the
Museum of Science and Industry,
and a director of The Children's
Memorial Hospital and the
Association of Governing Boards
of Colleges and Universities.
</TABLE>
6
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
It is the primary responsibility of the Board of Directors of the Corporation
to oversee the management of the business of the Corporation and its
subsidiaries, including the Bank. To assist in carrying out its
responsibilities, the Board of Directors has established five standing
committees which are described below.
AUDIT COMMITTEE
The members of the Audit Committee of the Corporation and the Bank are Frank
W. Considine, Andrew J. McKenna, Earl L. Neal and John H. Bryan, who serves as
Chairman. During 1993, the Audit Committee of the Corporation and the Bank met
concurrently six times.
Included among the functions performed by the Audit Committee are (i)
appointment of the Corporation's independent auditors subject to ratification
by the stockholders; (ii) review of the plan and results of the independent
auditors' auditing engagement; (iii) general review of the independence of the
independent auditors; (iv) consideration of the range of audit and non-audit
fees for professional services to be provided by the independent auditors; (v)
approval of the professional services provided by the independent auditors;
(vi) review of the Corporation's procedures for making internal audits of its
affairs; (vii) review of the scope and results of the audits performed by the
Corporation's internal auditors; (viii) review of the representations of
management and the findings of the independent auditors and the internal
auditors as to the adequacy of the Corporation's system of internal accounting
controls in order to obtain reasonable assurance that the Corporation's annual
and quarterly financial reports are prepared in accordance with generally
accepted accounting principles and are free from material fraud or error; (ix)
approval of the selection and discharge of the Corporation's General Auditor;
and (x) review of reports of examinations by regulatory agencies relating to
the Corporation and its subsidiaries.
EXAMINING COMMITTEE
The members of the Examining Committee of the Corporation and the Bank are
John H. Bryan, Dean L. Buntrock, Frank W. Considine, James S. Crown, Donald V.
Fites, Andrew J. McKenna, Richard M. Morrow, Earl L. Neal, Jack F. Reichert,
Adele Simmons and Jerry K. Pearlman, who serves as Chairman. During 1993, the
Examining Committee of the Corporation and the Bank met concurrently seven
times. The Examining Committee reviews, advises on, and approves certain
activities of the Corporation and the Bank in the following areas: liquidity,
including funding management; financial risk, including trading and interest
rate positions; credit risk, including credit portfolio risk and credit
process; and adequacy of the allowance for possible credit losses. In addition,
the Examining Committee reviews the results of any regulatory examination or
periodic report by federal banking regulatory agencies related to any of the
Examining Committee's responsibilities.
EXECUTIVE COMMITTEE
The members of the Executive Committee of the Corporation and the Bank are
John H. Bryan, Frank W. Considine, Richard M. Morrow, Leo F. Mullin, James J.
O'Connor, Jerry K. Pearlman, Roger W. Stone, David J. Vitale and Richard L.
Thomas, who serves as Chairman. During 1993, the Executive Committee of the
Corporation and the Bank met concurrently three times. The Executive Committee
exercises all the powers of the Board of Directors in the management of the
business and affairs of the Corporation and the Bank while the Board of
Directors is not in session.
TRUST REVIEW COMMITTEE
The members of the Trust Review Committee of the Corporation and the Bank are
Dean L. Buntrock, Donald V. Fites, Richard M. Morrow, Adele Simmons and Roger
W. Stone, who serves as Chairman. During 1993, the Trust Review Committee of
the Corporation and the Bank met concurrently five times. The Trust Review
Committee, with specified exceptions, exercises all of the powers of the Board
of Directors in the management of those aspects of the business and affairs of
the Bank which relate to the exercise and administration of its fiduciary
authorities and responsibilities. In addition, the Trust Review Committee makes
evaluations, conclusions and recommendations to the Board of Directors with
respect to the fiduciary activities engaged in by the Bank and all other
subsidiaries of the Corporation, particularly as to: the condition of such
fiduciary activities; the effectiveness of fiduciary policies, procedures and
controls; and whether fiduciary responsibilities have been administered in
accordance with the law, pertinent regulations and sound fiduciary principles.
7
<PAGE>
ORGANIZATION, COMPENSATION AND NOMINATING COMMITTEE
Committee Interlocks and Insider Participation
The members of the Organization, Compensation and Nominating Committee of the
Corporation and the Bank are James S. Crown, Donald P. Jacobs, James J.
O'Connor, Jerry K. Pearlman, Jack F. Reichert and Patrick G. Ryan, who serves
as Chairman. Except for Messrs. Crown and O'Connor, who were appointed to the
Committee in April 1993, all current members served on the Committee for the
entire year. Charles S. Locke, formerly a director of the Corporation, served
on the Committee until April 1993.
During 1993, the Organization, Compensation and Nominating Committee of the
Corporation and the Bank met concurrently six times.
All of the members of the Organization, Compensation and Nominating
Committee, or their associates, were customers of, or had transactions with,
the Corporation, the Bank and other subsidiaries of the Corporation in the
ordinary course of business during 1993. Additional transactions may be
expected to take place in the future. All outstanding loans to the directors
and their associates, commitments and sales, purchases and placements of
investment securities and other financial instruments included in such
transactions were made in the ordinary course of business, on substantially the
same terms, including interest rates and collateral, where applicable, as those
prevailing at the time for comparable transactions with other persons, and did
not involve more than normal risk of collectibility or present other
unfavorable features. All other transactions described below were entered into
in the ordinary course of business and on substantially the same terms as those
prevailing at the time for comparable transactions with other persons.
During 1993, Commonwealth Edison Company paid approximately $2,245,235 to a
subsidiary of the Corporation for rent and incidental services pursuant to
leases for office and garage space. James J. O'Connor, Chairman and Chief
Executive Officer of Commonwealth Edison Company, is a director of the
Corporation.
During 1993, subsidiaries of the Corporation made direct tuition payments
under employee tuition assistance programs for employees enrolled in courses at
Northwestern University of approximately $98,991. Contributions to Northwestern
University by subsidiaries of the Corporation for 1993 totaled approximately
$43,257. Donald P. Jacobs, Dean of the J. L. Kellogg Graduate School of
Management, Northwestern University, is a director of the Corporation.
Subsidiaries of Aon Corporation received brokerage commissions and fees in
1993 of approximately $689,987 for obtaining certain insurance for the
Corporation and its subsidiaries. In addition, during 1993, a subsidiary of Aon
Corporation paid approximately $803,745 to subsidiaries of the Corporation for
rent and incidental services pursuant to a lease of space on the subsidiaries'
premises used in connection with the marketing of annuity products. Certain
subsidiaries of the Corporation also received net commissions of approximately
$419,777 and referral incentive reimbursements of approximately $47,361 from
subsidiaries of Aon Corporation in connection with the sale of insurance
products. Patrick G. Ryan, President and Chief Executive Officer of Aon
Corporation, is a director of the Corporation.
Subsidiaries of the Corporation made payments in the aggregate of
approximately $1,522,771 for stationery supplies to American Envelope Company.
James S. Crown, a director of the Corporation, owns an indirect interest in
American Envelope Company.
A subsidiary of the Corporation paid approximately $88,920 to Tishman Speyer
Gateway Properties, A Limited Partnership, an Illinois limited partnership, in
1993 for rent and incidental services pursuant to a lease for office space.
James S. Crown, a director of the Corporation, through various partnerships,
owns an indirect interest in Tishman Speyer Gateway Properties, A Limited
Partnership.
Committee Responsibilities and Authorities
Included among the functions related to human resources management and
compensation performed by the Organization, Compensation and Nominating
Committee are (i) ensuring the effectiveness of senior management and
management continuity; (ii) ensuring the reasonableness and appropriateness of
senior management compensation arrangements and levels; (iii) overseeing
officer titling and employee compensation;
8
<PAGE>
(iv) ensuring the reasonableness of the Corporation's stock-based incentive
compensation programs; (v) monitoring the overall soundness and effectiveness
of the Corporation's compensation and benefit programs at all levels; and (vi)
providing advice and counsel regarding the Corporation's human resources
strategy and key human resources practices and issues.
Regarding formal authorities for compensation matters, the Corporation's
Board of Directors approves, upon recommendation of the Committee, (i) the
adoption and amendment of stock-based incentive plans (subject to stockholder
approval where required); (ii) the total number of available shares to be used
each year in stock-based plans; (iii) the adoption and amendment of all
significant compensation plans; and (iv) all compensation actions, including
employment and separation arrangements, for officers at or above the level of
executive vice president.
The Committee has been delegated authority by the Board of Directors to
approve (i) the terms and conditions of stock-based grants; (ii) funding for
senior management annual incentive awards; (iii) all annual incentive awards of
$200,000 or more, except awards for executive vice presidents and above; and
(iv) all compensation actions, including employment and separation
arrangements, for members of the senior leadership group who are not executive
vice presidents or above (approximately 65 employees).
Additionally, the Committee is responsible for (i) proposing new directors;
(ii) reviewing the performance of incumbent directors; (iii) providing counsel
regarding the organization of the Board of Directors and its committee
structure, committee charters, and membership; and (iii) overseeing director
compensation arrangements.
The Organization, Compensation and Nominating Committee will consider
candidates for nominees for election as directors of the Corporation submitted
by stockholders. Any stockholder who wishes to have the Committee consider a
candidate should submit the name of the candidate, along with any biographical
or other relevant information the stockholder wishes the Committee to consider,
to the Secretary of the Corporation at the address appearing on the first page
of this proxy statement.
DIRECTOR MEETING ATTENDANCE AND FEE ARRANGEMENTS
The Board of Directors of the Corporation held eleven meetings in 1993. Each
incumbent director attended 75% or more of the total number of meetings held
during 1993 by the Corporation's Board of Directors and Committees thereof on
which the director served, except for Messrs. Fites and Stone.
Each non-officer director receives an annual retainer of $40,000 ($20,000 for
service as a director of the Corporation and $20,000 for service as a director
of the Bank). The Chairman of each Committee receives an additional annual
retainer of $5,000 ($2,500 for service as Chairman of a Corporation Committee
and $2,500 for service as Chairman of a Bank Committee). John H. Bryan, Jerry
K. Pearlman, Patrick G. Ryan and Roger W. Stone are the current Committee
Chairmen receiving the additional annual retainer. In addition, each non-
officer director receives 200 shares of Common Stock annually. The aggregate
fair market value of the 200 shares of Common Stock received by each non-
officer director in 1993 was $8,800, based on a purchase price of $44 per
share. No additional fees are paid to directors for attending Board or
Committee meetings. Non-officer directors may elect to receive their annual
retainer in cash or have the retainer applied toward the purchase of shares of
Common Stock. Such payments and purchases are made on a quarterly basis.
Officers of the Corporation and its subsidiaries do not receive an annual
retainer, meeting fees, shares of Common Stock or other compensation for
service as directors of the Corporation or the Bank or for service on
Committees of the Board.
Directors may elect to defer cash compensation earned as directors pursuant
to the Deferred Compensation Plans of the Corporation and the Bank. Under these
plans, an amount representing the cash portion of the annual retainer a
director would otherwise be entitled to receive is credited to a cash account
which is maintained for bookkeeping purposes only. Each quarter, a
determination is made as to the number of full shares of the Corporation's
Common Stock that can be purchased with the amount credited to the director's
cash account. The number of phantom shares is then credited to the director's
phantom stock account. The phantom stock account does not represent actual
shares, but is maintained for bookkeeping purposes only.
Each director may select the date following retirement on which pay-out will
commence and the number of annual installments to be paid. Each deferred
payment is based upon the fair market value of the Corporation's Common Stock
at the time of payment. The plans of the Corporation and the Bank provide for
immediate lump sum payment in the event of a director's retirement or
termination of service as a director within one year of a change of control of
the Corporation.
9
<PAGE>
The following table sets forth the number of phantom shares of Common Stock
credited as of December 31, 1993, to the phantom stock accounts of the non-
officer directors participating in the Deferred Compensation Plans.
<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES
---- ---------
<S> <C>
James J. O'Connor.............. 6,782
Earl L. Neal................... 8,493
Dean L. Buntrock............... 3,310
James S. Crown................. 3,310
Andrew J. McKenna.............. 436
</TABLE>
<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES
- ---- ---------
<S> <C>
Richard M. Morrow............... 25,108
Donald P. Jacobs................ 19,109
John H. Bryan................... 24,437
Roger W. Stone.................. 17,155
Jerry K. Pearlman............... 17,768
</TABLE>
BENEFICIAL OWNERSHIP OF THE CORPORATION'S COMMON STOCK
Generally, under Securities and Exchange Commission rules, a person is deemed
to be the beneficial owner of a security with respect to which such person,
through any contract, arrangement, understanding, relationship or otherwise,
has or shares voting power (which includes power to vote, or direct the voting
of, such security) or investment power (which includes power to dispose of, or
direct the disposition of, such security). In addition, a person is deemed to
be the beneficial owner of a security if he or she has the right to acquire
such voting power or investment power over the security within sixty days, for
example, through the exercise of a stock option.
The following table shows the beneficial ownership of the Corporation's
Common Stock as of December 31, 1993 (unless otherwise noted below) by (i) each
person that is the beneficial owner of more than five percent of such
outstanding class of shares, (ii) each director, (iii) each nominee for
election, (iv) each executive officer named in the Summary Compensation Table
on page 16 and (v) all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP OF CLASS
AS OF (IF 1%
DECEMBER 31, OR
NAME 1993 GREATER)
- ---- ------------ --------
<S> <C> <C>
The Capital Group,
Inc.................. 4,796,230(a) 5.55%
Richard L. Thomas..... 556,014(b)(c) --
Richard M. Morrow..... 7,000(d) --
Frank W. Considine.... 3,200(e) --
Donald P. Jacobs...... 2,672 --
John H. Bryan......... 3,300 --
Patrick G. Ryan....... 21,807(f) --
Roger W. Stone........ 4,337(g) --
Jerry K. Pearlman..... 5,000 --
James J. O'Connor..... 2,271 --
Earl L. Neal.......... 2,800 --
</TABLE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP OF CLASS
AS OF (IF 1%
DECEMBER 31, OR
NAME 1993 GREATER)
- ---- ------------ --------
<S> <C> <C>
Jack F. Reichert...... 1,300 -- %
Adele Simmons......... 1,600 --
Dean L. Buntrock...... 5,600 --
James S. Crown........ 3,051,604(h) 3.53
Leo F. Mullin......... 200,770(b) --
David J. Vitale....... 179,784(b) --
Donald V. Fites....... 1,484 --
Andrew J. McKenna..... 2,200 --
J. Mikesell Thomas.... 153,861(b) --
W. G. Jurgensen....... 69,324(b) --
All Directors and Ex-
ecutive Officers (i)
as a Group........... 5,132,199(b) 5.87
</TABLE>
- -------
(a) Capital Guardian Trust Company, a California trust company, and Capital
Research and Management Company, a registered investment adviser, both of
which are operating subsidiaries of The Capital Group, Inc., a Delaware
corporation, had sole investment discretion with respect to 301,230 and
4,495,000 shares, respectively, which shares were owned by various
institutional investors. Additionally, The Capital Group, Inc. may also be
deemed to have sole voting power over 301,230 shares which were owned by
various institutional investors. The address of The Capital Group, Inc. is
333 South Hope Street, Los Angeles, California 90071.
(b) As set forth in the following table, for Messrs. R. L. Thomas, Mullin,
Vitale, Jurgensen and J. M. Thomas and all directors and executive officers
as a group, the share amounts include shares subject to options held by
such persons which were exercisable as of March 1, 1994, and also include
shares held pursuant to the Corporation's Savings Incentive Plan as of
December 31, 1993, which will be subject to the voting direction of such
persons at the Annual Meeting:
<TABLE>
<CAPTION>
ALL DIRECTORS
AND EXECUTIVE
RICHARD L. LEO F. DAVID J. J. MIKESELL W. G. OFFICERS AS
THOMAS MULLIN VITALE THOMAS JURGENSEN A GROUP
---------- ------- -------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Shares Subject to Op-
tions Exercisable
as of 3-1-94........ 302,333 139,332 109,192 93,963 50,833 1,079,392
Shares Held pursuant
to Savings Incentive
Plan................ 13,433 559 5,349 2,442 491 32,878
</TABLE>
(c) This figure includes 220 shares held by various trusts for which Mr. R. L.
Thomas serves as trustee.
(d) This figure includes 1,000 shares owned by Mr. Morrow's wife. Mr. Morrow
disclaims beneficial ownership of the shares owned by his wife.
10
<PAGE>
(e) Mr. Considine also owns 4,000 shares of the Corporation's 10% Cumulative
Preferred Stock, Series D (Stated Value $25 per share) and 4,000
depositary shares each representing a 1/25th interest in the Corporation's
8.45% Cumulative Preferred Stock, Series E (Stated Value $625 per share).
(f) This figure includes 1,538 shares of Common Stock owned by a corporation
the majority of the shares of which are owned by Mr. Ryan.
(g) This figure includes 2,267 shares of Common Stock held by Mr. Stone as
custodian for his children.
(h) The number of shares of Common Stock shown as beneficially owned by James
S. Crown include 1,555,305 shares owned by The Crown Fund, of which he is a
partner; 226,205 shares owned by Henry Crown and Company (Not
Incorporated), of which Mr. Crown is a partner; 230,179 shares owned by
Areljay, L.P., of which a trust of which Mr. Crown is a beneficiary is a
limited partner; 266,476 shares owned by Arie and Ida Crown Memorial, of
which Mr. Crown is a director; and 517,639 shares owned by Pines Trailer
Limited Partnership, of which a corporation of which Mr. Crown is a
shareholder and a partnership of which Mr. Crown is a partner are partners.
Also included are 131,941 shares beneficially owned by trusts of which Mr.
Crown is a beneficiary and 98,766 shares beneficially owned by trusts of
which Mr. Crown is a co-trustee. Mr. Crown's wife owns beneficially 802
shares, and trusts of which Mr. Crown's children are beneficiaries own
beneficially 4,445 shares. Mr. Crown disclaims beneficial ownership of the
shares held by the various persons and entities described above.
(i) For purposes of this table, the term "executive officers" includes all
persons who were executive officers of the Corporation on December 31,
1993.
ORGANIZATION, COMPENSATION AND NOMINATING COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The following is the report of the Organization, Compensation and Nominating
Committee for 1993 on executive compensation.
Compensation Principles
The Committee has adopted an executive compensation philosophy which consists
of certain guiding principles including the following:
. Compensation will play a prominent role in attracting, motivating and
encouraging a career commitment on the part of key employees.
. Compensation programs will reinforce the execution of the Corporation's
business strategies, the achievement of key financial and operating
objectives and ultimately the enhancement of stockholder value.
. Compensation opportunities and the mix of compensation program elements
will be structured in the context of the pay practices of competing
institutions.
. Performance contributions in a given year, achievements over a sustained
period and expectations regarding future contributions will be the
primary determinants of individual compensation actions.
. The Corporation's performance will be viewed in the context of statutory
and regulatory requirements, as well as the Corporation's key
constituencies, including stockholders, customers and its employees.
. Judgment and discretion will be an integral part of assessing
performance.
. Stock ownership will be encouraged to foster an ownership mentality on
the part of employees at all levels of the Corporation.
11
<PAGE>
Peer Institutions
The Corporation utilizes a group of peer bank holding companies to serve as a
benchmark for competitive pay levels and compensation practices for its
executive officers. The selection of firms which make up the peer group is
reviewed periodically by the Committee and reflects several factors, including
institutional performance, business mix and size. The specific positioning of
the Corporation's executive compensation opportunities relative to the peer
group is dependent on the Corporation's relative performance and other
considerations.
All of the current peer institutions are included in the Standard and Poor's
500 Index and the KBW 50 Index published by Keefe, Bruyette & Woods, Inc. Both
indices are utilized in the performance graph presented on page 15 of this
proxy statement, which presents the Corporation's cumulative total return over
the last five years on a comparative basis.
The Corporation conducts and participates in surveys to identify compensation
practices and levels within the financial services industry, as well as those
specifically within the executive officer peer group. Information contained in
peer proxies and other competitive data are analyzed and reviewed regularly by
the Committee to ensure an understanding of competitive compensation trends and
the appropriateness of executive officer compensation positioning. The 1993
review indicated that:
. Salaries for the Corporation's executive officers reported in the proxy
statement were below the median of the peer institutions.
. Bonuses paid for 1992 performance were below the median of the peer group
for 1992. (The Committee notes that the Corporation's performance for
1992 was below the median for the peer group).
. The stock awards made in 1992 were below the median of the peers' 1992
stock awards.
Information on 1993 peer group compensation actions will be reviewed by the
Committee in 1994 when such information becomes available.
Description of the Executive Compensation Program
Each element of the executive compensation program--base salaries, annual
incentives, and long-term incentives--has a specific role with respect to
supporting the concept of pay for performance and is structured to reinforce
specific job and organizational requirements.
Base Salary: Base salary represents compensation for discharging job
responsibilities and reflects the executive officer's performance over time.
Individual salary adjustments take into account the Corporation's salary
increase guidelines for the year and the individual's performance contributions
for the year, as well as sustained performance contributions over a number of
years and significant changes in responsibilities, if any. The Corporation's
salary increase guidelines reflect anticipated salary trends among the peer
banks and the Corporation's business plan for the coming year. The assessment
of individual performance contributions is subjective and does not reflect
specific objective corporate performance factors.
Peer salaries for comparable positions are used as reference points in
setting salary opportunities for executive officers. The Corporation's overall
goal is to approximate the median salaries paid by the peer group assuming
comparability of such factors as position responsibilities and tenure.
Annual Incentives: Annual incentives serve as the Corporation's primary
vehicle to recognize and reward accomplishments in a given year. Peer incentive
awards are utilized as reference points to establish a target pool of funds,
assuming profit plan goals are achieved. There are no individual award targets
or award maximums. The actual size of the funding pool at year-end for
executive officers and certain other members of senior management
(approximately 75 people in the aggregate) is based on the Committee's
subjective assessment of the Corporation's performance for the year, which
combines results for specific quantitative measures established at the
beginning of the year, progress during the year with respect to the achievement
of critical strategic goals and performance in relation to the peer
institutions.
For 1993, the Committee's approach to assessing the Corporation's performance
for incentive funding purposes was to rely on a subjective evaluation of
specific objective factors. Performance against an earnings per share target
(on a core earnings basis) was the primary measure. Other performance
benchmarks were considered, but were not formally weighted in terms of relative
importance, including total shareholder return, credit quality, return on
equity, credit ratings, capital adequacy and operating efficiency. The
Corporation's performance relative to the peer group for these same measures
also was assessed by the Committee. There were no preestablished performance
thresholds for the performance measures. Additionally, the Committee considered
progress toward the achievement of long-term goals and overall performance in
the context of economic conditions during 1993.
12
<PAGE>
For 1993, core earnings per share, as adjusted for certain one time gains and
extraordinary items, substantially exceeded the Corporation's business plan.
Results for the other performance benchmarks were also well above expectations
as was performance relative to the peer group. Based on the Corporation's
overall results, the Committee concluded that the funding available for awards
to executive officers and other members of the senior leadership group should
substantially exceed the target pool of funds. Individual awards for executive
officers from the funding pool were determined on a subjective basis and were
not subject to specific criteria.
Long-Term Incentives: The Corporation utilizes long-term incentives primarily
to provide an earnings opportunity based on the Corporation's success as
measured by Common Stock performance, and thus link the interests of employees
with those of the Corporation's stockholders. Additionally, long-term
incentives serve to establish an ownership perspective and encourage the
retention of key managers and professionals.
Consistent with these purposes, the Stock Incentive Plan was approved by
stockholders on April 12, 1991. The Plan, which is administered by the
Committee, authorizes the grant of: (1) stock options; (2) performance shares;
(3) restricted shares; and, (4) other stock awards the value of which is
determined in whole or in part by reference to the Corporation's Common Stock,
including stock appreciation rights, performance units, incentive stock
options, restricted stock units, and unrestricted stock grants (to other than
executive officers).
The Corporation granted stock option awards in January of 1993 to each of the
executive officers named in the Summary Compensation Table on page 16 of this
proxy statement. The options were granted at an exercise price based on the
market price of the Corporation's Common Stock on the date of grant. The
options have a ten year term, with one-third of the total grant becoming
exercisable after one, two and three years. Exercise of an option grant is
subject to continued employment.
The number of option shares granted to individual executive officers in 1993
was based on a subjective appraisal of past and expected future contributions
in relation to stock award guidelines. The Committee did not consider the
number of stock options outstanding or prior restricted share awards when it
determined individual stock option awards for 1993. The assessment of
individual performance was not subject to specific criteria. The stock award
guidelines were structured to reflect the average value of peer group long-term
incentive compensation opportunities and certain assumptions, including the
future price appreciation of the Corporation's Common Stock. The Corporation's
prior performance was not utilized as a factor with respect to the
establishment of the stock award guidelines. The actual amount to be realized
from the stock option awards is dependent on future stock price appreciation.
Stock Ownership Guidelines
Consistent with the importance placed on long-term incentives, the
Corporation has adopted stock ownership guidelines for all senior officers,
including executive officers. The goals set forth in the guidelines, which
became effective January 1, 1993, are expected to be achieved in five years.
Progress toward meeting the goals articulated in the guidelines is reviewed
annually. Executive officers are expected to make reasonable progress with
respect to achieving the ownership goals over the five year period if their
ownership is below guideline levels. Failure to achieve guideline levels of
ownership will be considered when future long-term incentive awards are made.
However, individual circumstances will be taken into account, including the
recency of promotion to a position subject to the guidelines.
Compensation of Richard L. Thomas
Mr. Thomas was elected Chairman, President and Chief Executive Officer as of
January 1, 1992. Prior to that time, he had served as the Corporation's
President. In November 1993, Leo F. Mullin was elected President and Chief
Operating Officer of the Corporation with Mr. Thomas retaining the titles of
Chairman and Chief Executive Officer.
Effective in April of 1993, Mr. Thomas' annual salary rate was increased from
$700,000 to $730,000. This increase (4.3%) was consistent with the
Corporation's overall salary guidelines for 1993 for employees at all levels.
Mr. Thomas' salary rate for 1992 was below the median salary reported for chief
executive officers of the Corporation's peer group. His actual salary-related
earnings for 1993 as presented in the Summary Compensation Table were $719,157.
The difference between Mr. Thomas' actual salary-based earnings and his annual
salary rate is due primarily to the increase in his salary rate during the
year.
Consistent with the Corporation's overall performance in 1990 and 1991, Mr.
Thomas did not receive an annual incentive award for those years. For 1992, Mr.
Thomas received an annual incentive award of $500,000
13
<PAGE>
in recognition of a redirection of corporate strategy, the strengthening of the
Corporation's balance sheet, improved credit quality, the formation of a new
senior leadership team and improvement in core operating earnings. Mr. Thomas'
annual incentive award for 1992 was below the median reported for his peer
group counterparts.
As noted above, the Committee determined that the funding available for 1993
senior management annual incentive awards, including the Chairman's, should
significantly exceed the target level of funding. Based on the Committee's
conclusions regarding appropriate funding for 1993 and the Committee's
subjective evaluation of Mr. Thomas' performance, an annual incentive of
$1,300,000 was awarded to Mr. Thomas for 1993. Specifically, the 1993 award was
in recognition of: the Corporation's record earnings, core earnings for the
Corporation which substantially exceeded the profit plan target, the
performance of each of the core businesses which exceeded plan, a decline in
the provision for credit losses, the notable success of the accelerated asset
disposition program and the continued strengthening of the entire balance
sheet. Additionally, the Committee considered the Corporation's overall results
for the year in relation to the peer group and Mr. Thomas' performance relative
to his personal objectives for the year.
In 1992, Mr. Thomas was granted 80,000 stock options and no restricted
shares. The value of the 1992 award was below the median award for the chief
executive officers of the peer group. In 1993, Mr. Thomas was granted 60,000
stock options and no restricted shares. The Committee believes the value of the
shares associated with the 1993 award was consistent with the average value of
long-term awards for chief executive officers of the peer institutions. The
options granted were intended to provide a significant incentive for meeting
the business challenges facing the Corporation in such a manner as to result in
meaningful stock price appreciation.
The 1993 Tax Law
The Omnibus Budget Reconciliation Act of 1993 limits the allowable deduction
for Federal income tax purposes of compensation paid by a publicly-held
corporation, effective January 1, 1994. The limit, which applies to the
Corporation's chief executive officer and its other four most highly
compensated executive officers employed by the Corporation at year end, is $1
million per executive per year subject to certain preestablished objective
performance-based exceptions.
The Committee has considered the implications of the law and proposed
Internal Revenue Service regulations and has concluded that a middle-ground
policy is appropriate for the Corporation with respect to the $1 million
compensation limit for its executive officers. The use of judgment and
discretion has been a critical element of the Committee's executive
compensation philosophy in the past, and the Committee believes it is in the
best interests of the stockholders to maintain discretionary control over
certain aspects of executive compensation in the future. In essence, the
Committee believes that the judgmental assessment of the Corporation's
performance and that of individual executives is critical with respect to
effective executive compensation management. Because of the importance of
judgment and discretion, certain aspects of executive compensation in the
future might not qualify for deductibility under the law and the Corporation
will forego a deduction for compensation expense.
In general, the Corporation's policy will be (1) to maintain the current mix
of value to be delivered by key compensation components (base salary, short-
and long-term incentives); (2) to attempt to structure a portion of annual
incentive compensation so that it meets the performance-based exceptions
related to the $1 million compensation deduction limit while maintaining
discretionary control over other compensation paid on the basis of annual
performance; and, (3) to utilize long-term incentives which are designed to
ensure that deductibility requirements are met.
Specifically for 1994, compensation attributable to stock options granted in
1994 will qualify for the performance-based exception in the year the option is
exercised. To ensure the deductibility of any future grants of stock option and
stock-based stock appreciation rights, the Committee has recommended, and the
Corporation's Board of Directors has approved, amending the Stock Incentive
Plan to provide a grant limit of 500,000 shares during any five year period to
any one individual.
The Corporation will not attempt to satisfy the performance-based exception
with respect to annual incentive compensation in 1994. The Committee believes
that the amount of the deduction foregone in 1994 will be minimal. During 1994
the Committee does intend to explore whether a portion of annual incentive
compensation can be appropriately designed to meet the performance-based
criteria for deductibility.
14
<PAGE>
Submitted by the members of the Corporation's Organization, Compensation and
Nominating Committee:
.James S. Crown .Jerry K. Pearlman
.Donald P. Jacobs .Jack F. Reichert
.James J. O'Connor .Patrick G. Ryan, Chairman
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Corporation's
Common Stock with the Standard & Poor's 500 Index (the "S&P 500 Index") and the
KBW 50 Index published by Keefe, Bruyette & Woods, Inc. (the "KBW 50 Index").
The S&P 500 Index is a broad based market index, and the KBW 50 Index
represents a cross-section of major banking institutions. Both of these indices
include the Corporation's Common Stock. The values in the graph show the
relative performance of a $100 investment made on December 31, 1988, in the
Corporation's Common Stock, the S&P 500 Index, and the KBW 50 Index, with
reinvestment of dividends.
Comparison of Five Year Cumulative Total Return(/1/)
Among First Chicago Corporation, S&P 500 Index and KBW 50 Index(/2/)
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG FIRST CHICAGO, S&P 500 INDEX AND KBW 50 INDEX
<CAPTION>
Measurement Period FIRST S&P KB 50
(Fiscal Year Covered) CHICAGO 500 INDEX INDEX
- ------------------- ------- --------- -----
<S> <C> <C> <C>
Measurement Pt-
12/31/88 $100 $100 $100
FYE 12/31/89 $131 $132 $119
FYE 12/31/90 $ 63 $128 $ 85
FYE 12/31/91 $103 $166 $135
FYE 12/31/92 $161 $179 $172
FYE 12/31/93 $195 $197 $182
</TABLE>
- -------
(1) Assumes $100 invested at December 31, 1988 with reinvested dividends.
(2) At December 31 in each year.
15
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
EXECUTIVE OFFICER COMPENSATION TABLE
The following table sets forth the compensation paid, earned or awarded for
the years indicated therein, to the Corporation's chief executive officer and
its other four most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------- -----------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY COMPENSATION AWARDS ($) OPTIONS/SARS COMPENSATION
POSITION YEAR ($) BONUS ($) ($) (1) (#) ($) (2)
- ------------------------ ---- -------- ---------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard L. Thomas ...... 1993 $719,157 $1,300,000 $10,689 $ 0 60,000 $32,443
Chairman of the Board 1992 659,772 500,000 3,796 0 80,000 20,043
and Chief Executive Of- 1991 552,107 0 360,000 45,000
ficer of the Corporation
and the Bank
Leo F. Mullin........... 1993 345,594 650,000 5,056 0 26,000 10,618
President and Chief Op- 1992 313,029 250,000 2,891 139,375 25,000 9,641
erating Officer of the 1991 281,609 175,000 160,800 20,000
Corporation and the Bank
David J. Vitale......... 1993 345,594 650,000 6,712 0 26,000 10,618
Vice Chairman of the 1992 310,346 250,000 3,014 139,375 25,000 9,560
Board of the Corporation 1991 270,498 300,000 129,600 16,000
and the Bank
J. Mikesell Thomas...... 1993 303,448 500,000 2,978 0 23,500 4,802
Executive Vice President 1992 282,186 200,000 1,903 125,438 22,500 750
of the Corporation and 1991 260,536 137,500 160,800 20,000
the Bank
W. G. Jurgensen......... 1993 303,448 450,000 57,725(3) 0 23,500 9,353
Executive Vice President 1992 276,822 200,000 3,472 125,438 22,500 8,555
of the Corporation and 1991 240,613 137,500 144,000 18,000
the Bank
</TABLE>
- -------
(1) The dollar values shown in the Restricted Stock Awards column are based
upon the closing market price of the Corporation's Common Stock on the date
the restricted shares were granted.
Dividends are payable in cash on the restricted shares that were granted in
1991 and 1992. No restricted shares were granted to any of the named
executive officers in 1993.
At December 31, 1993, the aggregate number of restricted shares of the
Corporation's Common Stock held by the executive officers named in the
Summary Compensation Table and the value of these shares, based upon the
$43.25 per share closing price of the Corporation's Common Stock on that
date, were as follows:
<TABLE>
<CAPTION>
NUMBER
OF
NAME SHARES VALUE
---------------- ------ ----------
<S> <C> <C>
Richard L. Thomas................... 42,319 $1,830,312
Leo F. Mullin....................... 30,327 1,311,638
David J. Vitale..................... 29,027 1,255,413
J. Mikesell Thomas.................. 30,967 1,339,327
W. G. Jurgensen..................... 10,500 454,125
</TABLE>
(2) All amounts included in this column represent the Corporation's
contributions in 1993 to the Corporation's Savings Incentive Plan and
Supplemental Savings Incentive Plan.
(3) During 1993, the Corporation reimbursed Mr. Jurgensen for club dues and
initiation fees in the amount of $40,291.
OPTION GRANTS TABLE
The following table provides information on stock options granted in 1993 to
the executive officers named in the Summary Compensation Table. All options
granted in 1993 were non-qualified stock options, and no stock appreciation
rights ("SARs") were granted in 1993.
16
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS/
OPTIONS/ SARS GRANTED TO
SARS EMPLOYEES IN EXERCISE OR
GRANTED (#) FISCAL YEAR BASE PRICE EXPIRATION GRANT DATE PRESENT VALUE ($)
NAME (1) (2) ($/SH) DATE (3)
- ----------------- ----------- ---------------- ----------- --------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Richard L. Thomas....... 60,000 7.41% $36.813 January 8, 2003 $709,200
Leo F. Mullin........... 26,000 3.21 36.813 January 8, 2003 307,320
David J. Vitale......... 26,000 3.21 36.813 January 8, 2003 307,320
J. Mikesell Thomas...... 23,500 2.90 36.813 January 8, 2003 277,770
W.G. Jurgensen.......... 23,500 2.90 36.813 January 8, 2003 277,770
</TABLE>
- -------
(1) One third of each option grant becomes exercisable on the first, second
and third anniversaries of the grant date, which was January 8, 1993.
(2) The percentages shown in the table are based on total options granted in
1993 on 809,270 shares of the Corporation's Common Stock.
(3) The grant date present values shown in the table are based on a per option
present value of $11.82, which was calculated on the basis of the Black-
Scholes option pricing model. The assumptions used in calculating the
Black-Scholes present value were:
(a) Volatility: 34%--based on 10 years of daily stock prices from January
1, 1983, through January 1, 1993;
(b) Risk-Free Rate of Return: 6.60%--estimated 10 year zero coupon
treasury yield;
(c) Dividend Yield: 3.25%--dividend at the time of grant divided by stock
price at time of grant;
(d) Option Duration (time of exercise and vesting): 1/3 of option assumed
to commence one year from grant date with a nine year term, 1/3 to
commence two years from grant date with an eight year term and 1/3 to
commence three years from grant date with a seven year term, all
discounted back to grant date using applicable zero coupon treasury
rates;
(e) Transferability: no adjustment was made for the lack of option
transferability; and
(f) Forfeitures: no adjustment was made for potential forfeiture.
The actual value of the options will depend on the market value of the
Corporation's Common Stock on the dates the options are exercised. No
realization of value from the options is possible without an increase in
the price of the Corporation's Common Stock, which would benefit all
stockholders.
1993 OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table provides information on options exercised in 1993 by the
executive officers named in the Summary Compensation Table, the number of
unexercised options each of them held at December 31, 1993, and the value of
the unexercised in-the-money options each of them held as of that date. No
SARs were outstanding at any time during 1993.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION /SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
ON VALUE AT FY-END (#) AT FY-END ($) (2)
EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($) EXERCISABLE(1) UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE
- -------------------- -------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard L.
Thomas... 17,000 $312,729 240,666 128,334 $3,628,726 $1,504,954
Leo F.
Mullin... 14,000 236,688 115,667 49,333 1,777,433 555,054
David J.
Vitale... 0 0 86,860 48,000 1,363,680 529,394
J. Mike-
sell
Thomas... 18,250 352,453 71,964 45,166 1,035,601 513,020
W. G. Jur-
gensen... 0 0 29,500 44,500 503,965 500,200
</TABLE>
- -------
(1) One third of each option grant becomes exercisable on the first, second
and third anniversaries of the date of the grants.
(2) The values shown in the table are based on the $43.25 per share closing
price of the Corporation's Common Stock on December 31, 1993, less the
exercise price of the options.
17
<PAGE>
PENSION PLAN
In general, full-time salaried employees of the Bank and designated
subsidiaries of the Corporation are eligible to participate in the Pension Plan
upon both attaining age 21 and completing one year of service. A participant is
100% vested after completing five years of vesting service. Generally, an
employee who has completed 15 years of vesting service may elect, upon adequate
notice, early retirement after attaining age 55. With certain exceptions, upon
reaching age 65 or after completing five years of vesting service, if later,
each participant is entitled to receive annual retirement income (in monthly
installments) for life equal to the average of the highest annual rates of base
salary paid to the participant in each of the participant's last five years of
employment, multiplied by a percentage (which may not exceed 70%) computed by
multiplying the number of years of credited service under the Pension Plan by
2%. There is no reduction in a participant's pension for Federal Social
Security benefits, except for participants whose employment terminated prior to
January 1, 1989.
The Supplemental Pension Plan was adopted to permit the payment of
supplemental benefits to employees whose annual benefits upon retirement under
the Pension Plan would exceed those permitted by the Internal Revenue Code of
1986, as amended (the "Code"). The Supplemental Pension Plan provides that if
at any time the amount of the annual retirement benefit which would otherwise
be payable under the Pension Plan to a person who has completed 5 or more years
of vesting service is or becomes limited by reason of compliance with the Code,
such person shall be entitled to receive under the Supplemental Pension Plan a
supplemental benefit equal to the difference between the benefit such person
receives under the Pension Plan and the benefit such person would have received
if such limitation had not been included. The benefit is payable from the
general assets of the Corporation.
The Executive Retirement Plan provides certain senior officers with an
additional retirement benefit payable from the general assets of the
Corporation. The benefit payable under the Executive Retirement Plan is equal
to the incremental benefit that would be provided under the Pension Plan and
the Supplemental Pension Plan if an amount equal to the average of the
participant's five largest annual bonus awards (with a maximum limit per year
of 50% of base salary) were added to the participant's base salary for purposes
of calculating the retirement benefits payable under the Pension Plan and
Supplemental Pension Plan.
The following table illustrates the estimated annual benefits payable upon
retirement for specified average compensation rates and years of credited
service classifications assuming retirement at age 65. The amounts shown in the
table include amounts payable pursuant to the Supplemental Pension Plan and the
Executive Retirement Plan.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS WITH
INDICATED YEARS OF CREDITED SERVICE
COVERED --------------------------------------------
COMPENSATION 15 20 25 30 35
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 200,000................. $ 60,000 $ 80,000 $100,000 $120,000 $140,000
400,000................. 120,000 160,000 200,000 240,000 280,000
600,000................. 180,000 240,000 300,000 360,000 420,000
800,000................. 240,000 320,000 400,000 480,000 560,000
1,000,000................. 300,000 400,000 500,000 600,000 700,000
1,200,000................. 360,000 480,000 600,000 720,000 840,000
</TABLE>
The years of credited service and covered compensation under the Pension Plan
(including the Supplemental Pension Plan) and Executive Retirement Plan as of
January 1, 1994, for the executive officers named in the Summary Compensation
Table are as follows:
<TABLE>
<CAPTION>
RICHARD L. LEO F. DAVID J. J. MIKESELL W. G.
THOMAS MULLIN VITALE THOMAS JURGENSEN(1)
---------- -------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Years of Credited Serv-
ice................... 35 12 26 20 3
Covered Compensa-
tion(2)............... $883,000 $447,000 $428,500 $401,000 $409,583
</TABLE>
- -------
(1) Mr. Jurgensen will become vested under the Pension Plan on December 16,
1994.
(2) These amounts represent the aggregate covered compensation under the
Pension Plan (including the Supplemental Pension Plan) and Executive
Retirement Plan for the past five years (four years in the case of Mr.
Jurgensen).
18
<PAGE>
CHANGE OF CONTROL EMPLOYMENT AGREEMENTS
Change of control employment agreements are in effect between the Corporation
and certain key officers of the Corporation and its subsidiaries, including
Messrs. R. L. Thomas, Mullin, Vitale, J. M. Thomas and Jurgensen. These
agreements would become effective upon the occurrence of a change of control of
the Corporation (as defined in the agreements) and provide for certain
compensation and benefits for a three-year employment period after the
effective date of the change of control.
These agreements provide that while the officer is employed during the three-
year employment period following the change in control, he will be entitled to
salary, bonus opportunities, employee benefits, perquisites and a title and
level of responsibility commensurate with those in effect before the change of
control, plus salary increases consistent with those of peer executives of the
Corporation. In the event that the officer's employment is terminated during
the three-year employment period (i) by the Corporation other than for "cause";
(ii) by the officer for "good reason"; (iii) voluntarily by the officer during
a thirty-day window period following the change of control; or (iv) due to his
death or disability, then he would be entitled to a lump sum severance benefit,
consisting of 250% of the sum of his annual base salary plus a bonus amount up
to 100% of his annual base salary. The employee also would be entitled to
continued employee welfare benefits during the remainder of the employment
period as well as a lump sum supplemental retirement payment equal to the value
of the service credit under the Corporation's pension and retirement plans that
would have been received for the remainder of the employment period.
If the terminated officer becomes employed elsewhere during the employment
period, welfare benefits payable by the Corporation would be reduced by those
provided by the new employer. The officer would be required to repay a portion
of his severance payment if he obtains other employment (including self-
employment) during the one-year period following termination of his employment
with the Corporation. The agreement also provides that if payments to be made
to the officer under the agreement would be subject to the 20% excise tax
imposed under Section 4999 of the Code, such payments will be reduced to 299.9%
of the officer's five-year average taxable base compensation if the reduction
would increase the net after-tax payment to the officer.
TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS, STOCKHOLDERS AND ASSOCIATES
Directors and executive officers of the Corporation and their associates and
The Capital Group, Inc., a beneficial owner of more than five percent of the
outstanding shares of Common Stock, and its associates were customers of, or
had transactions with, the Corporation, the Bank and other subsidiaries of the
Corporation in the ordinary course of business during 1993. Additional
transactions may be expected to take place in the future. All outstanding loans
to directors and executive officers and their associates, commitments and
sales, purchases and placements of investment securities and other financial
instruments included in such transactions were made in the ordinary course of
business, on substantially the same terms, including interest rates and
collateral, where applicable, as those prevailing at the time for comparable
transactions with other persons, and do not involve more than normal risk of
collectibility or present other unfavorable features, except the loan relating
to Mr. Buntrock described below. All other transactions described below and on
page 8 of this proxy statement were entered into in the ordinary course of
business and on substantially the same terms as those prevailing at the time
for comparable transactions with other persons.
During 1993, subsidiaries of the Corporation paid approximately $255,592 for
waste disposal services and approximately $1,055,461 for asbestos abatement
services to certain subsidiaries or affiliates of WMX Technologies, Inc. Dean
L. Buntrock, Chairman and Chief Executive Officer of WMX Technologies, Inc., is
a director of the Corporation.
During 1993, the Bank restructured a loan (the "Loan") which was outstanding
to Burnham Broadcasting Company, a Limited Partnership, a Delaware limited
partnership (the "Partnership"), which currently owns and operates several
network-affiliated television stations and a video production company. Dean L.
Buntrock, a director of the Corporation, owns a limited partnership interest in
the Partnership. Mr. Buntrock was not a director of the Corporation at the time
of the origination of the Loan.
19
<PAGE>
The Loan, of which $25 million principal amount is payable to the Bank, is a
senior revolving loan/term facility in the aggregate principal amount of $90
million, which was syndicated by the Bank to a five member bank group in 1989.
Originally, the interest rate on the Loan was based on several alternative
formulas, and from January 1, 1991, through October 31, 1992, was payable at a
floating rate equal to the Bank's corporate base rate plus 1 1/4% per annum,
and from November 1, 1992, through August 31, 1993 (the "Effective Date"), was
payable at a floating rate equal to the Bank's corporate base rate plus 1/2%
per annum. The Loan, prior to the 1993 restructuring, was collateralized by (a)
substantially all the assets of the Partnership, excluding the Partnership's
licenses from the Federal Communications Commission (the "FCC"), and (b) all
Partnership equity interests held by the respective general and limited
partners of the Partnership (collectively, the "Collateral"). This Collateral
was and continues to be shared on a pari passu basis with other senior secured
debt of the Partnership which totaled approximately $39.5 million as of
February 28, 1994. The principal amount of the Loan was originally scheduled to
begin amortizing on March 31, 1992, with the final principal payment due on
June 30, 1999.
In 1990, the Loan was restructured to reschedule the dates of the initial
principal payments and to provide for contributions to the Partnership by its
limited partners to cover interest shortfalls. As a result of the inability of
the Partnership to make the rescheduled principal payments due on the Loan at
September 30 and December 31, 1992, the Loan was further restructured by the
bank group in 1993, and additional concessions were made by the Partnership's
other creditors. As a result of the 1993 restructuring: (i) the contractual
interest rate payable on the Loan was reduced for the period beginning on the
Effective Date to the Bank's corporate base rate plus 1/2% per annum, provided
that the Partnership was given the right to fix the interest rate on the
Effective Date with respect to (a) up to $20 million principal amount of the
Loan for the period from the Effective Date through December 31, 1995, and (b)
up to $50 million principal amount of the Loan for the period from the
Effective Date for up to three years thereafter; (ii) the bank group agreed to
forego a schedule of regular quarterly amortization payments in return for a
pro rata share of prepayments equal to $20 million and $30 million to be paid
to all secured lenders in September 1994 and December 1995, respectively (the
"Required Payments"); (iii) all accrued and unpaid interest due to the bank
group was paid on the Effective Date; (iv) the Collateral securing the Loan was
enhanced by (a) a pledge to the senior lenders by the Partnership of its
beneficial or equity interest in a limited partnership which was created as
part of the restructuring to hold the Partnership's FCC television station
licenses (the "License Partnership") and (b) by a security interest in all the
License Partnership's property (including the FCC licenses, to the extent
permitted by law); and (v) the maturity date of the Loan was advanced to
December 31, 1998.
In connection with the restructuring, the License Partnership executed a
guaranty of the Loan and other secured debt of the Partnership. Additionally,
the general partner of the Partnership executed a limited guaranty of the
secured debt in the amount of $50 million. The Partnership also elected to fix
the interest rates payable on $20 million and $50 million principal amount of
the Loan at 6.70% per annum and 6.92% per annum, respectively, for the periods
indicated above.
Pursuant to the restructuring, the Partnership is also required to make
payments from annual excess cash flow ("Excess Cash Flow"), which are to be
applied generally (assuming the Partnership is solvent and not in default of
any principal payment obligations) to the senior secured debt (including the
Loan) as follows: first, toward the payment of the Required Amounts and
allocated ratably (to the extent such amounts remain outstanding) to each due
date; second, to principal due on the senior secured debt at maturity; and
third, to accrued and unpaid interest and other accrued and unpaid obligations
with respect to the senior secured debt. In the event that the first $20
million of the Required Payments is made from the proceeds of equity sales by
the Partnership, then the $30 million Required Payment will be converted to
fifteen scheduled quarterly payments of $2 million each that will be due from
December 31, 1994, to June 30, 1998.
The Loan was made by the Bank in the ordinary course of business and on
substantially the same terms as those prevailing at the time for comparable
loans to other persons. The largest principal amount outstanding to the Bank
under the Loan during 1993, and the principal amount outstanding on February
28, 1994, was $25 million.
APPROVAL OF APPOINTMENT OF AUDITORS
The Board of Directors recommends that the stockholders approve the
appointment by the Audit Committee of the Board of Directors of Arthur Andersen
& Co. as independent auditors for the Corporation for the year 1994.
20
<PAGE>
Arthur Andersen & Co. has served as independent auditors for the Corporation
since the Corporation commenced operations in 1969. Representatives of Arthur
Andersen & Co. will be present at the Annual Meeting and will have an
opportunity to make a statement if they desire to do so. They will also be
available to respond to appropriate questions presented at the Annual Meeting.
During 1993, Arthur Andersen & Co. provided audit services to the Corporation
and its subsidiaries along with certain non-audit services. The aggregate fees
billed for all services rendered by Arthur Andersen & Co. during 1993 were
approximately $5.0 million.
In the event the appointment of Arthur Andersen & Co. is not approved by the
affirmative vote of a majority of the shares of Common Stock represented at the
Annual Meeting, the appointment of independent auditors will be reconsidered by
the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE APPOINTMENT OF
AUDITORS.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal that a holder of Common Stock intends to present at next year's
Annual Meeting of Stockholders must be received by the Corporation, at the
address appearing on the first page of this proxy statement, no later than
November 4, 1994, in order to be included in the proxy statement and form of
proxy relating to that meeting.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors of the
Corporation does not know of any matters to be presented at the Annual Meeting
other than those specifically set forth in the Notice of Annual Meeting of
Stockholders. If other proper matters, however, should come before the Annual
Meeting or any adjournment thereof, the persons named in the enclosed proxy
intend to vote the shares represented by them in accordance with their best
judgment in respect to any such matters.
MISCELLANEOUS
The cost of soliciting proxies will be borne by the Corporation. The
solicitation will be primarily by mail. In addition to the use of the mail,
some of the officers, directors and regular employees of the Corporation and
its subsidiaries may solicit proxies by telephone, telegram or personal
interview without additional remuneration therefor. The Corporation intends to
reimburse banks, brokerage houses and other institutions, custodians, nominees
and fiduciaries for reasonable expenses in forwarding proxy material to their
principals.
Stockholders are urged to sign and date the enclosed proxy and return it as
promptly as possible in the envelope enclosed for that purpose. Properly
executed proxies will be voted in accordance with stockholders' directions. If
no directions are given, proxies will be voted for the election of directors
and, with respect to each other matter scheduled for consideration at the
Annual Meeting, in accordance with the recommendations of the Board of
Directors as set forth in this proxy statement. The proxy does not affect the
right to vote in person at the Annual Meeting and may be revoked by written
notice given to the Secretary of the Corporation at any time before it is voted
or by the proper execution and timely submission of a later-dated proxy.
By order of the Board of
Directors,
March 4, 1994 Sherman I. Goldberg
Secretary
21
<PAGE>
GRAPHICS APPENDIX
1. Page 15 of the Proxy Statement contains a graph comparing the cumulative
total return on the Corporation's Common Stock for the last five fiscal years
with the cumulative total return for the Standard & Poor's 500 Index and the KBW
50 Index, published by Keefe, Bruyette & Woods, Inc., as follows:
<TABLE>
<CAPTION>
Measurement S&P KBW
Period Corporation 500 Index 50 Index
- ---------------- ----------- --------- --------
(Fiscal Year
Covered)
<S> <C> <C> <C>
Measurement Pt-
12/31/88 $100 $100 $100
FYE 12/31/89 $131 $132 $119
FYE 12/31/90 $ 63 $128 $ 85
FYE 12/31/91 $103 $166 $135
FYE 12/31/92 $161 $179 $172
FYE 12/31/93 $195 $197 $182
</TABLE>
<PAGE>
PROXY
FIRST CHICAGO CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, APRIL 8, 1994
The undersigned hereby appoints M. James Alef, Jr. and John W. Ballentine,
and each of them, as proxies, with full power of substitution, to represent the
undersigned and to vote all shares of stock of First Chicago Corporation that
the undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Corporation to be held on April 8, 1994, and any adjournments thereof, upon all
matters that may properly come before the Meeting. THIS PROXY WHEN PROPERLY
EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF DIRECTORS AND FOR THE APPROVAL OF AUDITORS.
This card also provides voting instructions for any shares held in the
Corporation's dividend reinvestment and stock purchase plan.
Your vote for the election of the Directors may be indicated on the other
side. The nominees are-Thomas, Morrow, Jacobs, Bryan, Ryan, Stone, Pearlman,
O'Connor, Neal, Reichert, Simmons, Buntrock, Crown, Mullin, Vitale, Fites and
McKenna.
PLEASE DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED
BUSINESS REPLY ENVELOPE.
IF YOU DO NOT SIGN AND RETURN A PROXY, OR ATTEND THE MEETING AND VOTE BY
BALLOT, YOUR SHARES CANNOT BE VOTED.
<PAGE>
/ 3204
X Please mark your /------
votes as in this
example.
This proxy, when properly executed, will be voted in the manner directed
herein. If not direction is made, this proxy will be voted FOR the Election of
Directors and FOR the Approval of Auditors.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" proposals 1 and 2.
- -------------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Approval of / / / / / /
Directors. Auditors.
(see reverse)
For, except vote withheld from the following nominee(s):
- --------------------------------
- -------------------------------------------------------------------------------
The signer hereby revokes all proxies
heretofore given by the signer to vote at
said meeting or any adjournments thereof.
Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
--------------------------------
--------------------------------
SIGNATURE(S) DATE
<PAGE>
FIRST CHICAGO CORPORATION
INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, APRIL 8, 1994
To: The First National Bank of Chicago, Trustee for the Savings Incentive Plan
The undersigned hereby instructs the Trustee to vote, in person or by
proxy, the shares of Common Stock held by it and credited to my account in the
Plan at the Annual Meeting of Stockholders of the Corporation to be held on
April 8, 1994, and any adjournment thereof, upon all matters that may properly
come before the Meeting. THESE INSTRUCTIONS WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED PLAN PARTICIPANT. IF NO
DIRECTION IS MADE, THESE INSTRUCTIONS WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR THE APPROVAL OF AUDITORS.
Your instructions for the election of the Directors may be indicated on the
other side. The nominees are--Thomas, Morrow, Jacobs, Bryan, Ryan, Stone,
Pearlman, O'Connor, Neal, Reichert, Simmons, Buntrock, Crown, Mullin, Vitale,
Fites and McKenna.
PLEASE DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED BUSINESS REPLY ENVELOPE BY APRIL 4, 1994. THE TRUSTEE WILL VOTE STOCK
FOR WHICH IT HAS NOT RECEIVED TIMELY VOTING INSTRUCTIONS PROPORTIONATELY IN THE
SAME MANNER AS THE TRUSTEE VOTES THE STOCK FOR WHICH IT HAS RECEIVED SUCH
INSTRUCTIONS.
<PAGE>
PLEASE MARK YOUR 8867
X VOTES AS IN THIS ----
EXAMPLE.
THESE INSTRUCTIONS, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THESE INSTRUCTIONS WILL BE
VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE APPROVAL OF AUDITORS.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
- --------------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Approval of / / / / / /
Directors. Auditors.
(see reverse)
For, except vote withheld from the following nominee(s):
- -----------------------------------------------------------
- --------------------------------------------------------------------------------
The signer hereby revokes all instructions
heretofore given by the signer to vote at
said meeting or any adjournments thereof.
Please sign exactly as name appears hereon.
-------------------------------------------
-------------------------------------------
SIGNATURE(S) DATE
