<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Prospectus Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
FIRSTAR CORPORATION
(Name of Registrant as Specified In Its Charter)
FIRSTAR CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
FIRSTAR CORPORATION
LOGO
777 EAST WISCONSIN AVENUE
P.O. BOX 532
MILWAUKEE, WISCONSIN 53202
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1994
To the Holders of Common Stock of
Firstar Corporation:
The annual meeting of the shareholders of Firstar Corporation will be held
in the Firstar Center, Clybourn Level, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin, on Thursday, the 21st day of April 1994, at two o'clock p.m. The
purposes of the meeting are:
1. To elect 7 directors to hold office until their successors are duly
elected and qualified.
2. To amend the 1988 Incentive Stock Plan for Key Employees as set forth
in the attached proxy statement.
3. To approve the Annual Executive Incentive Plan as set forth in the
attached proxy statement.
4. To consider and vote on an advisory shareholder proposal concerning
South Africa as set forth in the attached proxy statement, if properly
presented at the meeting.
5. To transact any other business which may properly come before such
meeting or any adjournments thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, IT IS IMPORTANT THAT YOU
EXECUTE, DATE AND RETURN PROMPTLY YOUR PROXY IN THE ENCLOSED POSTPAID
ENVELOPE. YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO ITS BEING VOTED.
LOGO
William J. Schulz
First Vice President
and Secretary
March 18, 1994
<PAGE>
FIRSTAR CORPORATION
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 21, 1994
PERSONS MAKING THE SOLICITATION
This proxy statement and the accompanying proxy card are being mailed to
holders of common stock commencing on or about March 18, 1994 and are furnished
in connection with the solicitation of proxies by the Board of Directors of
Firstar Corporation (hereinafter referred to as "Firstar") at the expense of
Firstar through the mails for use at the annual meeting of shareholders to be
held April 21, 1994 at two o'clock p.m. in the Firstar Center, Clybourn Level,
at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, or at any
adjournments thereof. In addition, Firstar has engaged the services of
Georgeson & Co. of New York City to assist in the solicitation of proxies at a
fee of $8,000 plus certain expenses. Employees of Firstar may also solicit
proxies by telephone and in person at no extra cost to Firstar. Properly signed
and dated proxies received by the Secretary of Firstar prior to or at the
annual meeting will be voted as instructed thereon or, in the absence of such
instruction, (a) "FOR" Items 1, 2 and 3, (b) "AGAINST" Item 4, and (c) in
accordance with the best judgment of the persons named in the proxy on any
other matters which may properly come before the meeting. Any shareholder
giving a proxy has the power to revoke it at any time before it is actually
voted by delivery of a written notice of revocation to the Secretary of Firstar
at the above-indicated address. Unless so revoked, the shares represented by
each proxy will be voted at the meeting and at any adjournments thereof.
VOTING PROCEDURES/VOTES REQUIRED
A quorum consists of a majority of the shares entitled to vote represented at
the annual meeting in person or by proxy (including proxies reflecting
abstentions or broker non-votes). Broker non-notes are shares which are
represented at the meeting by proxy for which the record holder has not been
granted the authority to vote on one or more proposals. Once a share is
represented at the meeting it is deemed present for quorum purposes throughout
the meeting or any adjourned meeting unless a new record date is or must be set
for the adjourned meeting. The seven nominees for director who receive the
largest number of votes cast "FOR" will be elected as directors if a quorum is
present. Shares represented at the meeting for which authority to vote for a
nominee for director is withheld and non-votes will not affect the
determination of the outcome of the election of directors. In order to be
approved, the proposal to amend the Firstar Corporation Incentive Stock Plan
must receive more votes "FOR" the proposal than "AGAINST" provided the total
vote cast represents a majority of all outstanding shares. For purposes of
determining the vote regarding this proposal, abstentions will have the effect
of a vote "AGAINST" the proposal (but will not be counted as votes cast with
respect to the proposal for purposes of determining whether a majority of
outstanding shares were voted) and non-votes will not affect the determination
of whether the proposal is approved. The proposal to approve the Firstar
Corporation Annual Executive Incentive Plan must receive more votes "FOR" the
proposal than "AGAINST" in order to be approved. For purposes of determining
the vote regarding this proposal, abstentions or non-votes will not affect the
determination of whether the proposal is approved. The advisory shareholder
proposal must receive more votes "FOR" the proposal than "AGAINST" in order to
be approved. Abstentions or non-votes will not affect the determination of
whether the proposal is approved.
<PAGE>
VOTING SECURITIES AND OWNERSHIP THEREOF
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Holders of record of common stock of Firstar at the close of business on
March 3, 1994 (the "Record Date") will be entitled to one vote for each share
of common stock then held. There were 64,388,319 shares of Firstar's common
stock outstanding on the Record Date.
The following table sets forth information as of December 31, 1993 as to the
"beneficial ownership" of the common stock of Firstar by all of the directors
named in the proxy statement, the five most highly compensated executive
officers of Firstar, and directors and all executive officers of Firstar as a
group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OWNERSHIP(1) CLASS(2)
---- ----------------- ----------
<S> <C> <C>
Michael E. Batten........................... 800
Chris M. Bauer(3)........................... 63,842
John A. Becker(3)........................... 134,786
Ronald A. Bero(3)........................... 87,439
George M. Chester, Jr.(4)................... 14,600
Roger H. Derusha(5)......................... 31,600
Roger L. Fitzsimonds(3)..................... 177,461
James L. Forbes............................. 1,000
Holmes Foster............................... 4,333
Joseph F. Heil, Jr.......................... 47,460
John H. Hendee, Jr.......................... 123,207
Jerry M. Hiegel............................. 11,400
Joe Hladky.................................. 4,632
James H. Keyes.............................. 688
James R. Lang(3)............................ 75,221
Sheldon B. Lubar(6)......................... 166,800
Daniel F. McKeithan, Jr..................... 11,000
George W. Mead II........................... 800
Guy A. Osborn............................... 2,000
Judith D. Pyle.............................. 2,075
Clifford V. Smith, Jr....................... 130
William W. Wirtz(7)......................... 1,379,020 2.1%
Aggregate for all directors and executive
officers as a group(3)..................... 2,883,927 4.5%
</TABLE>
- --------
(1) Unless otherwise indicated, the beneficial owners exercise sole voting and
investment powers.
(2) Unless otherwise indicated, percentages are less than one percent.
(3) Includes shares which have been allocated to the individual as of December
31, 1993 under Firstar's Thrift and Sharing Plan and for which the
individuals have sole voting rights and investment power: Chris M. Bauer--
7,090; John A. Becker--16,328; Ronald A. Bero--20,639; Roger L.
Fitzsimonds--7,635; James R. Lang--27,402; and all directors and executive
officers as a group--
166,539. Also includes the right to acquire shares upon exercise of options
granted under Firstar's stock option plan: Chris M. Bauer--48,600; John A.
Becker--75,600; Ronald A. Bero--35,600; Roger L. Fitzsimonds--105,300;
James R. Lang--33,400; and all directors and executive officers as a
group--561,200. Also includes restricted shares subject to forfeiture and
held in escrow pending the completion of a performance period: Chris M.
Bauer--2,576; John A. Becker--4,560; Ronald A. Bero--2,012; Roger L.
Fitzsimonds--6,700; James R. Lang--2,012; and all directors and executive
officers as a group--30,235.
(4) Includes 13,600 shares for which voting and investment powers are shared.
(5) Includes 1,600 shares for which voting and investment powers are shared.
(6) Includes 132,332 shares for which voting and investment powers are shared.
(7) Includes 1,347,500 shares held by companies in which Mr. Wirtz is a
controlling shareholder and 18,400 shares in a pension trust.
2
<PAGE>
As of December 31, 1993, the following group was the beneficial owner of more
than 5% of the Firstar's outstanding common stock:
Firstar, through subsidiaries which conduct various fiduciary activities,
held 9,963,647 shares, or 15.5% of Firstar's common stock in estates,
trusts and other fiduciary accounts. Sole voting power is possessed with
respect to 978,657 shares, while sole investment power is retained for
7,390,112 shares. Shares held in the Firstar Corporation Thrift and Sharing
Plan are included as having sole investment power by virtue of the ability
of Firstar to amend the plan. Included in these totals are 6,726,297
shares, or 10.5% of Firstar's common stock, held by the Firstar Corporation
Thrift and Sharing Plan.
ELECTION OF DIRECTORS
The Articles of Incorporation of Firstar provide that the Board of Directors
of Firstar shall be divided into three classes as nearly equal in number as
possible, with the term of office of one class expiring each year. Each class
shall hold office for a term of three years. At the annual meeting, seven
directors will be elected to a three-year term expiring in 1997.
It is the intention of the persons named in the proxy, unless otherwise
directed, to vote the proxies given them for the election of these nominees.
All those named as nominees are presently serving as directors and were elected
by the shareholders. All of the nominees have consented to being named in this
proxy statement and to serve if elected, and the Board of Directors has no
reason to believe that any of the named nominees will be unable to act.
However, if any such nominee prior to election becomes unable to serve or for
good cause will not serve, the proxies will be voted for such substitute
nominee as may be selected by the Board of Directors of Firstar or only for the
remaining nominees. The names, ages and business experience during the past 5
years (including principal occupations and employment during that period) of
the nominees, all principal positions and offices with Firstar and Board
committee memberships presently held by them, and certain directorships held in
other companies are set forth below. All directors not named as members of the
Executive Committee of the Board of Directors are alternate members of that
committee. None of the directors or executive officers are related. With the
exception of Messrs. Fitzsimonds, Becker and Hendee, all of the directors'
business experience listed has been with organizations unaffiliated with
Firstar.
NOMINEES FOR TERMS EXPIRING IN 1997
- --------------------------------------------------------------------------------
JOHN A. BECKER
President and Chief Operating Officer of Firstar since February 1991. He had
been President of Firstar, Chairman of the Board and Chief Executive Officer of
Firstar Bank Milwaukee since January 1990; President of Firstar Bank Milwaukee
since January 1987.
He is 51 years of age, has been a director of Firstar since 1989 and is a
member of the Executive Committee of the Board of Directors. He is also a
director of Firstar Bank Milwaukee, Firstar Trust Company, Firstar Corporation
of Iowa and Firstar Bank of Minnesota.
He is also a director of Giddings & Lewis Corporation, Inc.
3
<PAGE>
- --------------------------------------------------------------------------------
GEORGE M. CHESTER, JR.
Partner of Covington & Burling, Washington, DC law firm.
He is 46 years of age and has been a director of Firstar since 1988.
- --------------------------------------------------------------------------------
ROGER L. FITZSIMONDS
Chairman of the Board and Chief Executive Officer of Firstar since February
1991. He had been Vice Chairman of Firstar since January 1990; President of
Firstar since January 1987.
He is 55 years of age, has been a director of Firstar since 1988 and is a
member of the Executive Committee and Committee on Directors of the Board of
Directors. He is also a director of Firstar Bank Milwaukee and Firstar Trust
Company.
- --------------------------------------------------------------------------------
HOLMES FOSTER
Retired. Chairman of the Board, President and Chief Executive Officer of
Banks of Iowa, Inc. from July 1988 to April 1991; President and Chief Executive
Officer prior to that.
He is 67 years of age and has been a director of Firstar since July 1991. He
is also a director of Firstar Corporation of Iowa.
He is also a director of Iowa Business Development Finance Corporation and
Chairman, President and a director of Iowa Business Investment Corporation.
- --------------------------------------------------------------------------------
JOE HLADKY
President and Chief Executive Officer of the Gazette Company, Cedar Rapids,
Iowa. An independent media company.
He is 53 years of age and has been a director of Firstar since July 1991 and
is a member of the Audit-Examining Committee of the Board of Directors. He is
also a director of Firstar Corporation of Iowa and Firstar Bank Cedar Rapids.
- --------------------------------------------------------------------------------
JUDITH D. PYLE
Vice Chairman and Senior Vice President-Marketing of Rayovac Corporation,
Madison, Wisconsin. Manufacturer and marketer of batteries and lighting
products.
She is 50 years of age and has been a director of Firstar since 1989 and is a
member of the Audit-Examining Committee of the Board of Directors.
She is also a director of Oshkosh B'Gosh, Inc. and Prange Corporation.
- --------------------------------------------------------------------------------
DR. CLIFFORD V. SMITH, JR.
President of the General Electric Foundation since 1990 and Chancellor
Emeritus of the University of Wisconsin-Milwaukee. He was Chancellor of the
University of Wisconsin-Milwaukee from 1986 to 1990.
He is 62 years of age and has been a director of Firstar since 1990.
4
<PAGE>
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1995
- --------------------------------------------------------------------------------
ROGER H. DERUSHA
Chairman of the Board and director of Marinette Marine Corporation,
Marinette, Wisconsin. Ship designers and builders.
He is 63 years of age and has been a director of Firstar since 1980. He is
also a director of Firstar Bank Green Bay.
- --------------------------------------------------------------------------------
JERRY M. HIEGEL
Chairman of The Hiegel Group, a private investment banking company located in
Madison, Wisconsin. Retired in 1989 as Chairman of the Board of Oscar Mayer
Foods Corporation, Madison, Wisconsin. Manufacturer of brand-identified
processed meats. He had been President and Chief Executive Officer of that
company from March 1980 to January 1987.
He is 67 years of age and has been a director of Firstar since 1983 and is a
member of the Compensation and Audit-Examining Committees of the Board of
Directors.
He is also a director of Oshkosh B'Gosh, Inc. and of McCarthy Improvement Co.
of Davenport, Iowa.
- --------------------------------------------------------------------------------
SHELDON B. LUBAR
Chairman of Lubar & Co., Milwaukee, Wisconsin. Investment and management
firm.
He is 64 years of age and has been a director of Firstar since 1986 and is a
member of the Executive, Committee on Directors, Audit-Examining, Compensation,
and Interstate Banking and Acquisitions Committees of the Board of Directors.
He is also a director of Firstar Bank Milwaukee.
He is also a director of Christiana Companies, Inc., Massachusetts Mutual
Life Insurance Company, MGIC Investment Corporation, Briggs & Stratton
Corporation, Ameritech Corporation and various private industrial companies.
- --------------------------------------------------------------------------------
DANIEL F. McKEITHAN, JR.
President and Chief Executive Officer of Tamarack Petroleum Company, Inc.,
Milwaukee, Wisconsin. Operator of producing oil and gas wells. Also, President
and Chief Executive Officer of Active Investor Management, Inc., Milwaukee,
Wisconsin. Manager of oil and gas wells; and president of AIM and Associates,
an accounting firm.
He is 58 years of age and has been a director of Firstar since 1977 and is a
member of the Audit-Examining, Compensation and Employee Benefits Committees of
the Board of Directors.
He is also a director of Marcus Corporation and WICOR, Inc. and a Trustee of
Northwestern Mutual Life Insurance Company.
- --------------------------------------------------------------------------------
GEORGE W. MEAD II
Chairman of Consolidated Papers, Inc., Wisconsin Rapids, Wisconsin.
Manufacturer and marketer of paper products.
He is 66 years of age and has been a director of Firstar since 1990. He is
also a director of Firstar Bank Wisconsin Rapids.
He is also a director of Snap-on Tools Corporation.
5
<PAGE>
- --------------------------------------------------------------------------------
GUY A. OSBORN
Chairman, Chief Executive Officer and a director of Universal Foods
Corporation, Milwaukee, Wisconsin since May 1990. Manufacturer and marketer of
food ingredients and selected consumer items. He had been President and Chief
Executive Officer from 1988.
He is 58 years of age and has been a director of Firstar since 1992 and is a
member of the Committee on Directors, Compensation, Employee Benefits,
Executive, and Interstate Banking and Acquisitions Committees of the Board of
Directors. He is also a director of Firstar Bank Milwaukee.
He is also a director of WICOR, Inc., Wisconsin Gas Co. and the Fleming
Companies.
- --------------------------------------------------------------------------------
WILLIAM W. WIRTZ
President and a director of Wirtz Corporation, Chicago, Illinois. Diversified
operations and investments.
He is 64 years of age and has been a director of Firstar since 1980 and is a
member of the Audit-Examining Committee of the Board of Directors.
He is also a director of Consolidated Enterprises, Inc., Forman Realty
Corporation, American Mart Corporation, 333 Building Corporation, Chicago
Stadium Corporation, Chicago Blackhawk Hockey Team, Inc. and Alberto-Culver
Company.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1996
- --------------------------------------------------------------------------------
MICHAEL E. BATTEN
Chairman, Chief Executive Officer and a director of Twin Disc, Incorporated,
Racine, Wisconsin since November 1991. Manufacturer of power transmission
equipment. He had been Chairman, President, Chief Executive Officer and a
director of that company from July 1989, and President, Chief Executive Officer
and a director from November 1983.
He is 53 years of age and has been a director of Firstar since July 1984 and
is a member of the Audit-Examining, Committee on Directors, and Interstate
Banking and Acquisitions Committees of the Board of Directors. He is also a
director of Firstar Trust Company and Firstar Bank Racine.
He is also a director of Universal Foods Corporation and Briggs & Stratton
Corporation.
- --------------------------------------------------------------------------------
JAMES L. FORBES
President, Chief Executive Officer and a director of Badger Meter, Inc.
Manufacturer of flow measurement technology.
He is 61 years of age and has been a director of Firstar since 1993 and is a
member of the Compensation and Employee Benefits Committees of the Board of
Directors. He is also a director of Firstar Trust Company.
He is also a director of Universal Foods Corporation, WICOR, Inc., Wisconsin
Gas Company and United Wisconsin Services.
- --------------------------------------------------------------------------------
JOSEPH F. HEIL, JR.
Chairman of the Board, and a director of The Heil Co., Chattanooga,
Tennessee, a subsidiary of Power Industries. Manufacturers of solid waste
systems and transportation equipment.
He is 68 years of age and has been a director of Firstar since 1970.
6
<PAGE>
JOHN H. HENDEE, JR.
Retired. Chairman of the Board and Chief Executive Officer of Firstar from
April 1988 to January 1991; Vice Chairman from January 1987 to April 1988;
Chairman of the Board of Firstar Bank Milwaukee from May 1986 to January 1990.
He is 68 years of age, has been a director of Firstar since 1976 and is a
member of the Executive, Committee on Directors, and Interstate Banking and
Acquisitions Committees of the Board of Directors. He is also a director of
Firstar Bank Milwaukee and Firstar Trust Company of Florida.
- -------------------------------------------------------------------------------
JAMES H. KEYES
Chairman of the Board, President and Chief Executive Officer of Johnson
Controls, Inc., Milwaukee, Wisconsin, since January 1993. Designer,
manufacturer, installer and servicer of building automation systems for energy
management, fire safety and security; manufacturer and marketer of batteries
for energy storage and manufacturer of automotive seating and plastics. He had
been President and Chief Executive Officer prior to that.
He is 53 years of age and has been a director of Firstar since 1993 and is a
member of the Audit- Examining, Committee on Directors, Executive, and
Interstate Banking and Acquisitions Committees of the Board of Directors. He
is also a director of Firstar Bank Milwaukee and Firstar Trust Company.
He is also a director of Universal Foods Corporation and LSI Logic.
- -------------------------------------------------------------------------------
COMMITTEES OF THE BOARD OF DIRECTORS
Firstar has various committees including standing audit (Audit-Examining
Committee), nominating (Committee on Directors) and Compensation committees.
The names of members on March 3, 1994 and the functions performed by such
named committees are set forth below.
AUDIT-EXAMINING COMMITTEE
Sheldon B. Lubar, Chairman
<TABLE>
<S> <C>
Michael E.
Batten Daniel F. McKeithan, Jr.
Jerry M. Hiegel Judith D. Pyle
Joe Hladky William W. Wirtz
James H. Keyes
</TABLE>
Functions performed--The Audit-Examining Committee's general
responsibilities include but are not limited to the supervision and review of
all matters concerning audits of Firstar by its independent auditors and
internal corporate audit staff, the review of all matters concerning
examinations of Firstar and its subsidiary banks and companies conducted by
governmental supervisory agencies and the review of Firstar's Annual Report on
Form 10-K and Annual Report to Shareholders. There were four meetings held
during 1993.
COMMITTEE ON DIRECTORS
Sheldon B. Lubar, Chairman
<TABLE>
<S> <C>
Michael E. Batten James H. Keyes
Roger L. Fitzsimonds Guy A. Osborn
John H. Hendee, Jr.
</TABLE>
Functions performed--The Committee on Directors has the general
responsibility of recommending policy as to the responsibilities, size and
committee structure of the Board of Directors. It also develops
7
<PAGE>
recommendations as to the compensation, qualifications, tenure and selection of
Board members, scheduling and content of Board meetings, and directors' and
officers' liability protection. The committee considers director nominees
recommended by shareholders. Any shareholder who wishes to recommend an
individual for nomination as a director of Firstar should write to the
Secretary of Firstar, no later than October 31 of the year preceding the annual
meeting of shareholders at which directors are to be elected, identifying the
individual recommended and setting forth any information which the shareholder
believes will be helpful to the Committee on Directors in evaluating the
qualifications of the recommended nominee. The Committee on Directors and,
ultimately, the Board of Directors, reserves the sole discretion to determine
the nominees named in management's proxy statement for election to the Board of
Directors. There was one meeting held during 1993.
COMPENSATION COMMITTEE
Guy A. Osborn, Chairman
<TABLE>
<S> <C>
James L. Forbes Sheldon B. Lubar
Jerry M. Hiegel Daniel F. McKeithan, Jr.
</TABLE>
Functions performed--The Compensation Committee has the general
responsibility of recommending for the approval of the Board of Directors the
remuneration arrangements for the executive officers of Firstar and its
subsidiaries and any additions or modifications to the employee benefit plans
administered by Firstar for the benefit of the officers and employees of
Firstar and its subsidiaries. There were six meetings held during 1993.
The Board of Directors held four meetings during 1993. All directors with the
exception of Messrs. Derusha, Foster and Smith attended 75% or more of the
aggregate of (1) the total number of meetings of the Board of Directors (held
during the period for which they have been a director) and (2) the total number
of meetings held by all committees of the Board on which they served (during
the periods that they served).
Following the election at the annual meeting, there will be nineteen
directors of Firstar Corporation. No person shall be eligible to be elected or
re-elected as a member of the Board of Directors if he or she reached the age
of seventy (70) years, and any director who reaches the age of seventy (70)
years shall resign from the Board of Directors as of the last day of the
calendar quarter in which such director's seventieth birthday falls. The Board
of Directors may authorize a change to the foregoing retirement provision.
The directors of Firstar are compensated for all services as a director in
the following manner: An annual retainer fee of $15,000 is paid each director
at the rate of $3,750 per quarter. An annual retainer fee of $3,000 is paid to
the chairman of the Audit-Examining Committee at the rate of $750 per quarter.
A $1,200 fee is paid for attendance at each regularly scheduled or special
meeting of the Board, a $1,200 fee is paid for attendance at meetings of the
Executive or Interstate Banking and Acquisitions Committees, and a $750 fee is
paid committee members for attendance at regularly scheduled or special
meetings of all other committees of the Board. Directors of Firstar who are
also directors of subsidiaries of Firstar also receive fees from such
subsidiaries for services as directors on their boards. Firstar has a deferred
compensation plan under which directors may elect to defer payment of such
fees. Those directors who are officers of Firstar or its subsidiary banks
receive no fees from Firstar or the subsidiary banks for services as directors.
8
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table presents data with respect to the
five most highly compensated executive officers for the years ended December
31, 1993, 1992 and 1991.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------- ---------------------------------------------
AWARDS
-----------------
NAME AND OTHER LONG-TERM
PRINCIPAL ANNUAL RESTRICTED STOCK INCENTIVE ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(/1/) STOCK(/2/) OPTION PAYOUT COMPENSATION(/3/)
- ------------------------ ---- -------- -------- ----------------- ---------- ------ --------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Roger L. Fitzsimonds
Chairman of the Board 1993 $548,000 $378,900 22,500 $144,200 $49,300
Chairman of the Board 1992 477,000 308,700 23,600 107,500 42,900
Chairman of the Board 1991 382,500 244,600 32,000 68,000
John A. Becker
President 1993 405,000 257,800 15,200 90,000 36,400
President 1992 372,000 195,100 18,200 81,100 33,500
President 1991 313,300 148,400 18,600 54,800
Chris M. Bauer
Chairman of Firstar
Bank Milwaukee 1993 259,000 149,000 9,000 52,400 19,400
Chairman of Firstar
Bank Milwaukee 1992 237,000 123,400 9,800 48,700 17,700
Chairman of Firstar
Bank Milwaukee 1991 199,150 96,300 12,000 31,500
James R. Lang
Chairman of the Board
Firstar Corp. of Iowa 1993 233,000 105,100 8,000 46,900 20,600
Chairman of the Board
Firstar Corp. of Iowa 1992 205,000 98,700 7,800 42,000 17,500
Chairman of the Board
Firstar Corp. of Iowa 1991 189,600 84,300 10,600
Ronald A. Bero
Senior Executive VP 1993 210,000 115,900 8,000 49,500 18,900
Senior Executive VP 1992 208,000 106,200 9,800 49,200 18,800
Senior Executive VP 1991 192,600 92,900 12,000 32,800
</TABLE>
- --------
(/1/Aggregate)amount of other annual compensation does not exceed the lesser of
$50,000 or 10% of executive officer's salary and bonus in both 1993 and
1992. Disclosure of amounts for 1991 is not required.
(/2/The)total number of restricted shares held and the aggregate market value
at December 31, 1993 was: Mr. Fitzsimonds--6,700 shares, $206,025; Mr.
Becker--4,560 shares, $140,220; Mr. Bauer--2,576 shares, $79,212; Mr.
Lang--2,012 shares, $61,869; Mr. Bero--2,012 shares, $61,869. Dividends are
paid on the restricted shares at the same rate as dividends paid to
unrestricted shares and are held in escrow pending the completion of the
performance period and determination of the shares to be earned.
(/3/Amounts)shown represent payments made under Firstar's Thrift and Sharing
Plan which consist of both contributions to the plan and cash payments made
to the executive officer to offset Internal Revenue Code limitations.
Disclosure of amounts for 1991 is not required.
9
<PAGE>
The following table presents information about stock options granted during
1993 to the five named executive officers. These stock options became
exercisable on August 21, 1993.
STOCK OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE EXPIRATION GRANT DATE
NAME OPTIONS EMPLOYEES PRICE DATE PRESENT VALUE(/1/)
- ---- ---------- ------------- -------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Roger L.
Fitzsimonds 22,500 7.2% $32.50 2/21/03 $186,750
John A. Becker 15,200 4.9 32.50 2/21/03 126,160
Chris M. Bauer 9,000 2.9 32.50 2/21/03 74,700
James R. Lang 8,000 2.6 32.50 2/21/03 66,400
Ronald A. Bero 8,000 2.6 32.50 2/21/03 66,400
</TABLE>
- --------
(/1/Present)value is determined as of the grant date, January 21, 1993, using
the Black-Scholes Model. This is a theoretical value for the stock options
which was constructed with the following underlying assumptions: an eight
year expected period to time of exercise; a risk free rate of return of
5.48%; an expected dividend yield of 3.0%; and a volatility factor of
22.4%. The amount realized from a stock option ultimately depends on the
market value of the stock at a future date.
The following table presents information concerning stock options exercised
during 1993. Also shown is information on unexercised stock options as of
December 31, 1993.
STOCK OPTIONS EXERCISED IN 1993 AND YEAR-END VALUES
<TABLE>
<CAPTION>
TOTAL TOTAL VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS HELD OPTIONS HELD
1993 AT 12/31/93 AT 12/31/93
----------------------- ------------ --------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE EXERCISABLE
- ---- ----------- -------- ------------ --------------
<S> <C> <C> <C> <C>
Roger L. Fitzsimonds $ 105,300 $1,126,550
John A. Becker 75,600 804,325
Chris M. Bauer 48,600 558,575
James R. Lang 10,000 200,375 33,400 332,613
Ronald A. Bero 10,000 179,375 35,600 340,513
</TABLE>
The following table presents information on Long-Term Incentive Awards
granted to the named executives during 1993. Estimated future payouts are
predicated upon the achievement of Firstar return on equity goals in relation
to peer group banking companies. The achievement of peer group median return
on equity will represent threshold; peer group 70th percentile will represent
target and peer group 90th percentile will represent maximum payout. One-half
of the award is in the form of restricted stock and the remainder is a
performance unit. The performance unit will be paid in cash equivalent to the
market value of the restricted shares earned at maturity. Dividends paid on
the restricted stock are held in escrow and will be paid at maturity. A cash
payment equivalent to the dividends paid on the restricted stock will also be
made at the maturity of the award.
LONG-TERM INCENTIVE PLAN AWARDS IN 1993
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-
NUMBER OF PERFORMANCE STOCK PRICE BASED PLANS
SHARES AND PERIOD -----------------------------
NAME UNITS UNTIL PAYOUT THRESHOLD TARGET MAXIMUM
- ---- ---------- ------------ --------- ------ -------
<S> <C> <C> <C> <C> <C>
Roger L. Fitzsimonds 13,400 3 Years 4,467 8,933 13,400
John A. Becker 9,120 3 Years 3,040 6,080 9,120
Chris M. Bauer 5,152 3 Years 1,717 3,435 5,152
James R. Lang 4,024 3 Years 1,341 2,683 4,024
Ronald A. Bero 4,024 3 Years 1,341 2,683 4,024
</TABLE>
10
<PAGE>
The following table presents estimated annual benefits payable under
Firstar's pension plans based upon years of service.
<TABLE>
<CAPTION>
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35+ YEARS
------------ -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
$100,000 $ 25,715 $ 34,286 $ 42,857 $ 51,429 $ 60,000
200,000 51,430 68,571 85,714 102,857 120,000
300,000 77,145 102,856 128,571 154,286 180,000
400,000 102,860 137,142 171,428 205,714 240,000
500,000 128,575 171,429 214,287 257,140 300,000
600,000 154,290 205,713 257,142 308,571 360,000
700,000 180,000 240,000 300,000 360,000 420,000
800,000 205,720 274,288 342,856 411,432 480,000
900,000 231,435 208,574 385,713 462,861 540,000
</TABLE>
The remuneration covered by the plan includes salary and one-half of bonus
and long-term incentive payments. The final average compensation is based on
average compensation during the highest five consecutive years in the last ten
years prior to retirement. Benefits payable under the Plan are subject to a
reduction equal to one-half of the Social Security benefit at the time of
retirement. The years of service of the named executives are as follows: Mr.
Fitzsimonds--29 years, Mr. Becker--26 years, Mr. Bauer--24 years, Mr. Lang--26
years and Mr. Bero--32 years. An agreement has been entered into with an
executive officer other than the named executives, whereby his pension will be
credited for up to ten additional years of service upon retirement.
Estimated annual benefits listed in the table are based on the terms of the
Pension Plan in effect as of December 31, 1993 and assume payment in the form
of a straight-life annuity beginning at age 65 without reduction for the
election of a joint and survivor annuity or for any limitation on maximum
annual benefits or compensation under the Internal Revenue Code. In the event
that any such reduction occurs, the named persons will receive benefits in the
amount of such reduction under certain supplemental retirement plans maintained
by Firstar. Any supplemental benefits are payable out of the general assets of
Firstar.
EMPLOYMENT AGREEMENTS
Firstar has identical Key Executive Employment and Severance Agreements with
Messrs. Fitzsimonds, Becker, Bauer, Lang, Bero and others. The agreements would
come into effect upon a change in control of Firstar as defined in the
agreements. The employment period under each agreement is the earlier of the
third anniversary of the change in control or the executive's sixty-fifth
birthday. If, during the employment period, the executive officer's employment
is ended through (1) termination by Firstar without cause or (2) termination by
the executive officer for good reason based upon a breach of the agreement by
Firstar or a significant adverse change in the executive officer's
responsibilities, then a termination payment will be made to the executive. The
agreements provide that such payment will be equal to three times the sum of
the executive's annual salary plus an amount attributable to incentive
compensation equal to a target payment under such plans. If any portion of the
termination payment constitutes an excess parachute payment, as defined in the
Internal Revenue Code, and is subject to an excise tax, Firstar shall pay to
the executive the amount necessary to offset the excise tax and any applicable
taxes on this additional payment. Additional provisions assure the payment of
other accrued benefits regardless of the reason for termination. Upon a change
in control of Firstar, as defined in the plan, the executive is entitled to a
lump sum cash payment equivalent to the present value of the projected benefits
under certain supplemental retirement plans.
11
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overall Policy
Firstar's executive compensation objective is to closely link compensation
with corporate and individual performance in a manner which, through
recognizing the marketplace practices of other banking companies, will retain
and attract executives who can lead Firstar to achieve the long-term goals of
its shareholders.
Toward the end of achieving this objective, an executive compensation program
has been developed which directly ties a significant portion of total executive
compensation to Firstar's financial performance in relation to its peer group
of U.S. commercial banking companies and to the appreciation in its stock
price.
The Compensation Committee has adopted the following statements of philosophy
which provide the foundation for Firstar's executive compensation program:
1. Pay-for-Performance--the total compensation program should have a strong
pay-for-performance relationship.
2. Total Compensation--over a period of years, total compensation relative
to peers should be consistent with performance relative to peers; in any
one year, the pay-performance match may lead or lag the peer group.
3. Total Cash Compensation--total cash compensation (base salary plus
annual incentive compensation) will be established conservatively with
no incentives paid for less than median performance.
4. Base Salaries--base salary midpoints will be established consistent with
the median of the peer group; actual base salaries will reflect
performance and experience within a competitive range.
5. Emphasis on Short-Term and Long-Term--emphasis should be placed on both
annual and long-term performance; strong performance must be achieved by
Firstar each year as well as over the long-term.
6. Emphasis on Financial Performance versus Shareholder Value--for short-
term performance, emphasis should be placed on rewarding financial
performance over shareholder value; however, shareholder value is the
most appropriate measure of performance over the long-term.
Each year the Compensation Committee carefully reviews each component of the
executive compensation program. This review includes as assessment of the total
compensation opportunities provided by Firstar's program in relation to both
the compensation being paid by peer banking companies and the financial
performance of those peers. The peer group used by Firstar for all of its
financial performance comparisons, including its reports to the investment
community, represents U.S. commercial banking companies ranging in total asset
size from $10-$25 billion. It is data from this same peer group which the
Compensation Committee uses to gauge the comparative compensation levels of
Firstar's executive group. This peer banking group is also the same peer
banking group referred to in the performance graph at the bottom of page 17
which portrays Firstar's performance as measured by return on equity. The
performance graph at the the top of page 17 measures Firstar's total
shareholder return against the S&P 500 Stock Index and the KBW 50 Index which
is a banking industry index comprised of 50 companies representing all money
center banks and most major regional banks as maintained by Keefe, Bruyette and
Woods, Inc.
For a number of years, the Committee has engaged an independent consultant
(an international accounting firm with significant experience in executive
compensation matters) to review the executive compensation program and the
resultant compensation earned by Firstar's senior executives.
The 1993 consultant's report, as reviewed by the Compensation Committee in
April 1993, concluded:
1. Total cash compensation (base salary plus annual incentive compensation)
comparisons indicate actual 1992 total cash compensation levels are
lower than peer group medians for the top five positions, in spite of
Firstar's top quartile performance.
12
<PAGE>
2. Actual 1992 total compensation (cash compensation plus long-term
compensation) for senior executives does not reflect Firstar's high
level of performance as compared to the peer group.
The same basic conclusions were made by the consultant the prior year, as
reported in last year's Proxy Statement. As a result, during 1993, the
Committee modified the appropriate components of the executive compensation
program to address this shortfall. The principal components of Firstar's
executive compensation program are base salary, an annual incentive
compensation plan, a three-year performance share plan (modified in 1993 from a
three-year cash plan) and a stock option program. The Compensation Committee
determines these components individually for each of the 14 executives
comprising Firstar's senior executive group, which includes each of the five
individuals whose compensation is analyzed in this proxy statement. In
determining the compensation of these executives, other than the chief
executive officer, the Committee carefully considers the recommendations of the
chief executive officer. However, it does independently approve the
remuneration of all 14 executives on an individual basis.
Base Salaries
A base salary grade and range has been established for the job of each
executive officer. Base salary grade midpoints are established consistent with
the median of the peer group and the internal evaluation of the
responsibilities of each position.
Annually, the Compensation Committee approves an overall percentage increase
for the executive officer group based on (1) the results of published
compensation surveys of the executive base salary increase percentages for the
financial services industry, and (2) the absolute and relative performance of
Firstar as measured by return on equity, return on assets, earnings per share,
net income, asset quality and growth. The chief executive officer recommends to
the Committee base salary adjustments within this overall limit for each
executive (exclusive of the chief executive officer) based upon the assessment
of the performance of the executive relative to his specific goals and
objectives. In addition, market adjustments are periodically provided by the
Committee for executives whose base salary is below the job grade midpoint
based on the recommendation of the chief executive officer and his assessment
of the performance of each such executive.
In administering the base salary of the chief executive officer in 1993, the
Committee's outside consultant determined that despite Firstar's sustained top
quartile performance under his leadership, his base salary continued to be well
below the median of the peer group and the midpoint of his job grade. As a
result, the Committee granted the chief executive officer a special market
adjustment base salary increase. Following this increase, the chief executive's
base salary remained slightly below the median of the peer group and the
midpoint of his job grade.
Annual Incentive Compensation Plan
Firstar's executive officers are eligible for an annual incentive award.
Performance objectives are established each year. These objectives are based on
the performance of Firstar and the performance of the executive's own business
unit. For the 14 executives comprising the senior executive group, at least 50%
of the bonus, ranging up to 100% for Firstar's chief executive officer and
Firstar's chief operating officer, is tied directly to Firstar's return on
common equity in comparison to the $10-$25 billion peer group. The goal for
this component of the annual incentive compensation plan is set in a manner
which does not compensate for below median performance; the Committee believes
that (1) performance is relative, and (2) no incentives should be paid unless
relative performance is at least equal to the median. Further, even if
performance is better than median, the Committee can elect to eliminate all
executive bonuses if Firstar's return on common equity does not exceed 12%.
Firstar's annual incentive compensation is a target bonus plan where target
represents a percentage of the salary midpoint of the executive's job grade.
For the senior executive group, this target percentage ranges up to 50% of the
salary midpoint for the chief executive officer's job. The bonus earned is
based on
13
<PAGE>
performance and ranges from a threshold of 50% of target to a maximum of 150%
of target. The Committee has determined that to earn a threshold level of bonus
on the corporate performance factor, which for the chief executive officer and
the chief operating officer is the only factor, requires a return on common
equity equal to the median of the peer group. Performance below the median of
the peer group would result in no bonus being earned on the corporate
performance factor. The peer group is the $10-$25 billion banking companies as
of the beginning of the year. To earn a target bonus, performance at the 70th
percentile is required. To earn a maximum bonus, performance at the 90th
percentile is required.
The performance measures other than Firstar's return on equity which comprise
up to 50% of the annual incentive compensation plan for those officers below
the level of the chief executive officer and chief operating officer are
established specific to each executive's business function including, for
example, net income and return on assets of the specified unit managed by the
executive, net charge-offs and nonperforming asset levels of the unit, expense
management, specified project attainments and other factors. Performance is
measured against target goals to determine payments.
In 1993, Firstar achieved a return on equity of 18.61%. Based on the formula
used in the plan, the chief executive officer earned a 1993 bonus of $378,900,
which equaled 131% of target. Payments to the other executives for this factor
equaled 131% of target. Performance in 1993 by executives with respect to their
other factors, which varied from officer to officer, ranged from 79% to 144% of
target.
Three-Year Cash Performance Unit Plan
Prior to 1993, Firstar's senior executive group was eligible for
participation in a performance unit plan. This plan provided for the earning of
a bonus at the end of the three-year period following date of the grant. The
sole performance measure used to determine payout was average return on common
equity in relation to the peer group. The plan was modified in 1993 as
discussed below under the three-year performance share plan. Grants made in
January 1991 and 1992 remained outstanding during 1993. The 1991 grant matured
at December 31, 1993; the 1992 grant will mature at year-end 1994.
As with the annual incentive compensation plan, this is a target bonus plan,
with participant targets ranging, based on job grade, up to 20% of the three-
year average midpoint salary for the chief executive officer's job. Again, as
with the annual plan, unless Firstar's three-year median return on common
equity is at least equal to peer group median, no bonus is paid. Also, unless
return on common equity is at least equal to 12%, regardless of relative
position, the Committee can elect to cancel the bonus. Actual payouts range
from a minimum of 50% of target to a maximum of 150% of target. To earn a
minimum bonus requires a three-year return on common equity equal to the peer
group median. A target bonus requires 70th percentile performance and a maximum
bonus requires a 90th percentile performance over the three-year term.
The performance period for the 1991 performance unit plan ended on December
31, 1993. Based on the formula used in the plan, the chief executive officer
earned a three-year bonus at the end of 1993 of $144,200, which equaled 137% of
target. Each of the other participants also received a payment equal to 137% of
target.
Three-Year Performance Share Plan
In 1993 Firstar implemented a new three-year performance share plan for its
senior executives. This plan, which modified the three-year cash performance
unit plan described above, was developed by the independent consultant retained
by the Committee. The modifications were intended to address in part the
concern that Firstar's compensation for senior executives was lagging
competitive levels based upon its high level of performance and to better tie
long-term incentive compensation to both comparative financial performance and
shareholder value.
14
<PAGE>
The performance share plan retained the target feature of the performance
unit plan. Under the revised plan, for the 14 executives comprising the senior
executive group, the target percentage ranges up to 50% of the salary midpoint
for the chief executive's job. In order for an executive to receive target
payout, Firstar must achieve a three-year return on common equity equal to the
70th percentile performance by its peer group. Threshold payout, which is equal
to 50% of target payout, requires a three-year return equal to the peer median
performance and maximum payout, which is equal to 150% of target payout,
requires a 90th percentile performance compared with peers. If Firstar achieves
less than median performance, all performance share awards are forfeited.
Further, if return on common equity of Firstar falls below 12% for the three-
year period, regardless of comparative peer performance, the Committee may
cancel all performance share awards.
Performance share awards are divided into two parts consisting of
performance-restricted shares of Firstar common stock issued pursuant to
Firstar's Incentive Stock Plan approved by shareholders and an equal number of
phantom performance-based shares payable in cash. The total number of
performance and phantom shares awarded to an executive is equal to the maximum
award computed based upon the applicable percentage of salary range midpoint
for the executive, as described above, divided by the price of one share of
Firstar common stock on the date of grant. Following the end of the three-year
performance period, the number of performance shares and phantom shares, if
any, earned by executives will be determined based upon Firstar's performance
compared with its peer group. Firstar will then remove the restrictions on the
performance shares earned and will pay executives in cash for an equal number
of earned phantom shares. The balance of the performance shares and phantom
shares will be forfeited. The cash payment for each phantom share earned will
be an amount equal to the market price of one share of Firstar common stock on
the last business day of the three-year performance period. Executives will
also receive payment in an amount equal to the dividends paid by Firstar during
the three-year performance period on an equal number of shares of common stock
as the total of earned performance and phantom shares. Thus, the value of these
awards is affected by both the relative performance of Firstar versus its peers
over the three-year period as well as the value of Firstar stock at the end of
that period.
The maximum number of performance-based shares that could be earned in the
three-year period for the chief executive officer and the other 13 executives
receiving awards in 1993 are 6,700 and 23,535 shares, respectively. An equal
number of phantom shares payable in cash was awarded in 1993.
If an executive leaves Firstar for reasons other than retirement, disability
or death prior to the end of the three-year term of the award, the award is
forfeited. A prorated payment is made in the event of retirement, death or
disability.
Stock Options
Stock options are designed to provide a direct long-term link between
executive compensation and shareholder interests. Options are granted with an
exercise price equal to the market value of the common stock on the date of the
grant. If the stock price does not increase, the option is worthless. The
option period is 10 years and one month from the date of the grant.
Under Firstar's 1988 Incentive Stock Plan approved by shareholders, stock
options are granted to executive officers. The Compensation Committee utilizes
a grant value formula to award shares under this program. The grant value,
which represents the number of shares multiplied by the exercise price, is a
percentage of the midpoint of the executive's job grade. For the 14 executives
comprising the senior executive group, the 1993 grant values ranged up to 120%
of the salary midpoint for the chief executive officer's job. Based on this
formula, the chief executive officer was granted stock options of 22,500 shares
in 1993. While Firstar employs a formula approach to the granting of stock
options, in the event of poor corporate performance, the Committee could elect
not to award options.
15
<PAGE>
Deductibility of Executive Compensation
As noted in this report, Firstar has developed a comprehensive program
directly linking executive compensation to Firstar's financial performance in
order to retain and attract executives who can lead Firstar to achieve
shareholder goals. To the extent achieving these goals is consistent with
favorable tax treatment under Section 162(m) of the Internal Revenue Code, the
Compensation Committee is committed to making awards under the executive
compensation plans that will qualify for the performance-based tax expense
deduction.
Conclusions
The Compensation Committee believes that the programs described above, driven
by its statements of philosophy, provide a direct link between executive
compensation and Firstar's financial performance and resultant stock price
appreciation.
Compensation Committee
Guy A. Osborn, Chairman
<TABLE>
<S> <C>
James L. Forbes Sheldon B. Lubar
Jerry M. Hiegel Daniel F. McKeithan, Jr.
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Each of Messrs. Guy A. Osborn, James L. Forbes, John H. Hendee, Jr., Jerry M.
Hiegel, Sheldon B. Lubar, Daniel F. McKeithan, Jr., Frederick L. Brengel,
George M. Chester, and Hal C. Kuehl served as a member of the Compensation
Committee during the year. Messrs. Brengel, Chester and Kuehl retired from the
Board of Directors in April 1993. Mr. Chester serves as counsel to Foley and
Lardner, a law firm that Firstar retained during 1993. Messrs. Hendee and Kuehl
were chief executive officers of Firstar prior to their retirement.
16
<PAGE>
PERFORMANCE GRAPHS
The following graph shows the cumulative return on a $100 investment in
Firstar common stock over a five year period. Also shown for comparison is the
performance of the KBW 50 Index and the S&P 500 Stock Index. The KBW 50 Index
is a banking industry index comprised of 50 companies representing all money
center banks and most major regional banks as maintained by Keefe, Bruyette and
Woods, Inc.
COMPARISON OF 5-YEAR CUMULATIVE RETURN
FIRSTAR, S&P 500 STOCK INDEX, & KBW 50 INDEX
(WITH DIVIDEND REINVESTMENT)
===========================================
Fiscal Year FIRSTAR S&P 500 KBW 50
-------------------------------------------
1988 100 100 100
-------------------------------------------
1989 127.84 131.7 118.9
-------------------------------------------
1990 116.39 128.9 085.4
-------------------------------------------
1991 206.46 167.9 135.2
-------------------------------------------
1992 277.60 180.7 172.2
-------------------------------------------
1993 279.41 198.8 181.8
===========================================
The following graph depicts the return on common equity of Firstar as
compared to the median and top quartile performance of its peer group. The peer
group consists of all domestic bank holding companies ranging in size from $10-
$25 billion as obtained from Thomson BankWatch, Inc., a nationally recognized
banking industry consultant. This peer group measurement of return on equity is
used in the determination of bonus and long-term incentive plan awards to
executive officers as described in the previous section entitled Board
Compensation Committee Report on Executive Compensation.
COMPARISON OF RETURN ON COMMON EQUITY
=========================================================
Fiscal Year FIRSTAR Peer Top Quartile Peer Median
---------------------------------------------------------
1988(1)(2) 16.3 16.2 14.8
---------------------------------------------------------
1989(2) 16.6 15.9 14.2
---------------------------------------------------------
1990(2) 16.4 14.5 12.7
---------------------------------------------------------
1991 15.9 15.3 12.8
---------------------------------------------------------
1992 17.4 17.1 14.2
---------------------------------------------------------
1993 18.6 18.1 15.8
=========================================================
1) Excludes impact of nonrecurring items for Firstar
2) Firstar's data is not restated for pooling of interests acquisition
occurring in 1991
3) Peer group data, which includes Firstar, is for $5 to $10 billion companies
in 1988 to 1990 and $10 to $25 billion in 1991 to 1993
17
<PAGE>
ADDITIONAL INFORMATION ON MANAGEMENT
During the past year, all of the directors and officers and one or more of
their associates were customers of and had business transactions with one or
more subsidiaries of Firstar. All loans included in such transactions were made
in the ordinary course of business and on substantially the same terms,
including interest rates and collateral, as those prevailing at the same time
for comparable transactions with other persons, and did not involve more than
normal risk of collectability or present other unfavorable features. It is
expected that similar transactions will occur in the future.
Section 16 of the Securities Exchange Act requires Firstar's executive
officers, directors and more than ten percent shareholders and certain trusts
affiliated with such persons ("Insiders") to file with the Securities and
Exchange Commission and Firstar reports of their ownership of Firstar
securities. Based upon written representations and copies of reports furnished
to Firstar by Insiders, all Section 16 reporting requirements applicable to
Insiders during 1993 were satisfied on a timely basis.
PROPOSAL TO AMEND THE FIRSTAR CORPORATION
1988 INCENTIVE STOCK PLAN FOR KEY EMPLOYEES
Summary of Proposal
In 1987, shareholders of Firstar approved the 1988 Incentive Stock Plan for
Key Employees. The original plan authorized a maximum number of shares of
common stock and stock appreciation rights of 1,000,000* which could be granted
under the plan. In 1990, Firstar shareholders approved an amendment to the plan
to authorize an additional 1,600,000* shares of common stock and stock
appreciation rights. Since the inception of the plan, a total of 2,307,735
stock options and restricted shares of Firstar common stock have been awarded
under the plan. The Board of Directors wishes to continue the plan and
accordingly is seeking the approval of Firstar's shareholders to amend the plan
to authorize an additional 3,000,000 shares of stock and stock appreciation
rights and to effect certain other changes to the plan summarized below. The
Restated Articles of Incorporation of Firstar authorize the issuance of
120,000,000 shares of common stock. There were 64,388,319 shares of Firstar
common stock issued and outstanding as of March 3, 1994 and the market value of
one share of common stock as of that date was $31.875. A copy of the amended
plan is set forth in Exhibit A and the following summary discussion is
qualified by reference to the plan.
The plan, which is administered by the Compensation Committee of the Board of
Directors, provides for the granting of annual awards to senior officers of
Firstar and its subsidiaries of stock options, stock appreciation rights and/or
restricted stock. Presently, approximately 120 employees are eligible to
participate in the plan. The number of participants could increase based upon
future growth and acquisitions by the Corporation. The selection of
participants will be based upon the Compensation Committee's opinion that the
participant is in a position to contribute materially to Firstar's continued
growth and development and to its long-term financial success. Members of the
Compensation Committee are ineligible to participate in the plan.
Options entitle the holder to purchase shares of common stock for an amount
not less than market value of the stock at the date of grant. Each option will
have a life of not more than ten years and one month from date of grant. The
plan originally provided that the option term could be reduced to twelve months
following the holder's death, disability or retirement, or to three months
following termination of employment with Firstar for any other reason. Under
the amended plan, the Compensation Committee could modify or eliminate such
term reduction for outstanding or future options in the event of a holder's
death, disability or retirement. Stock appreciation rights may be granted in
tandem with stock options or independently of any options. Each right granted
entitles the holder to receive cash and/or shares of Firstar common stock
pursuant to a formula based upon market appreciation of the stock. In no event
will the appreciation under any right exceed the fair market value of one share
of stock at the date of grant. Furthermore, no participant
- --------
*As adjusted to reflect the two-for-one stock split effected in September
1992.
18
<PAGE>
in the plan may receive options and stock appreciation rights in any five-year
period for more than 300,000 shares of stock. The plan provides that upon a
change in control of Firstar, as defined in the plan, all options vest and all
stock appreciation rights mature, subject to a minimum holding period of six
months in certain cases.
The plan also provides for awards of restricted stock which may not be sold,
transferred or pledged for a period of time as specified in the grant. In
January 1994, the Board of Directors amended the plan, subject to shareholder
approval, to provide for performance-based share awards. A group presently
consisting of 15 executive officers is eligible to receive performance share
awards. Under the plan a target number of performance shares is awarded
annually to a participant equal to an applicable percentage, not exceeding 50%,
of the participant's salary range midpoint divided by the market price of
Firstar's common stock at the beginning of the performance period. The number
of performance shares earned by a participant is determined based upon
Firstar's return on equity over a three-year performance period compared with
the return on equity achieved by its peer group of $10-$25 billion banking
companies. No shares are earned if Firstar's performance is less than a
threshold level of performance compared with the peer group's performance and
the maximum number of shares earned can not exceed 150% of the target award
based upon a higher level of performance. Furthermore, if Firstar's return on
equity is less than 12% for a performance period, the committee may cancel all
awards for such period regardless of performance compared with peers. The
performance shares are valued at the end of the performance period based upon
the market price of Firstar's common stock and the participant is paid the
value of the earned award one-half in shares of Firstar's common stock and one-
half in cash plus a cash amount equal to the dividends paid during the
performance period on a number of shares of common stock equal to the number of
performance shares earned. The plan provides for the termination of the period
of restriction for restricted stock and performance shares in certain events
including the occurrence of a change in control and a pro-rata reduced payment
based upon the shortened period.
Under the plan the Compensation Committee may establish additional or
different terms for performance shares including imposing a return on assets
goal in addition to or in lieu of a return on equity goal. The Compensation
Committee also may provide for a different allocation of the payment between
cash and stock. The Board of Directors may amend the plan provided, however,
that no amendment shall be made without shareholder approval if such action
would increase the amount of stock issuable under the plan or the maximum
amount issuable to one participant, would materially increase the cost of the
plan or the benefits to participants, or would change the class of persons
eligible to participate in the plan.
Set forth in the table below is information regarding awards of options and
performance shares made during the first quarter of 1994. No other awards were
made under the plan in 1994.
<TABLE>
<CAPTION>
TARGET
NUMBER OF
NUMBER OF PERFORMANCE
NAME AND PRINCIPAL POSITION STOCK OPTIONS SHARES
- --------------------------- ------------- -----------
<S> <C> <C>
Roger L. Fitzsimonds, Chairman of the Board.......... 38,100 9,649
John A. Becker, President............................ 23,100 6,566
Chris M. Bauer, Chairman of the Board of Firstar Bank
Milwaukee........................................... 9,200 3,709
James R. Lang, Chairman of the Board of Firstar
Corporation of Iowa................................. 8,200 2,897
Ronald A. Bero, Senior Executive Vice President...... 8,200 2,897
Executive officers as a group........................ 146,000 47,215
Non-executive officers, as a group................... 222,900
</TABLE>
The options issued in 1994 expire ten years and one month from date of grant
and may be exercised for not less than $30.875 per share. Generally, upon the
exercise of an option, the amount of appreciation in the market value of the
stock over the exercise price is taxable to the participant as ordinary income
and Firstar
19
<PAGE>
is entitled to a tax expense deduction for such amount. In certain other cases
(not involving the options issued in 1994), the appreciated value of the
underlying stock received upon exercise of incentive options within the meaning
of Section 422 of the Internal Revenue Code may be taxable to the participant
as a capital gain upon sale of the stock and Firstar may not receive any tax
expense deduction.
The 1994 performance share awards are subject to shareholder approval of the
amended plan. The maximum number of performance shares earned by any
participant under the 1994 awards is limited to 150% of the target award for
the chairman of the board. Subject to adjustment for variations in the market
price of Firstar's common stock on the award dates, the maximum for each
following year is five percent more than for the prior year. The threshold,
target and maximum objectives for the 1994 awards are median, 70th percentile
and 90th percentile performance as compared with peer group performance.
The Board of Directors believes that the plan will advance the interests of
Firstar and promote continuity of management by encouraging and providing for
acquisition of an equity interest in the success of Firstar by key employees
and by enabling Firstar to attract and retain the services of key employees
upon whose interest, skills and special effort the successful conduct of its
business is largely dependent.
Recommendation
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDED INCENTIVE STOCK PLAN.
PROPOSAL TO APPROVE THE FIRSTAR CORPORATION
ANNUAL EXECUTIVE INCENTIVE PLAN
Summary of Proposal
The Board of Directors of Firstar is seeking shareholder approval of the
Annual Executive Incentive Plan. The following summary discussion is qualified
by reference to the plan, a copy of which is set forth in Exhibit B.
The plan is administered by the Compensation Committee of the Board of
Directors and provides for annual cash awards to approximately 120 senior level
officers of Firstar and its subsidiaries based upon the achievement of certain
previously established performance objectives. The number of participants in
the plan could increase based upon future growth and acquisitions by Firstar.
The Compensation Committee will select participants for the plan based upon the
Committee's opinion that the participants are in positions to contribute
substantially to the success of Firstar. No member of the Compensation
Committee is eligible to participate in the plan.
At the start of each year a participant receives a target award under the
plan representing a percentage, ranging up to a maximum of 50%, of the salary
midpoint of the participant's job grade. The performance factor applicable to
Firstar's chairman of the board and president is Firstar's performance compared
with its peer group of $10-$25 billion banking companies based upon return on
equity. To earn a bonus under this factor, Firstar must perform at a threshold
level of its performance compared with its peer group and a maximum bonus
requires a higher level of performance. The threshold, target and maximum
return on equity objectives for the 1994 awards are median, 70th percentile and
90th percentile performance as compared with peer group performance. Other
participants in the plan are assigned performance measures which may include
the same corporate return on equity objective described above as well as other
factors specific to the participant's business function. Examples of other
performance categories include net income and return on assets for specific
business units, net charge-offs and nonperforming asset levels, expense
management and special projects. Performance at the end of the year is measured
against the target goals to determine payments which range from 50% of target
to 150% of target. No payment is earned if performance is below
20
<PAGE>
the threshold goal and if Firstar's return on equity does not exceed 12%, the
Compensation Committee may cancel all awards granted under the plan for that
year regardless of the participants' performances. The Compensation Committee
may establish additional or different terms for awards including imposing a
return on assets goal in addition to or in lieu of a return on equity
performance goal.
Set forth in the table below is information regarding awards made under the
plan for 1994.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION TARGET AWARD
- --------------------------- ------------
<S> <C>
Roger L. Fitzsimonds, Chairman of the Board....................... $ 297,900
John A. Becker, President......................................... 202,700
Chris M. Bauer, Chairman of the Board of Firstar Bank Milwaukee... 114,500
James R. Lang, Chairman of the Board of Firstar Corporation of
Iowa............................................................. 89,500
Ronald A. Bero, Senior Executive Vice President................... 89,500
Executive officers as a group..................................... 1,459,000
Non-executive officers as a group................................. 2,499,000
</TABLE>
The 1994 awards for the chairman of the board and the president are subject
to shareholder approval of the plan. The maximum amount earned by any
participant under the 1994 awards is limited to 150% of the target award for
the chairman of the board. The maximum for each following year is five percent
more than for the prior year.
The Board of Directors believes that the plan will promote continuity of
management and increase incentive and personal interest in the welfare of
Firstar by those who are primarily responsible for shaping and carrying out its
long-range plans and securing its continued growth and financial success.
Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ANNUAL EXECUTIVE
INCENTIVE PLAN.
ADVISORY SHAREHOLDER PROPOSAL
The Sisters of St. Francis of Philadelphia, located in Aston, Pennsylvania,
beneficial owners of 28,600 shares of Firstar common stock, have given notice
that they intend to present for the reasons noted, the following resolution for
action at the annual meeting of shareholders.
WHEREAS Firstar had millions of dollars in outstanding loans and credits in
South Africa in the mid-1980s when the apartheid system was fully in place, and
we believe it was then forced to reduce its exposure as a result of the
political instability caused by the decay of that system;
WHEREAS we expect that the establishment of an interim government more
representative of the majority of the people of South Africa in the near future
and believe that our bank has a responsibility, stemming from its past history,
to participate in the development of a new economic order;
WHEREAS the South African Council of Churches (1993) stated: "Even after the
establishment of a democratic dispensation, the poor in South Africa will
continue, for some period at least, to suffer from vast inequalities in income,
wealth, living standards and power . . . we must work to foster an ethical
approach to the economy . . .";
WHEREAS adequate housing for about 7 million people who live in makeshift
shanties is crucial to development and political stability;
WHEREAS the Urban Foundation of South Africa noted in 1990 that 174,000 new
housing units would be required each year for five years to meet the needs of
the existing black population;
21
<PAGE>
WHEREAS South African financial and non-governmental institutions have little
experience or expertise in providing for low-income housing;
WHEREAS we believe that U.S. banks could help increase the capacity of South
African financial and other institutions to provide the housing and development
loans to low-income communities of color, through:
1. Provision of loan guarantees, stand-by letters of credit and/or other
credit enhancement mechanisms,
2. Technical assistance with lending to low-income people of color upon the
request of South African institutions, and
3. Loans and grants for community development;
WHEREAS we believe that Firstar can make an important contribution to the
construction of a viable and democratic South Africa because it has significant
expertise in community reinvestment and can provide support for South African
community development initiatives;
RESOLVED, that the shareholders request that the bank develop a policy to
promote responsible banking practices for the development of a democratic South
Africa, once a transitional government is in place. This policy should include:
1. Rolling over outstanding loans and credits on terms conducive to South
Africa's long-term democratic development, and
2. Increasing the capacity of South African institutions to provide
financial resources to those groups previously denied equal access to
credit.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE AGAINST THIS
RESOLUTION.
We share the desire of the Sisters of St. Francis to see a fully democratic
South Africa develop a strong and prosperous economy. We also believe that
shareholders have a right to expect their company to exercise good corporate
citizenship. Each year, we contribute approximately $3 million to charitable
causes in Firstar communities. Our lead bank, Firstar Bank Milwaukee, is a
national leader among financial institutions in community redevelopment. All of
our other banks are proactively addressing the social and economic needs of
their communities as well. As a result, all of our banks have received ratings
of either "Outstanding" or "Satisfactory" for their compliance with the federal
Community Reinvestment Act.
However, it is our policy to focus both our lending and our community
investments in the markets where we have banks and are in a position to fully
understand local conditions and needs. We have no offices and employ no
representatives in South Africa, nor do we anticipate expanding our presence
there. We do maintain correspondent relationships with a small number of
private sector banks in South Africa. We maintain these relationships in order
to serve the export finance needs of our Midwest customers, which we will
continue to do. This activity represents less than 3/10ths of 1% of our income.
SHAREHOLDER PROPOSALS AND DISCUSSIONS
If any shareholder of Firstar wishes to submit a proposal to be included in
next year's proxy statement and acted upon at the annual meeting of Firstar to
be held in 1995, the proposal must be received by the Secretary of Firstar at
the principal executive offices of Firstar, 777 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202, prior to the close of business on November 29,
1994. Firstar's By-laws establish advance notice procedures as to (1) business
to be brought before an annual meeting of shareholders other than by or at the
direction of the Board of Directors, (2) the nomination, other than by or at
the direction of the Board of Directors, of candidates for election as
directors and (3) the request to call a special meeting of shareholders. Any
shareholder who wishes to take such action should obtain a copy of these By-
laws and may do so by written request addressed to the Secretary of Firstar at
the principal executive offices of Firstar.
22
<PAGE>
SELECTION OF AUDITORS
The Board of Directors, upon recommendation of the Audit-Examining Committee,
has selected KPMG Peat Marwick as Firstar's independent auditors for 1994. The
firm has served Firstar as auditors during the previous year. Representatives
of KPMG Peat Marwick are expected to be present at the shareholders' meeting
with the opportunity to make statements if they so desire and to be available
to respond to appropriate questions raised orally at the meeting.
GENERAL
The management does not intend to present to the meeting any other matters
not referred to above and does not presently know of any matters that may be
presented to the meeting by others. However, if other matters come before the
meeting, it is the intention of the persons named in the enclosed form of proxy
to vote the proxy in accordance with their best judgment in the interest of
Firstar. The receipt of any report which may be submitted to the meeting is not
to constitute approval or disapproval of any matters referred to in such report
or reports. Firstar's Form 10-K annual report, including financial statements
for the year ended December 31, 1993, has been provided with this notice of the
1994 annual meeting and proxy statement.
By order of the Board of Directors.
LOGO
William J. Schulz
First Vice President and Secretary
March 18, 1994
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY CARD FOR WHICH A RETURN
ENVELOPE IS PROVIDED.
23
<PAGE>
EXHIBIT A
FIRSTAR CORPORATION
1988 INCENTIVE STOCK PLAN FOR KEY EMPLOYEES
SECTION 1. ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN
1.1 Establishment. Firstar Corporation, a Wisconsin corporation, hereby
establishes the "1988 INCENTIVE STOCK PLAN" (the "Plan") for key employees.
The Plan permits the grant of Stock Options, Stock Appreciation Rights, and
Restricted Stock.
1.2 Purpose. The purpose of the Plan is to advance the interests of the
Corporation and its Subsidiaries and promote continuity of management by
encouraging and providing for the acquisition of an equity interest in the
success of the Corporation by key employees and by enabling the Corporation to
attract and retain the services of key employees upon whose judgment,
interest, skills, and special effort the successful conduct of its operations
is largely dependent.
1.3 Effective Date. The Plan shall become effective on January 1, 1988
subject to prior approval by the shareholders of the Corporation.
SECTION 2. DEFINITIONS; CONSTRUCTION
2.1 Definitions. Whenever used herein, the following terms shall have their
respective meanings set forth below:
(a) "Board" means the Board of Directors of the Corporation.
(b) A "Change of Control" shall be deemed to have occurred on the date on
which (i) securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding voting
securities are acquired pursuant to a tender offer or exchange offer; (ii)
the shareholders of the Corporation approve a merger or consolidation of the
Corporation with another corporation as a result of which less than 50% of
the outstanding voting securities of the surviving or resulting entity are
owned by the former shareholders of the Corporation (other than a
shareholder who is an "affiliate," as defined in the Securities Exchange Act
of 1934, of any party to such consolidation or merger); (iii) the
shareholders of the Corporation approve the sale of substantially all of the
Corporation's assets to a corporation which is not a wholly-owned subsidiary
of the Corporation; (iv) any "person," as used in Section 3(a)(9) of the
Securities Exchange Act of 1934, becomes the beneficial owner, directly or
indirectly, of securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding securities; or
(v) during any period of two consecutive years, individuals who, at the
beginning of such period, constituted the Board cease, for any reason, to
constitute at least a majority thereof, unless the election or nomination
for election of each new director was approved by a vote of at least two-
thirds of the directors then still in office who were directors at the
beginning of the period; provided, however, that no acquisition under clause
(i) or beneficial ownership under clause (iv) by a Participant, the
Corporation, any employee benefit plan of the Corporation or any person or
entity organized, appointed or established pursuant to the terms of any such
benefit plan shall be deemed to constitute a Change of Control event under
this Section 2.1(b). For purposes of this Plan, ownership of securities
shall include ownership as determined by applying the provisions of Rule
13d-3(a) of the Securities Exchange Act of 1934 (as then in effect).
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Compensation Committee of the Board which shall
consist of three or more members of the Board who are not, and who have not
been at any time within one year prior to appointment to the Committee,
eligible to receive Stock under the Plan or any similar plan of the
Corporation. The preceding sentence shall not preclude any person who is or
has been so eligible from serving as a member of the Committee, but such
person shall not be entitled to vote on any matter relating to the Plan.
(e) "Corporation" means Firstar Corporation, a Wisconsin corporation.
(f) "Disability" shall have the same meaning assigned to such term in the
Firstar Corporation Long-Term Disability Insurance Plan.
(g) "Fair Market Value" means the last sale price of the Stock as reported
by the New York Stock Exchange on a particular date.
(h) "Option" means the right to purchase Stock at a stated price for a
specified period of time. For purposes of the Plan an Option may be either
(i) an "incentive stock option" within the meaning of Section 422 of the
Code or (ii) a "nonstatutory stock option."
(i) "Participant" means any individual designated by the Committee to
participate in the Plan.
(j) "Period of Restriction" means the period during which the transfer of
shares of Restricted Stock is restricted pursuant to Section 8 of the Plan.
(k) "Restricted Stock" means Stock granted to a Participant pursuant to
Section 8 of the Plan.
(l) "Retirement" shall have the meaning assigned to such term in the
pension plan of the Corporation.
A-1
<PAGE>
(m) "Securities" shall have the meaning assigned to such term in
Subsection 10.1 of the Plan.
(n) "Stock" means the Common Stock of the Corporation, par value of $1.25
per share.
(o) "Stock Appreciation Right" means the right to receive a payment in
cash or a combination of cash and stock from the Corporation equal to the
excess of the Fair Market Value of a share of stock at the date of exercise
or maturity over a specified price fixed by the Committee, which shall not
be less than 100% of the Fair Market Value of the Stock on the date of
grant. In the case of a Stock Appreciation Right which is granted in
conjunction with an Option, the specified price shall be the Option exercise
price.
(p) "Subsidiary" means any present or future subsidiary of the
Corporation, as defined in Section 424(f) of the Code.
(q) "Tax Date" means the date on which Federal, state or local income tax
is determined as a result of the exercise of a nonstatutory stock option as
described in Subsection 6.1.
(r) "Act" means the Securities Exchange Act of 1934, as amended.
(s) "Peer Group" means the banking companies operating in the United
States having assets in the same range as the Corporation, as established by
Thomson BankWatch, or other similar service, from time to time.
(t) "Performance Account" means the account of a Participant established
and maintained pursuant to the provisions of Section 8A.
(u) "Performance Period" means a period of three consecutive calendar
years with respect to which a Performance Account is established.
(v) "Return on Equity" means, with respect to the Corporation or any other
member of the Peer Group, the ratio of its net income available to common
shareholders for a particular period to its average common shareholders'
equity during such period. If the Return on Equity is required to be
computed for a period exceeding one calendar year, the Return on Equity
shall first be computed separately for each complete calendar year and any
shorter period, and the arithmetic average (time-weighted for partial
periods) of such result shall be used.
(w) "Specified Percentage" means, with respect to a Participant, the
percentage determined by the Committee for the Participant, which shall in
no event exceed 50%.
2.2 Number. Except when otherwise indicated by the context, the singular
shall include the plural, and the plural shall include the singular.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility and Participation. Participants in the Plan shall be
selected by the Committee from among those officers and other key employees of
the Corporation and its Subsidiaries who, in the opinion of the Committee, are
in a position to contribute materially to the Corporation's continued growth
and development and to its long-term financial success.
SECTION 4. STOCK AND STOCK APPRECIATION RIGHTS SUBJECT TO PLAN
4.1 Number. The total number of shares of Stock subject to issuance under
the Plan and Stock Appreciation Rights which may be granted pursuant to the
Plan may not exceed 5,600,000. The total number of shares of Stock subject to
issuance pursuant to Options and Stock Appreciation Rights granted under the
Plan in any five year period to any one person may not exceed 300,000. The
limitations set forth in this Subsection 4.1 are subject to adjustment upon
occurrence of any of the events indicated in Subsection 4.3. A Stock
Appreciation Right that is granted in connection with an Option pursuant to
Subsection 7.1 shall not be counted for purposes of applying the limitations
of this Subsection 4.1. The shares to be delivered under the Plan may consist,
in whole or in part, of authorized but unissued Stock or treasury Stock, not
reserved for any other purpose.
4.2 Unused Stock; Unexercised Rights. In the event any shares of Stock are
subject to an Option which, for any reason, expires or is terminated
unexercised as to such shares, or any shares of Stock, subject to a Restricted
Stock grant made under the Plan are reacquired by the Corporation pursuant to
Subsection 8.9 or 8.10 of the Plan, such shares again shall become available
for issuance under the Plan. In the event that any exercisable Stock
Appreciation Rights expire unexercised, such Rights shall again become
available for issuance under the Plan.
4.3 Adjustment in Capitalization. In the event that any change in the
outstanding shares of Stock (including an exchange of the Stock for stock or
other securities of another corporation) occurs after adoption of the Plan by
the Board by reason of a Stock dividend or split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate
change, the aggregate number of shares of Stock (or the stock or other
securities that had been issued in exchange for the shares of Stock) subject
to each outstanding Option, and its stated Option price, shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive; provided, however, that fractional shares shall be rounded to the
nearest whole share. In such event, the Committee shall also make appropriate
adjustments to the number and type of Stock Appreciation Rights outstanding
and the related grant values, and shall have discretion to make appropriate
adjustments in the number and type of shares subject to Restricted Stock
grants then outstanding under the Plan pursuant to the terms of such grants or
otherwise. In the event of any other change in the Stock, the Committee shall
in its sole discretion determine whether such change equitably requires a
change in the number or type of shares subject to any outstanding Stock
Option, Restricted Stock Grant, or Stock Appreciation Right, and any such
adjustment made by the Committee shall be conclusive.
A-2
<PAGE>
SECTION 5. DURATION OF PLAN
5.1 Duration of Plan. The Plan shall remain in effect, subject to the
Board's right to earlier terminate the Plan pursuant to Subsection 12.3
hereof, until all Stock subject to it shall have been purchased or acquired
pursuant to the provisions hereof and all Stock Appreciation Rights shall have
expired or been exercised. Notwithstanding the foregoing, no Option, Stock
Appreciation Right or Restricted Stock may be granted under the Plan on or
after the tenth (10th) anniversary of the latest date any amendment, revision
or modification of the Plan was approved by shareholders of the Corporation.
SECTION 6. STOCK OPTIONS
6.1 Grant of Options. Subject to the provisions of Sections 4 and 5, Options
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee shall have complete discretion in
determining the number of Options granted to each Participant. The Committee
also shall determine whether an Option is to be an incentive stock option
within the meaning of Section 422 of the Code or a nonstatutory stock option.
However, in no event shall the Fair Market Value (determined at the date of
grant) of Stock with respect to which incentive stock options are exercisable
for the first time by a Participant during any calendar year exceed $100,000.
Nor shall any incentive stock option be granted to any person who owns,
directly or indirectly, stock possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation. Nothing in this
Section 6 of the Plan shall be deemed to prevent the grant of nonstatutory
stock options in excess of the maximum established by Section 422 of the Code.
6.2 Option Agreement. Each Option shall be evidenced by an Option agreement
that shall specify the type of Option granted, the Option price, the duration
of the Option, the number of shares of Stock to which the Option pertains and
such other provisions as the Committee shall determine.
6.3 Option Price. No Option granted pursuant to the Plan shall have an
Option price that is less than the Fair Market Value of the Stock on the date
the Option is granted.
6.4 Duration of Options. Each Option shall expire at such time as the
Committee shall determine at the time it is granted, provided, however, that
no Option that is an incentive stock option shall be exercisable later than
the tenth (10th) anniversary date of its grant, and no Option that is a
nonstatutory stock option shall be exercisable more than ten years and one
month after the date of its grant.
6.5 Exercise of Options. Subject to the provisions of Subsection 12.2,
options granted under the Plan shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall in each
instance approve, which need not be the same for all Participants; provided,
however, that Options granted to a Participant who is a director of the
Corporation or an officer of the Corporation or a Subsidiary subject to
Section 16 of the Act, shall not be exercisable until at least six months have
elapsed from the date of grant of such Options.
6.6 Payment. The Option price upon exercise of any Option shall be payable
to the Corporation in full either (i) in cash or its equivalent, or (ii) by
tendering shares of previously acquired Stock having a Fair Market Value at
the time of exercise equal to the total Option price, or (iii) by a
combination of (i) and (ii). The proceeds from such a payment shall be added
to the general funds of the Corporation and shall be used for general
corporate purposes.
6.7 Restrictions on Stock Transferability. The Committee may impose such
restrictions on any shares of Stock acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities law, under the requirements
of any stock exchange upon which such shares of Stock are then listed and
under any blue sky or state securities laws applicable to such shares.
6.8 Termination of Employment Due to Death, Disability or Retirement. In the
event the employment of a Participant is terminated by reason of death,
Disability or Retirement, the Committee may provide that any outstanding
Options (a) shall become immediately exercisable and (b) shall expire at any
time not later than the original expiration date of the Options. However, in
the case of incentive stock options, the favorable tax treatment prescribed
under Section 422 of the Code shall not be available if such options are not
exercised within three months after such date of termination due to
Retirement.
6.9 Termination of Employment Other than for Death, Disability or
Retirement. If the employment of the Participant shall terminate for any
reason other than death, Disability or Retirement, the rights under any then
outstanding Option granted pursuant to the Plan shall terminate upon the
expiration date of the Option or three months after such date of termination
of employment, whichever first occurs.
6.10 Nontransferability of Options. No option granted under the Plan may be
sold, transferred, pledged, assigned or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further,
all Options granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant.
SECTION 7. STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights. Subject to the provisions of
Sections 4 and 5, Stock Appreciation Rights may be granted to Participants.
Each grant of Stock Appreciation Rights shall be in writing. A Stock
Appreciation Right may relate to a specific Option granted under the Plan and
may, in such case, relate to all or part of the Option shares covered by the
related Option, or may be granted independently of any Option granted under
the Plan.
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<PAGE>
7.2 Exercise or Maturity of Stock Appreciation Rights. Subject to the
provisions of Subsection 12.2, Stock Appreciation Rights shall be exercisable
or shall mature at such time or times, on the conditions and to the extent and
in the proportion, that any related Option is exercisable and may be exercised
or mature for all or part of the shares of Stock subject to the related
Option. In the case of a Stock Appreciation Right that is granted
independently of any Option granted under the Plan, such Rights shall be
exercisable or shall mature at such time or times, on the conditions and to
the extent and in the proportion set forth in the grant. Notwithstanding the
preceding sentence, a Stock Appreciation Right granted under the Plan to a
Participant who is a director of the Corporation or an officer of the
Corporation or a Subsidiary subject to Section 16 of the Act, shall not be
exercisable until at least six months have elapsed from the date of grant of
such Stock Appreciation Right.
7.3 Effect of Exercise. Upon exercise of any number of Stock Appreciation
Rights, the number of Option shares subject to any related Option shall be
reduced accordingly and such Option shares may not again be subjected to an
Option under this Plan. The exercise of any number of Options shall result in
an equivalent reduction in the number of Option shares covered by the related
Stock Appreciation Right and such shares may not again be subject to a Stock
Appreciation Right under this Plan; provided, however, that if a Stock
Appreciation Right was granted for less than all of the Option shares covered
by any related Option, any such reduction shall be made at such time as, and
only to the extent that, the number of shares exercised under the related
Option exceeds the number of Option shares not covered by the Stock
Appreciation Right.
7.4 Payment of Stock Appreciation Right Amount. Upon exercise or maturity of
the Stock Appreciation Right, the holder shall be entitled to receive payment
of an amount (subject to Subsections 7.5 and 7.7 below) determined by
multiplying:
(a) The difference between the Fair Market Value of a share of Stock at
the date of exercise over the price fixed by the Committee at the date of
grant, by
(b) The number of shares with respect to which the Stock Appreciation
Right is exercised.
In the case of a Stock Appreciation Right which is granted in conjunction
with an incentive stock option, the amount determined under (a) above shall be
determined by using a price fixed by the Committee at the date of grant which
does not exceed the option price of any related incentive stock option. The
holder of a Stock Appreciation Right shall receive payment in cash or a
combination of cash and Stock, the Fair Market Value of which is to be
determined as of the date of exercise or maturity of the Right, all in
accordance with the terms and conditions of the written grant of the Right.
7.5 Limit on Appreciation. The amount per share which will be payable upon
exercise or maturity of a Stock Appreciation Right shall in no event exceed
the Fair Market Value of the Stock at the date of grant. At such time as the
amount so payable under the terms of a Stock Appreciation Right is first equal
to or greater than the limitation of the preceding sentence: (a) any Stock
Appreciation Right that has not become exercisable by the Participant shall be
immediately exercisable, and (b) any Stock Appreciation Right that has not
matured shall automatically mature and become payable. The preceding sentence
shall not limit or deny the right of a Participant to exercise any Option in
connection with which a Stock Appreciation Right has been granted.
7.6 Rule 16b-3 Requirements. Notwithstanding any other provision of the
Plan, the Committee may impose such conditions on exercise of a Stock
Appreciation Right (including, without limitation, the right of the Committee
to limit the time of exercise to specified periods) as may be required to
satisfy the requirements of Rule 16b-3 (or any successor rule), under the
Securities Exchange Act of 1934.
7.7 Termination of Employment. The Committee may provide in its grant of
Stock Appreciation Rights that in the event the employment of a Participant is
terminated by reason of death, Disability, Retirement or any other reason, any
Rights outstanding shall terminate, and the grant shall set forth the manner
and extent of termination.
SECTION 8. RESTRICTED STOCK
8.1 Grant of Restricted Stock. Subject to the provisions of Sections 4 and
5, the Committee, at any time and from time to time, may grant shares of
Restricted Stock under the Plan to such Participants and in such amounts as it
shall determine. Each grant of Restricted Stock shall be in writing.
8.2 Transferability. Except as provided in Section 8 hereof, the shares of
Restricted Stock granted hereunder may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated for such period of time as
shall be determined by the Committee and shall be specified in the Restricted
Stock grant, or upon earlier satisfaction of other conditions as specified by
the Committee in its sole discretion and set forth in the Restricted Stock
grant.
8.3 Other Restrictions. The Committee may impose such other restrictions on
any shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, restrictions providing for partial
payment of awards in certain events and for forfeiture of some or all such
shares of Restricted Stock in the event performance objectives established by
the Committee are not met and restrictions under applicable Federal or state
securities laws. The certificates representing Restricted Stock may be
legended to give appropriate notice of such restrictions.
8.4 Certificate Legend. In addition to any legends placed on certificates
pursuant to Subsection 8.3 hereof, each certificate representing shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is
subject to certain restrictions on transfer set forth in Firstar
Corporation's 1988 Incentive Stock Plan, rules of administration
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adopted pursuant to such Plan and a Restricted Stock grant dated
. A copy of the Plan, such rules and such Restricted Stock
grant may be obtained from the Secretary of Firstar Corporation."
8.5 Removal of Restrictions. Except as otherwise provided in Section 8
hereof, shares of Restricted Stock covered by each Restricted Stock grant made
under the Plan shall become freely transferable by the Participant after the
last day of the Period of Restriction; provided, however, that if a grant of
Restricted Stock sets forth any restrictions providing for forfeiture in the
event certain specified performance objectives are not met, shares of
Restricted Stock covered by such grant shall not become freely transferable
until a determination has been made whether such performance objectives have
been met. Once the shares are released from the restrictions, the Participant
shall be entitled to have the legend required by Subsection 8.4 removed from
the Participant's Stock certificate.
8.6 Voting Rights. During the Period of Restriction, Participants holding
shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those shares.
8.7 Dividends and Other Distributions. During the Period of Restriction,
Participants holding shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those shares while they are so held; provided, however, that the Committee may
provide in any grant of shares of Restricted Stock that payment of dividends
thereon may be deferred until termination of the Period of Restriction and may
be made subject to the same restrictions regarding forfeiture as apply to such
shares of Restricted Stock. If any such dividends or distributions are paid in
shares of Stock, the shares shall be subject to the same restrictions on
transferability as the shares of Restricted Stock with respect to which they
were paid.
8.8 Termination of Employment Due to Retirement. The Committee may provide
in its Restricted Stock grant that in the event a Participant terminates his
or her employment with the Corporation because of Retirement, any remaining
Period of Restriction applicable to the Restricted Stock pursuant to
Subsection 8.2 hereof shall automatically terminate and, except as otherwise
provided in Subsection 8.3, the shares of Restricted Stock shall thereby be
free of restrictions and freely transferable. In the event the Restricted
Stock grant does not automatically terminate such restrictions and a
Participant terminates his or her employment with the Corporation because of
Retirement, the Committee may, in its sole discretion, waive the restrictions
remaining on any or all shares of Restricted Stock pursuant to Subsection 8.2
hereof and/or add such new restrictions to those shares of Restricted Stock as
it deems appropriate.
8.9 Termination of Employment Due to Death or Disability. The Committee may
provide in its Restricted Stock grant that in the event a Participant
terminates his or her employment with the Corporation because of death or
Disability during the Period of Restriction, the restrictions applicable to
the shares of Restricted Stock pursuant to Subsection 8.2 hereof shall
terminate automatically with respect to all of the shares or that number of
shares (rounded to the nearest whole number) equal to the total number of
shares of Restricted Stock granted to such Participant multiplied by the
number of full months which have elapsed since the date of grant divided by
the maximum number of full months of the Period of Restriction. All remaining
shares shall be forfeited and returned to the Corporation; provided, however,
that the Committee may, in its sole discretion, waive the restrictions
remaining on any or all such remaining shares.
8.10 Termination of Employment for Reasons Other than Death, Disability or
Retirement. In the event that a Participant terminates his or her employment
with the Corporation for any reason other than those set forth in Subsections
8.8 and 8.9 hereof during the Period of Restriction, then any shares of
Restricted Stock still subject to restrictions at the date of such termination
shall automatically be forfeited and returned to the Corporation; provided,
however, that, in the event of an involuntary termination of the employment of
a Participant by the Corporation, the Committee may, in its sole discretion,
waive the automatic forfeiture of any or all such shares and/or may add such
new restrictions to such shares of Restricted Stock as it deems appropriate.
8.11 Nontransferability of Restricted Stock. No shares of Restricted Stock
granted under the Plan may be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution until the termination of the applicable Period of
Restriction. All rights with respect to Restricted Stock granted to a
Participant under the Plan shall be exercisable during the Participant's
lifetime only by such Participant.
SECTION 8A. PERFORMANCE-BASED RESTRICTED STOCK
8A.1 Grant of Performance-Based Restricted Stock. The Committee, at any time
and from time to time, may grant awards of Restricted Stock subject to this
Section 8A to such Participants and in such amounts as it shall determine.
Each such grant shall be in writing and shall be subject to the terms and
conditions of this Section 8A and, to the extent not inconsistent therewith,
the terms and conditions of Section 8.
8A.2 Performance Account. A Performance Account shall be established on the
books of the Corporation for each Participant. The Performance Account shall
be designated in shares of Stock. For each Participant, the number of shares
in his or her Performance Account shall be (a) the product of the Specified
Percentage and the base salary midpoint of his or her salary grade, (b)
divided by the Fair Market Value of a share of Stock on the last business day
preceding the commencement of the Performance Period or, in the case of awards
made in 1994, on the date of the award. The maximum number of shares credited
to any Participant's account for an award made in 1994 shall be computed as
provided in the preceding sentence wherein the product in clause (a) consists
of a Specified Percentage of 50% multiplied by the 1994 base salary midpoint
of the chief executive officer of the Corporation. The maximum number for each
following year shall be computed based upon a product which is five percent
more than for the prior year.
8A.3 No Credits to Account. Except as provided in Section 4.3, the number of
shares of Stock in each Participant's Performance Account shall not be
increased during the Performance Period for any reason, including the payment
of dividends or other distributions with respect to the Stock.
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8A.4 Final Adjustment to Performance Account. As soon as practicable after
the completion of the Performance Period, the Committee shall certify the
Return on Equity of the Corporation for the Performance Period. The Committee
shall also certify the comparison of the Corporation's Return on Equity with
the Return on Equity achieved by the other members of the Peer Group. The
number of shares in the Performance Account of each Participant shall be
multiplied by a percentage determined in accordance with the following table,
subject to the additional conditions and limitations set forth in this Section
8A:
<TABLE>
<CAPTION>
PERCENTILE APPLICABLE
RANKING PERCENTAGE
---------- ----------
<S> <C>
Below 50th percentile.......................................... 0%
50th percentile (median)....................................... 50%
70th percentile................................................ 100%
90th percentile................................................ 150%
</TABLE>
If the Corporation's performance is greater than the 50th percentile but less
than the 90th percentile, the applicable percentage shall be determined by
linear interpolation between the applicable points. In no event shall the
percentage exceed 150% for percentile rankings in excess of 90.
8A.5 Payment of Award. As soon as practicable after all of the
determinations required by Section 8A.4 have been made, each Participant shall
receive a cash payment equal to the product of the number of shares of Stock
credited to his or her Performance Account, as adjusted by Section 8A.4, and
the aggregate dividends paid by the Corporation on a share of Stock during the
Performance Period. At the same time, the Corporation shall deliver to each
Participant with respect to his or her Performance Account (a) a certificate
for shares of Stock equal in number to 50% of the number of shares of Stock
credited to such account, as adjusted, and (b) a payment of cash equal to the
product of 50% of the number of shares of Stock credited to such account, as
adjusted, and the Fair Market Value of a share of Stock as of the last
business day in the Performance Period. The Corporation shall also pay to each
Participant cash in lieu of issuing fractional shares of Stock.
8A.6 Threshold Performance Requirement. Notwithstanding the provisions of
Section 8A.4 and 8A.5, if the Return on Equity of the Corporation for a
Performance Period is less than 12% and the Committee shall have determined
that payments of awards under this Section 8A would not be in the best
interest of the Corporation, no Participant shall receive any payments,
whether in cash or Stock, with respect to his or her Performance Account for
such Performance Period.
8A.7 Status of Account. Until shares of Stock are issued and payments are
made to a Participant with respect to his or her Performance Account, the
Participant shall have no interest or rights in or to any specific assets or
property of the Corporation or any shares of Stock, and the Participant shall
have no right to vote any shares of Stock represented by the Performance
Account.
8A.8 Termination of Employment. In the event a Participant's employment is
terminated, the provisions of Sections 8.8, 8.9 and 8.10 shall apply to
determine the extent (if any) to which the Participant (or his or her
designated beneficiary) shall be entitled to receive cash and shares of Stock
that would otherwise be payable pursuant to Section 8A.5. For purposes of
making the adjustments described in Section 8A.5 and applying them to the
circumstances described in the preceding sentence, the Return on Equity of the
Corporation and the Peer Group shall be computed for the number of complete
fiscal years and/or quarters in the Performance Period preceding the effective
date of the termination of the Participants' employment.
8A.9 Other Terms. The Committee may, in its sole discretion, establish
additional or different terms and conditions with respect to the Performance
Account of any or all of the Participants. Without limiting the foregoing, the
Committee may impose a return on assets performance goal in addition to, or in
lieu of, a Return on Equity performance goal and may provide for a different
allocation between the cash and Stock components of the payment with respect
to the Performance Account.
8A.10 Change of Control. Upon the occurrence of Change of Control, each
Performance Period shall terminate and each Participant shall receive a
distribution with respect to his or her Performance Account under Section
8A.5, subject to the conditions set forth therein and in this Section 8A.10.
The amount of the cash payable and the number of shares of Stock to be issued
to each Participant with respect to each Performance Period shall be the
amount and number determined in accordance with Section 8A.5 multiplied by a
fraction, the numerator of which is the number of full months which have
elapsed since the beginning of the Performance Period and the denominator of
which is the number of full months in the Performance Period (determined
without regard to this Section 8A.10). For purposes of making the adjustments
described in Section 8A.5 and applying them to the consequences of a Change of
Control, the Return on Equity of the Corporation and the Peer Group shall be
computed for the number of complete fiscal years and/or quarters in the
Performance Period preceding the occurrence of the Change of Control.
SECTION 9. BENEFICIARY DESIGNATION
9.1 Beneficiary Designation. Each Participant under the Plan may, from time
to time, name any beneficiary or beneficiaries (who may be named contingently
or successively) to whom any benefit under the Plan is to be paid in case of
the Participant's death before he or she receives any or all of such benefit.
Each designation will revoke all prior designations by the same Participant,
shall be in a form prescribed by the Committee and will be effective only when
filed by the Participant in writing with the Committee during the lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the estate of the Participant.
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SECTION 10. ADDITIONAL TRANSFER RESTRICTIONS
10.1 Generally. In addition to the transfer restrictions provided in
Subsections 6.7, 8.2 and 8.3, no Participant or personal representative of a
deceased Participant who holds Stock acquired under the Plan, whether as
Restricted Stock or pursuant to the exercise or maturity of an Option or Stock
Appreciation Right, or any stock issued as a stock dividend thereon or any
securities issued in lieu thereof or in substitution or exchange thereof
(together referred to herein as "Securities") shall sell or otherwise dispose
of the Securities except as provided in this Section 10, without first
offering the Securities to the Corporation in writing for the consideration
and under the terms of payment to apply to the third-party transfer.
10.2 Response to Offer. Upon receipt by the Corporation of any such offer,
the Corporation shall have the right for a period of ten (10) days after such
receipt to either (a) purchase such Securities or place them with other
stockholders of the Corporation on the terms and at the price stated in such
offer, or (b) require that, unless such offer is withdrawn, the offerer sell
the Securities so offered on any national securities exchange upon which the
Securities are then being traded within a period of ten (10) days after being
advised by the Corporation in writing of such requirement.
If the Corporation shall fail to exercise such rights within ten (10) days
after its receipt of such offer of sale, the offerer may, within thirty (30)
days after the date of delivery of such offer to the Corporation, sell the
Securities to whomever will purchase them upon the same terms and price for
which they were offered to the Corporation, and after such sale such
Securities shall be free of the restrictions of this Section 10.
10.3 Legend on Certificates. Certificates for all Securities shall be
endorsed with a legend referring to the restrictions on transfer set forth in
this Section 10.
10.4 Exceptions. The provisions of this Section 10 shall not apply to a gift
or bequest of Securities, or disposition of the same pursuant to intestate
laws, provided, however, that any person who acquires any Securities by gift,
bequest or disposition pursuant to intestate laws shall be subject to the
provisions of this Section 10 to the same extent as though such person were a
Participant who acquired such Securities under the Plan.
10.5 Waiver. The provisions of this Section 10 may be waived in whole or in
part in any particular case or cases by the Committee or may be terminated at
any time by the Committee, whenever it may determine that no substantial
benefit to the Corporation is afforded by such provisions.
SECTION 11. RIGHTS OF EMPLOYEES
11.1 Employment. Nothing in the Plan shall interfere with or limit in any
way the right of the Corporation to terminate any Participant's employment at
any time nor confer upon any Participant any right to continue in the employ
of the Corporation.
SECTION 12. ADMINISTRATION; POWERS AND DUTIES OF THE COMMITTEE
12.1 Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Corporation, and
to make all other determinations necessary or advisable for the administration
of the Plan, but only to the extent not contrary to the express provisions of
the Plan. Determinations, interpretations, or other actions made or taken by
the Committee pursuant to the provisions of the Plan shall be final and
binding and conclusive for all purposes and upon all persons whomsoever.
12.2 Change of Control. Notwithstanding any other provision of this Plan,
upon the occurrence of a Change of Control all Options and Stock Appreciation
Rights then outstanding shall become immediately exercisable in full for the
remainder of their terms, all Stock Appreciation Rights then outstanding that
have not matured shall mature and all Periods of Restriction shall terminate;
provided, however, that Participants who are directors of the Corporation or
officers of the Corporation or a Subsidiary subject to Section 16 of the Act,
shall have the right to exercise their Options and Stock Appreciation Rights
and to receive Stock pursuant to awards of Restricted Stock only if at least
six months have elapsed from the date of grant of such Options, Stock
Appreciation Rights, and Restricted Stock awards, as the case may be. The
preceding sentence shall not apply to Restricted Stock awards subject to
Section 8A, and the effect of a Change of Control on such awards shall be
determined exclusively by the provisions of Section 8A.10.
12.3 Amendment, Modifications and Termination of Plan. The Board may at any
time terminate, and from time to time may amend or modify the Plan, provided,
however, that no such action of the Board, without approval of the
shareholders, may:
(a) Increase the total amount of Stock which may be issued or Stock
Appreciation Rights which may be granted under the Plan, except as provided
in Subsections 4.1, 4.3 and 5.3 of the Plan.
(b) Increase the total number of shares of Stock that may be issued
pursuant to Options granted under the Plan and Stock Appreciation Rights
granted under the Plan to any one Participant, except as provided in
Subsections 4.1, 4.3 and 5.3 of the Plan.
(c) Change the provisions of the Plan regarding the Option price except as
permitted by Subsection 4.3.
(d) Materially increase the cost of the Plan or materially increase the
benefits to Participants.
(e) Extend the period during which Options, Stock Appreciation Rights or
Restricted Stock may be granted.
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(f) Extend the maximum period after the date of grant during which Options
or Stock Appreciation Rights may be exercised or mature.
(g) Change the class of individuals eligible to receive Options,
Restricted Stock, or Stock Appreciation Rights.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options, Stock Appreciation Rights or Restricted Stock,
theretofore granted under the Plan, without the consent of the Participant.
SECTION 13. TAX WITHHOLDING
13.1 Tax Withholding. Whenever shares of Stock are to be issued under the
Plan, the Corporation shall have the power to require the recipient of the
Stock to remit to the Corporation an amount sufficient to satisfy Federal,
state and local withholding tax requirements prior to issuance of the
certificate for shares of Stock.
13.2 Share Withholding. In the discretion of the Committee, the Option
Agreement may provide that a Participant exercising an Option may satisfy the
Corporation's withholding requirements by electing to have the Corporation
withhold shares of Stock otherwise issuable to the Participant, having a Fair
Market Value on the Tax Date in the amount required to be withheld. The
election shall be made in writing and shall be made according to such rules
and in such form as the Committee shall from time to time determine.
SECTION 14. REQUIREMENTS OF LAW
14.1 Requirements of Law. The granting of Options, Stock Appreciation Rights
or Restricted Stock, and the issuance of shares of Stock upon the exercise of
an Option shall be subject to all applicable laws, rules and regulations, and
to such approvals by any governmental agencies or national securities
exchanges as may be required.
14.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of
Wisconsin.
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EXHIBIT B
FIRSTAR CORPORATION
ANNUAL EXECUTIVE INCENTIVE PLAN
SECTION 1. ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN
1.1 Establishment. Firstar Corporation, a Wisconsin corporation, hereby
establishes the Annual Executive Incentive Plan (the "Plan") for key employees
of the Corporation and its Subsidiaries. The Plan provides for annual cash
awards to be made to Participants based upon the achievement of certain
previously established objectives.
1.2 Purpose. The purpose of the Plan is to attract and retain in the employ
of the Corporation and its Subsidiaries persons possessing outstanding
management skills and competence who will contribute substantially to the
success of the Corporation and to provide incentives to such persons to exert
their maximum efforts on behalf of the Corporation by rewarding them with
additional compensation when the Corporation has achieved significant
financial objectives as provided for in the Plan. The Board believes that the
Plan will promote continuity of management and increased personal interest in
the welfare of the Corporation by those who are primarily responsible for
developing and carrying out the long-range plans of the Corporation and
securing its continued growth and financial success.
1.3 Effective Date. The Plan shall become effective on January 1, 1988, and
the first Plan Year shall be the year ending December 31, 1988. The Plan shall
continue in effect from time to time until and unless terminated by the Board.
SECTION 2. DEFINITIONS; CONSTRUCTION
2.1 Definitions. Whenever used herein, the following terms shall have their
respective meanings set forth below:
(a) "Midpoint Salary" means the midpoint of the range of the lowest and
highest salary established by the Corporation for the Participant's salary
grade level, in effect at the beginning of the Plan Year.
(b) "Board" means the Board of Directors of the Corporation.
(c) A "Change of Control" shall be deemed to have occurred on the date on
which (i) securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding voting
securities are acquired pursuant to a tender offer or exchange offer; (ii)
the shareholders of the Corporation approve a merger or consolidation of the
Corporation with another corporation as a result of which less than 50% of
the outstanding voting securities of the surviving or resulting entity are
owned by the former shareholders of the Corporation (other than a
shareholder who is an "affiliate," as defined in the Securities Exchange Act
of 1934, of any party to such consolidation or merger); (iii) the
shareholders of the Corporation approve the sale of substantially all of the
Corporation's assets to a corporation which is not a wholly-owned subsidiary
of the Corporation; (iv) any "person," as used in Section 3(a)(9) of the
Securities Exchange Act of 1934, becomes the beneficial owner, directly or
indirectly, of securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding securities, the
effect of which (as determined by the Board) is to take over control or
participate in the affairs of the Corporation; or (v) during any period of
two consecutive years, individuals who, at the beginning of such period,
constituted the Board cease, for any reason, to constitute at least a
majority thereof, unless the election or nomination for election of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period. For
purposes of this Plan, ownership of securities shall include ownership as
determined by applying the provisions of Rule 13d-3(a) of the Securities
Exchange Act of 1934 (as then in effect).
(d) "Committee" means the Compensation Committee of the Board which shall
consist of three or more members of the Board who are not, and who have not
been at any time within one year prior to appointment to the Committee,
eligible to receive any benefits under the Plan or any similar plan of the
Corporation. The preceding sentence shall not preclude any person who is or
has been so eligible from serving as a member of the Committee, but such
person shall not be entitled to vote on any matter relating to the Plan.
(e) "Corporation" means Firstar Corporation, a Wisconsin corporation.
(f) "Corporate Staff" means those Employees of the Corporation who are
engaged principally in activities relating to the overall operations and
management of the Corporation and its Subsidiaries as a whole.
(g) "Disability" shall have the same meaning assigned to such term in the
Firstar Corporation Long-Term Disability Insurance Plan.
(h) "Employee" means any person, including an officer or director, who is
employed on a permanent, full-time basis by, and receives a regular salary
from, the Corporation or any Subsidiary.
(i) "Operating Unit" means any Subsidiary or any division, branch,
department, office of the Corporation or any Subsidiary that is treated as a
separate profit center and that reports as such (directly or indirectly) to
management of the Corporation.
(j) "Participant" means any Employee who has been selected to participate
in the Plan.
(k) "Plan Year" means a fiscal year of the Corporation, except that a Plan
Year shall terminate on the day immediately preceding the day on which a
Change of Control occurs.
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(l) "Retirement" shall have the meaning and definition set forth in the
pension plan of the Corporation.
(m) "Subsidiary" means any corporation in which the Corporation owns
(directly or indirectly) 50% or more of the outstanding stock entitled to
vote for directors.
(n) "Act" means the Securities Exchange Act of 1934, as amended.
(o) "Peer Group" means the banking companies operating in the United
States having assets in the same range as the Corporation, as established by
Thomson BankWatch, or other similar service, from time to time.
(p) "Return on Equity" means, with respect to the Corporation or any other
member of the Peer Group, the ratio of its net income available to common
shareholders for a particular period to its average common shareholders'
equity during such period.
2.2 Number. Except when otherwise indicated by the context, the singular
shall include the plural and the plural shall include the singular.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Generally. In general, those Employees in compensation grades 37 through
54 shall participate in the Plan.
3.2 Special Circumstances. Other Employees in addition to those described in
Subsection 3.1 may be approved by the Committee for participation in the Plan
(either on a continuing basis or yearly basis) if it finds that the inclusion
of such other Employees in the Plan is necessary or desirable to carry out the
purposes of the Plan. The Committee may in its discretion exclude one or more
Employees who are otherwise eligible from participation in the Plan.
3.3 Date of Eligibility. All awards for a Plan Year will be made at the
beginning of such Plan Year, in accordance with Sections 5 and 6, to Employees
who are then eligible to participate in the Plan. If an employee becomes
eligible to participate in the plan due to a promotion during a Plan Year, the
Committee may make a partial pro rata award to such employee based upon the
number of months remaining in the Plan Year.
SECTION 4. ADMINISTRATION; POWERS AND DUTIES OF THE COMMITTEE
4.1 Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action, is authorized
to interpret the Plan, to prescribe, amend, and rescind rules and regulations
relating to the Plan, to provide for conditions and assurances deemed
necessary or advisable to protect the interests of the Corporation, and to
make all other determinations necessary or advisable for the administration of
the Plan, but only to the extent not contrary to the express provisions of the
Plan. The Committee may request the assistance of the Board in making any
determination under the Plan or in carrying out its duties hereunder.
Determinations, interpretations, or other actions made or taken by the
Committee pursuant to the provisions of the Plan shall be final and binding
and conclusive for all purposes and upon all persons whomsoever.
4.2 Amendment, Modification and Termination of Plan. The Board or the
Committee may at any time terminate, and from time to time may amend or modify
the Plan, except that no amendment by the Committee shall increase the amount
of an award payable to a Participant or class of Participants or allow a
member of the Committee to be a Participant, and except that no such
termination shall be effective with respect to the Plan Year in which it
occurs.
SECTION 5. BASIS FOR AWARDS
5.1 Determination of Goals. (a) Awards to the chief executive officer and
the chief operating officer of the Corporation shall be based solely upon the
Corporation's Return on Equity compared with the Return on Equity achieved by
other members of the Peer Group of which the Corporation is a member. Such
comparison shall be expressed in terms of a comparative ranking. Threshold
performance shall require median (50th percentile) performance; Target
performance shall require 70th percentile performance; and Maximum performance
shall require 90th percentile performance. (b) At the beginning of each Plan
Year, the Committee shall establish the criteria upon which awards to
Participants other than the chief executive officer and the chief operating
officer of the Corporation shall be based. The Committee may authorize the
chief executive officer and the chief operating officer to establish criteria
specific to a participant's business area. Such criteria may include earnings
per share, return on equity, net earnings, return on average assets, operating
earnings, net interest margin, and any others that, in the judgment of the
Committee, properly reflect the contribution of the Participant. Such criteria
may also be applied to the Corporation as a whole or, to the extent feasible,
to the Operating Unit in which the Participant is employed. These criteria
should take into account the forecasts, budgets and other plans of the Board
and management of the Corporation. The Committee is responsible for ensuring
that these criteria meet the objectives of the Corporation and its
shareholders and are achievable through high levels of management performance.
5.2 Revision of Goals. (a) The Committee may, in its sole discretion,
establish additional or different terms and conditions with respect to the
goals for the chief executive officer and chief operating officer set forth in
Subsection 5.1(a). Without limiting the foregoing, the Committee may impose a
return on assets performance goal in addition to, or in lieu of, a Return on
Equity performance goal. (b) Under normal business conditions, the criteria
set forth in Subsection 5.1(b) shall not be altered or revised after they have
been established for a Plan Year and communicated to Participants. However,
unusual conditions may warrant a re-examination of such criteria, such as
extraordinary gains or losses, acquisitions or dispositions of significant
Operating Units and other nonrecurring events. Revision of criteria under this
Subsection 5.2 shall be subject to approval by the Committee.
B-2
<PAGE>
SECTION 6. METHOD OF DETERMINING AWARDS
6.1 Allocation to Corporation, Operating Unit and Individual. A Participant
shall be assigned various criteria established pursuant to Subsection 5.1 with
respect to the Corporation as a whole, the Subsidiary and/or a regional group
of Subsidiaries as a whole (if any) and the Operating Unit (if any) by which
the Participant is employed. The extent to which a Participant's criteria have
been achieved shall first be separately determined at each of the levels, and
then in the aggregate in accordance with a series of relative weights to be
established in connection with the establishment of performance goals for each
Participant. In certain cases the criteria set for the Operating Unit level
may be comprised of more than one element and may include criteria specific to
the Participant's area of responsibility, and the performance levels may be
measured separately rather than in the aggregate. The sum of the relative
weights for each Participant shall be 100%. It is anticipated that Employees
who are Corporate Staff shall be assigned performance criteria with respect
(in whole or in part) to the Corporation as a whole, and Employees of a
Subsidiary or Operating Unit shall be assigned performance criteria with
respect (in part) to that Subsidiary or Operating Unit. The preceding sentence
is intended as a guide for the Committee and not as a limitation upon its
discretion. The Committee may, in its discretion, vary the relative weights to
be assigned to each of the levels at which performance is measured, provided
that any change shall take effect with the Plan Year beginning after the date
on which such change is approved by the Committee.
6.2 Target Award. A Participant who has achieved exactly 100% of his or her
criteria ("Target Percentage") pursuant to the provisions of Subsection 6.1
shall be entitled to an award ("Target Award") equal to the following
percentage of such Participant's Midpoint Salary for the Plan Year:
<TABLE>
<CAPTION>
COMPENSATION PERCENTAGE OF
GRADE MIDPOINT SALARY
------------ ---------------
<S> <C>
54.................................................. 50%
52-53.................................................. 45%
48-51.................................................. 40%
45-47.................................................. 35%
44.................................................. 30%
41-43.................................................. 25%
37-40.................................................. 20%
</TABLE>
A Participant who has achieved at least the minimum percentage established by
the Committee (the "Threshold Percentage") and not more than the maximum
percentage established by the Committee ("Maximum Percentage") of his or her
criteria pursuant to the provisions of Subsection 6.1 shall be entitled to a
percentage of such Participant's Target Award based upon the following table:
<TABLE>
<CAPTION>
PERCENTAGE
OF PERCENTAGE
CRITERIA OF
ACHIEVED TARGET AWARD
---------- ------------
<S> <C>
Threshold Percentage........................................ 50%
Target Percentage........................................... 100%
Maximum Percentage.......................................... 150%
</TABLE>
Where a percentage falls between any two points, the appropriate percentage of
Target Award shall be determined by linear interpolation between the
applicable points. No award shall be payable to a Participant who has not
achieved at least the Threshold Percentage of his or her criteria pursuant to
the provisions of Subsection 6.1, and no award in excess of 150% of the Target
Award shall be payable to a Participant who has achieved in excess of the
Maximum Percentage of his or her criteria.
6.3 Limitation on Awards. The Committee may, in its discretion, impose any
limitations or conditions upon the receipt of awards that it deems necessary
or desirable in appropriate circumstances, which may be applied to one or more
Participants or to all of the Participants as a group; such limitations and
conditions may include, but need not be limited to, the attainment of a
threshold level of return on assets, return on equity, or earnings per share
of the Corporation. Such limitations and conditions shall be established and
communicated to Participants at the time the criteria established pursuant to
Section 5.1 is communicated to Participants, and may thereafter be revised
only in accordance with the principles set forth in Subsection 5.2. The
maximum amount of payment to any Participant for an award made under the Plan
for 1994 shall not exceed 150% of the target award for the highest
compensation grade set forth in Section 6.2. The maximum for each following
year shall be five percent more than for the preceding year.
SECTION 7. PAYMENT OF AWARDS
Except as provided in Subsection 8.9, all awards made under the Plan shall
be paid to Participants if reasonably possible within 30 days after the date
on which consolidated financial statements of the Corporation for the Plan
Year have been prepared and the independent certified public accountants for
the Corporation have issued their report thereon.
SECTION 8. CHANGES IN EMPLOYMENT STATUS OR CONTROL
8.1 Generally. For purposes of this Plan, any changes in the employment
status of a Participant during a Plan Year, including but not limited to
termination of employment, transfers from Corporate Staff to an Operating Unit
or vice versa or between Operating Units, changes in compensation grades or
transfer between an eligible or ineligible position, shall be treated as
having occurred on the first day of the month following the month in which
such change or transfer occurs, unless such change or transfer occurs on the
first day of the month in which case the change or transfer shall be effective
on the first day of such month. Subject to the maximum award limitation
B-3
<PAGE>
set forth in Section 6.3, in the event that a Participant changes positions
during a Plan Year, the performance criteria may be modified or revised to
reflect such new position or level of responsibility and the Participant's
award will be pro-rated based upon the respective job grade midpoints and the
period of time the Participant held such positions during the Plan Year.
8.2 Reduced Award for Partial Year of Eligibility. If during a Plan Year a
Participant is assigned to a different position and thereby ceases to be
eligible to participate under the Plan, or if his or her eligibility is
terminated by action of the Committee during the Plan Year, he or she shall be
entitled to receive a partial Award for the portion of time during the Plan
Year that such Participant was eligible to participate.
8.3 Temporary Assignment. A Participant who is assigned to a position on an
"acting" or "temporary" basis shall not participate in the Plan for that
position until the Participant shall be permanently assigned to such position.
If the prior position of the Participant qualified for participation in the
Plan, the Participant shall continue to participate for that position until
the "acting" or "temporary" basis of his or her assignment is resolved or
until the end of the Plan Year of such assignment, whichever occurs first.
8.4 Transfer Between Units. If a Participant is employed in an eligible
position during an entire Plan Year but by more than one Operating Unit, or is
employed by an Operating Unit in an eligible position for part of a Plan Year
and as an eligible member of the Corporate Staff for the remainder of such
year, then the award of such Participant for the Plan Year shall consist of a
partial award under Section 6 based upon the number of months the Participant
was a member of the Corporate Staff and one or more partial awards under
Section 6 based upon the number of months the Participant was employed by each
Operating Unit in which the Participant was an Employee.
8.5 Temporary Absence. If a Participant is absent from work during a Plan
Year for 30 or more paid working days (exclusive of vacations and holidays),
the Participant's award for purposes of Section 6 of the Plan may, in the
discretion of the Committee, be reduced by the percentage obtained by dividing
the total number of paid working days so absent by the total number of working
days in the Plan Year or in the portion of the Plan Year when he or she was a
Participant, whichever is less.
8.6 Termination Other Than for Cause. In the event a Participant's
employment is terminated by death, Retirement, Disability or in any other
manner except for cause as provided in Subsection 8.7, the Participant shall
be entitled to receive the full amount of any award for the preceding Plan
Year not yet paid. In addition, such Participant shall be entitled to a
partial award for the Plan Year in which such termination of employment occurs
only in case of termination due to death, Retirement, or Disability.
8.7 Termination for Cause. A Participant whose employment is terminated for
cause (as determined by the Committee) shall not be entitled to any award for
the Plan Year in which termination of employment occurs or for the preceding
Plan Year (except for amounts previously paid to him or her).
8.8 New Subsidiaries. If the Corporation shall acquire a new Subsidiary
which is an Operating Unit, the employees of such Subsidiary who were not
previously employed by the Corporation or any Subsidiary and who are eligible
to participate in the Plan shall commence participation with the Plan Year
immediately following the Plan Year in which such Subsidiary was acquired.
8.9 Partial Awards. If a Participant's employment is terminated during a
Plan Year in accordance with Subsection 8.6, the partial award shall be
determined as follows. Any partial award shall be based upon the number of
full calendar months the Participant was employed by the Corporation during
the Plan Year. The extent to which the Participant's performance criteria have
been achieved shall be determined in accordance with Subsection 6.1 as of the
end of the month preceding the month in which termination of employment
occurs, unless termination occurs on the last day of the month in which case
it shall be determined as of the end of such month of termination. The
performance results for such partial period shall then be annualized to
determine whether the Participant is entitled to an award in accordance with
Subsection 6.2; provided, however, that the percentage of Target Award, if
any, that the Participant is entitled to receive shall be reduced to the
product obtained by multiplying such amount by a fraction the numerator of
which is the number of whole calendar months in which the Participant was
employed during the Plan Year and the denominator of which is 12. The
Corporation may rely on estimated financial results and other relevant data to
the extent necessary to determine achievement of performance criteria for any
partial award and absent manifest error such determinations shall be binding.
The payment of any partial award shall be made no later than the date of the
Participant's last day of employment.
8.10 Awards Payable Upon Change of Control. If a Plan Year is terminated
upon the occurrence of a Change of Control as provided in Subsection 2.1(k),
Participants shall be entitled to partial awards determined and payable in
accordance with Subsection 8.9 as if the Participants' employment had
terminated on the day on which the Change of Control occurred, and Subsection
8.9 shall be applied for this purpose as if the Plan Year had been a period of
12 months.
8.11 Periodic Vesting of Awards. Notwithstanding the provisions of
Subsections 8.6 and 8.7 to the contrary, in the case of a Participant who has
entered into a Key Executive Employment and Severance Agreement with the
Corporation, such Participant shall be entitled to receive all awards for all
Plan Years ending before the date of the Participant's termination and a
partial award computed under Subsection 8.9 for the number of complete months
in the Plan Year during which the Participant was employed by the Corporation
or a Subsidiary.
SECTION 9. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by
the Committee and
B-4
<PAGE>
will be effective only when filed by the Participant in writing with the
Committee during the Participant's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be
paid to the estate of the Participant.
SECTION 10. RIGHTS OF EMPLOYEES
10.1 Employment. Nothing in the Plan shall interfere with or limit in any
way the right of the Corporation to terminate any Participant's employment at
any time nor confer upon any Participant any right to continue in the employ
of the Corporation.
SECTION 11. STATUS OF PAYMENTS
No right, benefit or payment under this Plan shall be subject to
anticipation, sale, assignment, pledge, encumbrance or charge, and any attempt
to anticipate, sell, assign, pledge, encumber or charge the same shall be
void. No right, benefit or payment hereunder shall in any manner be liable for
or subject to the debts, contracts, liabilities or torts of the person
entitled to such benefits. If any Participant or beneficiary hereunder should
become bankrupt or attempt to anticipate, alienate, sell, assign, pledge,
encumber or charge any right, benefit or payment or any part thereof shall, in
the sole discretion of the Committee, cease; in such event, the Corporation
may hold or apply the same or any part thereof for the benefit of the
Participant or the beneficiary, spouse, children or other dependents of the
Participant, in such manner and in such proportion as the Committee deems
proper.
SECTION 12. GOVERNING LAW
The Plan shall be construed in accordance with and governed by the laws of
the State of Wisconsin.
B-5
<PAGE>
PROXY NO. FIRSTAR NO. OF SHARES
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION INDICATED, WILL BE VOTED FOR NOMINEES FOR DIRECTOR NAMED IN ITEM 1,
FOR THE AMENDMENT TO THE 1988 INCENTIVE STOCK PLAN FOR KEY EMPLOYEES IN ITEM 2,
FOR THE APPROVAL OF THE ANNUAL EXECUTIVE INCENTIVE PLAN IN ITEM 3 AND AGAINST
THE ADVISORY SHAREHOLDER PROPOSAL IN ITEM 4.
DATED: ____________________, 1994 ___________________________________________
___________________________________________
Stockholder(s) Sign Here
Please sign exactly as your name appears
hereon, giving your full title if signing
as attorney or fiduciary. If shares are
held jointly, each joint owner should sign.
If a corporation, please sign in full
corporate name, by duly authorized officer.
If a partnership, please sign in
partnership name by authorized person.
PLEASE RETURN PROMPTLY IN ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE
U.S.
================================================================================
FIRSTAR CORPORATION
777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Roger L. Fitzsimonds, John A. Becker and
William J. Schulz and each of them, proxies of the undersigned with power of
substitution, to vote all stock of the undersigned at the annual meeting of the
shareholders of Firstar Corporation, to be held on April 21, 1994, at 2:00 P.M.,
and at any adjournments thereof, as indicated below:
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
1. ELECTION OF FOR all nominees listed below WITHHOLD AUTHORITY
DIRECTORS (except as marked to the to vote for all nominees
contrary below) ______ listed below ______
NOMINEES FOR TERM EXPIRING IN 1997: John A. Becker, George M. Chester, Jr.,
Roger L. Fitzsimonds, Holmes Foster, Joe
Hladky, Judith D. Pyle, Dr. Clifford V.
Smith, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee, cross
out that nominee's name.)
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 2.
2. To amend the 1988 Incentive Stock Plan for Key Employees
FOR ______ AGAINST ______ ABSTAIN ______
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 3.
3. To approve the Annual Executive Incentive Plan
FOR ______ AGAINST ______ ABSTAIN ______
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM 4.
4. Advisory shareholder proposal concerning South Africa
FOR ______ AGAINST ______ ABSTAIN ______
- --------------------------------------------------------------------------------
5. With discretionary power upon any and all other business that may properly
come before the meeting and upon matters incident to the conduct of the
meeting.
