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:
[ ] Preliminary proxy statement
[X] 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)(1)(ii), 14a-6(i)(1), 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>
[ FMB Logotype ]
First Michigan Bank Corporation
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
and PROXY STATEMENT
March 14, 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 map
of which has been included for your convenience on the following page.
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,
/s/ David M. Ondersma
David M. Ondersma
Chairman
and Chief Executive Officer
<PAGE>
First Michigan Bank Corporation
Annual Shareholders Meeting
Directions:
Exit 43B from I-96. Go 1/2 mile east. The Holiday Inn Crowne Plaza is on the
right side of the street at 5700 28th Street SE. Hotel phone 616-957-1770.
[ MAP ]
Free parking is available on all sides of the hotel.
<PAGE>
[ FMB Logotype ]
First Michigan Bank Corporation
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
/s/ Stephen A. Stream
Stephen A. Stream
Secretary
Holland, Michigan
March 14, 1996
<PAGE>
March 14, 1996
[ FMB Logotype ]
First Michigan Bank Corporation
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.
<PAGE>
Following are summaries of the background, business experience, and
descriptions of the primary occupations of the nominees:
[ PHOTOGRAPH ] [ PHOTOGRAPH ] [ PHOTOGRAPH ]
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 18,197,655 shares. Of the
remaining 5,802,345 authorized but unissued shares of common stock, a total of
1,503,353 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 3,645,000 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 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.
<PAGE>
Other provisions of the Company's Articles could also be viewed as
potential impediments to efforts to acquire control of the Company.
Specifically, those provisions of the Articles requiring the election of only
one-third of the directors of the Company every 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) amendment to or deletion of any of
the foregoing provisions, 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. Unless otherwise directed by a
shareholder's proxy, the persons named as proxy voters in the accompanying
proxy will vote FOR the amendment.
The Board of Directors has determined that the proposed amendment is
desirable and recommends a vote FOR the amendment.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP OF MANAGEMENT
At March 1, 1996, the Company had outstanding 18,197,655 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:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Approximate
Beneficial Owner Beneficial Ownership Percent of Class
- ------------------- -------------------- ----------------
<S> <C> <C>
FMB-Trust(1) 1,423,948(1) 7.82%
<FN>
(1) FMB-Trust ("Trust"), a subsidiary of the Company, holds these shares in a
fiduciary capacity under 135 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.
</TABLE>
<PAGE>
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 presented later and by all directors
and executive officers as a group.
<TABLE>
<CAPTION>
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%
<FN>
(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 -- 154,476; 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
334,595 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>
<PAGE>
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:
<TABLE>
<CAPTION>
Year First Amount and Nature of Approx.
Became Beneficial Ownership Percent
Name Age Principal Occupation a Director as of 3/01/96(1) of Class
- ---- --- -------------------- ---------- -------------------- ---------
Nominees for Election as Directors for Terms Expiring in 1999:
<S> <C> <C> <C> <C> <C>
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%
<CAPTION>
Directors Whose Terms Expire in 1998:
<S> <C> <C> <C> <C> <C>
James H. Bloem 45 Executive Vice President of Perrigo Company (store
brand pharmaceutical, personal care and nutritional
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%
<CAPTION>
Directors Whose Terms Expire in 1997:
<S> <C> <C> <C> <C> <C>
Doyle A. Hayes 45 President and Chief Executive Officer of Pyper
Products, Inc. (automotive products supplier) ....... 1994 1,813 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%
David M. Ondersma 53 Chairman of the Board and Chief Executive Officer of
First Michigan Bank Corporation ..................... 1985 190,517(2)(3) 1.03%
<FN>
(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 the person's family, 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 -- 154,476 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.
</TABLE>
<PAGE>
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 chief financial officer 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 ("the 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 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.
<PAGE>
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 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 objectives pertaining to the Company's return on equity and asset
growth. In light of these achievements and other corporate accomplishments,
each of the Company's executive officers earned payouts of 56.2% 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.
<PAGE>
The Committee also authorized, during 1995, the grant of stock options to
the Company 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.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation ------------ All Other
Name & -------------------- 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
<CAPTION>
(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:
1995 1994 1993
---- ---- ----
<S> <C> <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>
<PAGE>
OPTION GRANTS IN 1995
The following table provides information on options granted to the Named
Executives during the year ended December 31, 1995.
<TABLE>
<CAPTION>
Individual Grants
- -----------------------------------------------------------------------------------------------
Number of Percentage of
Securities Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration Grant Date
Name Granted (1) 1995 (per share)(2) Date Present Value(3)
---- ----------- -------------- -------------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
David M. Ondersma 19,477 16.86% $22.86 01/13/05 $146,078
Stephen A. Stream 13,255 11.48 22.86 01/13/05 99,413
Larry D. Fredricks 8,819 7.64 22.86 01/13/05 66,143
Merle J. Prins 8,819 7.64 22.86 01/13/05 66,143
<FN>
(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 7.79%; (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.
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
12/31/95 12/31/95(2)
-------------------- -----------
Shares Acquired
Name on Exercise Value Realized(1) Exercisable/Unexercisable Exercisable/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
<FN>
(1) Aggregate market value of shares acquired at time of exercise, less the
aggregate exercise price paid by the employee to the Company.
(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>
<PAGE>
PENSION PLAN
The following table illustrates the maximum 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 Pension Benefit Restoration Plan ("PBRP"). 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. Benefits in excess of $120,000, as
limited by Section 415 of the Internal Revenue Code ("IRC"), are payable under
the PBRP. The PBRP provides participants with an additional retirement benefit
determined by applying the benefit formula set forth in the Company's defined
benefit plan to their average annual compensation (including salary and
generally only 50% of bonus payments) without regard to the IRC limit, minus
the amount of the benefit they will receive under the Company's defined benefit
plan. Benefits under the PBRP 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 PBRP upon an employee's retirement on or after age 55,
although at a reduced level for each month that the actual retirement date
precedes the participant's 65th birthday, or disability, provided the employee
has at least five years of credited service with the Company. The Company's
obligations under the PBRP are a general liability of the Company. Any assets
that the Company may designate as assets of the PBRP will still be subject to
the claims of the Company's creditors.
<TABLE>
<CAPTION>
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
$150,000 31,084 46,625 62,167 77,709 93,251
$200,000 41,834 62,750 83,667 104,584 125,501
$250,000 52,584 78,875 105,167 131,459 157,751
$300,000 63,334 95,000 126,667 158,334 190,001
$350,000 74,084 111,125 148,167 185,209 222,251
$400,000 84,834 127,250 169,667 212,084 254,501
$450,000 95,584 143,375 191,167 238,959 286,751
$500,000 106,334 159,500 212,667 265,834 319,001
$550,000 117,084 175,625 234,167 292,709 351,251
$600,000 127,834 191,750 255,667 319,584 383,501
<FN>
(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 PBRP, average
annual compensation includes salary and generally only 50% of bonus
payments (as referenced in the Summary Compensation Table) and is subject
to a maximum of $600,000 for all years.
(2) The Named Executives have credited years of service under the defined
benefit plan and PBRP 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>
The Company has entered into a separate retirement agreement with Mr.
Fredricks. Mr. Fredricks is covered and has four credited years of service
under the Company's defined benefit plan and the PBRP. In addition to the
benefits under those plans, 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 on a level basis over the employee's projected employment period
with contributions made to an irrevocable trust that is subject to the claims
of the Company's creditors.
<PAGE>
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 NASDAQ
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, all with dividends reinvested:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN FISCAL YEAR ENDING DECEMBER 31
[ CHART ]
<TABLE>
<CAPTION>
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>
<PAGE>
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, 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 79%-owned subsidiary, The Printery, Inc.
Mr. Kapenga, a nominee for election to the Board of Directors of the Company,
is president of both companies. 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 10, 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
/s/ Stephen A. Stream
Stephen A. Stream
Secretary
March 14, 1996
<PAGE>
[ PROXY CARD -- FRONT ]
PROXY
FIRST MICHIGAN BANK CORPORATION
One Financial Plaza
Holland, Michigan 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.
<TABLE>
<S> <C> <C>
1. Election of three persons [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
to the Board of Directors listed below (except to vote for all nominees
for terms expiring in 1999: as marked to the listed below.
contrary below).
<CAPTION>
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.)
___________________________________________________________________________
</TABLE>
2. 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.
[ ] 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)
- -------------------------------------------------------------------------------
[ PROXY CARD -- BACK ]
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.
________________________ ___________________________________ Date: __________
Signature Signature (if jointly held)
NOTE: Joint owners should each sign. When signing as executor, corporate
officer, trustee, guardian, etc., please indicate capacity.
