<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[_] Preliminary Information Statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
[X] Definitive Information Statement
ALLFIRST FINANCIAL INC.
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(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE>
ALLFIRST FINANCIAL INC.
25 South Charles Street
Baltimore, Maryland 21201
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 2, 2000
To the Stockholders of Allfirst Financial Inc.:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders (the
"Annual Meeting") of Allfirst Financial Inc., a Delaware corporation (the
"Corporation"), will be held at the Corporation's headquarters, 25 South
Charles Street, Baltimore, Maryland, on May 2, 2000, at 10:00 a.m., local time,
for the following purposes:
1. To elect 19 directors to serve until the 2001 Annual Meeting of
Stockholders and until their successors are elected and qualified; and
2. To act upon any other matter which may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors of the Corporation has fixed the close of business on
March 23, 2000 as the record date for determining stockholders of the
Corporation entitled to notice of and to vote at the Annual Meeting.
Your attention is directed to the attached Information Statement and to the
enclosed Annual Report on Form 10-K of the Corporation for the year ended
December 31, 1999.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
---
By Order of the Board of Directors.
JEROME A. RATLIFFE
Vice President and Secretary
Baltimore, Maryland
March 30, 2000
<PAGE>
INFORMATION STATEMENT
This Information Statement is provided in connection with the 2000 Annual
Meeting of Stockholders (the "Annual Meeting") of Allfirst Financial Inc. (the
"Corporation"). This Information Statement is first being sent to stockholders
on or about March 31, 2000.
The close of business on March 23, 2000 has been fixed by the Board of
Directors of the Corporation as the record date (the "Record Date") for
determining the stockholders of the Corporation entitled to notice of and to
vote at the Annual Meeting. On the Record Date, the Corporation had outstanding
597,764 shares of common stock, no par value per share (the "Common Stock"),
and 90,000 shares of 4.50% Cumulative Redeemable Preferred Stock, $5.00 par
value per share (the "Outstanding Preferred"). All of the outstanding Common
Stock is owned by Allied Irish Banks, p.l.c. ("AIB"), and AIB controls over
99% of the voting power of the Corporation's outstanding capital stock.
Each share of Common Stock entitles the holder thereof to 1,000 votes, and
each share of Outstanding Preferred entitles the holder thereof to one vote, on
each matter to be voted upon at the Annual Meeting. Shares of Common Stock and
Outstanding Preferred cannot be voted unless the holder of record is present in
person or represented by proxy at the Annual Meeting.
The matters to be voted upon at the Annual Meeting require the affirmative
vote of the holders of a majority of the Common Stock and the Outstanding
Preferred present in person or by proxy at the meeting, at which a quorum is
present. The presence, in person or by proxy, of at least a majority of the
aggregate total number of shares of Common Stock and Outstanding Preferred is
necessary to constitute a quorum at the Annual Meeting. For purposes of
determining the existence of a quorum, voting and all other matters at the
Annual Meeting, the Common Stock and the Outstanding Preferred will be treated
as a single class.
The Board of Directors is aware of one item of business to be considered at
the Annual Meeting: the election of 19 directors to the Board of Directors of
the Corporation.
NEITHER THE CORPORATION NOR ANY PERSON AFFILIATED WITH THE
CORPORATION IS ASKING YOU FOR A PROXY AND YOU ARE
-------
REQUESTED NOT TO SEND A PROXY TO THE CORPORATION.
-------------------------------------------------
<PAGE>
ELECTION OF DIRECTORS
The entire Board of Directors of the Corporation is elected at the Annual
Meeting. Each director is elected for a term of one year and until a successor
is elected and qualified. Except for Dr. Rapoport, each of the nominees was
elected a director at the 1999 Annual Meeting of Stockholders.
Information Concerning Nominees
Information concerning the nominees for election as directors is presented
below. Each of the nominees has consented to serve as a director if elected.
There is no arrangement or understanding between any director and any other
person pursuant to which such director was selected as a director. If any
nominee becomes unable to accept nomination or election, then the Board of
Directors will designate another nominee for election or will reduce the number
of directors.
Sherry F. Bellamy, age 47, has served as a director of the Corporation and of
its wholly owned subsidiary, Allfirst Bank (formerly The First National Bank of
Maryland and herein, "Allfirst Bank"), since January 1999. Since March 1997,
she has been the President and Chief Executive of Bell Atlantic-Maryland, Inc.,
a regional telecommunications company. Prior to March 1997, Ms. Bellamy was a
vice president and the general counsel of Bell Atlantic-Washington, D.C.
James T. Brady, age 59, has served as a director of the Corporation and of
Allfirst Bank since October 1998.Mr. Brady currently is the Managing Director-
Mid-Atlantic of Ballantree International, Ltd., a management consulting firm,
and has been a business consultant since May 1998. From May 1995 to May 1998,
Mr. Brady was the Secretary of the Maryland Department of Business and Economic
Development. Prior to May 1995, Mr. Brady was a partner with Arthur Andersen LLP
in Baltimore, Maryland. Mr. Brady is also a director of McCormick & Company,
Inc., a spices and seasonings company, and of Constellation Energy Group, a
diversified energy company. Mr. Brady serves on the Audit Committee.
Frank P. Bramble, age 51, has served as a director of the Corporation and of
Allfirst Bank since April 1994. Since December 1999, Mr. Bramble has served as
Chairman of the Board of the Corporation and Allfirst Bank. From April 1999 to
December 1999, he was the Chairman of the Board and the Chief Executive Officer.
From January 1999 to April 1999, Mr. Bramble was Chief Executive Officer of the
Corporation and Allfirst Bank, and from April 1994 to January 1999, he was
President and Chief Executive Officer. In November 1998, Mr. Bramble became the
Chief Executive, USA, and a director of Allied Irish Banks, p.l.c. ("AIB"), the
parent of the Corporation. Mr. Bramble is a permanent member of the Executive
Committee.
Michael D. Buckley, age 55, has served as a director of the Corporation since
October 1998. He is the Managing Director, Poland Division, of AIB and has been
a director of AIB since 1995.
Jeremiah E. Casey, age 60, has served as a director of the Corporation since
1983 and of Allfirst Bank since 1985. Until April 1999, Mr. Casey served as the
Chairman of the Corporation and Allfirst Bank. From 1989 through October 1998,
Mr. Casey was Chief Executive, USA, of AIB and was a director of AIB from 1992
through October 1998. Mr. Casey is a director of The Rouse Company, a real
estate development, management and ownership company, and is also a director of
the Federal Reserve Bank of Richmond, Baltimore Branch.
Edward A. Crooke, age 61, has served as a director of the Corporation and of
Allfirst Bank since 1985. He was the Vice Chairman of Constellation Energy Group
(formerly Baltimore Gas and Electric Company) from 1998 until his retirement on
January 1, 2000. He was President and Chief Operating Officerof Baltimore Gas
and Electric Company from 1992 to 1998, and served as a director from 1988 until
his retirement. Mr. Crooke is also a director of Corporate Office Properties
Trust, a real estate investment trust. Mr. Crooke serves on the Management and
Compensation Committee.
John F. Dealy, age 60, has served as a director of the Corporation and of
Allfirst Bank since 1981. He is President of The Dealy Strategy Group LLC, a
management consulting firm, and is also Chairman of The Maryland Health Care
Product Development Corporation, a venture capital company. In 1998, Mr. Dealy
retired as Distinguished Professor in the Georgetown University School of
Business. In 1996, Mr. Dealy retired as Senior
<PAGE>
Counsel to the law firm of Shaw, Pittman, Potts and Trowbridge. Mr. Dealy is the
chairperson of the Audit Committee.
Mathias J. DeVito, age 69, has served as a director of the Corporation and of
Allfirst Bank since 1974. He retired as Chief Executive Officer of The Rouse
Company in 1995 and as Chairman of the Board in 1997, but continues to serve as
Chairman Emeritus and Chairman of its Executive Committee. He is also a director
of USAirways Group, Inc. and of Mars Supermarkets, Inc. Mr. DeVito is the
chairperson of the Management and Compensation Committee.
Jerome W. Evans, age 53, has served as a director and as Vice Chairman and
Chief Financial Officer of the Corporation and of Allfirst Bank since January
1999. From August 1994 to August 1996, Mr. Evans was an Executive Vice
President, and from August 1996 to January 1999, Mr. Evans was an Executive Vice
President and the Chief Financial Officer, of the Corporation and of Allfirst
Bank.
Frank A. Gunther, Jr., age 68, has served as a director of the Corporation and
of Allfirst Bank since 1976. He is the retired Chairman of the Board and
President of Albert Gunther Inc., a contract hardware and industrial mill supply
firm. Mr. Gunther serves on the Community Affairs Committee.
Margaret M. Heckler, age 68, has served as a director of the Corporation and
of Allfirst Bank since 1989. She serves as Special Counsel to Chambers
Associates, Incorporated, Washington, D.C. and was U.S. Ambassador to Ireland
from 1985 to 1989. Ms. Heckler serves on the Audit Committee.
Lee H. Javitch, age 69, has served as a director of the Corporation since July
1997 and of Allfirst Bank since October 1998, and served as a director of
Dauphin Deposit Corporation for 15 years. He is a private investor and was
formerly the Chairman of the Board and Chief Executive Officer of Giant Food
Stores, Inc., Carlisle, Pennsylvania. Mr. Javitch is also a director of
Pennsylvania Real Estate Investment Trust, a real estate investment trust.
Susan C. Keating, age 49, has served as a director and as President of the
Corporation and of Allfirst Bank since January 1999. From January 1999 to
December 1999, Ms. Keating was also the Chief Operating Officer, and in December
1999, she became the Chief Executive Officer. From January 1996 to January
1999, Ms. Keating was an Executive Vice President of the Corporation and of
Allfirst Bank. Prior to joining the Corporation, Ms. Keating was President and
Senior Bank Executive-Maryland with NationsBank, N.A. in Baltimore, Maryland.
Ms. Keating is a permanent member of the Executive Committee.
Gary Kennedy, age 42, has served as a director of the Corporation since June
1997. He has served as Group Financial Director and a director of AIB since May
1997, prior to which he was Vice President, Enterprise Networks Europe and
Managing Director, Northern Telecom (Ireland) Ltd. He is a member of the Board
of the Industrial Development Authority (Ireland).
William T. Kirchhoff, age 58, has served as a director of the Corporation
since July 1997 and of Allfirst Bank since October 1998, and served as a
director of Dauphin Deposit Corporation for 18 years. He is the Vice Chairman of
Cleveland Brothers Equipment Company, Inc., a construction equipment dealer.
Henry J. Knott, Jr., age 61, has served as a director of the Corporation and
of Allfirst Bank since 1981. He is a trustee and the former President of the
Marion I. and Henry J. Knott Foundation, and is the former Chairman and Chief
Executive Officer of Real Estate Resource Management, Inc., a real estate
management company. Mr. Knott serves on the Audit Committee.
Andrew Maier II, age 50, has served as a director of the Corporation since
July 1997 and of Allfirst Bank since October 1998, and served as a director of
Dauphin Deposit Corporation for two years. He is a private investor and was
formerly the President and Chief Executive Officer of Maier's Bakery, Reading,
Pennsylvania. Mr. Maier serves on the Community Affairs Committee.
Thomas P. Mulcahy, age 58, has served as a director of the Corporation since
1993. He has served as Group Chief Executive of AIB since January 1, 1994, prior
to which he was Group General Manager of AIB's Capital
<PAGE>
Markets Division. He has been a director of AIB since 1990. Mr. Mulcahy serves
on the Management and Compensation Committee. He is President of the Ireland
Chapter of the Ireland-United States Council for Commerce & Industry, Inc.
Morton I. Rapoport, MD, age 65, has served as a director of the Corporation
and of Allfirst Bank since January 2000. Since 1984, he has served as the
President and Chief Executive Officer of the University of Maryland Medical
System. Dr. Rapoport is also a professor of medicine at the University of
Maryland School of Medicine and a professor of clinical pharmacology at the
University of Maryland School of Pharmacology.
Meetings, Committees and Fees
The Board of Directors met six times for regularly scheduled meetings and
twice for special meetings during 1999.
The Board of Directors has standing executive, audit, compensation and
community affairs committees. The Executive Committee has two permanent members
and six rotating members who are outside directors. The Executive Committee may
exercise most of the powers of the Board of Directors in the intervals between
meetings of the full Board; it may not, however, declare dividends, issue stock,
recommend to stockholders any action requiring stockholder approval, amend the
bylaws, or approve mergers. The Executive Committee met six times for regularly
scheduled meetings and twice for special meetings during 1999.
The Audit Committee, composed of outside directors, is primarily responsible
for ascertaining that the Corporation's financial statements are presented
fairly in conformance with generally accepted accounting principles. The
committee oversees the Corporation's internal audit function, evaluates the
Corporation's system of internal controls, and reviews the external auditors'
proposed audit scope and approach and the results of the external audit. The
committee also evaluates and approves, on behalf of the Board, the adequacy of
the Corporation's allowance for loan and lease losses, and reviews the status of
pending or threatened litigation involving the Corporation and its subsidiaries.
The Audit Committee met five times for regularly scheduled meetings and once for
a special meeting during 1999.
The Management and Compensation Committee reviews and recommends compensation
arrangements for the Corporation's executive officers and also reviews and
recommends action with respect to the Corporation's retirement plans. The
Management and Compensation Committee met four times during 1999.
The Community Affairs Committee oversees the Corporation's community
reinvestment activities. The Committee reviews the Corporation's community
outreach efforts, and its efforts to ascertain and satisfy the credit needs of
low and moderate income areas and borrowers and to develop and market products
to meet those needs. The Community Affairs Committee met four times during 1999
for regularly scheduled meetings.
Each director who is not also an officer of the Corporation or of AIB receives
an annual retainer of $20,000, plus $1,100 for attendance at each meeting of the
Board and $900 ($1,100 for the Executive Committee) for attendance at meetings
of committees of the Board of which he or she is a member. In addition, each
committee chairperson receives an additional $300 per committee meeting, other
than the chairperson of the Management and Compensation Committee, who receives
an annual retainer of $6,500 in lieu of an additional fee per meeting.
During 1999, each of Messrs. Buckley, Javitch and Mulcahy was unable to attend
at least 75% of the aggregate of the meetings of the Board of Directors and of
the Board committees on which he serves.
Certain Relationships and Transactions
Directors and officers of the Corporation, members of their immediate families
and AIB and certain affiliates were customers of, and had transactions with, the
Corporation, Allfirst Bank and other subsidiaries of the Corporation in the
ordinary course of business during 1999. Similar transactions in the ordinary
course of business may be expected to take place in the future.
All loans to executive officers and directors and members of their immediate
families and to AIB and certain
<PAGE>
affiliates were made in the ordinary course of business, on substantially the
same terms, including interest rates and collateral, 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. Of the
loans outstanding at December 31, 1999, none were contractually past due 90 days
or more as to principal or interest and none were classified as nonaccrual,
restructured or potential problem loans.
Security Ownership of Certain Beneficial Owners and Management
Allied Irish Banks p.l.c., Bankcentre, Ballsbridge, Dublin 4, Ireland has
owned 100% of the Corporation's Common Stock since March 21, 1989. Messrs.
Bramble, Buckley, Mulcahy and Kennedy are directors and/or executive officers of
AIB, and as such, each may be deemed to be the beneficial owner of 100% of the
Corporation's Common Stock.
The following table sets forth the number of AIB Ordinary Shares (including
such shares held in the form of AIB Ordinary ADRs but excluding directors'
qualifying shares) beneficially owned by each executive officer named in the
Summary Compensation Table, each nominee for director, and by all executive
officers and directors as a group as of December 31, 1999.
<TABLE>
<CAPTION>
Ordinary
--------
Shares (1)(2)
-------------
Executive Officers(3)
<S> <C>
Frank P. Bramble.............................................. 469,548 (4)
Jeremiah E. Casey............................................. 290,934
David M. Cronin............................................... 119,316 (4)
Jerome W. Evans............................................... 30,000 (4)
Susan C. Keating.............................................. 186,876 (4)
Brian L. King................................................. 120,704 (4)
Directors
Sherry F. Bellamy............................................. --
James T. Brady................................................ --
Michael D. Buckley............................................ 85,589 (4)
Edward A. Crooke.............................................. 100
John F. Dealy................................................. --
Mathias J. DeVito............................................. --
Frank A. Gunther, Jr.......................................... --
Margaret M. Heckler........................................... --
Lee H. Javitch................................................ 85,880
Gary Kennedy.................................................. 227,568 (4)
William T. Kirchhoff.......................................... 258,798 (5)
Henry J. Knott, Jr............................................ 1,137
Andrew Maier II............................................... 42,900 (6)
Thomas P. Mulcahy............................................. 792,169 (4)
Morton I. Rapoport............................................
All executive officers and directors as a group (22 persons).. 2,711,519
.
</TABLE>
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(1) No individual listed in the table beneficially owns, and all executive
officers and directors as a group do not beneficially own, more than one
percent of the shares of the indicated class outstanding.
(2) Each AIB Ordinary ADR represents two AIB Ordinary Shares.
(3) With respect to Ms. Keating, includes holdings of restricted stock.
(4) Includes shares subject to currently exercisable stock options.
(5) Includes 59,232 shares held with sole voting/dispositive powers, 180,000
shares held by the profit sharing plan of which the director is a
controlling person, 12,000 shares subject to a presently exercisable option
and 7,566 shares held solely by the director's spouse.
(6) Includes 2,350 shares held with sole voting/dispositive powers, 4,000 shares
held in trust for the benefit of the
<PAGE>
director and his spouse, and 800 held as custodian for the benefit of the
director's children.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following summary compensation table sets forth information about salary
and other compensation for the Corporation's chief executive officer and each of
the four other most highly compensated executive officers (the "named executive
officers") for services to the Corporation in all capacities during each of the
three years ended December 31, 1999.
<TABLE>
<CAPTION>
Long Term
---------
Annual Compensation Compensation
------------------------------ ------------
Restricted All Other
---------- ---------
Name and Principal Other Annual Stock LTIP Compensa-
- ------------------ ------------ ----- ---- ---------
Position at 12/31/99 Year Salary Bonus(2) Compensation(3) Award(s)(4) Payout(5) tion(6)
- -------------------- ---- ------- ---------- -------------- ----------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Susan C. Keating............. 1999 450,000 300,000 1,671 -0- -0- 186,531
President and CEO(1) 1998 375,000 -0- 1,708 -0- -0- 101,418
1997 375,000 225,000 -0- 198,062 445,223 321,937
Frank P. Bramble............. 1999 650,000 520,000 1,587 -0- -0- 34,659
Chairman(1) 1998 600,000 -0- 1,587 -0- -0- 36,963
1997 600,000 450,000 -0- -0- 1,606,200 38,517
Jeremiah E.Casey............. 1999 277,962 480,000 5,496 -0- -0- 21,516
Director (1) 1998 600,000 -0- 5,496 -0- -0- 22,781
1997 600,000 450,000 5,496 -0- 1,591,924 24,647
David M. Cronin.............. 1999 290,000 116,000 1,331 -0- -0- 14,465
Executive Vice Pres. 1998 290,000 -0- 1,265 -0- -0- 13,830
and Treasurer 1997 290,000 174,000 1,200 -0- 582,713 13,027
Jerome W. Evans.............. 1999 350,000 227,500 -0- -0- -0- 21,583
Vice Chairman and CFO 1998 290,000 -0- -0- -0- -0- 23,072
1997 275,000 165,000 -0- -0- 498,103 23,056
Brian L. King................ 1999 265,000 106,000 -0- -0- -0- 14,834
Executive Vice Pres. 1998 265,000 -0- -0- -0- -0- 12,458
1997 250,000 150,000 -0- -0- 402,008 10,770
</TABLE>
- ----------------
(1) Ms. Keating became the Chief Executive Officer on December 14, 1999. Mr.
Bramble served as the Chief Executive Officer from January 1, 1999 to
December 14, 1999. Mr. Casey retired as Chairman of the Board in April
1999.
(2) Bonuses are earned in the year specified and generally paid in the following
year.
(3) Consists of additional compensation in respect of income taxes due on
imputed income from executive long term disability insurance premiums paid
by the Corporation.
(4) This column shows the market value of awards of AIB restricted stock on the
date of grant. Restrictions on the stock lapse in equal amounts on the
third, fourth and fifth anniversaries of each respective grant. Dividends on
restricted stock are paid to the named executive officers in the same manner
and amount as paid on the same unrestricted securities. Information
concerning number of shares and values of restricted stock holdings at
December 31, 1999 is set forth in next table.
(5) The 1995 Long Term Incentive Plan established three performance measures on
which the amount of a participant's award would be determined: (i) the
Corporation's aggregate after-tax profit over the three-year performance
period from 1/1/95 to 12/31/97; (ii) the Corporation's return-on-assets
ratio ("ROA") for 1997 relative to the ROAs for a peer group of
approximately 20 U.S. bank holding companies; and (iii) the
<PAGE>
Corporation's cost-to-income ratio for 1997. Threshold, target and maximum
levels were established for each performance measure, and threshold, target
and maximum percentage multipliers were specified for each participant. The
threshold, target and maximum multipliers for Mr. Bramble were 85%, 170%
and 340%, respectively, and for the other named executive officers were
65%, 130% and 260%, respectively. The Corporation's actual performance was
measured against the performance measures, and the Management and
Compensation Committee determined that the Corporation performed at a level
between the target and maximum levels. The multipliers were as follows: Mr.
Bramble, 306%; Mr. Casey, 268%; other named executive officers, 205%. The
amount of an award equaled the multiplier times average base salary over
the performance period. Awards were paid in cash (55%) and/or AIB Ordinary
ADRs (45%). The plan terminated as of December 31, 1997.
(6) Consists of: (a) the value of split-dollar life insurance premiums paid
pursuant to the Corporation's Executive Life Insurance Program of $18,085,
$27,369, $11,306, $7,265, $14,383 and $4,694 during 1999 for Ms.Keating and
Messrs. Bramble, Casey, Cronin, Evans and King, respectively; (b) matching
contributions under the Corporation's qualified, defined contribution plan
of $7,200 for each named executive officer; (c) $161,246 in relocation
expenses paid by the Corporation in connection with Ms. Keating's
relocation to Baltimore, MD; and (d) $3,010 and $2,940 in respect of
certain earnings on deferred amounts forMessrs. Casey and King,
respectively.
The following table sets forth additional information concerning the number of
shares and the value of restricted stock holdings of the named executive
officers at December 31, 1999.
<TABLE>
<CAPTION>
Name Ordinary ADRs
- ---- -------------
<S> <C>
Susan C. Keating............. 27,438
$587,996
Frank P. Bramble............. -0-
Jeremiah E. Casey............ -0-
David M. Cronin.............. -0-
Jerome W. Evans.............. -0-
Brian L. King................ -0-
</TABLE>
1997 Stock Option Plan
In October 1997, the Corporation's Board of Directors approved the 1997 Stock
Option Plan (the "1997 Option Plan"). The purposes of the 1997 Option Plan are
to provide incentives to key employees to contribute to the growth and success
of the Corporation and of AIB, and to enhance the Corporation's ability to
attract, retain and reward the highest quality employees in positions of
substantial responsibility.
The 1997 Option Plan provides for the grant to key employees of options to
acquire AIB American Depository Shares ("AIB ADSs"). During 1999, the 1997
Option Plan was amended to permit a one-time grant of an option to acquire 100
AIB ADSs to substantially all of the employees of the Corporation and its
subsidiaries, other than executive officers. The Corporation and an independent
trustee have created a trust which has been funded with AIB ADSs acquired by the
trust with the proceeds of a loan from the Corporation. Proceeds of option
exercises and any dividends and other earnings on the trust assets will be used
to repay the loan to the trust. Optionees have no preferential rights with
respect to the trust assets, and the trust assets are subject to the claims of
the Corporation's general creditors in the event of insolvency. The AIB ADSs are
held in the available-for-sale account on the Corporation's balance sheet, and
any decline in value of the AIB ADSs in the trust below their original cost will
be recorded as an adjustment to the Corporation's stockholders' equity. The 1997
Option Plan is administered by the Management and Compensation Committee of the
Board of Directors. AIB will not issue any securities in connection with the
1997 Option Plan, will not receive any proceeds from the exercise of options,
and otherwise has no rights or obligations with respect to the 1997 Option Plan.
As of December 31, 1999, there were 4,085,585 AIB ADSs in the trust.
The following table sets forth information concerning options ("1999
Options") granted under the 1997 Option Plan to the named executive officers
during the year ended December 31, 1999. Mr. Casey was not eligible to receive
options under the 1997 Option Plan.
<PAGE>
<TABLE>
<CAPTION>
Potential
---------
Realizable Value
----------------
at Assumed Annual
-----------------
Rates of Stock Price
--------------------
Appreciation for
----------------
Individual Grants Option Term(1)
------------------------------------------- --------------
% of
----
Total
-----
No. of Options
---------- ------------
Securities Granted to Exercise
---------- ---------- --------
Underlying Employees or Base
---------- --------- -------
Options in Fiscal Price Expiration
---------- ---------- ----- ----------
Name Granted(2) Year ($/Sh)(3) Date(4) 5%($) 10%($)
- ------------------- ---------- ----- -------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
S.C. Keating............ 30,000 1.38% $34.04 2/9/09 $642,265 $1,627,625
50,000 2.30 26.05 8/10/09 819,135 2,075,850
F.P. Bramble............ -0-
D.M. Cronin............. 25,000 1.20 26.05 8/10/09 409,468 1,037,925
J.W. Evans.............. 30,000 1.38 34.04 2/9/09 642,265 1,627,625
40,000 1.84 26.05 8/10/09 655,308 1,660,680
B.L. King............... 25,000 1.20 26.05 8/10/09 409,468 1,037,925
</TABLE>
(1) Illustrates value that would be realized upon exercise of options
immediately prior to expiration of term, assuming the specified annual
compound rates of appreciation on AIB ADSs over the option term.
(2) All options under the 1997 Option Plan are nonqualified options. A 1999
Option is exercisable for up to 50% of the underlying securities two years
after the grant date (February 9 and August 10, 1999) and for the remaining
50% of the securities, three years after the grant date, except in the event
of a change in control of the Corporation or of AIB.
(3) The exercise price of each option granted under the 1997 Option Plan is
equal to the greater of the cost or the market price of AIB ADSs on the date
of grant. The number of AIB ADSs subject to an option and the exercise price
may be adjusted in the event of a stock dividend or split, recapitalization
or similar transaction affecting the outstanding Ordinary Shares of AIB. The
exercise price of an option may be paid in cash or through the
contemporaneous sale of the underlying AIB ADSs.
(4) 1999 Options granted under the 1997 Option Plan expire ten years from the
date of grant, subject to certain exceptions relating to the manner of
termination of an optionee's employment. An option may not be transferred
except by will, by the laws of descent and distribution, or in connection
with a limited number of family estate planning transfers.
The following table sets forth information concerning exercised and
unexercised options under the 1997 Option Plan as of the end of 1999.
<TABLE>
Value of
--------
Number of Unexercised
--------- -----------
Unexercised in-the-money
----------- ------------
Options Options at
------- ----------
Shares at 12/31/99 12/31/99($)
------ ----------- -----------
Acquired Value Exercisable/ Exercisable/
-------- ----- ------------ ------------
on Exercise Realized($) Unexercisable Unexercisable(1)
----------- ----------- ------------- ----------------
Name
- -------------------
<S> <C> <C> <C> <C>
S.C. Keating............. 24,000 $310,481 66,000/116,000 $162,030/-0-
F.P. Bramble............. -0- -0- 180,000/ 441,900/-0-
260,000
D.M. Cronin.............. -0- -0- 42,000/49,000 103,110/-0-
J.W. Evans................ -0- -0- 15,000/95,000 36,825/-0-
Brian L. King............. 9,000 121,950 36,000/49,000 88,380/-0-
</TABLE>
(1) Based on market value of AIB ADSs at December 31, 1999.
<PAGE>
1999 Stock Option Plan
In May 1999, the Corporation's Board of Directors implemented the 1999 Stock
Option Plan (the "1999 Option Plan"). An individual who is an executive
officer and/or director of AIB and an officer of the Corporation may not
---
participate in the 1997 Option Plan. The purpose of the 1999 Option Plan is to
provide incentives to such individuals and to enhance the Corporation's (and
AIB's) ability to attract, retain and reward the highest quality employees in
positions of substantial responsibility. The only participant in the 1999
Option Plan is Mr. Bramble.
The 1999 Option Plan is structured in substantially the same way as the 1997
Option Plan, except that the 1999 Option Plan establishes certain performance
measures that must be satisfied before the options may be exercised. The 1999
Option Plan is also administered by the Management and Compensation Committee of
the Board of Directors. AIB will not issue any securities in connection with the
1999 Option Plan, will not receive any proceeds from the exercise of options,
and otherwise has no rights or obligations with respect to the 1999 Option Plan.
As of December 31, 1999, there were 122,400 AIB ADSs in the 1999 Option Plan
trust.
The following table sets forth information concerning options granted under
the 1999 Option Plan during the year ended December 31, 1999.
<TABLE>
<CAPTION>
Potential
---------
Realizable Value
----------------
at Assumed Annual
-----------------
Rates of Stock Price
--------------------
Appreciation for
----------------
Individual Grants Option Term(1)
------------------------------------------- --------------
% of
----
Total
-----
No. of Options
---------- ------------
Securities Granted to Exercise
---------- ---------- --------
Underlying Employees or Base
---------- --------- -------
Options in Fiscal Price Expiration
---------- ---------- ----- ----------
Name Granted(2) Year ($/Sh)(3) Date(4) 5%($) 10%($)
- ------------------- ---------- ----- -------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Frank P. Bramble....... 95,000 4.4% 26.05 11/03/09 1,556,357 3,944,114
</TABLE>
(1) Illustrates value that would be realized upon exercise of options
immediately prior to expiration of term, assuming the specified annual
compound rates of appreciation on AIB ADSs over the option term.
(2) All options under the 1999 Option Plan are nonqualified options. Options
granted during 1999 under the 1999 Option Plan are exercisable as follows:
(i) as to 35% of the AIB ADSs, on the achievement by the Corporation of
year-over-year growth in tangible net income (adjusted as provided below) of
7.5%, compounded annually, for at least two consecutive years; (ii) as to
35% of the AIB ADSs, on the achievement by the Corporation of a tangible
cost-to-income ratio of less than 55% for at least two consecutive years;
(iii) as to 30% of the AIB ADSs, on the achievement of growth in tangible
earnings per share, i.e. excluding the amortization of goodwill of AIB over
the first three years from the date of grant at least equal to the growth in
the Consumer Price Index (compiled and published by the Central Statistics
Office of the Government of Ireland during the same period plus five percent
per annum, compounded annually over such three year period; (iv) as to 100%
of the AIB ADSs, on the date that is three months prior to the Expiration
Date; and (v) as to 100% of the AIB ADSs, on a change of control .
(3) The exercise price of each option granted under the 1999 Option Plan is
equal to the greater of the cost or the market price of AIB ADSs on the date
of grant. The number of AIB ADSs subject to an option and the exercise price
may be adjusted in the event of a stock dividend or split, recapitalization
or similar transaction affecting the outstanding Ordinary Shares of AIB. The
exercise price of an option may be paid in cash or through the
contemporaneous sale of the underlying AIB ADSs.
(4) Options granted under the 1999 Option Plan expire ten years from the date of
grant, subject to certain exceptions relating to the manner of termination
of an optionee's employment. An option may not be transferred except by
will, by the laws of descent and distribution, or in connection with a
limited number of family estate planning transfers.
The following table sets forth information concerning exercised and
unexercised options under the 1999 Option Plan as of the end of 1999.
<PAGE>
<TABLE>
Value of
--------
Number of Unexercised
--------- -----------
Unexercised in-the-money
----------- ------------
Options Options at
------- ----------
Shares at 12/31/99 12/31/99($)
------ ----------- -----------
Acquired Value Exercisable/ Exercisable/
-------- ----- ------------ ------------
on Exercise Realized($) Unexercisable Unexercisable(1)
----------- ----------- ------------- ----------------
Name
- -------------------
<S> <C> <C> <C> <C>
F.P. Bramble............. -0- -0- 0/95,000 -0-
</TABLE>
(1) Based on market value of AIB ADSs at December 31, 1999.
Pension Plans
Mr. Bramble is entitled to supplemental retirement benefits under an agreement
which provides for a retirement benefit at age 60 of 60% of the average of the
highest three years of compensation during his career, offset by benefit
payments under the Corporation's qualified defined benefit plan and excess
benefit plan, by social security benefits and by benefit payments under defined
benefit plans of former employers. Ms. Keating and Mr. King are entitled to
supplemental retirement benefits under an agreement that provides for a
retirement benefit equal to a minimum of 30% and a maximum of 60% of the average
of the highest three years of compensation during the last 10 years of
employment, offset by benefit payments under the Corporation's qualified defined
benefit plan and excess benefit plan, by social security benefits, and by
benefit payments under defined benefit plans of former employers. Mr. Evans is
entitled to supplemental retirement benefits under an agreement that requires
the Corporation to make a deferred compensation contribution of 15% of annual
cash compensation at the end of each year of employment.
Short Term Incentive Awards
The Corporation's annual Short Term Incentive Plan for Senior Officers (the
"Annual Bonus Plan") is intended to focus the efforts of executive and senior
officers on the attainment of specific annual performance goals that will
promote the overall success of the Corporation. Payments under the Annual Bonus
Plan are funded out of the Corporation's net income.
Under the Annual Bonus Plan, the Management and Compensation Committee (the
"Compensation Committee") approves minimum, target and maximum net income
levels at the beginning of the year. The Compensation Committee determines the
percentage of base salary applicable to each net income level. If the minimum
net income level is not achieved, then generally no award is made under the
plan. If a higher level of net income is achieved, then the Compensation
Committee determines the percentage applicable to the Chief Executive Officer
and the percentages applicable to the other executive officers, based on the
scope of each officer's duties and responsibilities. Individual performance
measures also are considered in setting individual percentages, in the
discretion of the Compensation Committee. Such measures include achievement of
strategic and tactical objectives, growth, meeting business unit objectives,
promoting corporate values, providing leadership to employees and encouraging
teamwork.
1989 Long Term Incentive Plan
The Corporation's 1989 Long Term Incentive Plan and Trust (the "1989 LTIP")
was developed to attract and retain key employees who contribute to the
continued growth, development and profitable performance of the Corporation and,
thereby, to the continued financial success of AIB. The 1989 LTIP has been
approved by the Board of Directors of the Corporation.
The 1989 LTIP provides for awards of AIB ordinary ADRs ("incentive shares")
to officers eligible to participate in the plan. Incentive shares are restricted
and may not be disposed of by an officer for a period of time after the date of
an award. The restriction for a specific award lapses in equal installments on
the third, fourth and fifth anniversary dates of the award. During the
restricted period, the officer is entitled to receive, without
<PAGE>
restriction, any dividends on the incentive shares. Awards of incentive shares
are intended to serve as compensation over a period of several years and
generally are made on a biennial basis. The size of an award of incentive shares
is based on a percentage of base salary for each participant.
As of January 1, 2000, 93,807 ordinary ADRs were available for awards under
the 1989 LTIP. All incentive shares available for awards in any year that are
not used and incentive shares that are later forfeited are also available for
use in subsequent years.
Change in Control Agreements
The Corporation has entered into a change-in-control agreement ("Change
Agreement") with each named executive officer. Each Change Agreement provides
that if an executive is discharged, or if the executive experiences a material
reduction in compensation or duties or relocation to an office more than 50
miles from the executive's then current office, in each case within two years
following a "change of control," then the executive will be entitled to a
severance package comprised of the following elements (subject to any
limitations imposed by regulatory authorities): (i) a payment equal to two times
annual salary and bonus (three times annual salary and bonus in the case of the
Chief Executive Officer); (ii) payment of the greater of the executive's actual
or target bonus pro-rated for the months elapsed in the annual bonus period at
the time a change in control transaction is actually consummated; (iii) vesting
of all restricted stock awards and stock options; (iv) payment of any target
amounts under long-term incentive plans; (v) continuation of all fringe benefit
coverage for up to two years; (vi) additional service credit equal to the
multiple paid in severance is added to retirement plan participation; (vii)
payment of excise taxes and gross-up payments if any payments exceed the maximum
amounts set forth in Section 280G of the Internal Revenue Code; and (vi)
outplacement services.
For purposes of the Change Agreements, a "change of control" will be deemed
to have taken place on the date of the earliest to occur of any of the following
events: (i) an unaffiliated third party becomes the beneficial owner of 50% or
more of the outstanding ordinary shares of AIB, or 25% or more of the
outstanding common stock of the Corporation or of Allfirst Bank; (ii) the
commencement of, or first public announcement of the intention of any person to
commence, a tender or exchange offer the consummation of which would result in
beneficial ownership by a person (other than AIB, the Corporation, any wholly-
owned subsidiary of either AIB or the Corporation, or any employee benefit plan
of AIB or the Corporation or of any subsidiary of either or any entity holding
common stock for or pursuant to the terms of any such plan) of 50% or more of
the outstanding common stock of AIB, or 25% or more of the outstanding common
stock of the Corporation or of Allfirst Bank; or (iii) as the result of, or in
connection with, any cash tender or exchange offer, merger, consolidation or
other business combination, sale or disposition of all or substantially all of
the Corporation's assets, or contested election, or any combination of the
foregoing transactions (a "Transaction"), (a) the persons who were directors
of either AIB, the Corporation, or Allfirst Bank immediately before the
Transaction shall cease to constitute a majority of the Board of Directors of
such entity or any successor to such entity, or (b) the persons who were
stockholders of AIB or the Corporation, as applicable, immediately before the
Transaction shall cease to own at least 50% of the outstanding voting stock of
the applicable entity or any successor to such entity.
Compensation Committee Interlocks and Insider Participation
Messrs. Crooke, DeVito, Geckle and Mulcahy served on the Compensation
Committee during 1999. No member of the Compensation Committee was an officer or
employee of the Corporation during 1999.
Report of Management and Compensation Committee
General. The Compensation Committee, made up of three outside directors and
the Group Chief Executive of AIB, is responsible for executive compensation
policies. In addition to establishing policies, the Compensation Committee
approves all executive compensation arrangements and makes recommendations to
the Board of Directors for specific salary amounts and other compensation awards
for individual executives.
The Corporation's compensation program is designed to attract, motivate and
retain executive personnel capable of making significant contributions to the
long term success of the Corporation. The primary components of the executive
compensation program are competitive base salaries and both short term and long
term incentives.
<PAGE>
Executive officers also participate in other broad based employee compensation
and benefit programs.
The Corporation retains an independent compensation consulting firm
("Compensation Consultant") to assist the Compensation Committee in performing
its duties. The Compensation Consultant provides analytical and general
interpretive guidance regarding compensation practices for the banking industry
as a whole and for a group of the Corporation's peers, and advises the
Compensation Committee on structuring compensation arrangements to achieve the
desired quantitative and qualitative goals.
In connection with the annual review of the executive compensation program,
the Compensation Committee has confirmed with the Compensation Consultant that
the executive compensation plans remain competitive and effectively serve the
purposes for which they were established. For 1999, the Board approved all
recommendations by the Compensation Committee related to the compensation of
Susan C. Keating and Frank P. Bramble, the two individuals who served as Chief
Executive Officer of the Corporation during 1999.
Base Salary. Base salaries for the Corporation's executive officers are
established based upon an analysis of executive salary practices at a group of
the Corporation's peer bank holding companies (the "Peer Group"). The Peer
Group is selected based on total assets, geographic location, and comparable
lines of business. The Compensation Committee believes that base salary should
reflect the scope of an executive officer's duties and responsibilities, his or
her importance to the Corporation relative to other executive officer positions,
and the competitiveness of the executive officer's total compensation relative
to similarly situated executives within the Peer Group.
Executive officer salary increases are reviewed annually and are based on the
executive officer's performance, base salary position relative to the median or
average rates paid in the Peer Group and in the broader financial institutions
market, and the Corporation's net income during the prior year. In determining
the base salaries for Ms. Keating and Mr. Bramble, the Committee focused on
compensation data for those chief executive officers in the Peer Group whose
duties and responsibilities most closely resemble theirs.
Annual Bonus Plan. For 1999 awards under the Annual Bonus Plan, the
Compensation Committee approved minimum, target and maximum net income levels;
the percentages of base salary corresponding to these levels were 40%, 80% and
120%, respectively, for the Chief Executive Officer. The Corporation missed the
target net income level established by the committee for 1999 by approximately
$5 million. Ms. Keating and Mr. Bramble received 1999 Annual Bonus Plan awards
of $300,000 and $520,000, respectively, in recognition of their substantial
contributions to the Corporation's results during 1999.
Long Term Incentives. The Compensation Committee administers the 1989 LTIP,
and determines whether, to whom and in what amounts awards are made under those
plans. The Board of Directors acts on the recommendations of the Committee
regarding proposed awards under the 1989 LTIP to the Chief Executive Officer. No
award was made to the Chief Executive Officer under the 1989 LTIP in 1999.
The Chief Executive Officer's level of participation in the 1997 Stock Option
Plan during 1999 was based primarily on the broad scope of her responsibilities
and the significant role she plays in the Corporation achieving the performance
goals established under the plan.
Internal Revenue Code Section 162(m) Compliance
The deductibility of executive compensation in excess of the limit set in
Section 162(m) of the Internal Revenue Code 1986, as amended, was not a factor
in the Committee's determination of 1999 compensation levels. The Committee will
continue to review the Corporation's executive compensation plans to determine
what changes, if any, may be advisable in connection with Section 162(m).
Mathias J. DeVito, Chairman, Jerome W. Geckle , Edward A. Crooke, Thomas P.
Mulcahy
<PAGE>
OTHER MATTERS
As of the date of this Information Statement, the Board of Directors of the
Corporation knows of no other business which will be presented for consideration
at the Annual Meeting.
_________________
