<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/X/ Preliminary proxy statement
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Boatmen's Bancshares, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Boatmen's Bancshares, Inc.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 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 transactions applies:
- -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:<F1>
- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
- -------------------
[FN]
<F1> Set forth the amount on which the filing fee 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:
- -------------------------------------------------------------------------------
<PAGE> 2
Notice of
ANNUAL MEETING
and
PROXY STATEMENT
Annual Meeting of Shareholders
APRIL 25, 1995
<PAGE> 3
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March --, 1995
TO SHAREHOLDERS OF
BOATMEN'S BANCSHARES, INC.
Notice is hereby given that the annual meeting of shareholders of
Boatmen's Bancshares, Inc. will be held at the principal executive
offices of the Corporation at One Boatmen's Plaza, 800 Market Street,
St. Louis, Missouri 63101, on Tuesday, April 25, 1995, at 10:00 a.m.
for the purpose of considering and voting upon the following matters:
1. The election of five Directors, each to hold office for a term of
three years and until his successor shall have been duly elected and
qualified.
2. The adoption of an amendment to the Restated Articles of
Incorporation of Boatmen's Bancshares, Inc. to increase the authorized
shares of Common Stock from 150,000,000 to 200,000,000.
3. The adoption of an amendment to the Boatmen's Bancshares, Inc.
1987 Non-Qualified Stock Option Plan to increase the authorized shares
of Common Stock under the Plan.
4. The adoption of an amendment to the Boatmen's Bancshares, Inc.
1991 Incentive Stock Option Plan to increase the authorized shares of
Common Stock under the Plan.
5. Any other business which may be brought before the meeting or any
adjournment thereof.
DAVID L. FOULK
Secretary
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE, WHETHER YOU PLAN TO ATTEND THE MEETING IN PERSON OR NOT. IF
YOU DO ATTEND THE MEETING, YOU MAY THEN WITHDRAW YOUR PROXY, IF YOU
WISH.
<PAGE> 4
BOATMEN'S BANCSHARES, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 1995
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of Boatmen's Bancshares, Inc., (the
"Corporation") of proxies to be voted at the annual meeting of
shareholders to be held at 10:00 a.m. on April 25, 1995, at the
principal executive offices of the Corporation at One Boatmen's Plaza,
800 Market Street, St. Louis, Missouri 63101. This proxy statement and
the form of proxy were first mailed to shareholders on March --, 1995.
Any shareholder executing a proxy which is solicited hereby has the
power to revoke it. Revocation may be made effective by giving written
notice to the Corporation at any time prior to exercise of the proxy.
Proxies will be solicited by mail. They also may be solicited by
officers and regular employees of the Corporation, personally or by
telephone or other electronic means, but such persons will not be
specially compensated for their services. The Corporation has retained
Corporate Investor Communications, Inc., a proxy solicitation firm, to
assist in the solicitation of proxies from banks, brokers, nominees and
intermediaries at a base fee of $6,000, plus reasonable out-of-pocket
expenses. All expenses of solicitation will be paid by the Corporation.
As of March 2, 1995, there were ------- shares of Common Stock, $1.00
par value, (the "Common Stock") and ----- shares of 7% Cumulative
Redeemable Preferred Stock, Series B, $100 Stated Value, (the "Series B
Preferred") (together hereinafter "Voting Stock") outstanding. Only
holders of record of such Voting Stock at the close of business on
March 2, 1995, are entitled to notice of and to vote at the annual
meeting. Each holder of shares of Voting Stock of record on that date
is entitled to one vote for each share of Voting Stock held, except
that, in the election of Directors, such shareholders have cumulative
voting rights which entitle each such shareholder to the number of
votes which equals the number of shares held by the shareholder
multiplied by the number of Directors to be elected. All such
cumulative votes may be cast for one candidate or may be distributed
among two or more candidates. There is no condition precedent to the
exercise of these cumulative voting rights. The affirmative vote of at
least a plurality of the votes cast by the holders of Voting Stock
represented in person or by proxy at the annual meeting is required to
elect Directors. With respect to each matter to be acted upon at the
meeting, abstentions on properly executed proxy cards will be counted
for purposes of determining a quorum at the meeting; however, such
abstentions and shares not voted by brokers and other entities holding
shares on behalf of beneficial owners will not be counted in
calculating voting results on those matters for which the shareholder
has abstained or the broker has not voted.
The following table sets forth, as of December 31, 1994, the name and
address of each beneficial owner of more than 5% of the Corporation's
Common Stock and Series B Preferred known to the Board of Directors of
the Corporation, showing the amount and nature of such beneficial
ownership:
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
VOTING POWER INVESTMENT POWER TOTAL
NAME & ADDRESS OF ------------ ---------------- BENEFICIAL PERCENT
BENEFICIAL OWNER SOLE SHARED SOLE SHARED OWNERSHIP OF CLASS
-------------------- ---- ------ ---- ------ --------- --------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK:
Boatmen's Bancshares, Inc.<F1>.............. -0- 8,857,456 -0- 8,233,354 9,171,715 8.8%
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63101
Boatmen's Trust Company..................... 4,094,288 1,938,255 746,283 4,587,309 6,134,289 5.9
100 North Broadway
St. Louis, Missouri 63102
SERIES B PREFERRED:
Carolyn C. Glassman & Albert Irl Dubinsky... 2,018 2,018 2,018 17.7
TR UA DTD April 8, 1982
Carolyn Glassman Trust
1815 Locust Street
St. Louis, Missouri 63103
George W. Howard, Jr........................ 1,249 1,249 1,249 10.9
Drawer U
Mount Vernon, Illinois 62864
Mabel B. Howard............................. 1,096 1,096 1,096 9.6
Drawer U
Mount Vernon, Illinois 62864
Helen Lucille Powers........................ 975 975 975 8.5
835 North 27th Street
Mount Vernon, Illinois 62864
<FN>
- -----
<F1> The Corporation itself holds no shares as record owner. However,
subsidiaries of the Corporation hold shares in various fiduciary
capacities and, by virtue of sole or shared voting or investment
power in respect of such shares, are deemed to own them
beneficially. As parent of its subsidiaries, the Corporation may be
deemed to share voting power or investment power, or both, as to
all shares beneficially owned by those subsidiaries and is
therefore deemed a beneficial owner of all such shares. It is the
practice of those subsidiaries when holding shares as sole trustee
or sole executor to vote said shares but, where shares are held as
co-executor or co-trustee, approval is obtained from the
co-fiduciary prior to voting.
</TABLE>
3
<PAGE> 6
SHAREHOLDER PROPOSALS
The Corporation's Amended Bylaws require that notice of shareholder
nominations for Directors and proposals of business to be transacted at
the Corporation's annual meeting of shareholders must be received by
the Secretary of the Corporation not less than 75 days prior to the
date of the meeting in order to be considered.
If shareholder proposals are to be considered for inclusion in the
Corporation's proxy statement and form of proxy for a forthcoming
annual meeting, such proposals must be submitted on a timely basis and
the proposals and proponents thereof must meet the requirements
established by the Securities and Exchange Commission (the "SEC") for
shareholder proposals. Such proposals for the annual shareholders'
meeting to be held in April 1996 must be received by the Corporation no
later than November --, 1995. Any such proposals, together with
supporting statements, should be directed to the Secretary of the
Corporation.
ITEM 1. ELECTION OF DIRECTORS AND
INFORMATION WITH RESPECT TO DIRECTORS AND EXECUTIVE OFFICERS
The first item to be acted upon at the annual meeting of shareholders
is the election of five (5) Directors to serve as members of Class II,
each to hold office for a term of three (3) years and until his
successor shall have been duly elected and qualified.
The Corporation's Restated Articles of Incorporation and Amended
Bylaws presently provide that the number of Directors to constitute the
Board of Directors shall consist of not less than fifteen (15) nor more
than twenty-seven (27) and that the total number of Directors may be
fixed, within the minimum and maximum numbers, by a vote of a majority
of the Directors then in office. Pursuant to these provisions, the
Board of Directors has fixed the number of Directors at sixteen (16).
The Restated Articles of Incorporation also provide that the Board of
Directors shall be divided into three (3) classes, as nearly equal as
possible, with one class to be elected annually for a three (3) year
term, and designate the Class II Directors for election at the 1995
annual meeting of shareholders.
All proxies in the form enclosed which are received by the Board of
Directors conferring authority to vote in the election of Directors
will be voted FOR the five (5) nominees listed below equally or in such
other proportions as the proxy holders, upon the direction of the Board
of Directors, shall deem appropriate, except that special instructions
received from any shareholder by proxy to exercise his cumulative
voting rights in any way shall be followed. In the event any nominee
declines or is not able to serve, it is intended that the proxies will
be voted for a successor nominee designated by the Board of Directors.
The Board of Directors knows of no reason to believe that any nominee
will decline or be unable to serve if elected.
4
<PAGE> 7
INFORMATION ABOUT NOMINEES FOR DIRECTORS:
CLASS II DIRECTORS
NAME AND AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS
- ------------------------------------------------------------------------
RICHARD L. BATTRAM
[PHOTO] Served as a Director
since 1986; Age: 60
Vice Chairman of the Board, The May Department Stores Company
(retailer)
Director of Pet Incorporated
WILLIAM E. CORNELIUS
[PHOTO] Served as a Director
since 1981; Age: 63
Retired Chairman of the Board and Chief Executive Officer, Union
Electric Company (electric utility)
Director of General American Life Insurance Company; GenCare Health
Systems, Inc.; McDonnell Douglas Corporation
C. RAY HOLMAN
[PHOTO] Nominee for
Director; Age: 52
Chairman of the Board, President and Chief Executive Officer,
Mallinckrodt Group Inc. (human and animal health care products and
specialty chemicals)
Director of Laclede Gas Company
WILLIAM E. MARITZ
[PHOTO] Served as a Director
since 1992; Age: 66
Chairman of the Board and Chief Executive Officer, Maritz Inc.
(performance improvement, travel, communication, business meeting,
training and marketing research company)
Director of Brown Group, Inc.; General American Life Insurance Company;
Petrolite Corporation
RICHARD E. PECK
[PHOTO] Nominee for
Director; Age: 58
President, University of New Mexico (32,000 student multi-campus
university)
5
<PAGE> 8
INFORMATION ABOUT DIRECTORS CONTINUING IN OFFICE:
CLASS III DIRECTORS
(TERMS EXPIRING 1996)
NAME AND AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS
- ------------------------------------------------------------------------
ANDREW B. CRAIG, III
[PHOTO] Served as a Director
since 1985; Age: 63
Chairman of the Board and Chief Executive Officer of the Corporation
Director of Anheuser-Busch Companies, Inc.; Laclede Gas Company;
Petrolite Corporation
JOHN PETERS MACCARTHY
[PHOTO] Served as a Director
since 1975; Age: 61
Vice Chairman of the Corporation; Chairman of the Board and Chief
Executive Officer of Boatmen's Trust Company (a subsidiary of the
Corporation)
Director of Union Electric Company
ANDREW E. NEWMAN
[PHOTO] Served as a Director
since 1990; Age: 50
Chairman of the Board, Edison Brothers Stores, Inc. (retail specialty
chain stores)
Director of Sigma-Aldrich Corporation; Lee Enterprises
ALBERT E. SUTER
[PHOTO] Served as a Director
since 1990; Age: 59
Senior Vice Chairman of the Board and Chief Operating Officer, Emerson
Electric Co. (manufacturer of electrical and electronic products)
DWIGHT D. SUTHERLAND
[PHOTO] Served as a Director
since 1985; Age: 72
Partner, Sutherland Lumber Company (retailer of lumber and building
materials)
Director of Datapoint Corporation; Canal Capital Corporation; Intelogic
Trace
6
<PAGE> 9
CLASS III DIRECTORS (CONTINUED)
(TERMS EXPIRING 1996)
NAME AND AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS
- ------------------------------------------------------------------------
THEODORE C. WETTERAU
[PHOTO] Served as a Director
since 1985; Age: 67
Retired Chairman of the Board and Chief Executive Officer, Wetterau
Incorporated (a SUPERVALU Company); Retired Vice Chairman of the Board
and Director, SUPERVALU Inc.
Director of Automobile Club of Missouri; General American Life
Insurance Company; GenCare Health Systems, Inc.; Maritz Inc.
CLASS I DIRECTORS
(TERMS EXPIRING 1997)
B. A. BRIDGEWATER, JR.
[PHOTO] Served as a Director
since 1983; Age: 61
Chairman of the Board, President and Chief Executive Officer, Brown
Group, Inc. (footwear and specialty retailing)
Director of ENSERCH Corporation; FMC Corporation; McDonnell Douglas
Corporation
JOHN E. HAYES, JR.
[PHOTO] Served as a Director
since 1986; Age: 57
Chairman of the Board, President and Chief Executive Officer, Western
Resources, Inc. (electric and gas utility)
Director of Cellular, Inc.; Security Benefit Group
SAMUEL B. HAYES, III
[PHOTO] Served as a Director
since 1988; Age: 58
President of the Corporation; Chairman of the Board, The Boatmen's
National Bank of St. Louis (a subsidiary of the Corporation)
JERRY E. RITTER
[PHOTO] Served as a Director
since 1986; Age: 60
Executive Vice President, Chief Financial and Administrative Officer,
Anheuser-Busch Companies, Inc. (brewing of beer, food products and
family entertainment)
7
<PAGE> 10
CLASS I DIRECTORS (CONTINUED)
(TERMS EXPIRING 1997)
NAME AND AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS
- ------------------------------------------------------------------------
WILLIAM P. STIRITZ
[PHOTO] Served as a Director
since 1982; Age: 60
Chairman of the Board and Chief Executive Officer, Ralston Purina
Company (food products and processing; animal foods)
Director of Angelica Corporation; Ball Corporation; The May Department
Stores Company; Reinsurance Group of America, Inc.
Each of the Directors has held the same position or another executive
position with the same employer during the past five years.
The Board of Directors of the Corporation met eight times during
1994. All of the incumbent Directors attended 75% or more of the total
meetings of the Board and all committees on which they served except
for the following: William E. Maritz, Jerry E. Ritter and William P.
Stiritz.
The Nominating Committee is appointed by the Board of Directors
annually or more often and is comprised of three or more Directors who
are not officers or employees of the Corporation. The Nominating
Committee met once during 1994. It is presently comprised of the
following members: William P. Stiritz, Chairman, Albert E. Suter and
Theodore C. Wetterau.
The functions of the Nominating Committee are to recommend to the
Board of Directors a slate of nominees for Directors to be presented
for election by shareholders at each annual meeting of the Corporation
and to recommend to the Board of Directors persons to fill vacancies on
the Board. The Committee will consider nominees for Director submitted
in writing to the attention of the Secretary of the Corporation.
8
<PAGE> 11
<TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 2, 1995, the number of
shares of all equity securities of the Corporation owned beneficially
by each Director (including nominees for Director), executive officers
named in the Summary Compensation Table, and all Directors and
executive officers as a group, including options exercisable within 60
days for the purchase of shares.
<CAPTION>
SHARES OF COMMON STOCK
OF THE CORPORATION
BENEFICIALLY OWNED<F1>
AS OF MARCH 2, 1995
------------------------------- PERCENT
BENEFICIAL OWNERS SHARES<F2> OPTIONS OF CLASS<F3>
----------------- ---------- ------- -----------
<S> <C> <C> <C>
Richard L. Battram................................. 3,000 - -
B. A. Bridgewater, Jr.............................. 20,000 - -
William E. Cornelius............................... 7,668 - -
Andrew B. Craig, III............................... 39,210 181,219 -
Ilus W. Davis(4)................................... 429,045 - -
John E. Hayes, Jr.................................. 3,420 - -
Samuel B. Hayes, III............................... 36,306 111,549 -
C. Ray Holman...................................... 1,000 - -
Lee M. Liberman<F5>................................ 7,376 - -
John Peters MacCarthy<F6>.......................... 81,814 31,082 -
William E. Maritz.................................. 6,364 - -
Andrew E. Newman................................... 4,382 - -
Richard E. Peck.................................... 240 - -
Jerry E. Ritter.................................... 1,974 - -
William P. Stiritz................................. 2,920 - -
Albert E. Suter.................................... 4,200 - -
Dwight D. Sutherland<F7>........................... 654,596 - -
Ted C. Wetterau.................................... 9,143 - -
John M. Brennan<F8>................................ 38,656 33,361 -
Gregory L. Curl.................................... 9,432 50,724 -
All Directors, Nominees and Executive Officers as a
Group............................................. 1,373,882 555,317 %
<FN>
- -----
<F1> Beneficial ownership of shares, as determined in accordance with
applicable SEC rules, includes shares as to which a person directly
or indirectly has or shares voting power or investment power or
both.
<F2> Fractional shares omitted.
<F3> Assumes exercise of options for the purchase of 2,549,595 shares. The
percentage is less than 1.0% except as otherwise noted.
<F4> Includes 336,705 shares of which Mr. Davis' wife is sole owner and as
to which Mr. Davis disclaims beneficial ownership.
<F5> Includes 1,700 shares of which Mr. Liberman's wife is sole owner
and as to which Mr. Liberman disclaims beneficial ownership.
<F6> Includes 30,000 shares held in Mr. MacCarthy's Charitable Lead Trust
of which his wife is a trustee and 3,652 shares of which his wife
is sole owner. Mr. MacCarthy disclaims beneficial ownership of
these shares.
<F7> Includes 181,596 shares under trust or agency agreements for which
Mr. Sutherland is trustee.
<F8> Includes 13,448 shares of which Mr. Brennan's wife is sole owner and
as to which Mr. Brennan disclaims beneficial ownership.
</TABLE>
9
<PAGE> 12
<TABLE>
EXECUTIVE COMPENSATION
The following table sets forth on an accrual basis for the three
fiscal years ended December 31, 1994, the compensation paid to the
Corporation's Chief Executive Officer and the four most highly
compensated Executive Officers other than the Chief Executive Officer.
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------------------------
AWARDS PAYOUTS
----------------------------
SECURITIES LONG TERM ALL OTHER
UNDERLYING INCENTIVE COMPEN-
SALARY BONUS OPTIONS/ PAYOUTS SATION
NAME AND PRINCIPAL POSITION YEAR ($)<F1> ($) SARS (#)<F2> ($) ($)<F3>
- --------------------------- ---- ------ ----- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Andrew B. Craig, III 1994 $625,024 $307,800 21,700 $246,533 $ 7,400
Chairman of the Board and Chief 1993 $587,523 $373,750 21,400 $408,750 $10,394
Executive Officer of the Corporation 1992 $560,002 $370,600 23,890 $190,000 $ 5,977
Samuel B. Hayes, III 1994 $471,838 $214,217 14,900 $162,756 $ 8,900
President of the Corporation; 1993 $449,837 $220,500 14,800 $240,000 $10,394
Chairman of the Board of 1992 $430,517 $222,600 18,410 $112,000 $ 5,764
The Boatmen's National Bank of
St. Louis
John Peters MacCarthy 1994 $387,965 $128,419 12,400 $135,630 $13,614
Vice Chairman of the Corporation; 1993 $374,865 $183,750 12,400 $210,000 $16,608
Chairman of the Board and Chief 1992 $358,750 $185,500 15,342 $ 96,000 $12,105
Executive Officer of Boatmen's
Trust Company
Gregory L. Curl 1994 $275,571 $123,824 7,500 $ 79,811 $10,380
Vice Chairman of the Corporation 1993 $223,569 $108,000 7,200 $112,350 $11,851
1992 $208,008 $106,000 7,500 $ 52,800 $11,527
John M. Brennan 1994 $268,975 $111,296 8,600 $ 94,324 $ 6,000
Executive Vice President of the 1993 $259,905 $127,400 8,600 $143,100 $ 8,994
Corporation 1992 $249,900 $129,850 10,740 $ 72,000 $ 4,364
<FN>
- -----
<F1> Includes deferred compensation.
<F2> Each non-qualified option was granted with a tandem stock
appreciation right ("SAR").
<F3> Includes contributions to the Corporation's 401(k) plan (1994
contributions: Mr. Craig-$6,000; Mr. Hayes-$7,500; Mr.
MacCarthy-$6,000; Mr. Curl-$3,000; and Mr. Brennan-$6,000) and
stock purchase plan (1994 contributions: Mr. Craig-$1,400; Mr.
Hayes-$1,400; Mr. MacCarthy-$1,400; and Mr. Curl-$1,400) and
interest earned on the Centerre Executive Deferred Compensation
Plan exceeding 120% of applicable Federal long-term rate for Mr.
MacCarthy (1994 earnings: $6,213).
</TABLE>
10
<PAGE> 13
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
NUMBER OF
SECURITIES POTENTIAL REALIZABLE VALUE AT
UNDERLYING % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
OPTIONS/ OPTIONS/SARS APPRECIATION FOR OPTION TERM<F2>
SARS GRANTED TO EXERCISE OR -------------------------------------
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION 0% 5% 10%
NAME #<F1> FISCAL YEAR ($/SH) DATE ($) ($) ($)
---- ------- ------------ ----------- ---------- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Andrew B. Craig, III........... 21,700 3.12% $27.75 02/15/04 $0 $378,705 $959,712
Samuel B. Hayes, III........... 14,900 2.14% $27.75 02/15/04 $0 $260,032 $658,973
John Peters MacCarthy.......... 12,400 1.78% $27.75 02/15/04 $0 $216,403 $548,407
Gregory L. Curl................ 7,500 1.08% $27.75 02/15/04 $0 $130,889 $331,698
John M. Brennan................ 8,600 1.23% $27.75 02/15/04 $0 $150,086 $380,347
<FN>
- -----
<F1> Each non-qualified option was granted with a SAR. The stock options
and SARs, which were granted on February 15, 1994, become
exercisable at the rate of one-third on each of the first three
anniversary dates of the grant, subject to acceleration in the
event of a "change in control".
<F2> Exercise or base price is equal to the closing trade price on the
date of grant.
<F3> Pre-tax gain. The dollar amounts under these columns are the result
of calculations at 0% and at the 5% and 10% rates set by the SEC
and, therefore, are not intended to forecast possible future
appreciation, if any, of the Corporation's stock price. The
Corporation's per share stock price would be $45.20 and $75.32 if
increased 5% and 10%, respectively, compounded annually over the
option term.
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FY-END FY-END<F2>
SHARES --------------------------------------------------------------
ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($)<F1> # # $ $
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew B. Craig, III................. 2,100 $ 25,137 145,724 63,370 $1,351,431 $236,419
Samuel B. Hayes, III................. 5,400 $ 61,325 85,849 45,173 $ 736,198 $174,721
John Peters MacCarthy................ 15,496 $247,169 9,247 38,265 $ 22,568 $151,717
Gregory L. Curl...................... 1,300 $ 18,440 38,378 25,236 $ 279,872 $ 93,275
John M. Brennan...................... 1,100 $ 7,254 18,287 26,421 $ 131,595 $103,807
<FN>
- -----
<F1> Pre-tax gain. Amounts shown represent the difference between the
stock option grant price and the market value of the stock on the
date of exercise.
<F2> Pre-tax gain. Value of unexercised in-the-money options based on
December 30, 1994 closing trade price of $27.125.
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLAN-AWARDS IN LAST FISCAL YEAR
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS UNDER
OTHER PERIOD NON-STOCK PRICE BASE PLANS
UNTIL --------------------------------------------------------------------
MATURATION MINIMUM THRESHOLD TARGET MAXIMUM
NAME OR PAYOUT $ $ $ $
---- ----------------- ------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
Andrew B. Craig, III........................ Three Years $0 $120,000 $300,000 $540,000
Samuel B. Hayes, III........................ Three Years $0 $ 73,382 $183,456 $330,221
John Peters MacCarthy....................... Three Years $0 $ 61,152 $152,880 $275,184
Gregory L. Curl............................. Three Years $0 $ 36,979 $ 92,448 $166,406
John M. Brennan............................. Three Years $0 $ 42,398 $105,996 $190,793
</TABLE>
11
<PAGE> 14
The Corporation's long-term incentive plan makes cash payouts
pursuant to a formula based upon total shareholder return over three-
year periods, beginning annually, measured against a peer group of 40
other financial institutions and adjusted upward or downward in
relation to the attainment of objectives for average annual earnings
per share growth rate as set by the Compensation Committee at the
beginning of each three-year period.
Potential future payouts are based on average base salary as of each
January 1, for the three year performance period, 1994-1996, but assume
no increase in base salary during the performance period. The payouts,
if any, will be made in 1997.
RETIREMENT BENEFITS
Executive Officers of the Corporation participate in the Boatmen's
Bancshares, Inc. Retirement Plan for Employees (the "Retirement Plan")
and the Boatmen's Supplemental Retirement Plan (the "BSRP"). The
purpose of the BSRP is to supplement the benefits payable under the
Retirement Plan to the extent they are reduced on account of the
limitations imposed by the Internal Revenue Code (maximum compensation
and maximum benefit) and also to include bonuses which are excluded
from earnings used to calculate benefits under the Retirement Plan.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF SERVICE
-------------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
------------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$ 200,000................................ $ 45,000 $ 60,000 $ 75,000 $ 90,000 $105,000
400,000................................ 90,000 120,000 150,000 180,000 210,000
600,000................................ 135,000 180,000 225,000 270,000 315,000
800,000................................ 180,000 240,000 300,000 360,000 420,000
1,000,000................................ 225,000 300,000 375,000 450,000 525,000
1,200,000................................ 270,000 360,000 450,000 540,000 630,000
1,400,000................................ 315,000 420,000 525,000 630,000 735,000
1,600,000................................ 360,000 480,000 600,000 720,000 840,000
1,800,000................................ 405,000 540,000 675,000 810,000 945,000
</TABLE>
Remuneration in the Pension Plan table includes annual base salary,
annual bonus and long-term incentive payouts as reported in the Summary
Compensation Table. As of December 31, 1994, years of credited service
for purposes of computing retirement benefits under the Retirement Plan
and the BSRP for the named executives are as follows: Andrew B. Craig,
III-32, Samuel B. Hayes, III-23, John Peters MacCarthy-24, Gregory L.
Curl-19, and John M. Brennan-24.
Retirement benefits under the retirement plans are based upon final
average earnings and years of credited service up to a maximum of 35
years. Generally, final average earnings are the average of an
employee's highest five consecutive years' earnings out of the final
ten years of employment. The annual retirement benefits are 1.5% of
final average earnings multiplied by years of credited service and are
not subject to any offset amounts.
Mr. MacCarthy is entitled to receive retirement benefits under the
Centerre Executive Retirement Program (the "CERP") earned through 1988
to the extent those benefits would exceed any benefits under the
Retirement Plan and BSRP, taking service with Centerre into account.
The CERP was intended to provide pension benefits, when added to other
Centerre pension benefits and social security benefits, equaling 50% of
the highest three year average of salary and bonuses for a thirty-year
executive. However, benefits due Mr. MacCarthy under the CERP will
reduce his benefits under the BSRP.
Benefits under the BSRP and CERP are paid from the general assets of
the Corporation. The Corporation has entered into a trust agreement to
provide for payment of benefits under these
12
<PAGE> 15
plans. While only a nominal amount has been paid into the trust, full
funding is required in the event of a "change in control".
EMPLOYMENT CONTRACTS AND TERMINATIONS, SEVERANCE AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Corporation has an Employment Agreement with each of Messrs.
Craig, Hayes and Curl which provides, among other things, that, if his
employment is terminated by the Corporation without "cause" or by him
for "good reason" prior to its expiration date (June 30, 1997, in each
case), he shall be paid his then current base compensation until the
later of such expiration date or one year after such termination and
shall receive health and welfare benefits for such period, together
with all vested employee benefits. If, however, such termination occurs
either during the six months before or three years after a "change in
control", or if he voluntarily terminates during the 30 days following
one year after a "change in control", he shall receive an amount equal
to three times his highest annualized base compensation rate and three
times his average annual bonuses for the prior three years plus
continuation of benefits, limited however to an amount $1 less than the
maximum that the Corporation is entitled to pay without loss of
deduction because of "excess purchase payments" under the Internal
Revenue Code, which is three times his average annual taxable
compensation for the last five years. Mr. MacCarthy has an agreement
with the Corporation which provides for his being paid, in the event of
termination of his employment for any reason prior to his 63rd
birthday, a lump sum equal to his then annual base salary. In addition,
his agreement provides that he will not engage in any trust or
commercial banking business in the States of Missouri or Illinois for
two years after the termination of the Agreement.
DIRECTOR COMPENSATION
Directors whose principal occupations are with the Corporation or any
of its subsidiaries receive no Director's fee. All other Directors
receive quarterly retainer payments of $5,000 each, plus $1,000 for
each Board meeting attended and $850 for each committee meeting
attended.
COMPENSATION COMMITTEE
The Compensation Committee is appointed annually or more often by the
Corporation's Board of Directors. Only Directors who are not officers
or employees of the Corporation can serve on the Compensation
Committee. The Compensation Committee met three times during 1994. The
functions of the Compensation Committee are to review the competency
and effectiveness of management of the Corporation and its
subsidiaries, to review the soundness and adequacy of compensation
programs, to approve compensation for senior officers of the
Corporation, to review the adequacy of compensation of senior
management of the Corporation's subsidiaries and to formulate policy
on, and administer, the Corporation's special compensation programs.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following persons served on the Corporation's Compensation
Committee during 1994: Lee M. Liberman, Chairman, B. A. Bridgewater,
Jr., Ilus W. Davis, John E. Hayes, Jr., William E. Maritz, and Albert
E. Suter.
During 1994, Mr. Craig served on the Executive Salaries Committee and
Stock Option Plans Committee of the Board of Directors of Anheuser-
Busch Companies, Inc. while Mr. Ritter served on the Corporation's
Board of Directors. Mr. MacCarthy served on the Human Resources
Committee of Union Electric Company while Mr. Cornelius served on the
Corporation's Board of Directors.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Policies, Goals and Responsibilities
The Compensation Committee (the "Committee") is committed to linking
compensation decisions to corporate and individual performance. In
formulating the executive compensation program, the Committee's goals
are to provide appropriate incentives to management and align the
13
<PAGE> 16
economic interests of management and its shareholders. The major
policies of this program include the following:
- Establishing total compensation targets at market (i.e., median)
levels in comparison to a peer group of companies,
- Evaluating short-term versus long-term goals and performances of
the Corporation,
- Assessing achievement of corporate and individual performance
objectives prior to disbursing incentive rewards, and
- Providing an ownership perspective for management through the use
of the Corporation's Common Stock as a compensation vehicle.
The Corporation's compensation structure reflects the underlying
philosophy and helps meet broader corporate goals to: 1) attract and
retain the best management talent, 2) sustain levels of superior
financial performance, and 3) encourage and reward superior management
performance that enhances shareholder value.
The Committee's responsibilities to the Corporation include not only
the design of this program but also review of its fairness and
competitiveness at least annually. In performing this duty, the
Committee consulted with a national, independent consulting firm that
provided competitive data and analysis of the Corporation's executive
compensation program. This information was used as a basis in
determining executive compensation arrangements.
The companies chosen for the two comparator groups used for
compensation purposes are not the same companies that comprise the
published industry index used in the common stock performance graph
that follows this report. For compensation comparison purposes, the
Committee has selected a group of approximately 14 regional banking
institutions that are similar to the Corporation in asset size and
lines of business. The comparator group members' asset sizes ranged
from $21.8 billion to $65.0 billion with median assets of $39.1
billion. This compares to the Corporation's 1994 year-end assets of
$28.9 billion.
The Committee believes that the Corporation's most direct competitors
for executive talent are not all of the companies that should be
included in a peer group established for comparing shareholder returns.
As discussed further in this report, annual cash incentive awards and
long-term cash incentive awards are adjusted based on the Corporation's
performance ranking compared with that of a group of approximately 40
banking institutions. This second comparator group consists of the
country's 50 largest banking organizations, minus money center
institutions, plus three other midwestern regional banking
organizations, all of whose financial performances are monitored and
continually compared to the Corporation's performance.
The executive compensation program consists of four components: 1)
base salary, 2) annual cash incentive awards, 3) long-term cash
incentive awards, and 4) stock options. The Committee has established
the objective of targeting executives' total compensation at the median
of the peer group of 14 regional banking institutions described above.
This compensation objective for executives has been established
recognizing that the provisions of the Internal Revenue Code may affect
the Corporation's ability to deduct all such compensation. The
following discussion summarizes each component of the executive
compensation program and the systematic review process used by the
Committee in administering the program.
Base Salary
The base salary of each executive officer, including those named in
the Summary Compensation Table, is reviewed annually. In deciding the
appropriate salary, the Committee considers internal equity issues,
median external pay practices of the appropriate comparator group,
individual performance, special assignments or responsibilities, level
of responsibility, time in position, prior experience and knowledge.
The Committee uses broad discretion when setting base salary levels and
considers all of the above criteria. It does not assign a specific
weight to any of these factors. Mr. Craig's current base salary was
established based on these principles.
14
<PAGE> 17
Annual Cash Incentive Awards
The Corporation's 1992 Annual Incentive Bonus Plan (the "Annual
Plan") is discretionary and non-contractual. Under current practice,
annual cash awards are made to middle management and senior executives
to recognize and reward individual and corporate performance.
Participants are selected on the basis of their positions in the
Corporation and the extent to which those positions can impact the
Corporation's financial performance.
The Committee establishes a performance/payout schedule each year to
fix target bonuses (as a percentage of salary) for each salary grade,
depending upon the percentage of the Corporation's budgeted income
achieved during the year. In making the ultimate comparison of actual
income to the original budgeted amount, the Committee may exercise its
discretion to adjust income to take unusual factors into account. It
may also pay an award even if the minimum performance/payout threshold
is not met; no such exceptions have been made during the last three
fiscal years.
The award is then subject to adjustment by a return on equity factor
set by the Committee each year. This adjustment is based on the
Corporation's performance compared to the peer group of 40 financial
institutions described above. Finally, the individual awards thus
determined may be decreased or eliminated, but not increased, based on
an evaluation of the participant's performance.
During 1994, the Corporation exceeded its budgeted income by 2.4%,
resulting in target bonuses ranging between 16.0% and 54.0% of base
salary, before taking individual performance factors into account.
Since the Corporation's return on equity of 16.3% placed it in the 51st
percentile of the peer group, that factor did not affect the annual
cash incentive award. As a result of such individual adjustments for
1994, participants received approximately 95% of the awards determined
under the performance/payout schedule (after return on equity
adjustment).
The Committee awarded Mr. Craig a 1994 annual incentive cash award of
$307,800, or 51.3% of his base salary. The maximum award level
established for Mr. Craig in 1994 was 75% of base salary (before
return-on-equity adjustment).
Long-Term Cash Incentive Awards
The Amended 1982 Long-Term Incentive Plan (the "Long Term Plan") is a
cash award program for senior management. The Committee believes that
the Long Term Plan is an important component of the total compensation
program of top executives for several equally important reasons. Cash
payments provide an incentive beyond those offered by stock options.
The criteria and relative measurement systems employed ensure that
"real" performance is attained before awards are made. Furthermore, the
longer-term time horizon of the Long Term Plan balances the short-term
goals inherent in the Annual Plan.
Effective January 1, 1992, the Long Term Plan was amended in order,
among other things, to link awards, which are contractual, primarily to
the performance of the corporation's Common Stock. Under the amended
plan, participants are rewarded for total shareholder return over a
three-year performance period, beginning annually, as measured against
the above-referenced peer group of 40 banking institutions. Payouts are
adjusted upward or downward but not to exceed 20% in either direction
based on the attainment of average annual earning per share growth rate
objectives set by the Committee at the beginning of each performance
period.
The first payments under the amended plan were made for the 1992-1994
performance period. The Corporation's total shareholder return for that
period placed it at the 51st percentile of the peer group, which
coupled with the Corporation's average annual earnings per share growth
rate for the period, resulted in a 1994 award for Mr. Craig of $246,533.
15
<PAGE> 18
Stock Option Awards
Middle and senior management executives are eligible to participate
in the Corporation's two stock option plans: a qualified plan and a
non-qualified plan. Stock options provide executives the opportunity to
acquire an equity interest in the Corporation and to share in the
appreciation of the stock's value, thereby aligning their interests
with those of the shareholders. The stock option plans and any benefits
under them are directly tied to how well management creates increased
value for shareholders. Stock option grants in 1994 were based on a
fixed percentage of base salary. These percentage levels varied
according to scope of responsibility and reflected the competitive
practice of the Corporation's peer group of 14 financial institutions.
In determining option grants to the current executive group, the
Committee does not take into account the amount and value of options
currently held, and the Corporation does not have a target ownership
level of equity holdings by its executives. In accordance with the
fixed percentage of base salary described above, the Committee awarded
Mr. Craig an option to acquire 21,700 shares of Common Stock under the
non-qualified plan in 1994.
Summary
The Corporation's executive compensation program is based on the
premise that a balance is required between the needs of the Corporation
in operating its business in an effective and profitable manner and the
competitiveness of rewards in competing for management talent in the
marketplace. The program is reviewed at least annually by the Committee
to ensure consistency with the compensation philosophy of the
Corporation and that the stated objectives continue to be met.
Members of the Compensation Committee:
Lee M. Liberman, Chairman John E. Hayes, Jr.
B. A. Bridgewater, Jr. William E. Maritz
Ilus W. Davis Albert E. Suter
<TABLE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN<F*>
BOATMEN'S BANCSHARES, INC., S&P 500 STOCK INDEX,
AND S&P MAJOR REGIONAL BANKS INDEX
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Boatmen's Bancshares, Inc. $100 $106 $164 $206 $228 $216
S & P 500 $100 $ 97 $126 $136 $150 $152
S & P Major Regional Banks Index $100 $ 71 $128 $163 $172 $163
<FN>
- -----
Assumes $100 invested on December 31, 1989 in the Corporation's Common
Stock, the S&P 500 Index, and the S&P Major Regional Banks Index.
<F*>Total return assumes reinvestment of dividends on a quarterly basis.
</TABLE>
16
<PAGE> 19
CERTAIN TRANSACTIONS
Subsidiaries of the Corporation have had, and in the future expect to
have, banking and fiduciary transactions with Directors and Executive
Officers of the Corporation and some of their associates. All such
transactions have been in the ordinary course of business and on
substantially the same terms (including interest rates on loans,
collateral, and collectibility considerations) as those prevailing at
the time for comparable transactions with others.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
Directors and Executive Officers of the Corporation to file with the
SEC initial reports of ownership and reports of changes in ownership of
securities of the Corporation. Directors and Executive Officers are
required by SEC regulation to furnish the Corporation with copies of
all Section 16(a) forms they file.
To the Corporation's knowledge, based solely on review of the copies
of such reports furnished to the Corporation and written
representations that no other reports were required, during the fiscal
year ended December 31, 1994, all Section 16(a) filing requirements
applicable to Directors and Executive Officers were complied with,
except that Messrs. Liberman and Wetterau each reported one acquisition
late.
ITEM 2. ADOPTION OF AMENDMENT TO COMMON STOCK PROVISIONS OF
ARTICLE III OF THE RESTATED ARTICLES OF INCORPORATION
The second item to be acted upon at the meeting is a proposal to
amend Article III of the Corporation's Restated Articles of
Incorporation to increase the aggregate number of authorized shares of
Common Stock from 150,000,000 shares to 200,000,000 shares. At the
present time, the authorized capital stock of the Corporation consists
of 150,000,000 shares of Common Stock, $1.00 par value, of which -------
shares were issued and outstanding on March 2, 1995, and 10,300,000
shares of Preferred Stock, no par value, of which --- shares of Series
B Preferred were issued and outstanding on March 2, 1995.
If the proposed amendment is approved by the shareholders,
200,000,000 shares of Common Stock, $1.00 par value, will be authorized
for issuance and the additional authorized Common Stock may be issued
by the Corporation without any further action by the shareholders.
The purpose of the proposed amendment is to provide additional
authorized shares of Common Stock for possible use in connection with
future financings, investment opportunities, acquisitions, employee
benefit or dividend reinvestment plan distributions, other
distributions, such as stock dividends or stock splits, or for other
corporate purposes. Shareholders do not have preemptive rights and will
not have a right of first refusal to purchase any of the additional
authorized shares of Common Stock. The Corporation has no plans or
commitments at this time for the issuance of the additional authorized
Common Stock but wants to put itself in a position to do so when needs
arise and market conditions warrant.
VOTE REQUIRED
The affirmative vote of a majority of all the Corporation's issued
and outstanding shares of Common Stock, voting separately as a class,
and the affirmative vote of a majority of all the Corporation's issued
and outstanding shares of Voting Stock is required to approve the
proposed amendment. Dissenting votes give rise to no rights on the part
of dissenters.
BOARD RECOMMENDATION
The Board of Directors believes this action will be in the best
interests of the shareholders and, accordingly, recommends a vote FOR
this proposal, which is ITEM 2 on the Proxy Card.
17
<PAGE> 20
ITEM 3. ADOPTION OF AN AMENDMENT TO THE BOATMEN'S
BANCSHARES, INC. 1987 NON-QUALIFIED STOCK OPTION PLAN
The third item to be acted upon at the meeting is a proposal to amend
Section 2 of the Boatmen's Bancshares, Inc. 1987 Non-Qualified Stock
Option Plan to increase the aggregate number of shares of Common Stock
available for purchase pursuant to the NQSO Plan from 2,000,000 to
3,500,000 shares (subject to adjustment for future stock dividends,
stock splits and other changes in capitalization as described in the
NQSO Plan). The Board of Directors of the Corporation at its January
31, 1995 meeting adopted a resolution proposing to amend the NQSO Plan,
conditioned upon shareholder approval.
SUMMARY OF THE PLAN AS PROPOSED TO BE AMENDED
The purpose of the NQSO Plan is to provide increased incentive for
certain key employees of the Corporation and its subsidiaries and to
encourage them to acquire a proprietary interest in the Corporation. It
is believed that the NQSO Plan is helpful to the Corporation in
attracting new personnel and retaining present personnel. Presently
there are approximately ----- persons eligible to participate in the
NQSO Plan. The market value of the shares issuable under the NQSO Plan
was ------- as of March 2, 1995.
The NQSO Plan is administered by the Compensation Committee, which
has full authority to interpret and regulate the NQSO Plan and the
options and stock appreciation rights granted thereunder. The
Compensation Committee determines, among other things, the individuals
to whom and the price at which options may be granted and when such
options may be exercised. Options and stock appreciation rights may be
granted to any person who, at the time of the grant, is a key employee
of the Corporation or its subsidiaries, including, but not limited to,
officers whether or not they are Directors.
Options granted under the NQSO Plan may be exercised, in whole or in
part, by paying cash or, if authorized by the Corporation, Common Stock
valued at fair market value (or a combination of cash and Common
Stock). The options may be exercised only during the option period or
periods provided in the grant, which generally may not be less than six
months nor more than ten years from the date of such grant. Upon
receipt of payment, the Corporation will deliver a certificate or
certificates for the full number of shares purchased pursuant to the
exercise of an option.
Options granted under the NQSO Plan may be, at the discretion of the
Compensation Committee, accompanied by a related stock appreciation
right. An optionee may elect to exercise the stock appreciation right
instead of the option itself, with respect to all or a portion of the
shares subject to exercise under the option. Stock appreciation rights
are granted subject to the same terms and conditions as the related
options, are exercisable only to the extent the related options are
exercisable and terminate when the the options terminate. Exercise of a
stock appreciation right will reduce the number of shares subject to
exercise under the related option as though the option had been
exercised.
The Board of Directors may modify or terminate the NQSO Plan at any
time, except that no options or stock appreciation rights shall be
granted after February 10, 1997.
No income will be recognized by an optionee when an option is granted
to him under the NQSO Plan and the Corporation will not receive any tax
deduction at the time of grant. Upon exercise of an option, the
difference between the fair market value of the shares acquired at the
time of exercise and the option price of such shares will be treated
for Federal income tax purposes as ordinary income received as
additional compensation, subject to Federal income tax withholding and
employment tax provisions, and the Corporation will receive a
corresponding tax deduction.
An optionee's basis in shares received upon exercise of an option
will equal the fair market value thereof on the date of exercise.
Generally, subsequent sales of such shares will result in recognition
of capital gain or loss, which may be long-term or short-term,
depending on how long the shares were held before the disposition.
18
<PAGE> 21
Upon exercise of a stock appreciation right, cash amounts received
will be treated for Federal income tax purposes as ordinary income
received as additional compensation, subject to Federal income tax
withholding and employment tax provisions, and the Corporation will
receive a corresponding tax deduction.
The number of units and dollar value of future grants under the NQSO
Plan are not determinable.
VOTE REQUIRED
The affirmative vote of holders of a majority of all the
Corporation's issued and outstanding shares of Voting Stock is required
to approve the amendment to the NQSO Plan. Dissenting votes give rise
to no rights on the part of dissenters.
BOARD RECOMMENDATION
The Board of Directors believes this action will be in the best
interests of the shareholders and, accordingly, recommends a vote FOR
this proposal, which is ITEM 3 on the proxy card.
ITEM 4. ADOPTION OF AN AMENDMENT TO THE BOATMEN'S BANCSHARES, INC.
1991 INCENTIVE STOCK OPTION PLAN
The fourth item to be acted upon at the meeting is a proposal to
amend Section 2 of the Boatmen's Bancshares, Inc. 1991 Incentive Stock
Option Plan to increase the aggregate number of shares of Common Stock
for purchase pursuant to the ISO Plan from 2,000,000 to 4,000,000
shares. The Board of Directors of the Corporation, at its January 31,
1995 meeting, approved a resolution proposing to amend the 1991 ISO
Plan, conditioned upon shareholder approval.
SUMMARY OF THE 1991 ISO PLAN
The purpose of the 1991 ISO Plan is to provide increased incentive
for certain key employees and to encourage them to acquire a
proprietary interest in the Corporation. Options may be granted only to
persons who, at the time of the grant, are key employees of the
Corporation or its subsidiaries, including, but not limited to,
officers whether or not they are directors. Presently there are
approximately -- persons eligible to participate in the 1991 ISO Plan.
The 1991 ISO Plan is administered by the Compensation Committee. All
options granted under the 1991 ISO Plan are granted by the Compensation
Committee, which has full authority to interpret and regulate the 1991
ISO Plan and options granted thereunder. Each option grant will be
subject to and no exercise thereof effective unless, and until, the
Compensation Committee shall deem there has been compliance with the
requirements of all applicable federal, state and other pertinent
regulatory authority. All determinations by the Compensation Committee
are conclusive.
If the proposed amendment is approved by shareholders, 4,000,000
shares of Common Stock of the Corporation may be issued, subject to
adjustment for certain changes in capitalization. The market value of
the 4,000,000 shares issuable under the 1991 ISO Plan was $------- as of
March 2, 1995. There is no maximum or minimum number of shares for
which an option may be granted to an eligible employee. The 1991 ISO
Plan provides, however, that, with respect to options granted after
December 31, 1986, the aggregate fair market value, determined at the
time the option is granted, of all the shares with respect to which
options are exercisable for the first time by an employee during any
calendar year pursuant to all incentive stock option plans of the
Corporation and its subsidiaries shall not exceed $100,000.
The option price at which shares may be purchased pursuant to each
option is not less than the fair market value thereof on the date on
which the option is granted, as determined by the Compensation
Committee. Options may be exercised at such times and for such number
of shares as the Compensation Committee may determine. Options shall be
exercised in writing accompanied by payment in full for the amount
exercised. Such payment shall be made in cash or, if authorized by
19
<PAGE> 22
the Compensation Committee in the option grant, in whole or in part in
shares of Common Stock valued at fair market value. The period during
which an option may be exercised may not exceed ten years from the date
of grant of such option.
The Board of Directors may modify or terminate the 1991 ISO Plan at
any time, except that no options shall be granted after January 22,
2001.
It is intended that the options granted under the 1991 ISO Plan shall
be incentive stock options pursuant to the Internal Revenue Code (the
"Code") and regulations issued thereunder. The 1991 ISO Plan will be
administered in such a manner as to effect such intention.
For federal income tax purposes, no income is recognized by an
optionee when an option is granted or exercised pursuant to the 1991
ISO Plan. Similarly, the Corporation recognizes no income or expense
upon such grant or exercise. However, the amount by which the fair
market value of the shares at the time of exercise exceeds the exercise
price will be a tax preference item for purpose of the alternative
minimum tax imposed by section 55 of the Code. In general, an
optionee's basis in the shares received upon exercise of an option will
be the exercise price paid by him for the shares. For purposes of
calculating alternative minimum tax income in the year the shares are
sold, however, the basis acquired through the exercise of an option is
increased to the fair market value of the stock at time of exercise,
which was taken into account in determining the amount of tax
preference.
If an optionee who acquires shares by exercise of an option does not
dispose of the shares within the later of two years from the date of
option grant or one year after the transfer of the shares to the
optionee (the "holding period"), any gain or loss upon disposition of
the shares will be treated for federal income tax purposes as long-term
capital gain or loss, as the case may be. A "disposition" includes a
sale, exchange, gift or other transfer of legal title. If the option
shares are disposed of within the holding period, all or part of the
gain, if any, will be characterized as ordinary income depending upon
the relative amount of the sale price of the shares as compared with
the exercise price of the shares. Any loss resulting from the
disposition of option shares within the holding period will be long-
term or short-term capital loss depending upon how long the shares were
held before the disposition.
The number of units and dollar value of future grants under the 1991
ISO Plan are not determinable.
VOTE REQUIRED
The affirmative vote of a majority of all the Corporation's issued
and outstanding shares of Voting Stock is required to approve the
amendment to the 1991 ISO Plan. Dissenting votes give rise to no rights
on the part of dissenters.
BOARD RECOMMENDATION
The Board of Directors believes this action will be in the best
interests of the shareholders and, accordingly, recommends a vote FOR
this proposal, which is ITEM 4 on the Proxy Card.
INDEPENDENT AUDITORS AND AUDIT COMMITTEE
Ernst & Young LLP were the auditors for the Corporation for the year
ended December 31, 1994, and management of the Corporation has
recommended them as auditors for the year ending December 31, 1995.
Representatives of that firm will be present at the annual meeting to
respond to appropriate questions that may be raised, and they will have
an opportunity to make a statement, if they so desire.
The Audit Committee is appointed by the Board of Directors annually
or more often and is comprised of three or more Directors who are not
officers or employees of the Corporation. The
20
<PAGE> 23
Audit Committee met four times in 1994. It is presently comprised of
the following members: William E. Cornelius, Chairman, Richard L.
Battram, Lee M. Liberman, Jerry E. Ritter and Theodore C. Wetterau.
The functions of the Audit Committee are to nominate the independent
auditors of the Corporation for appointment by the Board of Directors;
arrange for and review the Corporation's annual audit; approve
professional services performed by the independent auditors and
determine that such services do not impair the independence of the
auditors; ratify all accountants' fees rendered during the year; review
the scope and results of internal audit controls and procedures; and
provide for independent review of the adequacy of the Corporation's
system of internal controls.
OTHER MATTERS
The Board of Directors is not aware of any other matters which will
be presented for consideration at the meeting. However, the proxies may
be voted with discretionary authority with respect to any other matters
that may properly come before the meeting.
March --, 1995.
DAVID L. FOULK
Secretary
21
<PAGE> 24
March --, 1995
Dear Shareholder:
The annual meeting of Stockholders of Boatmen's Bancshares, Inc. will
be held at the principal executive offices of the Corporation at One
Boatmen's Plaza, 800 Market Street, St. Louis, Missouri at 10:00 a.m.
on Tuesday, April 25, 1995. At the meeting Stockholders will elect five
directors and act upon proposals to amend the Corporation's Restated
Articles of Incorporation to increase the authorized shares of Common
Stock and to amend the Corporation's 1987 Non-Qualified Stock Option
Plan and 1991 Incentive Stock Option Plan to increase the authorized
shares of Common Stock issuable under the Plans.
It is important that your shares are represented at this meeting.
Whether or not you plan to attend the meeting, please review the
enclosed proxy materials, complete the attached proxy form below, and
return it promptly in the envelope provided.
PLEASE DETACH PROXY HERE, SIGN AND MAIL
- ------------------------------------------------------------------------
3. Adoption of Amendment to Boatmen's Bancshares, Inc. 1987 Non-
Qualified Stock Option Plan:
/ / FOR / / AGAINST / / ABSTAIN
4. Adoption of Amendment to Boatmen's Bancshares, Inc. 1991 Incentive
Stock Option Plan:
/ / FOR / / AGAINST / / ABSTAIN
5. On any other matter that may be submitted to a vote of shareholders.
THIS PROXY WILL BE VOTED "FOR" ITEMS 1, 2, 3 AND 4 IF NO INSTRUCTION TO
THE CONTRARY IS INDICATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE
MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION
OF MANAGEMENT.
Dated ......................., 1995
...................................
...................................
Please sign name or names as
appearing on this proxy. If signing
as a representative, please include
capacity.
<PAGE> 25
PLEASE DETACH PROXY HERE, SIGN AND MAIL
- ------------------------------------------------------------------------
COMMON SHAREHOLDERS
P R O X Y
BOATMEN'S BANCSHARES, INC.
ANNUAL MEETING APRIL 25, 1995
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned shareholder of Boatmen's Bancshares, Inc., a Missouri
corporation, appoints CHARLES C. ALLEN, JR. and DAVID L. FOULK, or
either of them, with full power to act alone, the true and lawful
attorneys-in-fact of the undersigned, with full power of substitution
and revocation, to vote all shares of stock of said Corporation which
the undersigned is entitled to vote at the annual meeting of its
shareholders to be held at the principal executive offices of the
Corporation at One Boatmen's Plaza, 800 Market Street, St. Louis,
Missouri 63101, on April 25, 1995, at 10:00 a.m. and at any adjournment
thereof, with all powers the undersigned would possess if personally
present, as follows:
1. Election of Directors:
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote for
(except as marked to the contrary all nominees listed below.
below)
Richard L. Battram, William E. Cornelius, C. Ray Holman, William E.
Maritz and Richard E. Peck
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW.
- ------------------------------------------------------------------------
2. Adoption of Amendment to Article III of the Restated Articles of
Incorporation to increase the authorized shares of Common Stock:
/ / FOR / / AGAINST / / ABSTAIN
(YOU ARE REQUESTED TO COMPLETE, SIGN AND RETURN THIS PROXY PROMPTLY)
<PAGE> 26
March --, 1995
Dear Shareholder:
The annual meeting of Stockholders of Boatmen's Bancshares, Inc. will
be held at the principal executive offices of the Corporation at One
Boatmen's Plaza, 800 Market Street, St. Louis, Missouri at 10:00 a.m.
on Tuesday, April 25, 1995. At the meeting Stockholders will elect five
directors and act upon proposals to amend the Corporation's Restated
Articles of Incorporation to increase the authorized shares of Common
Stock and to amend the Corporation's 1987 Non-Qualified Stock Option
Plan and 1991 Incentive Stock Option Plan to increase the authorized
shares of Common Stock issuable under the Plans.
It is important that your shares are represented at this meeting.
Whether or not you plan to attend the meeting, please review the
enclosed proxy materials, complete the attached proxy form below, and
return it promptly in the envelope provided.
PLEASE DETACH PROXY HERE, SIGN AND MAIL
- ------------------------------------------------------------------------
3. Adoption of Amendment to Boatmen's Bancshares, Inc. 1987 Non-
Qualified Stock Option Plan:
/ / FOR / / AGAINST / / ABSTAIN
4. Adoption of Amendment to Boatmen's Bancshares, Inc. 1991 Incentive
Stock Option Plan:
/ / FOR / / AGAINST / / ABSTAIN
5. On any other matter that may be submitted to a vote of shareholders.
THIS PROXY WILL BE VOTED "FOR" ITEMS 1, 2, 3 AND 4 IF NO INSTRUCTION TO
THE CONTRARY IS INDICATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE
MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION
OF MANAGEMENT.
Dated ......................., 1995
...................................
...................................
Please sign name or names as
appearing on this proxy. If signing
as a representative, please include
capacity.
<PAGE> 27
PLEASE DETACH PROXY HERE, SIGN AND MAIL
- ------------------------------------------------------------------------
PREFERRED SHAREHOLDERS
P R O X Y
BOATMEN'S BANCSHARES, INC.
ANNUAL MEETING APRIL 25, 1995
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned shareholder of Boatmen's Bancshares, Inc., a Missouri
corporation, appoints CHARLES C. ALLEN, JR. and DAVID L. FOULK, or
either of them, with full power to act alone, the true and lawful
attorneys-in-fact of the undersigned, with full power of substitution
and revocation, to vote all shares of stock of said Corporation which
the undersigned is entitled to vote at the annual meeting of its
shareholders to be held at the principal executive offices of the
Corporation at One Boatmen's Plaza, 800 Market Street, St. Louis,
Missouri 63101, on April 25, 1995, at 10:00 a.m. and at any adjournment
thereof, with all powers the undersigned would possess if personally
present, as follows:
1. Election of Directors:
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote for
(except as marked to the contrary all nominees listed below.
below)
Richard L. Battram, William E. Cornelius, C. Ray Holman, William E.
Maritz and Richard E. Peck
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW.
- ------------------------------------------------------------------------
2. Adoption of Amendment to Article III of the Restated Articles of
Incorporation to increase the authorized shares of Common Stock:
/ / FOR / / AGAINST / / ABSTAIN
(YOU ARE REQUESTED TO COMPLETE, SIGN AND RETURN THIS PROXY PROMPTLY)
<PAGE> 28
(THIS PLAN IS BEING SUBMITTED PURSUANT TO INSTRUCTION 3 TO ITEM 10 OF SCHEDULE
14A. IT IS NOT PRINTED IN THE PROXY STATEMENT CIRCULATED TO INVESTORS.)
BOATMEN'S BANCSHARES, INC.
1987 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE
- -------------------------------------------------------------------------------
The purpose of the 1987 Non-Qualified Stock Option Plan (the
"Plan") of Boatmen's Bancshares, Inc. (the "Corporation") is to
provide increased incentive for certain key employees of the
Corporation and its subsidiaries and encourage them to acquire a
proprietary interest in the Corporation.
2. SHARES
- -------------------------------------------------------------------------------
The shares which may be issued under the Plan shall be limited
to 3,500,000 shares, par value $1.00 per share, of the common stock
of the Corporation (the "Shares"), subject to adjustment as
provided in Section 12 of the Plan. The Shares may be either
authorized but unissued shares or treasury shares.
3. ADMINISTRATION
- -------------------------------------------------------------------------------
The Plan shall be administered by the Compensation Committee
(the "Committee") composed of three or more directors of the
Corporation who are not officers or employees thereof. Members of
the Committee shall be appointed by and shall serve at the pleasure
of the Board of Directors. Subject to the express provisions of
the Plan, the Committee shall have complete authority to determine
the individuals to whom and the time or times when options shall be
granted and when they may be exercised, to specify the terms and
provisions of the options, to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it and to the
conduct of the Committee's affairs, and to make all other
determinations necessary or advisable for the administration of the
Plan. All determinations by the Committee shall be conclusive.
4. ELIGIBILITY
- -------------------------------------------------------------------------------
Options may be granted only to key employees of the
Corporation or its subsidiaries, including but not limited to
officers, whether or not they are directors of the Corporation or
its subsidiaries.
<PAGE> 29
5. OPTION PRICE
- -------------------------------------------------------------------------------
The price per share for Shares to be sold pursuant to an
option shall be not less than the fair market value thereof on the
date on which the option is granted, as determined by the
Committee.
6. OPTION PERIOD; LIMITATIONS ON RIGHT TO EXERCISE
- -------------------------------------------------------------------------------
An option by its terms may be exercised only during an option
period commencing on the date on which the option is granted and
ending no more than ten years thereafter, provided, however, that
the Committee may specify such additional restrictions upon the
right of optionees to exercise options within the aforementioned
option period as said Committee may deem advisable from time to
time.
7. PAYMENT FOR SHARES
- -------------------------------------------------------------------------------
Full payment for Shares purchased shall be made on or before
the time of exercise of the option. Such payment shall be made in
cash or, if authorized by the Corporation, in whole or in part in
common shares of the Corporation valued at fair market value, as
determined by the Committee. Options may be exercised in whole or
in part. No Shares will be issued until full payment therefor has
been made and the optionee shall have none of the rights of a
shareholder until such payment is made.
8. STOCK APPRECIATION RIGHTS
- -------------------------------------------------------------------------------
A stock appreciation right may be granted to an eligible
employee, as set forth in Section 4 hereof, in connection with (and
only in connection with) any option granted under the Plan subject
to the following terms and conditions:
(a) Such stock appreciation right shall entitle a holder of
an option within the period specified for the exercise of
the option in the related option grant to surrender the
unexercised option (or a portion thereof) and to receive
in exchange therefor a payment in cash equal to the
product of (i) the amount by which (A) the fair market
value of each Share on the exercise date exceeds (B) the
option price per Share, times (ii) the number of Shares
under the option, or portion thereof, which is
surrendered.
2
<PAGE> 30
(b) Exercise of any such stock appreciation right by any
director, officer or 10% beneficial shareholder of the
Corporation shall be effected in conformity with the
limitations and restrictions contained in Rule 16b-3(e)
of the General Rules and Regulations under the Securities
Exchange Act of 1934, or in any successor provision
thereto, which may have the effect of limiting the time
period for exercise of such right to certain "window
periods" following the release by the Corporation of
quarterly and annual financial information. Exercise of
any stock appreciation right granted hereunder shall
become effective upon receipt by the Committee of a
written notice of election to exercise or, if one or more
conditions to exercise are not satisfied at such time, as
of the first subsequent date on which all such conditions
are satisfied. With the exception of the foregoing, each
stock appreciation right granted hereunder shall be
subject to the same terms and conditions as the related
option, shall be exercisable only to the extent such
option is exercisable and shall terminate or lapse and
cease to be exercisable when the related option
terminates or lapses and ceases to be exercisable.
(c) Upon exercise of a stock appreciation right, the number
of Shares subject to exercise under the related option
shall automatically be reduced by the number of Shares
represented by the option or portion thereof which is
surrendered in connection with the exercise of the right.
9. NON-TRANSFERABILITY OF OPTIONS OR STOCK APPRECIATION RIGHTS
- -------------------------------------------------------------------------------
All options and stock appreciation rights granted under the
Plan by their terms shall be non-transferable otherwise than by
will or by the laws of descent and distribution and shall be
exercisable, during the lifetime of the optionee, only by him.
3
<PAGE> 31
10. TERMINATION OF EMPLOYMENT
- -------------------------------------------------------------------------------
If the employment of an optionee by the Corporation or any
subsidiary of the Corporation is terminated other than by reason of
his death, disability (within the meaning of Section 105(d)(4) of
the Internal Revenue Code), or retirement, he may exercise his
option or stock appreciation right, if applicable, at any time
within one year after such termination, provided that an optionee
whose employment is terminated by reason of conduct which the
Committee determines to have been knowingly fraudulent, deliberately
dishonest or willful misconduct shall forfeit all rights hereunder
and provided further that no exercise of any option or stock
appreciation right may take place later than the end of the term
specified in the grant. No change in the duties of an optionee,
while in the employ of the Corporation or any subsidiary of the
Corporation, or any transfer among them shall constitute
termination of employment by the Corporation or any subsidiary of
the Corporation. Nothing in the Plan or in any option or stock
appreciation right shall be deemed to create any limitation or
restriction on such rights as the Corporation and its subsidiaries
otherwise would have to terminate the employment of any person at
any time for any reason.
11. DEATH OF OPTIONEE
- -------------------------------------------------------------------------------
In the event of the death of an optionee prior to the exercise
of an option or stock appreciation right granted under this Plan,
such optionee's estate, or any person who acquired the right to
exercise such option or stock appreciation right by bequest or
inheritance or by reason of the death of the optionee, may exercise
such option or stock appreciation right to the same extent that the
optionee would have been entitled to exercise such option or right
and subject to the same restrictions upon such exercise.
12. EFFECT OF CHANGE IN SHARES
- -------------------------------------------------------------------------------
If there is any change in the Shares by reason of stock
dividends, split-ups or consolidations of Shares,
recapitalizations, mergers, consolidations, reorganizations,
combinations or exchange of Shares, the number and class of shares
available for options and the number of shares and stock
appreciation rights subject to any outstanding option, and the
price thereof, shall be appropriately adjusted by the Committee,
provided, however, that, if the Corporation shall issue additional
capital stock of any class for a consideration, there shall be no
adjustment.
4
<PAGE> 32
13. AMENDMENT OR TERMINATION
- -------------------------------------------------------------------------------
Unless the Plan shall theretofore have been terminated as
hereinafter provided, the Plan shall terminate on, and no option or
stock appreciation right shall be granted hereunder after, ten
years from the effective date hereof. The Board of Directors of
the Corporation may, at any time prior to that date, terminate the
Plan or make such modifications of the Plan as it may deem
advisable.
14. REGULATORY AUTHORITY
- -------------------------------------------------------------------------------
Each option and stock appreciation right grant shall be
subject to, and no exercise of any option or stock appreciation
right shall be effective unless and until there shall have been,
compliance, to the extent the Committee shall deem advisable, with
the requirements of all applicable Federal, state and other
pertinent regulatory authority.
15. APPLICABLE LAW
- -------------------------------------------------------------------------------
The Plan shall be governed and construed in accordance with
the laws of the State of Missouri.
16. EFFECTIVE DATE OF PLAN
- -------------------------------------------------------------------------------
The Plan shall be effective as of February 10, 1987, but no
option or stock appreciation right granted hereunder, if any, may
be exercised unless and until the Plan shall have been approved by
the shareholders of the Corporation.
5
<PAGE> 33
(THIS PLAN IS BEING SUBMITTED PURSUANT TO INSTRUCTION 3 TO ITEM 10 OF SCHEDULE
14A. IT IS NOT PRINTED IN THE PROXY STATEMENT CIRCULATED TO INVESTORS.)
BOATMEN'S BANCSHARES, INC.
1991 INCENTIVE STOCK OPTION PLAN
1. PURPOSE
- -------------------------------------------------------------------------------
The purpose of the 1991 Incentive Stock Option Plan (the
"Plan") of Boatmen's Bancshares, Inc. (the "Corporation") is to
provide increased incentive for certain key employees of the
Corporation and its subsidiaries and to encourage them to acquire
a proprietary interest in the Corporation.
2. SHARES
- -------------------------------------------------------------------------------
The shares which may be issued under the Plan shall be limited
to 4,000,000 (subject to adjustment as provided in Section 12) of
the $1.00 par value common shares of the Corporation. Such shares
may be either authorized but unissued shares or treasury shares.
3. ADMINISTRATION
- -------------------------------------------------------------------------------
The Plan shall be administered by the Compensation Committee
of the Corporation (the "Committee"), composed of three or more
directors of the Corporation who are not officers or employees
thereof. Members of the Committee shall be appointed by and shall
serve at the pleasure of the Board of Directors. Subject to the
express provisions of the Plan, the Committee shall have complete
authority to determine the individuals to whom and the time or
times when options shall be granted and when they may be exercised,
to specify the terms and provisions of the options, to interpret
the Plan, to prescribe, amend and rescind rules and regulations
relating to it and to the conduct of the Committee's affairs, and
to make all other determination necessary or advisable for the
administration of the Plan. All determinations by the Committee
shall be conclusive.
<PAGE> 34
4. ELIGIBILITY
- -------------------------------------------------------------------------------
Options may be granted only to key employees of the
Corporation or its subsidiaries, including but not limited to
officers, whether or not they are directors of the Corporation or
its subsidiaries. An option may not be granted to any person who,
at the time the option is granted, owns, within the meaning of
Section 424(d) of the Internal Revenue Code, more than 10% of the
total combined voting power of all classes of stock of the
Corporation or any of its subsidiaries, unless, at the time such
option is granted, the option price is at least 110% of the fair
market value of the shares subject to the option and such option by
its terms is not exercisable after the expiration of five years from
the date such option is granted.
5. OPTION PRICE
- -------------------------------------------------------------------------------
The price per share for shares to be sold pursuant to an
option shall be not less than the fair market value thereof on the
date on which the option is granted, as determined by the
Committee.
6. LIMITATIONS ON GRANTS PER EMPLOYEE
- -------------------------------------------------------------------------------
The aggregate fair market value, determined at the time the
option is granted, of the shares with respect to which options are
exercisable for the first time by an employee during any calendar
year (under all stock option plans of the Corporation and its
subsidiaries to which the provisions of Section 422 of the Internal
Revenue Code apply) shall not exceed $100,000.
7. OPTION PERIOD AND LIMITATIONS ON RIGHT TO EXERCISE
- -------------------------------------------------------------------------------
An option by its terms may be exercised only during an option
period commencing on the date on which the option is granted and
ending ten years thereafter, provided, however, that the Committee
may specify a period or periods within such option period during
which one or more portions or all of the total number of shares to
which such option relates may not be purchased; and except as set
forth in Sections 10 and 11 hereof, no option may be exercised
unless the optionee is then in the employ of the Corporation or of
one of its subsidiaries and shall have been continuously so
employed since the date of the grant of his option.
2
<PAGE> 35
8. PAYMENT FOR SHARES
- -------------------------------------------------------------------------------
Full payment for Shares purchased shall be made at the time of
exercise of the option. Such payment shall be made in cash or, if
authorized by the Committee in the option grant, in whole or in
part in common shares of the Corporation valued at fair market
value, as determined by the Committee. Options may be exercised in
whole or in part. No shares will be issued until full payment
therefor has been made and the optionee shall have none of the
rights of a shareholder until such payment is made.
9. NON-TRANSFERABILITY OF OPTIONS
- -------------------------------------------------------------------------------
An option granted under the Plan by its terms shall not be
transferable otherwise than by will or by the laws of descent and
distribution and shall be exercisable, during the lifetime of the
optionee, only by the optionee, or the optionee's guardian or legal
representative.
10. TERMINATION OF EMPLOYMENT
- -------------------------------------------------------------------------------
If the employment of an optionee is terminated other than by
reason of his death, he may exercise his option, to the extent that
he was entitled to exercise it at the date of such termination of
employment, at any time within three months after such termination
or, in the case of an optionee who is disabled (within the meaning
of Section 22(e)(3) of the Internal Revenue Code) within one year
after such termination, provided that an optionee whose employment
is terminated by reason of conduct which the Committee determines to
have been knowingly fraudulent, deliberately dishonest or willful
misconduct shall forfeit all rights hereunder and provided further
that no exercise of any option may take place later than ten years
from the date of grant of such option. No change in the duties of
an optionee, while in the employ of the Corporation or one of its
subsidiaries, or any transfer among them shall constitute
termination of employment by the Corporation and its subsidiaries.
Nothing in the Plan or in any option shall be deemed to create any
limitation or restriction on such rights as the Corporation and its
subsidiaries otherwise would have to terminate the employment of
any person at any time for any reason.
3
<PAGE> 36
11. DEATH OF OPTIONEE
- -------------------------------------------------------------------------------
In the event of the death of an optionee, either while
employed by the Corporation or within three months after
termination of his employment, his option may be exercised to the
extent that he was entitled to exercise it at the date of his
death, by his estate, or by any person who acquired the right to
exercise such option by bequest or inheritance or by reason of the
death of the optionee, at any time, but in no event after ten years
from the date of the grant of the option.
12. EFFECT OF CHANGE IN SHARES
- -------------------------------------------------------------------------------
If there is any change in the shares of the Corporation by
reason of stock dividends, split-ups or consolidations of shares,
recapitalizations, mergers, consolidations, reorganizations,
combinations or exchange of shares, the number and class of shares
available for options and the number of shares subject to any
outstanding option, and the price thereof, shall be appropriately
adjusted by the Committee, provided, however, that if the
Corporation shall issue additional capital stock of any class for
consideration, there shall be no adjustment.
13. AMENDMENT OR TERMINATION
- -------------------------------------------------------------------------------
Unless the Plan shall theretofore have been terminated as
hereinafter provided, the Plan shall terminate on, and no option
shall be granted hereunder after January 22, 2001 (ten years from
the date of its adoption by the Board of Directors of the
Corporation). The Board of Directors of the Corporation may, at
any time prior to that date, terminate the Plan or make such
modifications of the Plan as it may deem advisable.
4
<PAGE> 37
14. REGULATORY AUTHORITY
- -------------------------------------------------------------------------------
It is intended that options granted under the Plan shall be
incentive stock options within the meaning of the provisions of
Sections 421-425 of the Internal Revenue Code and the regulations
issued thereunder and shall be entitled to the benefits afforded
thereby. (References in the Plan to such provisions and regulations
shall be deemed to refer as well to any enacted or issued in lieu
thereof.) The Plan shall be administered in such a manner as to
effectuate such intention and shall be construed and interpreted in
accordance with such provisions and regulations. Each option grant
shall be subject to, and no exercise of any option shall be
effective unless and until there shall have been, compliance, to the
extent the Committee shall deem advisable, with the requirements of
all applicable Federal, state and other pertinent regulatory
authority.
15. EFFECTIVE DATE OF PLAN
- -------------------------------------------------------------------------------
The Plan shall be effective as of January 22, 1991 only if it
shall be approved within twelve months thereafter by the
shareholders of the Corporation as required by the Internal Revenue
Code and the regulations issued thereunder and no option granted
hereunder, if any, after such effective date but prior to such
approval may be exercised unless and until such approval shall have
been granted.
16. EFFECTIVE DATE OF PLAN
- -------------------------------------------------------------------------------
The Plan shall be effective as of February 10, 1987, but no
option or stock appreciation right granted hereunder, if any, may
be exercised unless and until the Plan shall have been approved by
the shareholders of the Corporation.
5
<PAGE> 38
APPENDIX
Page 16 of the printed proxy contains a Performance Graph which
is replaced by a table in the EDGAR version which depicts the same
information.
Photographs of Directors and nominees for Director appear on
pages 5-8 of the printed proxy.
