SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X ] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST MICHIGAN BANK CORPORATION
(Name of registrant as specified in its charter)
FIRST MICHIGAN BANK 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)(l)(ii), 14a-6(i)(l), or 14a-6(i)(2)
[previously paid]
[ ] $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:
[ ] 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:
<PAGE>
(FMBC logo)
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
and PROXY STATEMENT
March __, 1996
Dear Shareholder,
You are cordially invited to attend First Michigan Bank Corporation's Annual
Meeting of Shareholders on Thursday, April 18, 1996, at 10:00 a.m. The
meeting will take place in the Grand Centennial Ballroom of the Holiday Inn
Crowne Plaza, Grand Rapids, Michigan, and will be preceded by a continental
breakfast at 9:00 a.m. Please note this change in location of our Annual
Meeting.
A copy of First Michigan Bank Corporation's 1995 Annual Report is enclosed
for your review. We are pleased to report that the Corporation had another
outstanding year with record earnings and strong asset growth. This
performance, as well as our plans for the future, will be highlighted at the
Annual Meeting.
Every shareholder's vote is important. Therefore, please sign and return the
accompanying proxy in the return envelope provided. If you attend the meeting
and wish to vote your shares in person, you may do so by withdrawing your
proxy prior to the meeting. If your shares are held in the name of a
brokerage or bank, you may need to obtain a legal proxy from that institution
to vote your shares in person.
Thank you for your continued interest and investment in our Corporation, and
we look forward to seeing you at the Annual Meeting.
Sincerely,
David M. Ondersma
Chairman and Chief Executive Officer
<PAGE>
(FMBC logo)
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of First Michigan Bank Corporation will
be held in the Grand Centennial Ballroom at the Holiday Inn Crowne Plaza
Hotel, 5700-28th Street, SE, Grand Rapids, Michigan, on Thursday, April 18,
1996, at 10:00 a.m. (local time), for the following purposes:
(1) To elect three persons to the Board of Directors for terms
expiring in 1999.
(2) To consider and vote upon a proposal to amend the
Company's Articles of Incorporation to increase the authorized
common stock from 24,000,000 shares to 50,000,000 shares of common
stock.
(3) To transact such other business as may properly come
before the meeting.
Shareholders of record at the close of business on March 1, 1996, will be
entitled to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Stephen A. Stream
Secretary
Holland, Michigan
March __, 1996
<PAGE>
(FMBC logo) Preliminary Proxy
Statement Dated
February 22, 1996
One Financial Plaza 10717 Adams
Holland, Michigan 49423
(Telephone 616/355-9200)
PROXY STATEMENT
SOLICITATION OF PROXIES
This Proxy Statement is furnished to the shareholders of First Michigan Bank
Corporation (the "Company") in connection with the solicitation by the Board
of Directors of proxies to be used at the Annual Meeting of Shareholders, and
any adjournments thereof, to be held on Thursday, April 18, 1996, at the time
and place and for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders.
Execution and return of the proxy in the form enclosed will not in any way
affect a shareholder's right to attend the meeting and vote in person. A
shareholder giving a proxy may revoke it at any time before it is exercised
by giving notice to the Chairman of the Board of the Company in writing or
in open meeting, by submitting to the Chairman of the Board a duly executed
proxy bearing a later date, or by attending the meeting and voting in person.
Proxies executed and returned in the form enclosed, unless previously revoked,
will be voted at the meeting as set forth herein and in the proxies.
The costs of soliciting proxies will be borne by the Company. The
solicitation of proxies will be made primarily by mail. The Company has
engaged Corporate Investor Communications, Inc., specialists in proxy
solicitation, to solicit proxies on its behalf from brokers, bank nominees,
and other institutional holders of its stock at an anticipated cost of $6,000
plus certain out-of-pocket expenses. Proxies may also be solicited by
directors, officers, and other employees of the Company and its subsidiaries
personally, and by telephone, facsimile, or other means. No additional
compensation will be paid to directors, officers, or employees for any such
solicitation nor will any such solicitation result in more than a minimal
cost to the Company.
ELECTION OF DIRECTORS
The Articles of Incorporation provide for the division of the Board of
Directors into three classes of nearly equal size with staggered three-year
terms of office. Three persons have been nominated for election to the Board
to serve three-year terms expiring at the 1999 Annual Meeting of Shareholders.
The Board has nominated the following three persons: Roger A. Andersen,
David M. Cassard and Robert J. Kapenga. All three are incumbent directors
previously elected by the Company's shareholders. The latter portions of
this Proxy Statement contain more information about the nominees.
Unless otherwise directed by a shareholder's proxy, the persons named as
proxy voters in the accompanying proxy will vote for the nominees named above.
In the event any of such nominees shall become unavailable, which is not
anticipated, the Board of Directors in its discretion may designate substitute
nominees, in which event the enclosed proxy will be voted for such substituted
nominees. Proxies cannot be voted for a greater number of persons than the
number of nominees named.
A plurality of the votes cast at the meeting is required to elect the nominees
as directors of the Company. As such, the three individuals who receive the
largest number of votes cast at the meeting will be elected as directors.
Shares not voted at the meeting, whether by abstention, broker nonvote, or
otherwise, will not be treated as votes cast at the meeting.
The Board of Directors recommends a vote FOR the election of all the persons
nominated by the Board.
Following are summaries of the background, business experience, and
descriptions of the primary occupations of the nominees:
<PAGE>
Roger A. Andersen David M. Cassard Robert J. Kapenga
Roger A. Andersen, 62, is President of Peninsular Investment Company, a
commercial real estate and equipment leasing company. He also is majority
partner of Park Place Development, a commercial real estate partnership. He
serves on the Business Development Committee of the Muskegon Economic Growth
Alliance, the Steering Committee of the Muskegon Community Health Project,
and as a trustee of the Grand Valley State University Foundation.
David M. Cassard, 42, is President of the Waters Corporation, a commercial
real estate management and development company. He also is Chairman and
Associate Broker of Waters Realty and Development. He serves as Vice Chair
of the Board of Trustees of Butterworth Hospital and Vice Chairman of the
Grand Rapids Downtown Development Authority. He is a director of the Grand
Rapids Chamber of Commerce, the Direction Center and the Grand Rapids/Kent
County Convention and Visitors Bureau.
Robert J. Kapenga, 53, is President of Steketee-VanHuis, Inc., a graphic arts
manufacturing company. He is President of The Printery, Inc., a subsidiary
of Steketee-Van Huis, and a director of the Electronic Publishing Center,
Inc. He also serves as a director of the Holland Economic Development
Corporation (HEDCOR) and the Holland Christian Education Foundation.
<PAGE>
PROPOSED INCREASE IN AUTHORIZED CAPITAL STOCK
The Company's Board of Directors has proposed that the first
paragraph of Article III of the Company's Articles of Incorporation
("Articles") be amended to read as follows:
"The total authorized capital stock of this Corporation is fifty
million (50,000,000) shares of common stock of the par value of
one dollar ($1.00) per share and one million (1,000,000) shares
of preferred stock, without par value."
This amendment would increase the Company's authorized common stock
from 24,000,000 shares to 50,000,000 shares of common stock, $1.00
par value. There would be no change in the number of authorized
preferred shares. The purpose of the amendment is to provide
additional shares for future issuance. As of March 1, 1996, issued
shares of common stock, totaled 18,___________ shares. Of the
remaining 5,___________ authorized but unissued shares of common
stock, a total of 1,509,259 shares are reserved for issuance under
the Company's 1987 Stock Option Plan, the Automatic Dividend
Reinvestment and Stock Purchase Plan, the Employee Stock Purchase
Plan and the Deferred Compensation, Deferred Stock and Current Stock
Purchase Plan for Non-Employee Directors. The Board of Directors
anticipates issuing approximately 654,000 shares in the second
quarter of 1996 in connection with the proposed acquisition of
Arcadia Financial Corporation. Accordingly, there remain only
_____________ shares of common stock for future issuance as
authorized by the Board of Directors of the Company. The Company has
no series preferred stock issued or outstanding.
Apart from the shares of common stock reserved for issuance under the
1987 Stock Option Plan, the Automatic Dividend Reinvestment and Stock
Purchase Plan, the Employee Stock Purchase Plan and the Deferred
Compensation, Deferred Stock and Current Stock Purchase Plan for Non-
Employee Directors and the anticipated issuance of shares for the
purchase of Arcadia Financial Corporation, the Company does not have
any present plan, understanding or agreement to issue additional
shares of common stock or to issue shares of preferred stock.
Nevertheless, the Board of Directors believes that it is advisable to
have additional shares of common stock available for possible future
acquisitions, public offerings and stock dividends or stock splits.
Historically, the Board of Directors has declared and paid an annual
stock dividend, and it is reasonable to assume that this practice will
continue in 1996. The Board of Directors of the Company will determine
whether and on what terms the issuance of shares of common stock or
preferred stock may be warranted and appropriate. Except for the
contemplated issuance of shares to be made in connection with the
proposed acquisition of Arcadia Financial Corporation, the Company
has no past or present plan, understanding or agreement for future
acquisitions.
All of the additional shares resulting from the increase in the
Company's authorized common stock would be of the same class with the
same dividend, voting and liquidation rights as the shares of common <PAGE>
stock presently outstanding. The shares would be unreserved and
available for issuance. No further authorization for the issuance of
common shares by shareholder vote is required under the Company's
existing Articles, and none would be required prior to the issuance
of the additional common shares by the Company. Shareholders have no
preemptive rights to acquire any shares issued by the Company under
its existing Articles, and shareholders would not acquire any such
rights with respect to any additional shares under the proposed
amendment to its Articles.
While the Company is not aware of any pending or threatened effort to
gain control of the Company, shareholders should be aware that the
authority of the Board to issue common or preferred stock might be
considered as having the effect of discouraging an attempt by another
person or entity to effect a takeover or otherwise gain control of
the Company, because the issuance of preferred stock with voting
powers, or the issuance of additional common stock, would dilute the
voting power of the stock then outstanding. Moreover, since the
terms of the preferred stock remain to be fixed by the Board of
Directors, such stock (or rights to acquire such stock) might contain
terms (including class voting rights or rights to exchange such stock
or warrants for stock of an acquiring company) which could make
acquisition of a controlling interest in the Company more difficult
or costly.
Other provisions of the Company's Articles of Incorporation could
also be viewed as potential impediments to efforts to acquire control
of the Company. Specifically, those provisions of the Articles of
Incorporation requiring the election of one-third of the directors of
the Company every third year, and the super-majority vote requirement
applicable to any proposed (a) merger or consolidation of the Company
as a result of which the Company would not be the surviving
corporation, (b) sale of all or substantially all of the assets of
the Company, (c) the dissolution of the Company, or (d) the amendment
to or deletion of the provision, could be used in a manner calculated
to prevent the removal of management and make more difficult or
discourage a change in control of the Company. In addition, the
Company's Shareholder Protection Rights Plan could be used with the
intent of the same effect. The Company has no present intention of
soliciting the vote of shareholders on any other proposal, or series
of proposals, to deter changes in control of the Company.
If the proposed amendment to increase the authorized shares of
capital stock is approved, common or preferred stock may, as noted,
be issued without further action by the shareholders and without
first offering such shares to the Company's shareholders for
subscription. Issuance of common or preferred stock otherwise than
on a pro rata basis to all current shareholders would reduce current
shareholders' proportionate interests.
The affirmative vote of the holders of a majority of the outstanding
shares of common stock of the Company is required for approval of the
proposed amendment to the Company's Articles. The Board of Directors <PAGE>
has determined that the proposed Amendment is desirable and
recommends a vote FOR the amendment. Unless otherwise directed by a
shareholder's proxy, the persons named as proxy voters in the
accompanying proxy will vote FOR the amendment.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP OF
MANAGEMENT
At March 1, 1996, the Company had outstanding ________________ shares
of common stock, par value $1.00 per share. Shareholders are
entitled to one vote for each full share of common stock registered
in their names at the close of business on March 1, 1996, the record
date fixed by the Board of Directors. Votes cast at the meeting and
submitted by proxy are counted by the inspectors of the meeting, who
are appointed by the Company.
As of March 1, 1996, no person was known by management to be the
beneficial owner of more than 5% of the outstanding common stock of
the Company, except as follows:
Name and Address of Amount and Nature of Approximate
Beneficial Owner Beneficial Ownership Percent of Class
FMB-Trust(1) _______________(1) _______%
(1) FMB-Trust ("Trust"), a subsidiary of the Company, holds these
shares in a fiduciary capacity under _______ trusts. Trust has
sole or shared voting and investment powers as to these shares.
Trust has no actual pecuniary interest in any of the shares held
by it. All of the shares are held of record by nominees of
Trust. All of such shares held of record by the nominees for
these trusts are included for informational purposes in the
amount shown as beneficially owned by Trust, although Trust may
not be deemed to be beneficial owner of all of such shares under
the applicable tests, and the inclusion of such shares for
informational purposes is not to be construed as an admission
that Trust is the beneficial owner of such shares. Trust
instructs its respective nominees to vote these shares in
accordance with instructions from trust creators or beneficiaries
when shared voting and investment powers are applicable;
otherwise, if Trust has sole voting power with respect to the
shares in question, the nominees may vote these shares in
accordance with the recommendation of the management of Trust.
However, in those cases in which Trust holds sole voting power,
its normal practice is to seek voting instructions from trust
grantors or beneficiaries and to follow such instructions to the
extent received.
The information in the following table sets forth the beneficial
ownership of the Company's common stock by each of the executive
officers listed in the Summary Compensation Table below and by all
directors and executive officers as a group.
<PAGE>
<TABLE>
Amount and Nature of Approximate
Persons Beneficial Ownership(1) Percent
of Class(2)
<S> <C> <C>
David M. Ondersma 190,517(3) 1.03%
Stephen A. Stream 76,483 0.41%
Larry D. Fredricks 43,629 0.24%
Merle J. Prins 89,007 0.48%
All executive officers and directors
as a group (consisting of 13 persons) 670,816(4) 3.62%
(1) Includes shares with respect to which certain executive
officers have the right to acquire beneficial ownership under
stock options exercisable in 60 days as follows: Mr. Ondersma -
154,830; Mr. Stream - 63,237; Mr. Fredricks - 32,629; Mr. Prins -
84,253.
(2) Calculated on the basis of the amount of shares outstanding
plus the 334,949 shares acquirable upon exercise of the options
described in the preceding note.
(3) Includes 1,830 shares owned by Mr. Ondersma's children to
which Mr. Ondersma disclaims beneficial ownership.
(4) Included for informational purposes are 23,267 shares to which
officers and directors disclaim beneficial ownership.
</TABLE>
<TABLE>
<CAPTION>
INFORMATION ABOUT DIRECTORS AND DIRECTOR NOMINEES
The information in the following table relating to principal
occupation or employment and beneficial ownership of shares has been
furnished to the Company by the respective directors and director
nominees:
Amount &
Year First Nature of Approx.
Became a Beneficial Percent
Principal Director Ownership of
Name Age Occupation as of Class
3/01/96(1)
<S> <C> <C> <C> <C> <C>
Nominees for Election as Directors for Terms Expiring in 1999:
Roger A. Andersen 62 President of Peninsular
Investment Company (real
estate investment company) 1979 16,644 0.09%
David M. Cassard 42 President of The Waters
Corporation (real estate
investment and management
company) 1993 2,631 0.01%
Robert J. Kapenga 53 President of Steketee-
VanHuis, Inc. (graphics
arts manufacturing
company) 1994 7,390 0.04%
Directors Whose Terms Expire in 1998:
James H. Bloem 45 Executive Vice President
of Perrigo Company (over-
the-counter drug and
personal products
manufacturer) 1994 2,409 0.01%
Meriam B. Leeke 58 Chief Executive Officer
of Old Channel Trail
Enterprises (golf course
and real estate company) 1992 15,408 0.08%
John W. Spoelhof 56 President of Prince
Corporation (automotive
products and machine
tool manufacturer) 1987 71,109(2) 0.38%
Stephen A. Stream 53 President, Chief
Operating Officer
and Secretary of
First Michigan
Bank Corporation 1995 76,483(3) 0.41%
Directors Whose Terms Expire in 1997:
Doyle A. Hayes 45 President and Chief
Executive Officer of
Pyper Products, Inc.
(automotive products
supplier) 1994 1,814 0.01%
Donald W. Maine 53 President and Chief
Executive Officer of
Davenport College
of Business 1985 4,011(2) 0.02%
Jack H. Miller 63 President and Chief
Executive Officer of
Howard Miller
Company (clock and
furniture manufacturer) 1982 149,765 0.81%
<PAGE>
David M. Ondersma 53 Chairman of the Board
and Chief Executive
Officer of First
Michigan Bank
Corporation 1985 190,517(2)(3) 1.03%
</TABLE>
(1) Unless otherwise indicated by note (2), each director or nominee has sole
voting and investment power and owns the shares directly or shares voting and
investment power with his or her spouse under joint ownership.
(2) The persons named above disclaim beneficial interest in the following
shares of common stock that are included in the foregoing schedule for
informational purposes: Mr. Maine--3,132; Mr. Ondersma--1,830; and Mr.
Spoelhof--18,305. The foregoing shares are owned directly or indirectly by
members of their families, by a company in which the person serves as an
officer, or by a foundation of which the person serves as a director.
(3) Includes shares with respect to which each director or nominee has the
right to acquire beneficial ownership under stock options exercisable within
60 days as follows: Mr. Ondersma--154,830 and Mr. Stream--63,237. These
shares have been added to shares outstanding in calculating each director's
or nominee's individual approximate percentage of beneficial ownership.
For the last five years, the nominees and directors of the Company have either
been engaged in the positions reported above or in other executive positions
with their respective organizations shown above, except Mr. Hayes, who was
employed by Diesel Technologies, Inc. in various executive positions for the
period prior to his current occupation, and Mr. Bloem, who was employed as
vice president and controller by Herman Miller, Inc. for the period prior to
his current occupation. There are no family relationships between or among
any of the directors, nominees or executive officers of the Company.
During 1995, the Board of Directors held seven regular meetings and one
special meeting. Various committees of the Board held meetings as needed.
Each director attended at least 75% of the total number of meetings of
the Board of Directors and meetings of committees on which they served.
The Audit Committee, comprised of Messrs. Andersen, Bloem, Cassard, Kapenga
and Ms. Leeke met on four occasions during 1995. Its primary duties and
responsibilities include: (1) annually recommending to the Board of Directors
the independent public accounting firm to be appointed auditors of the Company
and its subsidiaries; (2) a review of the scope of and fees for the audit and
a review of all reports received from the independent public accountants; and
(3) coordination of the internal auditing department and a review of the
scope of its annual program and the results of its audit findings.
During 1995, the Nominating and Salary Committee, comprised of Messrs. Hayes,
Maine, Miller and Spoelhof met five times. Its primary duties and
responsibilities include: (1) the coordination of salary and benefit
administration throughout the Company; (2) the making of recommendations
to the Board of Directors regarding salaries and benefits for corporate
officers and subsidiary bank presidents; (3) reviewing qualifications of
and making recommendations for membership on the Board of Directors of the
Company and on the boards of its subsidiaries; and (4) the administration of
the Company's stock option plans. This Committee will consider for Board
nomination qualified persons recommended by shareholders provided that any
recommendations are submitted in writing, on or before the 60th day preceding
the anniversary date of the previous annual meeting, including a description
of the proposed nominee, his or her consent to serve as a director, and other
biographical data of the nominee, to Stephen A. Stream, Secretary, First
Michigan Bank Corporation, One Financial Plaza, Holland, Michigan 49423.
Directors who are not employees of the Company were compensated at the rate of
$14,000 per year, plus $800 per regular Board meeting, special Board meeting
and committee meeting attended. In addition, the chair of each Board committee
received an additional $600 per committee meeting attended. Directors were
reimbursed for out-of-pocket expenses incurred in attending meetings.
During 1995, the Company's Deferred Compensation, Deferred Stock and Current
Stock Purchase Plan for Non-Employee Directors ("Plan") was approved by the
shareholders to provide an opportunity for directors of the Company and its
subsidiaries to defer payment of all or a part of their director fees ("Plan
Fees") or to receive shares of FMBC stock in lieu of cash payment of Plan
Fees. Each director, who participates in the plan, must elect to have his or
her Plan Fees credited quarterly to either (a) a Current Stock Purchase
Account, (b) a Deferred Cash Investment Account, or (c) a <PAGE> Deferred
Stock Account. Plan Fees credited to a Current Stock Purchase Account are
converted to shares of FMBC common stock at market value on the credit date
and distributed to the director in lieu of cash payment of Plan Fees. Plan
Fees credited to a Deferred Cash Investment Account are deferred for tax
purposes and are credited quarterly with an appreciation factor that may
not exceed the prime rate of interest charged by FMB - First Michigan Bank.
Plan Fees credited to a Deferred Stock Account are also deferred for tax
purposes. At the credit date, the Plan Fees are converted into "FMBC stock
units" determined by dividing the amount of the Plan Fees credited for the
quarter by the fair market value of a share of FMBC common stock on the credit
date. From the credit date forward, the value of the FMBC stock units in the
director's account is tied directly to the fair market value of FMBC common
stock, including the impact of paid dividends. Upon termination of a
director's service with the Company, the amount credited to his or her
Deferred Cash Investment Account or Deferred Stock Account is paid out in a
lump sum, or if termination occurs because of retirement, the distribution
may be spread over 5 to 10 years.
COMPENSATION OF EXECUTIVE OFFICERS
Committee Report on Executive Compensation
Decisions on the compensation of the Company's executive officers are made by
the Board's Nominating and Salary Committee (the "Committee"), composed of
non-employee directors. To ensure this Committee's independence, the Board
of Directors has made annual changes in the non-employee directors who serve
on the Committee. This Report, prepared by the Committee, addresses the
Company's compensation policies and programs for the year ended December 31,
1995, the details of which are reflected in the tables set forth on the
following pages of this Proxy Statement.
Compensation Policies and Programs
The Company's established policies and programs of compensation are tailored
to reward employees for the achievement of annual and long-term corporate
goals, as well as individual and collective accomplishments. The various
means of compensation, which apply to other employees of the Company as well,
are intended to encourage management to increase the value of the Company as
an asset of its shareholders, to reward and challenge individuals, working
individually and as a team, to achieve superior operating results, and to
attract and retain well-qualified personnel.
The Company's compensation program is comprised of several elements: cash
compensation (including salary and incentive bonus), stock options, and
defined benefit and defined contribution retirement plans. Reflective of the
Company's goal of tying compensation to corporate performance, the incentive
bonus plan permits executive officers, who are employees of the Company
("Company executives"), to earn up to 70% of their salary if outstanding
results are achieved under both the subjective and objective aspects of the
plan. Of this amount, up to 49% of base salary may be earned by Company
executives if the Company's return on equity (ROE) and growth exceeds the
annual targets established by the Board of Directors. Executive officers
who are employees of a subsidiary may also earn up to 70% of their salary
under this plan. The maximum percentage of base salary that may be earned
under this plan is reduced for nonexecutive officers. Once the target ROE
level is <PAGE> achieved, executive officers, as well as other employees,
earn a percentage of their base salary, up to the established maximum.
The balance of the potential bonus may be earned under the subjective portion
of the incentive bonus plan. This determination is made by the Committee,
which evaluates the performance of the Company executives and other management
personnel as a group. The Committee reviews an array of criteria, including
the achievement of various strategic projects and programs, significant
corporate accomplishments, management's initiative and efforts to achieve
annual and long-term corporate objectives, and various measures of financial
performance relative to corporate goals and peer group and industry
performance.
The award of the subjective portion of the bonus is made to the Company's
management personnel, as a group, subject to limitations on the maximum amount
of bonus that may be earned by different classifications of personnel. The
Committee believes that the treatment of Company executives and management
personnel collectively in determining the grant of the subjective portion of
the bonus enhances collegiality among employees and places the interests of
the Company and its shareholders ahead of individual considerations and
performance.
Company Performance and Executive Compensation
The salaries of the Company's Chief Executive Officer and other Company
executives are established based on a performance appraisal system. Each
Company executive's performance, other than that of the Chief Executive
Officer, is evaluated by his or her superior and reviewed by the Committee.
This review considers the employee's overall performance relative to the
achievement of corporate objectives, as well as the satisfaction of a number
of specific performance criteria. This same appraisal system is applied to
the Company's Chief Executive Officer by the Committee.
The Company achieved a number of financial performance goals for the year
ended December 31, 1995. The Company attained record earnings during the
year and exceeded all of the objectives pertaining to the Company's return on
equity. In light of these achievements and other corporate accomplishments,
each of the Company's executive officers earned the maximum amount payable
under the incentive bonus plan. The Chief Executive Officer received the same
relative bonus under the incentive program as the other Company executives
for performance during 1995.
The Committee also authorized, during 1995, the grant of stock options to the
Company's executives and other management personnel under the Company's 1987
Stock Option Plan ("the Plan"). The Plan, approved by shareholders in 1987,
provides for the grant of options to purchase shares of the Company's common
stock over a ten-year period. The options become exercisable one year after
the date of grant, and the exercise price equals the market price of the
stock on the date of grant. The Plan was established to provide additional
incentive to management to contribute to the success of the Company and to
attract and retain well-qualified key employees. The Committee believes that
the Plan, by encouraging and promoting stock ownership, inures to the benefit
of the Company's shareholders by aligning their interests with the enhancement
of shareholder value. Options are granted to management personnel, including
the Company executives and the Chief Executive Officer, based on their
relative annual salary and their position with the Company and its
subsidiaries.
Submitted by the Nominating and Salary Committee:
Doyle A. Hayes Jack H. Miller
Donald W. Maine John W. Spoelhof
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the Company's
Chief Executive Officer and the three other executive officers (referred to
collectively as the "Named Executives") for each of the three years ended
December 31, 1995.
<PAGE>
<TABLE>
Long-term
Annual Compen- All
Compensation sation other
Name and Options Compen-
Principal Position Year Salary(1) Bonus(1) (# Shares) sation(2)
<S> <C> <C> <C> <C> <C>
David M. Ondersma 1995 $374,300 $210,357 19,477 $8,948
Chairman of the Board 1994 340,000 170,000 21,827 8,111
and Chief Executive Officer 1993 315,000 157,500 16,743 7,791
Stephen A. Stream 1995 $254,150 $142,832 13,255 $6,531
President, Chief Operating 1994 209,615 104,808 13,448 5,943
Officer and Secretary 1993 185,500 92,750 8,562 5,666
Larry D. Fredricks 1995 $219,050 $123,106 8,819 $9,239
Executive Vice President and 1994 199,654 99,827 9,772 8,184
Chief Financial Officer 1993 181,000 90,500 8,562 7,511
Merle J. Prins 1995 $219,050 $123,106 8,819 $7,378
Executive 1994 199,654 99,827 9,772 6,201
Vice President 1993 181,000 90,500 8,562 5,037
</TABLE>
(1) Includes amounts deferred by employees under the Company's Cash
Option Plan, pursuant to Section 401(k) of the Internal Revenue Code.
(2) The amounts disclosed in this column include: (a) amounts
contributed by the Company to the Company's Cash Option Plan, pursuant
to which substantially all salaried employees of the Company
participate, (the Company made matching contributions equal to 35% of
each Named Executive's salary reduction contribution for the first six
months of 1995, and 50% for the remainder of 1995); and (b) dollar value
of premiums paid by the Company for term life insurance on behalf of the
Named Executives as follows:
<TABLE>
1995 1994 1993
<S> <C> <C> <C>
Mr. Ondersma (a) $3,785 $3,234 $3,148
(b) 5,163 4,877 4,643
Mr. Stream (a) 3,570 3,234 3,148
(b) 2,961 2,709 2,518
Mr. Fredricks (a) 3,791 3,234 3,148
(b) 5,448 4,950 4,363
Mr. Prins (a) 3,894 3,064 2,534
(b) 3,484 3,137 2,503
</TABLE>
<TABLE>
<CAPTION>
OPTION GRANTS IN 1995
The following table provides information on options granted to the Named
Executives during the year ended December 31, 1995.
Individual Grants
Number of Percentage Exercise
Securities of Total or Base
Underlying Options Price (per Grant Date
Options Granted to share)(2) Expiration Present
Name Granted(1) Employees Date Value (3)
in 1995
<S> <C> <C> <C> <C> <C>
David M. Ondersma 19,477 16.86% $22.86 01/13/05 ______
Stephen A. Stream 13,255 11.48 22.86 01/13/05 ______
Larry D. Fredricks 8,819 7.64 22.86 01/13/05 ______
Merle J. Prins 8,819 7.64 22.86 01/13/05 ______
</TABLE>
(1) Indicates number of shares that may be purchased pursuant to
options granted under the Company's 1987 Stock Option Plan on
January 12, 1995. Options may not be exercised in full or in part prior
to the expiration of one year from the date of grant. Each option contains
a limited stock appreciation right which becomes exercisable: (1) if any
person acquires 25% or more of the Company's outstanding Common Stock;
(2) prior to a merger in which the Company will not survive; or (3) upon
the sale of substantially all of the Company's assets. The limited stock
appreciation right entitles the holder to surrender all or part of his or
her options in exchange for cash, Company shares or both cash and shares,
in an amount equal to the excess of the prevailing per share market value
of the Company's common stock over the option price.
(2) The exercise price equals the prevailing market price of the Company's
common stock on the date of grant. The exercise price may be paid in cash,
or if at least 500 shares are being acquired, by the delivery of previously
owned shares, or a combination thereof.
(3) The values reflect standard application of the Black-Scholes option
pricing model employing these assumptions: (a) expected stock price
volatility of 0.209; (b) risk-free rate of return of 7.85%; (c) cash
dividend yield of 2.9%; and (d) expected time to exercise of 10 years.
The actual value, if any, of the options granted is dependent upon the
market value of the Company's stock subsequent to the date the options
become exercisable.
<TABLE>
AGGREGATED STOCK OPTION EXERCISES IN 1995 AND YEAR-END
OPTION VALUES
The following table provides information on the exercise of stock options
during 1995 by the Named Executives and the value of unexercised options
at December 31, 1995.
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares 12/31/95 12/31/95 (2)
Acquired Value Exercisable/ Exercisable/
on Exercise Realized (1) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
David M. Ondersma 4,184 $90,664 137,414/19,477 $2,191,756/$90,373
Stephen A. Stream 0 0 49,982/13,255 706,414/ 61,503
Larry D. Fredricks 2,600 46,046 23,810/ 8,819 271,792/ 40,920
Merle J. Prins 1,416 32,865 76,634/ 8,819 1,252,138/ 40,920
(1) Aggregate market value of shares acquired at time of exercise, less
the aggregate exercise price paid by the employee to the Company.
<PAGE>
(2) Values are based on the difference between the closing bid price of
the Company's Common Stock on December 31, 1995 ($27.50) and the exercise
prices of the options.
</TABLE>
PENSION PLAN
The following table illustrates the estimated annual benefits payable upon
normal retirement at age 65 to persons in specified compensation and years
of service classifications under the Company's defined benefit plan and the
Company's Supplemental Retirement Program ("SRP"). Under the Company's
defined benefit plan, the projected benefits are computed on a straight line
annuity basis, and such benefit is in addition to any amounts which may be
received under the Social Security Act. Amounts in excess of $120,000, as
limited by Section 415 of the Internal Revenue Code, are payable under the
SRP to employees eligible to participate in the SRP pursuant to separate
agreements with these employees. The SRP is intended to provide participants
with a retirement benefit up to 60% of their average annual compensation
(not including bonus payments), as reduced by the amount of their benefit
under the Company's defined benefit plan. Benefits under the SRP are reduced
proportionately for each year of completed service with the Company that is
less than 30, as determined at the time of the participant's retirement or
termination of employment. Benefits are payable under the SRP upon an
employee's retirement on or after age 62 or disability, provided the employee
has at least ten years of credited service with the Company. Also, under the
terms of the respective agreements, the Company is required to immediately
fund the present value and pay a participant's benefits under the SRP within
60 days of a change in control of the Company. Contributions to fund the
projected benefits are made by the Company on a level basis over the
employee's projected employment period and are made to an irrevocable trust
that is subject to the claims of the Company's creditors.
<TABLE>
Final Average Annual Years of Benefit Service (2)(3)
Compensation (1) 10 15 20 25 30 or More
<S> <C> <C> <C> <C> <C>
$100,000 $20,334 $ 30,500 $ 40,667 $ 50,834 $ 61,001
$125,000 25,709 38,563 51,417 64,272 77,126
$150,000 31,084 46,625 62,167 77,709 93,251
$175,000 35,000 52,500 70,000 87,500 105,000
$200,000 40,000 60,000 80,000 100,000 120,000
$225,000 45,000 67,500 90,000 112,500 135,000
$250,000 50,000 75,000 100,000 125,000 150,000
$275,000 55,000 82,500 110,000 137,500 165,000
$300,000 60,000 90,000 120,000 150,000 180,000
$325,000 65,000 97,500 130,000 162,500 195,000
$350,000 70,000 105,000 140,000 175,000 210,000
$375,000 75,000 112,500 150,000 187,500 225,000
$400,000 80,000 120,000 160,000 200,000 240,000
$425,000 85,000 127,500 170,000 212,500 255,000
(1) The final average annual compensation is determined under the defined
benefit plan by the average of the five highest consecutive years of annual
compensation (including salary and bonus payments as referenced in the
Summary Compensation Table) during the last ten years of employment, subject
to a maximum of $150,000 for all years. Under the SRP, average annual
compensation is not subject to a maximum, but it excludes bonus payments
(as referenced in the Summary Compensation Table).
(2) The Named Executives have credited years of service under the defined
benefit plan and SRP as follows: David M. Ondersma - 23, Stephen A. Stream -
14, and Merle J. Prins - 28.
(3) Effective May 1, 1995, the benefit formula was revised for participants
born during or after 1935. Future tables will reflect the amended formula
which will reduce the benefit prospectively.
</TABLE>
<PAGE>
The Company has entered into a separate retirement agreement with Mr. Fredricks
who is not covered under the SRP. Mr. Fredricks is covered and has four
credited years of service under the Company's defined benefit plan. In
addition to the benefits under the Company's defined benefit plan, this
agreement provides for a $50,000 annual retirement benefit for the life of
Mr. Fredricks beginning at age 65 or a $45,000 annual retirement benefit
beginning at age 62. The Company funds this obligation in the same manner
as projected benefits are funded under the SRP referred to above.
The Company has entered into individual Management Continuity Agreements with
Messrs. Ondersma, Stream, Fredricks, and Prins. These agreements provide
severance benefits if the executive's employment is terminated within 36
months after a change in control or within 12 months before a change in
control if the Company terminates his employment in contemplation of a change
in control and to avoid the agreement. For the purposes of these agreements,
a "change in control" is any occurrence reportable as such in a proxy
statement under applicable rules of the Securities and Exchange Commission,
and would include, without limitation, the acquisition of beneficial
ownership of 25% of the Company's voting securities by any person or an
extraordinary change in the composition of the board of directors. Severance
benefits will not be payable if the Company terminates the employment for
cause, if employment terminates due to the executive's death or disability,
or if the executive resigns without good reason. An executive may resign with
"good reason" after a change in control and retain benefits if the Company
reduces the executive's salary or bonus, assigns duties inconsistent with the
executive's prior position, or shifts the executive's job location more
than 40 miles. The agreements are for self-renewing terms of 3 years unless
the Company takes action to stop further extensions. Each agreement is
automatically extended for a 3-year term from the date of a change in
control. These agreements provide a severance benefit of a lump-sum
payment equal to 3 years' salary and bonus and continuation of benefit
coverage for 3 years.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in the
cumulative total shareholder return on the Company's common stock with that
of the cumulative total return of the NASDAQ Bank Stocks Index, the NADSAQ
Stock Market Index and the Standard & Poor's 500 Stock Index for the five
year period ended December 31, 1995. The following information is based
on an investment of $100, on January 1, 1991, in the Company's common stock,
the NASDAQ Bank Stocks Index, the NASDAQ Stock Market Index and the Standard
& Poor's 500 Stock Index, with dividends reinvested:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
FISCAL YEAR ENDING DECEMBER 31
300 Dollars
250
200 [SEE ATTACHED GRAPH]
150
100
50
1990 1991 1992 1993 1994 1995
<TABLE>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
First Michigan Bank Corporation 100 138 200 253 311 398
NASDAQ Bank Stock Index 100 164 239 272 271 404
NASDAQ Stock Market Index 100 161 187 215 210 296
S&P 500 Index 100 130 140 155 157 215
</TABLE>
OTHER TRANSACTIONS
During 1995, subsidiary banks of the Company entered into, and had
outstanding, credit relationships and other transactions with directors
and executive officers of the Company and their associates in the ordinary
course of business. The loans and extensions of credit included in such
transactions: (1) were made on substantially the same terms, including
interest rates and collateral, <PAGE> as those prevailing at the time for
comparable transactions with others; (2) did not involve more than the normal
risk of collectibility or present other unfavorable features; and (3) were
repaid as scheduled or, to the extent still outstanding, remain current in
their respective repayment schedules.
One of the Company's subsidiary banks leases office space from The Waters
Corporation, of which Mr. Cassard, a nominee for election to the Board of
Directors of the Company, is president. Payments for rent, utilities and
miscellaneous services totaled $432,306 during 1995. The Board of Directors
of this bank believes that the terms of these leases are at least as
favorable to the bank as could have been obtained from unrelated parties.
The Company and its subsidiaries contract for certain printing services from
Steketee-VanHuis, Inc. and its wholly-owned subsidiary, The Printery, Inc.,
of which Mr. Kapenga, a nominee for election to the Board of Directors of the
Company, is president. Payments for printing services during 1995 totaled
$115,557. The Company believes that rates charged for these printing services
are competitive with other printing firms in the market.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The financial statements of the Company for the year ended December 31, 1995,
have been examined by BDO Seidman, independent public accountants. A
representative of BDO Seidman will be at the Annual Meeting of Shareholders
and will have an opportunity to make a statement and will be available to
answer appropriate questions. BDO Seidman has been reappointed by the Board
of Directors as the independent public accountants of the Company and its
subsidiaries for the year ending December 31, 1996.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be considered by the Company for inclusion in the
1997 Annual Meeting of Shareholders proxy material must be received by the
Company no later than November __, 1996.
OTHER BUSINESS
The Board of Directors is not aware of any matter to be presented for action
at the meeting, other than the matters set forth herein. If any other
business should come before the meeting, the proxy will be voted in respect
thereof in accordance with the best judgment of the persons authorized
therein, and discretionary authority to do so is included in the proxy.
The Annual Report of the Company for 1995 is included with this Proxy
Statement. Copies of the report will also be available for all shareholders
attending the Annual Meeting.
Shareholders are urged to sign and return the enclosed proxy in the enclosed
envelope. A prompt response will be helpful and appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
Stephen A. Stream
Secretary
March __, 1996
<PAGE>
PROXY
FIRST MICHIGAN BANK CORPORATION
One Financial Plaza
Holland, MI 49423
ANNUAL MEETING OF SHAREHOLDERS - APRIL 18, 1996
The undersigned hereby appoints David M. Ondersma and Jack H. Miller,
and each of them, Proxies, with power of substitution, to vote the shares of
capital stock of First Michigan Bank Corporation which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company, to be
held in the Grand Centennial Ballroom at the Holiday Inn Crowne Plaza Hotel,
5700-28th Street S.E., Grand Rapids, Michigan, on Thursday, April 18, 1996
at 10:00 a.m. local time.
1. Election of three persons to the Board of Directors for terms expiring
in 1999;
[ ] FOR all nominees listed below [ ] WITHOLD AUTHORITY to vote
(except as marked to the for all nominees listed
contrary below). below.
Roger A. Andersen, David M. Cassard and Robert J. Kapenga
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
2. Proposal to amend the Company's Articles of Incorporation to increase the
authorized common stock from 24,000,000 to 50,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
(Continued and to be signed on other side)
<PAGE>
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted FOR the nominees named in Item 1 and FOR the proposal in
Item 2 on the reverse side.
Signature Signature (if jointly held) Date
NOTE: Joint holders should each sign. When signing as executor, corporate
officer, trustee, guardian, etc., please indicate capacity.
