XXXFRONT COVERXXX
STAR BANC
CORPORATION
425 Walnut Street
Cincinnati, Ohio 45202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 9, 1996
TO THE SHAREHOLDERS OF STAR BANC CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of Star Banc Corporation ("Corporation") will be held IN THE
FOUNTAIN ROOM ON THE SECOND FLOOR OF THE WESTIN HOTEL, Fifth and
Walnut Streets, Cincinnati, Ohio, on Tuesday, April 9, 1996 at
11:00 a.m. for the purpose of considering and acting upon the
following:
1. To elect six directors for three-year terms ending in 1999.
2. To transact any other business that may properly come before
the Annual Meeting and any adjournment thereof.
Shareholders who are of record at the close of business on
February 29, 1996, are entitled to vote at the meeting.
Shareholders are cordially invited to attend the meeting. IF
YOU WISH TO ATTEND THE MEETING BUT YOUR SHARES ARE HELD IN THE
NAME OF A BROKER, TRUST, BANK OR OTHER NOMINEE, PLEASE BRING
WITH YOU A PROXY OR LETTER FROM THE BROKER, TRUSTEE, BANK OR
NOMINEE CONFIRMING YOUR BENEFICIAL OWNERSHIP OF THE SHARES.
Whether or not you plan to attend the meeting, we urge you to
complete, execute and return the enclosed Proxy in the enclosed
prepaid envelope, so that your shares may be represented at the
meeting. If you attend the meeting, you may, if you desire,
revoke your Proxy and vote in person.
By order of the Board of Directors
/s/ Thomas J. Lakin
Thomas J. Lakin
Executive Vice President,
General Counsel and Secretary
Cincinnati, Ohio
March 11, 1996
YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED
PROXY PROMPTLY WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE
MEETING.
XXXBEGIN PAGE 1XXX
STAR BANC
CORPORATION
425 Walnut Street
Cincinnati, Ohio 45202
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
Star Banc Corporation ("Corporation") for use at the Annual
Meeting of Shareholders to be held on April 9, 1996. A Notice
of Annual Meeting is attached and a form of proxy is enclosed.
These proxy materials are first being mailed to shareholders of
the Corporation on or about March 11, 1996.
THE PROXY
The persons named as proxies were selected by the Board of
Directors of the Corporation.
When the proxies in the enclosed form are properly executed and
returned, the shares they represent will be voted at the
meeting. Any shareholder giving a proxy has the power to revoke
or revise that proxy at any time before the meeting by written
notice to the Corporation's Secretary, by executing and
returning a later-dated proxy or by voting by ballot at the
meeting.
The expense of the solicitation of proxies will be borne by the
Corporation. In addition to the solicitation of proxies by the
use of the mails, solicitation may be made by the directors,
officers and regular employees of the Corporation by telephone,
or in person without additional compensation. Should the
Corporation, in order to solicit proxies, request the assistance
of banks, brokerage houses and other custodians, nominees or
fiduciaries, such organizations or individuals shall be
reimbursed by the Corporation for their reasonable expenses in
forwarding soliciting material to their principals and in
obtaining authorization for the execution of proxies.
OUTSTANDING VOTING SECURITIES AND PRINCIPAL HOLDERS
At the close of business on February 29, 1996, there were
29,555,381 outstanding shares of the Corporation's common stock,
par value $5.00 per share ("Common Stock"). Each share will be
entitled to one vote upon each matter submitted at the meeting.
Only shareholders of record at the close of business on February
29, 1996 (the "Record Date") are entitled to vote at the meeting.
XXXBEGIN PAGE 2XXX
The following table sets forth, as of December 31, 1995 the
holdings of the only persons (including any "group" as that term
is used in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) known by the Corporation to be the beneficial
owners of more than five percent (5%) of its outstanding Common
Stock.
Name of Shares Beneficially
Beneficial Owner Address Owned Percent of Class
Western Southern Life 400 Broadway 2,545,677 8.53%
Insurance Co. Cincinnati, Ohio 45202
As defined in Securities and Exchange Commission Rule 13d-3,
"beneficial ownership" means that a person has voting or
investment decision power over shares. It does not necessarily
mean that the person enjoys any economic benefit from those
shares.
The following table sets forth, as of December 31, 1995,
certain information with regard to the beneficial ownership of
the Corporation's Common Stock by each director, named executive
officer and nominee individually, as reported to the Corporation
by those persons.
Shares Shares Held Pursuant to
Beneficially Deferred Compensation Percentage
Name Owned (1) Plan(4) of Ownership
James R. Bridgeland, Jr. 3,416 17,374 0.07%
Laurance L. Browning 8,000 -- 0.03%
Victoria B. Buyniski 3,037 255 0.01%
Joseph A. Campanella 66,915(2)(3) -- 0.22%
Samuel M. Cassidy 119,233 -- 0.40%
Raymond R. Clark 810 2,613 0.01%
V. Anderson Coombe 54,868 24,112 0.26%
John C. Dannemiller 300 3,112 0.01%
Richard K. Davis 40,053(2)(3) -- 0.13%
Jerry A. Grundhofer 219,030(2)(3) 10,782 0.77%
J.P. Hayden, Jr. 331,226(5) -- 1.11%
Roger L. Howe 50,080 -- 0.17%
Thomas J. Klinedinst, Jr. 14,829 -- 0.05%
Thomas J. Lakin 43,790(2)(3) 951 0.15%
Charles S. Mechem, Jr. 1,685 -- 0.01%
Daniel J. Meyer 400 4,353 0.02%
David M. Moffett 38,782(2)(3) 1,547 0.14%
David B. O'Maley 84,800(6) -- 0.28%
O'dell M. Owens, M.D. 500 3,122 0.01%
Thomas E. Petry 800 15,690 0.06%
William C. Portman 16,598 17,751 0.12%
Oliver W. Waddell 120,000 -- 0.40%
Total 1,219,152 101,662 4.43%
(1) Listed shares may also include shares held in the name of a
person's spouse, minor children, other relatives and trusts and
estates as to which beneficial ownership is disclaimed.
(2) Includes shares which may be purchased upon exercise of
presently exercisable options or options exercisable in 60 days
in the following amounts: Mr. Campanella, 56,769 shares; Mr.
Davis, 38,333 shares; Mr. Grundhofer, 179,999 shares; Mr. Lakin,
36,730 shares; and Mr. Moffett, 38,333 shares.
(3) Includes the following shares which are held for the
individual's account in the Corporation's Thrift Savings 401(k)
Plan: Mr. Campanella, 3,415 shares; Mr. Davis, 174 shares; Mr.
Grundhofer, 931 shares; Mr. Lakin, 4,913 shares; and Mr.
Moffett, 449 shares.
XXXBEGIN PAGE 3XXX
(4) Shares listed are those held pursuant to the Star Banc
Corporation Deferred Compensation Plan (the "Deferred
Compensation Plan"); under the terms of the trust in which they
are held such shares are subject to creditors of the Corporation
and may not be voted until released to the individual
participants.
(5) Includes shares which are owned by companies for which Mr.
Hayden serves as Chairman, CEO and director in the following
amounts: The Midland Company, 109,381 shares; American Family
Home Insurance Company, 100,000 shares; and American Modern Home
Insurance Company, 64,000 shares.
(6) Includes 80,000 shares which are owned by Ohio National Life
Insurance Company, for which Mr. O'Maley serves as Chairman,
President and Chief Executive Officer.
ELECTION OF DIRECTORS
The Corporation's Articles of Incorporation provide that the
number of directors constituting the Board of Directors shall be
not less than nine nor more than twenty-five as determined in
accordance with the Code of Regulations from time to time. The
Board of Directors is divided into three classes: Class I
(terms expire in 1996), Class II (terms expire in 1997) and
Class III (terms expire in 1998). The Articles of Incorporation
also provide that nominees for each Class of the Board of
Directors are to be elected to serve for a term of three years.
The Board of Directors currently consists of eighteen members,
with Class I containing seven directors, Class II containing
five directors and Class III containing six directors. Mr.
Clark, who is currently serving as a Class I Director, is not
seeking reelection.
At the 1996 Annual Meeting, six directors in Class I are to be
elected to hold office until the 1999 Annual Meeting of
Shareholders and until their successors are duly elected and
qualified. All of the nominees are current directors. The
persons named in the Proxy intend to vote for the election of
the nominees named below. If any nominee should become unable
to serve, which is not now contemplated, the proxies will be
voted for such substitute nominee as Management recommends.
Information concerning the nominees and continuing directors is
set forth below:
CLASS I DIRECTORS
(Nominees for Terms to Expire in 1999)
JAMES R. BRIDGELAND, JR.: born 1929, Director since 1975. Mr.
Bridgeland has been a partner in the law firm of Taft,
Stettinius & Hollister, counsel to the Corporation, for more
than five years.
SAMUEL M. CASSIDY: born 1932, Director since 1991. Prior to
his retirement December 31, 1994, Mr. Cassidy was an Executive
Vice President of the Corporation, a position he held since
1985. He has been a Director of Star Bank, N.A., the
Corporation's lead subsidiary, since 1980 and was that Bank's
President since 1984 and its Chief Executive Officer since 1988.
V. ANDERSON COOMBE: born 1926, Director since 1963. Mr.
Coombe is Chairman of the Board, Treasurer and a Director of Wm.
Powell Co. and has served that company in an executive capacity
for more than five years. The Company is a manufacturer of
valves. He is also a Director of Eagle-Picher Industries, Inc.
and The Union Central Life Insurance Co.
CHARLES S. MECHEM, JR.: born 1930, Director since 1968. Mr.
Mechem is Commissioner Emeritus of the Ladies Professional Golf
Association. He was Commissioner of the LPGA from 1991-1995.
Mr. Mechem was also Chairman of the Board of U.S. Shoe
Corporation from 1993 to 1995. Mr. Mechem was formerly Chairman
and CEO of the former Taft Broadcasting Company, having served
in an executive capacity for more than five years. He is a
Director of AGCO Corporation, Cincinnati Bell, Mead Corporation,
Ohio National Life Insurance Company and J.M. Smucker Company.
XXXBEGIN PAGE 4XXX
O'DELL M. OWENS, M.D.: born 1947, Director since 1991. Dr.
Owens has been Director of Reproductive Endocrinology and
Infertility for the Christ Hospital of Cincinnati since 1986.
From 1982 to 1986, Dr. Owens was Assistant Professor of
Obstetrics and Gynecology, Director of the Division of
Reproductive Endocrinology and Infertility and Assistant
Professor of Orthopedics at the University of Cincinnati Medical
Center.
THOMAS E. PETRY: born 1939, Director since 1987. Mr. Petry is
Chairman and Chief Executive Officer of Eagle-Picher Industries,
Inc., which he has served in an executive capacity for more than
five years. The Company is a diversified manufacturer of
industrial products. A voluntary petition under Chapter 11 of
the Federal Bankruptcy Law was filed by Eagle-Picher Industries,
Inc. on January 7, 1991. Mr. Petry is also a Director of
CINergy, Wm. Powell Co., Union Central Life Insurance Company
and Insilco Corporation.
CLASS II DIRECTORS
(Terms Expire in 1997)
LAURANCE L. BROWNING, JR.: born 1929, Director since 1970. Mr.
Browning was formerly Vice Chairman of Emerson Electric Co., a
manufacturer of electrical equipment and controls. Prior to his
retirement, he served Emerson Electric Co. in an executive
capacity for more than five years. He is also a Director of
Emerson Electric Co.
VICTORIA B. BUYNISKI: born 1951, Director since 1991. Ms.
Buyniski is Founder, President and Chief Executive Officer of
United Medical Resources, Inc. and has served that company in an
executive capacity since 1983. The Company acts as a third
party administrator for self-funded medical, dental and other
employee benefit plans. Ms. Buyniski is also a Director of The
Health Alliance and Ohio National Life Insurance Company and is
a member of the Board and the Executive Committee of the
Cincinnati Chamber of Commerce and a member of the Board and
Executive Committee of Junior Achievement of Greater Cincinnati.
JERRY A. GRUNDHOFER: born 1944, Director since 1993. Mr.
Grundhofer is Chairman, President and CEO of the Corporation and
of Star Bank, N.A. Mr. Grundhofer is also a Director of Arete
Associates, Visa U.S.A., Inc., Visa International and the
Hennegan Company. He is a Director of the Federal Reserve Board
of Cleveland, Cincinnati Branch and a Trustee of Children's
Hospital Medical Center, Greater Cincinnati Foundation, Ohio
Federation of Independent Colleges, University of Cincinnati
Foundation, and Xavier University.
J. P. HAYDEN, JR.: born 1929, Director since 1973. Mr. Hayden
is Chairman of the Board, Chief Executive Officer and a Director
of The Midland Company and has served that company in an
executive capacity for more than five years. The Company is
engaged in the finance, insurance, river transportation and
imprinted sportswear businesses.
DANIEL J. MEYER: born 1936, Director since 1988. Mr. Meyer is
Chairman, Chief Executive Officer and a Director of Cincinnati
Milacron, Inc., a manufacturer of factory automation equipment
and systems, principally machine tools and plastics processing
machinery. He has served that company in an executive capacity
for more than five years. Mr. Meyer is also a Director of E.W.
Scripps Co. and Hubbell, Incorporated.
CLASS III DIRECTORS
(Terms Expire in 1998)
JOHN C. DANNEMILLER: born 1938, Director since 1990. Mr.
Dannemiller is Chairman, Chief Executive Officer and a Director
of Bearings, Inc., a distributor of bearings, power transmission
products and related specialty items. He was Executive Vice
President of Bearings, Inc. from 1988 until 1990. From 1985
until 1988 he was President of Leaseway Transportation Corp., a
diversified transportation company. Mr. Dannemiller is also a
Director of Lamson & Sessions Co.
XXXBEGIN PAGE 5XXX
ROGER L. HOWE: born 1935, Director since 1985. Mr. Howe is
Chairman of the Board of U.S. Precision Lens, Inc. and has
served that company in an executive capacity for more than five
years. U.S. Precision Lens manufactures plastic optical
components used in both industrial and consumer products. Mr.
Howe is also a Director of Cintas Corporation, Eagle-Picher
Industries, Inc. and Baldwin Piano and Organ Company.
THOMAS J. KLINEDINST, JR.: born 1942, Director since 1993.
Mr. Klinedinst is Chairman, President, Chief Executive Officer
and Chief Operating Officer of Thomas E. Wood, Inc., a general
insurance agency. He has served that company in an executive
capacity for more than five years. Mr. Klinedinst is also
President and a Director of Ohio Cap Insurance Company, Ltd. and
is a member of the Executive Committee of U.S.I. Insurance
Services Company.
WILLIAM C. PORTMAN: born 1922, Director since 1985. Mr.
Portman is Chairman of the Board of Portman Equipment Company
which he has served in an executive capacity for more than five
years. Portman Equipment Company is a distributor of material
handling equipment to a wide variety of businesses.
OLIVER W. WADDELL: born 1930, Director since 1982. Prior to
his retirement December 31, 1993, Mr. Waddell was Chairman of
the Board of the Corporation and Vice Chairman of Star Bank,
N.A. Mr. Waddell is also a Director of CINergy, Ohio National
Life Insurance Company, Chiquita Brands International, Inc. and
is a member of the Board of Trustees of Christ Hospital.
DAVID B. O'MALEY: born 1946, Director since 1995. Mr. O'Maley
is the Chairman, President and Chief Executive Officer of Ohio
National Life Insurance Company, a position he has held since
1994. From 1993 to 1994, he was President and Chief Operating
Officer and from 1992 to 1993, he was Executive Vice President
and Chief Marketing Officer of Ohio National Life Insurance
Company. Prior to that he was Chief Marketing Officer of Life
of Virginia. Mr. O'Maley is also Chairman of the 1996 United
Way Campaign, a member of the Board of Trustees and the Finance
Committee of Good Samaritan Hospital, a member of the Board of
Trustees of the Cincinnati Chamber of Commerce and a Director of
the Ohio Association Life Companies.
Certain of the nominees and continuing directors served as
directors of The First National Bank of Cincinnati (now known as
Star Bank, N.A.,) prior to the formation of the Corporation as a
bank holding company in 1973 and as directors of the
Corporation's predecessor Delaware corporation since the dates
shown.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of Star Banc Corporation is composed
entirely of independent outside directors and is responsible for
setting corporate compensation policy.
Base salaries of all executives except Mr. Grundhofer were
determined by the Compensation Committee using senior
management's recommendations. Salaries were decided based on
individual performance, and industry standards as determined in
the Hewitt Associates Compensation Survey and information from
regional bank holding companies.
The purpose of the Executive Bonus Plan is to reward the
achievement of Corporate financial objectives established in
advance by the Compensation Committee. The performance measures
for determining plan awards include fully diluted earnings per
share (EPS), return on average assets (ROA), credit quality and
individual performance against objectives. The plan provides
awards, however, only if the Corporation's EPS and ROA reach
specified thresholds established by the Compensation Committee
and approved by the Board of Directors at the beginning of each
plan year. The opportunity for a bonus award for the Named
Executives in 1995 ranged from 20% to 125% of base salary
depending on the individual's position, and the amount by which
actual EPS and ROA exceeded the thresholds set. The initial
threshold for a bonus award was $4.05 EPS and 1.28% ROA, which
would have resulted in record net income for the Corporation.
Actual EPS was $4.54 and actual ROA was 1.45%. Bonuses were
paid in cash for all but 12 executives (who comprised the
Management Committee of the Corporation), whose bonuses were
paid 75% in cash and 25% in the Corporation's common stock.
XXXBEGIN PAGE 6XXX
The purpose of the Corporation's Stock Incentive Plan is to
incent long-term growth in the Corporation's shareholder value.
Stock options and restricted stock are granted pursuant to the
plan, using guidelines which include corporate performance,
individual responsibilities and performance, and competitive
indices including the Hewitt Associates Compensation Survey and
information from regional bank holding companies. 1995 options
are subject to a vesting schedule with full vesting four years
from the date of grant.
Mr. Grundhofer's compensation was determined by the
Compensation Committee and approved by the Board. His year-end
1995 base salary of $650,000 was established under the terms of
his employment agreement with the Corporation, and is consistent
with industry standards as determined from the Hewitt Associates
Compensation Survey. His bonus was based on the same criteria
as that described previously. He was granted 60,000 options on
December 12, 1995 exercisable pursuant to a 4-year vesting
schedule at a grant price of $60.875. In addition, he was
awarded 30,000 stock award shares under the Stock Incentive
Plan, pursuant to a five year vesting schedule, at a grant price
of $60.875.
The goal of the Corporation's compensation program is to
attract, motivate, reward and retain the management talent
required to achieve corporate objectives and increase
shareholder value.
Compensation Committee of
Star Banc Corporation Board of Directors
Laurance L. Browning, Jr. Victoria B. Buyniski J.P. Hayden, Jr.
Roger L. Howe Daniel J. Meyer David B. O'Maley
Thomas E. Petry
The following tables list information as to compensation
received for services by the Chief Executive Officer and the
next four highest compensated executive officers of the
Corporation in all capacities to the Corporation and its
subsidiaries during the year ended December 31, 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation All Other
Name and Salary Bonus Other Options Stock Compensation
Principal Position Year ($)(1) ($)(2) ($) (#) Award ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Jerry A. Grundhofer 1995 625,000 781,250 86,354(3) 60,000 1,826,250(4) 11,423(5)
Chairman, President, Chief 1994 575,192 718,990 113,674 120,000 -- 11,319
Executive Officer and 1993 304,615 190,743 170,271 200,000 -- 1,980
Director of the Corporation
and Star Bank, N.A.
Richard K. Davis 1995 250,000 255,000 -- 20,000 -- 8,373(6)
Executive Vice President of 1994 225,000 229,500 105,359 20,000 -- 832
the Corporation 1993(10) -- -- -- -- -- --
David M. Moffett 1995 250,000 255,000 -- 20,000 -- 8,393(7)
Executive Vice President and Chief 1994 225,000 229,500 76,650 20,000 -- 2,668
Financial Officer of the Corporation 1993(10) -- -- -- -- -- --
Joseph A. Campanella 1995 220,000 224,400 -- 7,500 -- 7,473(8)
Executive Vice President of 1994 220,000 224,400 -- 10,000 -- 7,432
the Corporation 1993 220,000 110,207 -- 18,000 -- 7,392
Thomas J. Lakin 1995 186,000 158,100 -- 7,500 -- 6,261(9)
Executive Vice President, 1994(11) -- -- -- -- -- --
General Counsel and Secretary 1993 171,827 53,078 -- 12,000 -- 5,794
of the Corporation
</TABLE>
XXXBEGIN PAGE 7XXX
(1) Includes amounts deferred at the direction of the executive
officer pursuant to the Star Banc Corporation Thrift Savings
401(k) Plan and the Star Banc Corporation Deferred Compensation
Plan, as amended and restated through January 1, 1995.
(2) Reflects bonus earned during the fiscal year. In some
instances all or a portion of the bonus was paid during the next
fiscal year.
(3) Includes a tax gross-up of $23,481 for taxable fringe
benefits and $30,977 in club membership fees.
(4) Shares will be issued on the fifth anniversary of the award
date of 12/12/95. Dividend equivalents are paid to the grantee.
As of December 31, 1995 a total of 30,000 shares of stock were
reserved for Mr. Grundhofer, and the value of said shares (based
upon the closing market value of $59.50 per share on said date)
was $1,785,000.
(5) Includes $9,240 Corporate contribution to the Star Banc
Corporation Thrift Savings 401(k) Plan and $2,183 split dollar
life insurance premium. Split dollar insurance premiums are
based on the cost of equivalent group term coverage.
(6) Includes $7,500 Corporate constribution to the Thrift
Savings 401(k) Plan and $873 split dollar life insurance
premium. Split dollar insurance premiums are based on the cost
of equivalent group term coverage.
(7) Includes $7,500 Corporate contribution to the Star Banc
Corporation Thrift Savings 401(k) Plan and $893 split dollar
life insurance premium. Split dollar insurance premiums are
based on the cost of equivalent group term coverage.
(8) Includes $6,600 Corporate contribution to the Star Banc
Corporation Thrift Savings 401(k) Plan and $873 split dollar
life insurance premium. Split dollar insurance premiums are
based on the cost of equivalent group term coverage.
(9) Includes $5,580 Corporate contribution to the Star Banc
Corporation Thrift Savings 401(k) Plan and $681 split dollar
life insurance premium. Split dollar insurance premiums are
based on the cost of equivalent group term coverage.
(10) Mr. Davis and Mr. Moffett were not listed in the Summary
Compensation Table in 1993.
(11) Mr. Lakin was not listed in the Summary Compensation Table
in 1994.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
(a) (b) (c) (d) (e) (f)(1)
% of Total Options
Individual Grants Options Granted to Employees Exercise or Expiration Grant date
Name Granted (#) in Fiscal Year base price ($) Date present value ($)
<S> <C> <C> <C> <C> <C>
Jerry A. Grundhofer 60,000 14.4% 60.875 12/12/05 $741,900.00
Richard K. Davis 20,000 4.8 60.875 12/12/05 247,300.00
David M. Moffett 20,000 4.8 60.875 12/12/05 247,300.00
Joseph A. Campanella 7,500 1.8 60.875 12/12/05 92,737.50
Thomas J. Lakin 7,500 1.8 60.875 12/12/05 92,737.50
</TABLE>
(1) Grant date option values calculated through use of the
"Black Scholes" option pricing model. Values are calculated
assuming a risk free rate of return of 5.7%, dividend growth
rate of 10.5% annually, volatility rate of 16.1% and quarterly
reinvestment of dividends. No adjustments have been made for
nontransferability or risk of forfeiture.
XXXBEGIN PAGE 8XXX
<TABLE>
<CAPTION>
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND YEAR END OPTION VALUE
(a) (b) (c) (d) (e)
Number of Value of unexercised
unexercised in the money options
Shares acquired Value realized options 12/31/95 (#) 12/31/95 ($)
Name on exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
<S> <S> <C> <C> <C>
Jerry A. Grundhofer - - 179,999 / 200,001 3,769,354 / 2,558,147
Richard K. Davis - - 38,333 / 51,667 969,783 / 805,217
David M. Moffett - - 38,333 / 51,667 961,450 / 801,050
Joseph A. Campanella - - 56,769 / 24,000 1,685,812 / 414,938
Thomas J. Lakin 2,046 41,573 36,730 / 21,000 1,208,608 / 340,688
</TABLE>
Stock Performance Chart. The following chart compares the
yearly percentage change in the cumulative total shareholder
return on the Corporation's common stock during the five years
ended December 31, 1995 with the cumulative total return on the
Keefe, Bruyette & Woods, Inc., 50 Bank Stock Index and the
Standard & Poor's 500 Stock Index. The comparison assumes $100
was invested on January 1, 1991 in the Corporation's Common
Stock and in each of the foregoing indices and assumes
reinvestment of dividends.
1990 1991 1992 1993 1994 1995
Star Banc Corp $100.00 $155.97 $231.91 $232.72 $250.94 $424.09
KBW 50 Index $100.00 158.28 201.68 212.86 202.00 323.61
S&P 500 $100.00 130.48 140.41 154.63 156.64 215.57
XXXBEGIN PAGE 9XXX
Defined Benefit Pension Plan. Compensation in the form of
payments from the Corporation's non-contributory, defined
benefit pension plan is not included in the compensation tables
above. Substantially all employees are eligible to receive
benefits from this pension plan, which are based upon average
base salary during the five consecutive calendar years in which
compensation was the highest and upon the employee's years of
service, with a normal retirement age of 65 and five years of
plan participation. The 1996 total of annual payments as a life
annuity with 120 guaranteed payments (exclusive of Social
Security) from the pension plan may be individually estimated
using the following information.
<TABLE>
<CAPTION>
YEARS OF SERVICE
Current
Annual
Earnings 10 15 20 25 30 35
<C> <C> <C> <C> <C> <C> <C>
125,000 15,697 23,546 31,395 39,243 47,092 54,941
150,000 19,107 28,660 38,213 47,767 57,320 66,873
175,000 22,516* 33,774* 45,032* 56,291* 67,549* 78,807*
200,000 25,926* 38,889* 51,851* 64,814* 77,777* 90,740*
225,000 29,335* 44,003* 58,670* 73,338* 88,006* 102,673*
250,000 32,745* 49,117* 65,489* 81,861* 98,234* 114,606*
300,000 39,564* 59,345* 79,127* 98,909* 118,691* 138,472*
400,000 53,201* 79,802* 106,403* 133,003* 159,604* 186,204*
500,000 66,839* 100,259* 133,678* 167,098* 200,517* 233,937*
600,000 80,477* 120,716* 160,954* 201,193* 241,431* 281,670*
700,000 94,115* 141,172* 188,230* 235,287* 282,345* 329,402*
800,000 107,753* 161,629* 215,506* 269,382* 323,258* 377,135*
900,000 121,391* 182,086* 242,781* 303,477* 364,172* 424,867*
1,000,000 135,029* 202,543* 270,057* 337,571* 405,086* 472,600*
1,100,000 148,666* 223,000* 297,333* 371,666* 445,999* 520,332*
1,200,000 162,304* 243,456* 324,608* 405,761* 486,913* 568,065*
1,300,000 175,942* 263,913* 351,884* 439,855* 527,826* 615,797*
1,400,000 189,580* 284,370* 379,160* 473,950* 568,740* 663,530*
1,500,000 203,218* 304,827* 406,436* 508,044* 609,653* 711,262*
</TABLE>
[*] The benefits in the [noted] shaded area do not reflect the $150,000
compensation limit or the $111,189 annual benefit limit which
apply under Federal law. The actual benefits payable from the
qualified pension plan will take into account these limits, and
will be adjusted accordingly as the limits are adjusted each
year. Also, these benefits were estimated using a five year
average of compensation determined from the "Current Annual
Earnings" shown above.
For purposes of computing benefits under this Plan, on December
31, 1995, Mr. Grundhofer had 2 years of credited service; Mr.
Campanella, 8; Mr. Davis, 2; Mr. Lakin, 29 and Mr. Moffett, 2.
XXXBEGIN PAGE 10XXX
Non-Qualified Retirement Plan. Compensation in the form of
payments from the Corporation's non-contributory, non-qualified
retirement plan to the extent that it replaces income lost due
to legislated limits on benefits and compensation is included in
the above table. The plan provides vested supplemental
retirements to certain officers of the Corporation so that
participants receive a combined pension benefit under the
qualified and non-qualified plans at one of two levels.
Participants approved for the first level receive benefits equal
to those which would have been payable in the absence of
legislated limits on compensation and benefits, and include Mr.
Lakin. Participants eligible for the second level of augmented
combined benefits under the qualified, non-qualified and certain
other prior employer plans as a percentage of final average
compensation (base plus bonus) include Messrs. Grundhofer,
Campanella, Davis, Moffett and certain other executive officers.
Eligibility for such augmented benefits is determined by the
Compensation Committee of the Board of Directors based on
individual performances and level of responsibility. The 1996
total of annual payments as a life annuity with 120 guaranteed
payments at the augmented level (less benefits replaced due to
the application of legislated limits) may be individually
estimated using the following table.
<TABLE>
<CAPTION>
YEARS OF SERVICE
CURRENT
ANNUAL
EARNINGS 10 15 20 25 30 35
<C> <C> <C> <C> <C> <C> <C>
125,000 52,492 44,643 36,794 28,946 21,097 13,248
150,000 62,720 53,167 43,614 34,060 24,507 14,954
175,000 72,949 61,691 50,433 39,174 27,916 16,658
200,000 83,177 70,214 57,252 44,289 31,326 18,363
225,000 93,406 78,738 64,071 49,403 34,735 20,068
250,000 103,633 87,261 70,889 54,517 38,144 21,722
300,000 124,090 104,309 84,527 64,745 44,963 25,182
400,000 165,004 138,403 111,802 85,202 58,601 32,001
500,000 205,917 172,497 139,078 105,658 72,239 38,819
600,000 246,831 206,592 166,354 126,115 85,877 45,638
700,000 287,745 240,688 193,630 146,573 99,515 52,458
800,000 328,658 274,782 220,905 167,029 113,153 59,276
900,000 369,572 308,877 248,182 187,486 126,791 66,096
1,000,000 410,485 342,971 275,457 207,943 140,428 72,914
1,100,000 451,399 377,065 302,732 228,399 154,066 79,733
1,200,000 492,313 411,161 330,009 248,856 167,704 86,552
1,300,000 533,226 445,255 357,284 269,313 181,342 93,371
1,400,000 574,140 479,350 384,560 289,770 194,980 100,190
1,500,000 615,053 513,444 411,835 310,227 208,618 107,009
Employment Agreements. The Corporation has entered into
employment agreements with severance benefits with Messrs.
Grundhofer, Davis, Moffett, Campanella and Lakin and certain
other officers of the Corporation. The agreements are designed
to enhance the Corporation's ability to attract and retain high
caliber senior management at a time when mergers and
acquisitions are common in the financial services industry. In
general, the agreements provide for the payment of a lump sum
benefit to the officer, including a gross-up for federal excise
tax purposes if necessary pursuant to Section 280G of the
Internal Revenue Code, plus the continuation of certain medical
and insurance benefits, in the event that the officer's
employment is terminated involuntarily by the Corporation, or
voluntarily by the officer for good reason, following a Change
in Control of the Corporation during the officer's protected
period. Change in Control is defined in the document and
includes certain mergers, sales of assets or tender offers.
XXXBEGIN PAGE 11XXX
Among other things, Mr. Grundhofer's agreement provides for
severance benefits of three times salary and bonus in the event
of a qualified termination during his Employment Period (either
before or following a Change in Control), and full vesting under
the Non-Qualified Retirement Plan in the event of a qualified
termination following a Change in Control. In addition, Mr.
Grundhofer's agreement provides for the granting of past
employer service credit for vesting purposes under the
Non-Qualified Retirement Plan upon three years of service.
Messrs. Davis, Moffett and Campanella have agreements which
provide for lump sum benefits of three times salary and bonus
and Mr. Lakin has an agreement which provides for lump sum
benefits of two times salary and bonus in the event of a
qualified termination following a Change in Control during the
officer's protected period.
Retention Agreements. The Corporation has entered into
retention agreements with Messrs. Davis, Moffett and Campanella.
The agreements are designed to enable the Corporation to
maintain, reward and encourage continuity and excellence in
senior management. The agreements provide for a lump sum
payment in the event that the executive remains in good standing
in his position with the Corporation for a specified period of
time. The agreements provide, respectively, for payments of
$350,000 to Mr. Davis, $350,000 to Mr. Moffett, and $200,000 to
Mr. Campanella if each executive is actively employed with the
Corporation on January 1, 2000.
COMPENSATION OF DIRECTORS
In 1995, each director of the Corporation who was not an
officer of the Corporation or a subsidiary, received an annual
retainer fee of $15,000 plus a fee of $1,500 for each meeting of
the Board of Directors attended and a fee of $850 for each
committee meeting attended. In addition, the Audit, Community
Outreach, Compensation and Governance Committee Chairmen receive
an annual retainer fee of $2,500. Each director of the
Corporation also received an option for 2,000 shares of Star
Banc Corporation stock, subject to a four-year vesting schedule.
CORPORATE GOVERNANCE INFORMATION
The Board of Directors held eight meetings in 1995.
The Board of Directors has an Executive Committee, an Audit
Committee, a Compensation Committee and a Governance Committee.
The Executive Committee held eleven meetings in 1995. The
Committee has the authority to exercise all powers of the Board
of Directors between regularly scheduled Board meetings. The
current members of the Executive Committee are Messrs.
Bridgeland, Cassidy, Grundhofer, Hayden, Howe, Petry, Portman
and Waddell.
The Audit Committee held two meetings in 1995 and reviewed the
work of Arthur Andersen LLP, the Corporation's outside
independent auditor for 1995. The Committee reviews
recommendations on various matters made by Arthur Andersen LLP
and action taken by management and the Corporation's internal
auditor to implement these recommendations. The Committee also
considers the proposals of Arthur Andersen LLP for the scope of
the audit to be performed for the Corporation and its
subsidiaries and their proposed fees for this work. The
Committee recommends action to the Board of Directors of the
Corporation in connection with all the above matters. The
current members of the Audit Committee are Ms. Buyniski and
Messrs. Clark, Coombe, Hayden, Howe, Klinedinst and Petry.
The Compensation Committee sets policy for compensation,
reviews the recommendations of the Chief Executive Officer as to
compensation for officers, establishes the compensation of the
Chief Executive Officer and approves eligibility for benefits
under the Corporation's non-qualified retirement plan. It also
administers the Corporation's Stock Incentive Plans. The
Compensation Committee held six meetings in 1995. The current
members of the Compensation Committee are Ms. Buyniski and
Messrs. Browning, Hayden, Howe, Meyer, O'Maley and Petry.
XXXBEGIN PAGE 12XXX
The Governance Committee held seven meetings in 1995. The
Committee administers the affairs of the Board of Directors,
evaluates current directors, and nominates new directors. The
current members of the Governance Committee are Messrs.
Bridgeland, Browning, Dannemiller, Hayden and Portman.
Shareholders who wish to suggest director nominees should
contact the Committee by mail at the Corporate Headquarters.
All Directors except Mr. Hayden, Mr. Mechem and Mr. Meyer
attended at least 75% of the aggregate of the number of regular
and special meetings of the Board of Directors held during 1995
and all committees of the Board on which the director served
during the 1995 calendar year.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Under Rule 14a-8 of the Securities Exchange Act of 1934, as
amended, any shareholder who wishes to include a proposal for
shareholder action in next year's Proxy Statement must submit
such proposal to the Corporation (along with other information
called for in Rule 14a-8) no later than November 9, 1996. The
Corporation will at the time of any such submission determine
whether or not the proposal is proper for inclusion in the Proxy
Statement.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Some of the directors and executive officers of the
Corporation, and the companies with which they are associated,
were customers of and had various transactions with the
Corporation's subsidiary banks in the ordinary course of
business during 1995. All loans, loan commitments and sales of
notes included in these transactions were made in the ordinary
course of business, on substantially the same terms, including
interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons and did not
involve more than the normal risk of collectability or present
other unfavorable features.
Mr. Bridgeland, a Director of the Corporation, is a partner in
the law firm of Taft, Stettinius & Hollister, counsel to the
Corporation.
Ms. Buyniski, a Director of the Corporation, is President and
Chief Executive Officer of United Medical Resources, Inc., which
acts as third party administrator for some of the medical plans
offered by the Corporation and its subsidiaries.
Mr. Klinedinst, a Director of the Corporation, is President and
Chief Operating Officer of Thomas E. Wood, Inc., which provides
insurance brokerage services to the Corporation.
Mr. O'Maley, a Director of the Corporation, is Chairman,
President and Chief Executive Officer of Ohio National Life
Insurance Company, which provides life insurance for the
Corporation's employees.
INDEPENDENT AUDITORS
The Board of Directors appointed Arthur Andersen LLP as
independent auditors of the Corporation and its subsidiaries for
the year 1995. The Corporation anticipates that Arthur Andersen
LLP will be appointed independent auditors for 1996 at the
regular meeting of the Board of Directors to be held in April.
Representatives of Arthur Andersen LLP will be present at the
Annual Meeting serving as inspectors of election. They will
have an opportunity to make a statement if they desire to do so,
and they will also be available to respond to questions raised
at the meeting.
XXXBEGIN PAGE 13XXX
OTHER BUSINESS
The Board of Directors knows of no other matters to be
presented at the Annual Meeting. However, if any other matters
do come before such meeting, or an adjournment thereof, the
Board of Directors intends that the holders of the proxies will
vote in accordance with the recommendation of Management.
By order of the Board of Directors
Thomas J. Lakin
Executive Vice President,
General Counsel and Secretary
Cincinnati, Ohio
March 11, 1996
YOU MAY REQUEST A COPY OF THE FORM lO-K ANNUAL REPORT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION (LESS EXHIBITS) BY
CALLING (513) 632-4008 OR WRITING TO DAVID M. MOFFETT, EXECUTIVE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, STAR BANC
CORPORATION, 425 WALNUT STREET, CINCINNATI, OHIO 45201.<PAGE>
XXX APPENDIX XXX
STAR BANC CORPORATION Proxy
This Proxy is solicited by Management on behalf of the Board of Directors.
The undersigned hereby appoints Jerry A. Grundhofer and Thomas
J. Lakin or either of them with full power of substitution,
proxies of the undersigned to vote at the Annual Meeting of
Shareholders of Star Banc Corporation to be held in the Fountain
Room on the Second Floor of the Westin Hotel, Fifth and Vine
Streets, Cincinnati, Ohio, on Tuesday, April 9, 1996, at 11:00
a.m., and at any adjournment thereof, all the shares of the
Corporation the undersigned would be entitled to vote if
personally present, and hereby revokes any proxy previously
given.
SHARES
Continued on reverse side
1. Election of Directors for a Three-Year Term Ending in 1999:
James R. Bridgeland, Jr. For Against
Samuel M. Cassidy, Jr. For Against [Graphic Logo:
STAR BANK
V. Anderson Coombe For Against Bank Without Boundaries]
Charles S. Mechem, Jr. For Against
O'dell M. Owens, M.D. For Against
Thomas E. Petry For Against
2. At their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner
directed herein by the shareholder. If no direction is made,
this proxy will be voted in accordance with management's
recommendations.
Please sign exactly as name appears. When shares are held by
joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, or guardian, please give full
title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.
NAME DATE NAME DATE
</TABLE>
