<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
MELLON BANK CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MELLON BANK CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
[ ] $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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
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4) Proposed maximum aggregate value of transaction:
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* Set forth the amount of 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 date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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Notes:
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<TABLE>
<S> <C>
MELLON BANK CORPORATION Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, PA 15258-0001
March 6, 1995
</TABLE>
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of Mellon
Bank Corporation in Pittsburgh on Tuesday, April 18, 1995, at 10:00 A.M. Further
information about the meeting and the matters to be considered is contained in
the formal Notice of Annual Meeting and Proxy Statement on the following pages.
It is important that your shares be represented at this meeting. Whether or not
you plan to attend, we hope that you will sign, date and return your Proxy
promptly in the enclosed envelope. Completing and returning the enclosed Proxy
will not limit your right to vote in person or to attend the meeting.
Sincerely,
Frank V. Cahouet
Chairman, President and
Chief Executive Officer
<PAGE> 3
<Logo>
MELLON BANK CORPORATION
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258-0001
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of Mellon Bank
Corporation (the "Corporation") will be held on the 10th Floor of the Union
Trust Building, 501 Grant Street, Pittsburgh, Pennsylvania, on Tuesday, April
18, 1995, at 10:00 A.M., for the purpose of considering and acting upon the
following:
1. the election of directors;
2. the ratification of the appointment of KPMG Peat Marwick LLP as independent
public accountants of the Corporation for the year 1995; and
3. such other matters as may properly come before the meeting.
The Board of Directors has fixed the close of business on Wednesday, February
15, 1995, as the record date for the determination of shareholders entitled to
notice and to vote at the meeting or any adjournment thereof.
Enclosed are a Proxy Statement, a form of Proxy, an addressed return envelope
and the Corporation's 1994 Annual Report. All shareholders, whether or not they
expect to be present at the meeting, are requested to sign and date the Proxy
and to return it in the addressed envelope promptly. Shareholders who plan to
attend the meeting in person are also requested to complete and return the
reservation form which appears at the end of the Proxy Statement. Shareholders
who attend the meeting may, if they wish, vote in person even though they have
previously submitted a Proxy.
By Order of the Board of Directors
James M. Gockley
Secretary
March 6, 1995
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<Logo>
MELLON BANK CORPORATION
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258-0001
PROXY STATEMENT
March 6, 1995
The accompanying Proxy is solicited by the Board of Directors of Mellon Bank
Corporation (the "Corporation") for use at the Annual Meeting of Shareholders of
the Corporation scheduled to be held on Tuesday, April 18, 1995. Proxies are
being solicited from holders of the Corporation's common stock, par value $0.50
per share (the "Common Stock"). If the Proxy is properly executed and returned,
the shares represented thereby will be voted and, where specification is made by
the shareholder as provided therein, will be voted in accordance with such
specification, subject to limitations applicable to certain shares of Common
Stock, as described below. The Proxy may, nevertheless, be revoked by notice to
the Secretary of the Corporation at any time prior to the voting thereof. In
addition, shareholders who attend the annual meeting may, if they wish, vote in
person even though they have submitted a Proxy, in which event, their Proxy will
be deemed to have been revoked.
Subject to the limitations described below, unless a Proxy is revoked or
contains other instructions, the shares represented thereby will be voted at the
meeting FOR the election as directors of the nominees of the Board of Directors
set forth below (Proxy Item 1) and FOR ratification of the appointment of KPMG
Peat Marwick LLP as independent public accountants of the Corporation for the
year 1995 (Proxy Item 2). The Proxy also provides that the persons authorized
thereunder may, in the absence of instructions to the contrary, vote or act in
accordance with their judgment on any other matter properly presented for action
at the meeting.
At the annual meeting, holders of Common Stock will be entitled to one vote for
each share held and will not be entitled to cumulative voting. Pursuant to the
terms of agreements under which the Corporation's Series D Junior Preferred
Stock, par value $1.00 per share (the "Series D Stock") was issued and
subsequently converted into Common Stock, those shares of Common Stock held by
Warburg, Pincus Capital Company, L.P., Warburg, Pincus Capital Partners, L.P.
and other former Series D holders will be voted FOR the election of the nominees
named below and will be voted as directed by the holder on all other matters;
provided, however, that such shares will be voted on such other matters in a
manner that is no less favorable to the position recommended by the Board of
Directors than the allocation of the votes cast by all other shareholders of the
Corporation voting on such other matters.
The close of business on Wednesday, February 15, 1995, has been fixed by the
Board of Directors as the record date for the determination of shareholders
entitled to notice of and to vote at the annual meeting or any adjournment
thereof. As of that date, the Corporation had outstanding 146,728,316 shares of
Common Stock. Proxies, ballots and voting tabulations that identify individual
holders of Common Stock will be held in confidence by the Corporation's transfer
agent. The vote of any holder of Common Stock will not be disclosed except as
may be necessary to meet legal requirements, in the case of a contested proxy
solicitation or as may be requested by the particular shareholder. The
distribution of these proxy materials, consisting of the Notice of Annual
Meeting, the Proxy Statement, the form of Proxy and the Corporation's 1994
Annual Report is expected to commence on or about March 8, 1995.
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ELECTION OF DIRECTORS (PROXY ITEM 1)
The By-Laws of the Corporation provide that the directors of the Corporation
shall be classified into three classes, as nearly equal in number as possible,
with such classes of directors serving staggered, three-year terms of office.
Accordingly, at each annual meeting of shareholders, a class consisting of
approximately one-third of the Corporation's directors is elected to hold office
for a term expiring at the annual meeting of shareholders to be held in the
third year following the year of their election and until their successors have
been duly elected and qualified. The By-Laws further provide that the
Corporation's Board of Directors shall consist of such number of directors as
shall be fixed from time to time by a majority vote of the full Board of
Directors. The Board of Directors has fixed the number of directors at 19, and
at this year's annual meeting of shareholders six directors will be elected for
terms ending in 1998. Ira J. Gumberg, Edward J. McAniff, David S. Shapira, W.
Keith Smith, Joab L. Thomas and William J. Young, all of whom are presently
serving as directors of the Corporation, have been nominated for election at
this year's annual meeting.
Any vacancies in the Board of Directors resulting from death, retirement,
resignation, disqualification, removal from office or other cause, as well as
any vacancy resulting from an increase in the number of directors that occurs
between annual meetings of shareholders, will be filled by a majority vote of
the remaining directors then in office. Directors so chosen to fill vacancies
will hold office until the expiration of the term of the class to which they
have been elected.
It is intended that the shares of Common Stock represented by the enclosed Proxy
will be voted FOR the election of the nominees named below, unless such
authority to vote for one or more of the nominees is withheld. Pursuant to the
terms of the agreements mentioned above, Proxies submitted representing shares
of Common Stock received by the holders thereof upon conversion of their Series
D Stock will be voted FOR the election of the nominees named below. In the event
that one or more of the nominees is unable or unwilling to serve as a director,
the persons named in the Proxy will vote for the election of such substitute
nominee, if any, as shall be named by the Nominating Committee of the Board of
Directors. The Board of Directors has no reason to believe that any of the
nominees will be unable or unwilling to serve as a director, as each of the
nominees has expressed a willingness to serve if elected.
BIOGRAPHICAL SUMMARIES OF NOMINEES AND CONTINUING DIRECTORS
Certain information regarding the nominees for election at this year's annual
meeting, as well as information regarding the continuing directors whose terms
expire in 1996 and 1997, is set forth below. Each of the nominees other than
Edward J. McAniff and Joab L. Thomas was previously elected by the shareholders
at the Corporation's 1992 annual meeting of shareholders. Dr. Thomas was elected
by the Board of Directors in 1993. Mr. McAniff was elected by the Board of
Directors in August of 1994 pursuant to the terms of the Amended and Restated
Agreement and Plan of Merger between the Corporation and The Dreyfus Corporation
(the "Dreyfus Merger Agreement").
NOMINEES FOR DIRECTOR--TERM EXPIRES 1998
Ira J. Gumberg Director Since 1989 Age 41
PHOTO
President, Chief Executive Officer and director, J.J.
Gumberg Co. (real estate management and development). Mr.
Gumberg is also a director of Fabri-Centers of America.
He serves on the Corporation's Executive Committee,
Audit Committee and Trust and Investment Committee
(Chairman).
Edward J. McAniff Director Since 1994 Age 60
PHOTO
Partner, O'Melveny & Myers (full service law firm). Mr.
McAniff serves on the Corporation's Trust and Investment
Committee.
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David S. Shapira Director Since 1986 Age 53
PHOTO
Chairman, Chief Executive Officer and director, Giant
Eagle, Inc. (retail grocery store chain). Mr. Shapira is
also a director of Action Industries, Inc., Bell Atlantic
and Equitable Resources, Inc. He serves on the
Corporation's Executive Committee, Audit Committee
(Vice Chairman) and Trust and Investment Committee.
W. Keith Smith Director Since 1987 Age 60
PHOTO
Vice Chairman of the Corporation and Mellon Bank, N.A.
("Mellon Bank"); Chairman and Chief Executive Officer, The
Boston Company (since 1993); Vice Chairman, The Dreyfus
Corporation (since 1995). Mr. Smith is also a director of
Dentsply International, Inc. He serves on the
Corporation's Executive Committee.
Joab L. Thomas Director Since 1993 Age 62
PHOTO
President, The Pennsylvania State University (major public
research university). Dr. Thomas was Professor of Biology,
University of Alabama from 1988 to 1990. Dr. Thomas is
also a director of Blount, Inc. and Lukens, Inc. He
serves on the Corporation's Human Resources Committee and
Technology Committee.
William J. Young Director Since 1964* Age 66
PHOTO
Retired President, Portland Cement Association (trade
association for the Portland Cement Industry). Mr. Young
is also a director of St. Marys Cement Company. He serves
on the Corporation's Human Resources Committee, Trust and
Investment Committee (Vice Chairman) and Community
Responsibility Committee.
CONTINUING DIRECTORS--TERM EXPIRES 1996
J. W. Connolly Director Since 1989 Age 61
PHOTO
Retired (1993) Senior Vice President, H. J. Heinz Company
(food manufacturer). Mr. Connolly is also a director of
Consolidated Natural Gas Company. He serves on the
Corporation's Executive Committee, Audit Committee and
Human Resources Committee (Vice Chairman).
Pemberton Hutchinson Director Since 1989 Age 63
PHOTO
Chairman and director, Westmoreland Coal Company (coal
mining company). Mr. Hutchinson is also a director of The
Pep Boys--Manny, Moe and Jack and Teleflex Incorporated.
He serves on the Corporation's Nominating Committee,
Trust and Investment Committee and Community
Responsibility Committee.
* Served as a director of The Girard Company from the date indicated until its
merger with the Corporation in 1983.
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Rotan E. Lee, Esquire Director Since 1993 Age 45
PHOTO
Senior Executive Vice President, RMS Technologies, Inc.
(information technology); of Counsel, Sherr, Joffe &
Zuckerman, P.C. (full service law firm). Prior to 1994,
Mr. Lee was a partner with Fox, Rothschild, O'Brien &
Frankel (full service law firm). Mr. Lee serves on the
Corporation's Trust and Investment Committee and
Community Responsibility Committee.
Robert Mehrabian Director Since 1994 Age 53
PHOTO
President, Carnegie Mellon University (private
co-educational research institution). Dr. Mehrabian was
Dean of Engineering, University of California from 1983
to 1990. Dr. Mehrabian is also a director of DQE,
Duquesne Light Company and PPG Industries, Inc. He serves
on the Corporation's Audit Committee and Technology
Committee.
Howard Stein Director Since 1994 Age 68
PHOTO
Chairman and Chief Executive Officer, The Dreyfus
Corporation. Mr. Stein is also a director of Avnet, Inc.
He serves on the Corporation's Executive Committee.
Mr. Stein was elected as a Director of the Corporation
by the Board of Directors in August of 1994 pursuant
to the terms of the Dreyfus Merger Agreement.
Wesley W. von Schack Director Since 1989 Age 50
PHOTO
Chairman, President, Chief Executive Officer and director,
DQE (energy services holding company). Mr. von Schack is
also a director of Duquesne Light Company and RMI
Titanium Company. He serves on the Corporation's
Executive Committee, Nominating Committee, Human
Resources Committee and Community Responsibility
Committee (Chairman).
CONTINUING DIRECTORS--TERM EXPIRES 1997
Burton C. Borgelt Director Since 1991 Age 62
PHOTO
Chairman, Chief Executive Officer and director, Dentsply
International, Inc. (manufacturer of artificial teeth and
consumable dental products). Mr. Borgelt is also a
director of DeVlieg-Bullard, Inc. He serves on the
Corporation's Trust and Investment Committee and
Community Responsibility Committee.
Carol R. Brown Director Since 1992 Age 61
PHOTO
President, The Pittsburgh Cultural Trust (cultural and
economic growth organization). Mrs. Brown serves on the
Corporation's Audit Committee and Community
Responsibility Committee.
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Frank V. Cahouet Director Since 1987 Age 62
PHOTO
Chairman, President and Chief Executive Officer of the
Corporation and of Mellon Bank. Mr. Cahouet is also a
director of Avery Dennison Corporation, Saint-Gobain
Corporation and Teledyne, Inc. He serves as Chairman of
the Corporation's Executive Committee.
Charles A. Corry Director Since 1991 Age 63
PHOTO
Chairman, Chief Executive Officer and director, USX
Corporation (energy and steel). He serves on the
Corporation's Executive Committee, Audit Committee,
Nominating Committee (Chairman) and Human Resources
Committee.
C. Frederick Fetterolf Director Since 1984 Age 66
PHOTO
Retired (1991) President and Chief Operating Officer,
Aluminum Company of America (aluminum and chemicals). Mr.
Fetterolf is also a director of Allegheny Ludlum
Corporation, Praxair, Quaker State Corporation, Union
Carbide Corporation and Urethane Technologies, Inc. He
serves on the Corporation's Executive Committee, Audit
Committee (Chairman), Trust and Investment Committee and
Community Responsibility Committee (Vice Chairman).
Andrew W. Mathieson Director Since 1981 Age 66
PHOTO
Executive Vice President, Richard K. Mellon and Sons
(investments and philanthropy). Mr. Mathieson is also a
director of General Re Corporation. He serves on the
Corporation's Executive Committee, Nominating Committee
(Vice Chairman) and Human Resources Committee (Chairman).
Seward Prosser Mellon Director Since 1972 Age 52
PHOTO
President, Richard K. Mellon and Sons (investments and
philanthropy).
ACTION BY SHAREHOLDERS
The six nominees receiving the highest number of votes cast at the annual
meeting by all holders of shares of Common Stock will be elected as directors
for terms expiring in 1998. A vote indicated as withheld from a nominee will not
be cast for such nominee but will be counted in determining the presence of a
quorum.
WITH RESPECT TO THE ELECTION OF DIRECTORS (PROXY ITEM 1), THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES.
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THE BOARD AND ITS COMMITTEES; DIRECTORS' COMPENSATION
The Board of Directors held 12 regular meetings during 1994. Each incumbent
director attended at least 75 percent of the aggregate number of meetings of the
Board and of the committees of which he or she was a member during the period
served in 1994. With the exception of the Executive Committee, all committees of
the Board of Directors are composed of directors who are not officers of the
Corporation.
The committees of the Board of Directors and a general description of their
respective duties follow:
EXECUTIVE COMMITTEE
The Executive Committee has the power and authority of the Board of Directors to
manage the affairs of the Corporation between meetings of the Board of
Directors. The Committee also regularly reviews significant corporate matters
and recommends action as appropriate to the Board. The Executive Committee met
14 times during 1994.
AUDIT COMMITTEE
The Audit Committee oversees the credit policies, accounting practices, auditing
policies, controls and other material financial matters of the Corporation and
its subsidiaries. The Committee meets monthly with the head of the Auditing
Department of the Corporation and with representatives of the Corporation's
independent public accountants when necessitated, with and without
representatives of management present, to review accounting, auditing and
financial reporting matters, including the review of audit plans. Appointment of
the independent public accountants is made by the Board of Directors upon the
recommendation of the Audit Committee and is ratified by the shareholders. The
Audit Committee met 12 times during 1994.
NOMINATING COMMITTEE
The Nominating Committee considers and recommends to the Board of
Directors of the Corporation and to the Boards of Directors of its various
significant subsidiaries such as Mellon Bank, Mellon Bank (DE), Mellon Bank
(MD), Boston Safe Deposit and Trust Company, Glendale National Bank of New
Jersey, Mellon Bank, F.S.B. (together referred to as the "Banks"), The Boston
Company and The Dreyfus Corporation, candidates for nomination for election as
directors of those respective entities. The Committee also considers nominees
recommended by shareholders for election as directors of the Corporation. To
make such a recommendation, a shareholder should submit in writing the name,
address and qualifications of the proposed nominee to the Secretary of the
Corporation, One Mellon Bank Center, Room 1820, Pittsburgh, Pennsylvania
15258-0001. In addition, the By-Laws of the Corporation set forth specific
procedures that, if followed, enable any shareholder entitled to vote in the
election of directors to make nominations directly at a meeting of
shareholders. The procedures set forth in the By-Laws include a requirement for
written notice to the Corporation at least 90 days prior to the anniversary
date of the previous year's annual meeting of shareholders.
The Committee also reviews and recommends to the Board of Directors of the
Corporation and the Boards of Directors of its various significant subsidiaries
policies relating to practices and responsibilities of the Boards of Directors
and their various committees and the components of the directors' compensation.
The Nominating Committee met two times during 1994.
HUMAN RESOURCES COMMITTEE
The Human Resources Committee establishes the compensation and benefits of the
Chairman and Chief Executive Officer and reviews the performance of such senior
officers of the Corporation and its subsidiaries as the Committee designates.
The Committee also generally advises and assists management in implementing
programs designed to assure the selection and development of key personnel and
receives and reviews reports on other significant matters and actions taken in
connection with the operation and administration of the Corporation's employee
benefits plans. The Committee administers the Corporation's Profit Bonus Plan
and Long-Term Profit Incentive Plan, including the making of awards thereunder.
The Committee met nine times during 1994.
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TRUST AND INVESTMENT COMMITTEE
The Trust and Investment Committee has general oversight of the trust and
investment activities of the Corporation's subsidiaries. It ensures that assets
held in a fiduciary capacity are being administered in accordance with
applicable law and regulations. It also acts as a channel independent of
management through which auditing and bank examination reports regarding trust
and investment activities are presented to the Banks' Boards of Directors. The
Committee is also responsible for overseeing the administration of fiduciary
responsibilities for the non-bank subsidiaries of the Corporation and has
general oversight responsibilities for the trust departments of the Banks. The
Committee met seven times during 1994.
COMMUNITY RESPONSIBILITY COMMITTEE
The Community Responsibility Committee has general oversight responsibility for,
and may take such action as the Committee deems necessary or desirable in
connection with, the Corporation's policy concerning overall compliance with the
Community Reinvestment Act ("CRA") and Fair Lending laws. In addition to these
oversight responsibilities, the Committee also has specific responsibilities for
reviewing the Corporation's overall policy and goals concerning CRA and Fair
Lending activities and approving the Bank's Annual CRA Statements, monitoring
each Bank's compliance and reviewing reports from each of the Banks concerning
their contributions program. The Committee also reviews the examination reports
of the Corporation and the Banks by regulatory authorities concerning CRA and
Fair Lending compliance and renders a report to the Board with respect thereto.
The Committee met three times during 1994.
TECHNOLOGY COMMITTEE
Formed in 1994, the Technology Committee has general oversight responsibility
for, and may take such action as the Committee deems necessary or desirable in
connection with, the overall role of technology and its use throughout the
Corporation. It advises and assists management in the formulation and
implementation of operating and strategic plans designed to take full advantage
of existing and emerging technology. It also monitors the performance of
technology throughout the Corporation. John C. Marous, formerly a director of
the Corporation, served as the initial Chairman of the Committee. The Committee
met twice during 1994.
DIRECTORS' COMPENSATION
Each director of the Corporation who does not receive a salary from the
Corporation or one of its subsidiaries currently receives a monthly retainer of
$2,083 and, in addition, a per meeting fee of $900 for each meeting at which
such director renders services to the Corporation, including meetings of
shareholders, the Board of Directors or any committee of the Board of Directors
on which such director serves, and separate meetings (if any) with senior
management of the Corporation at which services are rendered. In addition, each
director who serves as a Committee chairman receives a quarterly retainer
ranging from $500 to $625, according to the Committee on which he serves. The
directors also serve as the Board of Directors of Mellon Bank and are paid a per
meeting fee of $900 for attending any meeting of such Board on a day when the
Corporation's Board of Directors does not meet. Non-employee directors may defer
all or a portion of their fees pursuant to the terms of an elective deferred
compensation plan, which pays interest at a rate based on the 120 month moving
average rates on 10-year Treasury Notes, plus a premium based on service which
is credited retroactively upon termination of service.
In addition, non-employee directors receive stock option grants under the
Corporation's Stock Option Plan for Outside Directors (1989) (the "Directors
Option Plan"), a formula plan under which options to purchase Common Stock are
granted each year on the third business day following the Corporation's annual
meeting of shareholders. Currently, the number of shares of Common Stock covered
by each grant is equal to 8.1% (which percentage has been adjusted pursuant to
the terms of the Directors Option Plan to reflect the Corporation's three for
two Common Stock split declared in November 1994
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(the "Common Stock split")) of the dollar value of the annual retainer for the
service year in which the grant is made. Directors (if any) elected during the
service year at a time other than the annual meeting of shareholders receive an
option grant covering a prorated number of shares but with all other terms
identical to those options granted on the regular grant date. All options have a
term of 10 years, are not exercisable until one year from the regular grant date
(at which time they become fully exercisable), and have an exercise price equal
to the closing price of the Common Stock on the New York Stock Exchange on the
regular grant date. Options that have not become exercisable are forfeited as of
the date the optionee ceases to serve as a director for any reason other than
the director's death, disability or completion of term of service. Options that
have become exercisable remain exercisable throughout their 10-year term,
regardless of whether the optionee is a director at the time of exercise. In
April 1994, each of the directors, except Messrs. Cahouet, McAniff, Smith and
Stein, was granted an option covering 2,025 shares of Common Stock at an
exercise price of $38.00 per share (which numbers have been adjusted to reflect
the Common Stock split). Upon his election to the Board of Directors in August
1994, Mr. McAniff was granted an option covering 1,332 shares (which number has
been adjusted to reflect the Common Stock split), representing a pro rata share
of a full year's award.
Directors also participate in the Directors' Retirement Plan which is intended
to assure that compensation arrangements for directors of the Corporation are
adequate to attract and retain highly qualified individuals. Under the
Directors' Retirement Plan an eligible director will receive monthly benefits
equal to the monthly retainer in effect at his or her time of retirement from
the Board for a period equal to his or her total months of service on the Board
but no longer than 120 months. Only directors who are not officers of the
Corporation are eligible to receive this benefit and a director must serve on
the Board for at least five years before this benefit vests.
As part of its overall program to promote charitable giving, the Corporation has
also established a Directors' Charitable Giving Program to be funded by
Corporation-owned life insurance policies on the directors. Under the program,
upon the death of a director, the Corporation will donate up to an aggregate of
$250,000 to one or more qualifying charitable organizations designated by the
director. The donations are paid by the Corporation over a 10-year period
following the director's death and the Corporation is reimbursed for the
donation by the life insurance proceeds. A director must have served the Board
for three years to be eligible to participate in the Charitable Giving Program.
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BUSINESS RELATIONSHIPS; RELATED TRANSACTIONS;
CERTAIN LEGAL PROCEEDINGS
Certain directors, executive officers and principal shareholders of the
Corporation and their associates were customers of and had transactions with one
or more of the Banks or other subsidiaries of the Corporation in the ordinary
course of business during 1994. Similar transactions may be expected to take
place in the future. Loans and commitments included in such transactions were
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other persons
and did not involve more than the normal risk of collectibility, nor did they
present other unfavorable features. The Banks, in the ordinary course of
business, also engage in purchases and sales of government and municipal
securities and in other money market transactions with certain directors,
executive officers and principal shareholders of the Corporation and their
associates. In addition, the Banks act as fiduciaries under various employee
benefit plans of certain customers, the officers of which are directors of the
Corporation and of Mellon Bank.
During 1994, the purchase of goods and services, or the lease of property, by
the Corporation, the Banks or other subsidiaries of the Corporation in the
ordinary course of business included transactions with various director-related
companies and with principal shareholders of the Corporation. The amounts
involved in these transactions were in no case material in relation to the
business of the Corporation, any of the Banks or any of the other subsidiaries
of the Corporation. It is also believed that the amounts involved in such
transactions, as well as the transactions themselves, were not material in
relation to the business of any such director-related company or principal
shareholder and that no director had a material interest in any such
transaction.
On August 17, 1992, Phar-Mor, Inc. and a number of its related entities filed a
voluntary petition under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the Northern
District of Ohio (the "Chapter 11 filing"). David S. Shapira, a director of the
Corporation, is a shareholder and currently the Chairman of Phar-Mor. At the
time of the Chapter 11 filing, Mr. Shapira was the Chief Executive Officer and a
shareholder of Phar-Mor. As of March 1, 1992, Mellon Bank became a member of a
group of banks participating in a revolving credit facility which was committed
to Phar-Mor for an aggregate amount of $600,000,000, of which Mellon Bank's
share was $30,000,000 (the "Pre-Petition Facility"). The largest amount
outstanding under the Pre-Petition Facility from Mellon Bank was $19,150,000 and
prior to the Chapter 11 filing, the rates of interest paid thereunder ranged
from 5.6875% to 6.75% per annum. In connection with events leading to Phar-Mor's
Chapter 11 filing, the Pre-Petition Facility was considered to be in default
under its covenants and all amounts outstanding thereunder were accelerated. In
the bankruptcy proceedings, the group of banks participating in the Pre-Petition
Facility agreed to accept current payments of interest on account of the
pre-petition debt at a rate lower than the accrual rate, reserving, however, the
right to claim the full amount of interest. This post petition cash payment
interest rate was 8.25% and Phar-Mor was timely in making these payments. In
August 1993, Mellon Bank assigned to another institution all of its rights under
the Pre-Petition Facility.
Westmoreland Coal Company ("Westmoreland") filed a voluntary petition under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware on November 8, 1994. On December 22, 1994, the plan of
reorganization was confirmed and Westmoreland emerged from bankruptcy
proceedings. Pemberton Hutchinson, a director of the Corporation, is Chairman of
the Board of Directors of Westmoreland and served as an executive officer of
Westmoreland until his retirement as Chief Executive Officer in June of 1993.
On November 29, 1994, a shareholder of the Corporation brought an action in
federal court in Pittsburgh, purportedly on behalf of the Corporation, against
various directors of the Corporation. The lawsuit alleges that those directors
breached their fiduciary duty to the Corporation by grossly mismanaging and
wasting corporate assets in connection with the fourth-quarter $130 million
after tax loss to the Corporation as a result of actions taken in its securities
lending business. The Corporation believes that this complaint lacks merit.
10
<PAGE> 13
BENEFICIAL OWNERSHIP OF STOCK
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth, as of February 15, 1995, the amount of the
Corporation's stock beneficially owned by each incumbent director, each nominee
and each executive officer named in the Summary Compensation Table appearing on
page 13 and by all incumbent directors, nominees and executive officers of the
Corporation as a group. Except as otherwise indicated, sole voting power and
sole investment power with respect to the shares shown in the table are held
either by the individual alone or by the individual together with their spouse.
<TABLE>
<CAPTION>
Common Stock Owned
Name Beneficially(1)(2)
- ---------------------------------------------------------------------------------------------------
<S> <C>
Burton C. Borgelt............................................................ 11,855
Carol R. Brown............................................................... 5,101
Frank V. Cahouet............................................................. 581,620(3)
J. W. Connolly............................................................... 15,663
Charles A. Corry............................................................. 9,912(4)
Thomas F. Donovan............................................................ 65,463
Steven G. Elliott............................................................ 55,446
C. Frederick Fetterolf....................................................... 14,523
Ira J. Gumberg............................................................... 53,081
Pemberton Hutchinson......................................................... 14,912
Rotan E. Lee................................................................. 1,016
Andrew W. Mathieson.......................................................... 23,357(5)
Edward J. McAniff............................................................ 1,500
Martin G. McGuinn............................................................ 66,690
Robert Mehrabian............................................................. 2,106
Seward Prosser Mellon........................................................ 111,461(6)
David S. Shapira............................................................. 15,342
W. Keith Smith............................................................... 111,291(7)
Howard Stein................................................................. 1,585,336(8)
Joab L. Thomas............................................................... 6,582
Wesley W. von Schack......................................................... 19,508
William J. Young............................................................. 16,692
Directors, Nominees and Executive Officers as a group (28 persons)........... 2,933,693
<FN>
- ---------
(1) On February 15, 1995, none of the individuals named in the above table,
except Mr. Stein, beneficially owned more than 1% of the Corporation's
outstanding shares of Common Stock. On that date, Mr. Stein owned
beneficially approximately 1.1% and all the directors, nominees and
executive officers as a group owned beneficially approximately 2.0% of the
Corporation's outstanding Common Stock.
(2) The amounts shown include the following amounts of Common Stock which the
indicated individuals and group have the right to acquire within 60 days of
February 15, 1995, through the exercise of stock options granted pursuant to
the Corporation's stock option plans: Mr. Borgelt, 8,705; Ms. Brown, 2,025;
Mr. Cahouet, 145,000; Mr. Connolly, 13,413; Mr. Corry, 7,412; Mr. Donovan,
24,000; Mr. Elliott, 0; Mr. Fetterolf, 12,192; Mr. Hutchinson, 13,187; Mr.
Lee, 866; Mr. Mehrabian, 606; Mr. McGuinn, 6,000; Mr. Smith, 19,500; Mr.
Thomas, 1,182; all other directors (except Mr. McAniff, whose options have
not yet vested), 15,192 shares each; and all directors, nominees and
executive officers as a group, 521,650 shares. Shares held in accounts under
the Corporation's Retirement Savings Plan, a 401(k) plan, as to which the
holders have voting power but not investment power, are also included as
follows: Mr. Cahouet, 1,638 shares; Mr. Donovan, 873 shares; Mr. Elliott,
1,244 shares; Mr. McGuinn, 1,391 shares; Mr. Smith, 1,367 shares; and all
executive officers as a group, 9,342 shares.
(3) Of these shares, 138,986 are held in trust for Mr. Cahouet's wife. Mellon
Bank is the sole trustee for the trust and Mr. Cahouet has no voting or
investment control over such shares and disclaims their beneficial
ownership.
(4) Mr. Corry also holds 2,000 shares of Series H Preferred Stock, 1,000 shares
of Series I Preferred Stock and 6,200 shares of Series K Preferred Stock of
the Corporation. These holdings represent less than 1% of the Corporation's
outstanding shares of Series H, Series I or Series K Preferred Stock.
</TABLE>
(footnotes continued on next page)
11
<PAGE> 14
<TABLE>
<C> <S>
(5) Mr. Mathieson is a co-trustee with others, including Mellon Bank, and shares
voting and investment control for trusts which hold an aggregate of
1,574,566 shares of Common Stock, not shown in the table. In addition, Mr.
Mathieson is also a general partner, with others, and shares voting and
investment control for a limited partnership which holds 6,919 shares of
Common Stock, not shown in the table. Mr. Mathieson disclaims beneficial
ownership of all such shares.
(6) Mr. Mellon is a general partner of the limited partnership referred to in
footnote (5) and shares voting and investment control over the 6,919 shares
of Common Stock held by the partnership, which shares are not shown in the
table. Mr. Mellon disclaims beneficial ownership of these shares.
(7) Of these shares, 15,000 are held by Mr. Smith's wife. Mr. Smith disclaims
beneficial ownership of such shares.
(8) The amount shown includes 99,020 shares which Mr. Stein has the right to
acquire within 60 days of February 15, 1995, through the exercise of stock
options granted pursuant to The Dreyfus Corporation 1989 NonQualified Stock
Option Plan, 241,142 shares held in The Dreyfus Corporation Retirement
Profit-Sharing Plan, as to which Mr. Stein has voting and investment power,
and 79,215 shares which are held by Mr. Stein's wife. Mr. Stein disclaims
beneficial ownership of the shares held by his wife.
</TABLE>
PRINCIPAL SHAREHOLDERS
The following table sets forth, to the knowledge of the Corporation, the
beneficial owners, as of December 31, 1994, of more than 5% of the outstanding
shares of the Corporation's Common Stock.
<TABLE>
<CAPTION>
Common Stock Owned
Beneficially
------------------------
Number of Percent of
Name Address Shares Class
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
American Express Company (1) American Express Tower
World Financial Center
New York, New York 8,257,206 5.46%
Oppenheimer Group, Inc. (2) Oppenheimer Tower
World Financial Center
New York, NY 10281 7,844,487 5.35%
Warburg, Pincus 466 Lexington Avenue
Capital Company, L.P. (3) New York, NY 10017 11,015,266 7.51%
Warburg, Pincus 466 Lexington Avenue
Capital Partners, L.P. (3) New York, NY 10017 2,074,270 1.41%
<FN>
- ---------
(1) American Express Company holds directly 3,750,000 shares of Common Stock and
currently exercisable warrants to purchase an additional 4,500,000 shares of
Common Stock for $33.33 per share. Subsidiaries of American Express Company
hold 7,206 shares of Common Stock on behalf of third parties, with no power
to vote and with shared power to direct the disposition of such shares.
(2) According to Oppenheimer Group, Inc.'s (the "Holding Company") Schedule 13G
dated February 1, 1995, filed under the Securities Exchange Act of 1934, the
shares in the table are held by subsidiaries of the Holding Company,
including 7,257,541 shares held by Oppenheimer Capital, with shared power to
vote or direct the disposition of all shares.
(3) The sole general partner of Warburg, Pincus Capital Company, L.P. ("WPCC")
and Warburg, Pincus Capital Partners, L.P. ("WPCP") is Warburg, Pincus &
Co., a New York general partnership ("WP"). Lionel I. Pincus is the managing
partner of WP and may be deemed to control it. E.M. Warburg Pincus & Co.,
Inc. ("EMW"), through a wholly owned subsidiary, manages WPCC and WPCP. WP
owns all of the outstanding stock of EMW and, as the sole general partner of
WPCC and WPCP, has a 20% interest in the profits of WPCC and WPCP. EMW owns
0.9% of the limited partnership interests in WPCC and 1.5% of the limited
partnership interests in WPCP. Pursuant to a Purchase Agreement, dated as of
July 25, 1988, among the Corporation, WPCC and WPCP (the "Purchase
Agreement"), under which shares of the Corporation's Series D Stock were
originally acquired (which shares were converted into Common Stock, pursuant
to their terms), WPCC and WPCP are entitled to have a representative attend
every meeting of the Board of Directors of the Corporation and each
committee of the Board of Directors of the Corporation in an observer
capacity. Such representative does not vote or receive any retainer or fee
for such attendance.
</TABLE>
12
<PAGE> 15
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows the compensation for the past three years of each of
the Corporation's five most highly compensated officers, including the chief
executive officer (the "named executive officers").
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------------
Annual Compensation
------------------------------------------- Awards Payouts
Other ----------------------- ----------
Annual Restricted Securities LTIP All Other
Name and Bonus Compensation Stock Underlying Payouts Compensation
Principal Position Year Salary ($) ($)(1) ($) Awards $(1) Options(2) ($) ($)(3)
- ------------------ ---- ---------- ---------- ----------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FRANK V. CAHOUET........... 1994 $826,667 $322,500 $ 6,400 $136,063 300,402 $ -0-(4) $ 284,527
Chairman, President and 1993 760,000 625,000 6,200 250,006 2,091,250 190,080
Chief Executive Officer 1992 726,667 570,000 16,000 435,000 1,173,625 62,300
W. KEITH SMITH............. 1994 400,000 105,000 8,400 44,706 163,996 -0-(4) 27,450
Vice Chairman 1993 376,537 280,000 900 34,493 493,125 20,079
1992 338,750 233,000 2,300 117,000 384,250 3,000
THOMAS F. DONOVAN.......... 1994 290,000 152,250 900 64,144 60,379 -0-(4) 5,751
Chairman, President 1993 281,667 205,000 700 3,995 358,262 5,740
and Chief Executive 1992 270,000 176,000 1,100 72,000 123,625 3,000
Officer, Mellon PSFS
MARTIN G. MCGUINN.......... 1994 270,250 147,000 1,500 62,200 83,313 -0-(4) 27,120
Vice Chairman 1993 241,000 170,000 1,400 23,789 304,000 21,341
1992 228,167 157,000 1,500 66,000 59,250 10,700
STEVEN G. ELLIOTT.......... 1994 270,000 147,000 2,100 62,200 96,177 -0-(4) 9,285
Vice Chairman and 1993 240,000 170,000 1,400 21,134 342,219 14,231
Chief Financial Officer 1992 235,833 156,000 300 66,000 97,469 3,000
<FN>
- ---------
(1) Bonus awards for 1994 were payable 75% in cash and 25% in restricted shares
of the Corporation's Common Stock. Bonus awards in previous years were paid
entirely in cash. The amounts shown under "Restricted Stock Awards"
represent the market value on February 21, 1995 of the restricted shares
awarded on that date. In calculating the number of restricted shares to be
awarded as the non-cash portion of the 1994 bonus awards, the value of the
non-cash portion of the award was divided by the per share market value of
the Common Stock with the result multiplied by 125% to take into account the
financial impact of the restrictions placed on the stock. The restrictions
generally prevent transfer or sale of the stock for a three year period and
subject the shares to forfeiture in the event the executive terminates his
employment with the Corporation during that three year period. During the
restriction period, the executive has full voting rights and receives
dividends at the same rate as other holders of the Corporation's Common
Stock.
(2) Numbers have been adjusted to reflect the Common Stock split.
(3) Includes for 1994 for Messrs. Cahouet, Smith, Donovan, McGuinn and Elliott,
respectively, the following compensation amounts: (i) the portion of
interest accrued (but not currently paid or payable) on deferred
compensation above 120% of the applicable federal long-term rate at the
maximum rate payable under the Corporation's Elective Deferred Compensation
Plan for Senior Officers, $136,508, $1,251, -0-, $20,408, -0-; (ii) matching
contributions under the Corporation's Retirement Savings Plan, a 401(k)
plan, of $3,000 for each of the named executive officers; (iii) the present
value of the economic benefit to the executive from corporate premiums paid
to purchase split dollar life insurance contracts under the Mellon Bank
Senior Executive and Optional Life Insurance Plans, $139,045, $21,071,
$1,046, $3,020, $5,734; and (iv) cash paid to the executive equal to his
imputed income under the Mellon Bank Senior Executive Life Insurance Plan,
$5,974, $2,128, $1,705, $692 and $551.
(4) No LTIP Payouts were paid in 1994. LTIP Payouts, in the form of deferred
cash incentive awards, were paid in January of 1995 in connection with the
exercise of accelerated stock options, including payments to Messrs.
Cahouet, Smith, Donovan, McGuinn and Elliott, respectively, of $1,613,127,
$493,126, $341,063, $304,000, and $334,330. These January, 1995 payments
will be recorded as 1995 LTIP Payouts in the Summary Compensation Table
included in next year's Proxy Statement.
</TABLE>
13
<PAGE> 16
OPTION GRANTS IN 1994
Shown below is information on grants of stock options pursuant to the
Corporation's Long-Term Profit Incentive Plan (1981) (the "Option Plan") during
the year ended December 31, 1994. The Option Plan is administered by the Human
Resources Committee of the Board of Directors, which has authority to determine
the individuals to whom options are granted and the terms of all grants
thereunder. No stock appreciation rights were granted under the Option Plan in
1994. In the event of a change of control of the Corporation, as defined in the
Option Plan, all the option grants shown below would become immediately
exercisable.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------
Percent
Number of of Total
Securities Options Exercise
Underlying Granted to Price Grant Date
Options Employees (per share) Expiration Present
Name Granted(1) in 1994 ($)(1) Date Value($)(8)
- ---- ---------- ---------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
FRANK V. CAHOUET.................. 37,500(2) 1.2% $ 38.2500 3/14/04 $ 303,514
37,902(3) 1.2% 37.2500 10/20/04 246,791
37,500(3) 1.2% 35.3333 10/20/04 234,048
37,500(4) 1.2% 35.3333 10/20/04 228,960
150,000(5) 4.9% 38.2500 3/14/00 959,310
W. KEITH SMITH.................... 37,500(2) 1.2% 37.2500 10/20/04 244,174
10,691(3) .3% 37.2500 10/20/04 69,612
37,500(4) 1.2% 37.2500 10/20/04 238,866
12,500(6) .4% 37.2500 10/20/04 77,853
16,883(7) .6% 37.0833 10/22/02 112,944
27,716(7) .9% 37.0833 7/08/97 123,007
21,206(7) .7% 37.0833 10/17/98 110,723
THOMAS F. DONOVAN................. 25,500(2) .8% 37.2500 10/20/04 166,038
878(3) * 37.2500 10/20/04 5,717
25,500(4) .8% 37.2500 10/20/04 162,429
8,501(6) .3% 37.2500 10/20/04 52,946
MARTIN G. MCGUINN................. 25,500(2) .8% 37.2500 10/20/04 166,038
4,799(3) .2% 37.2500 10/20/04 31,248
25,500(4) .8% 37.2500 10/20/04 162,429
8,501(6) .3% 37.2500 10/20/04 52,946
9,437(7) .3% 38.0000 10/22/02 64,693
9,576(7) .3% 37.0833 10/22/02 56,562
STEVEN G. ELLIOTT................. 25,500(2) .8% 37.2500 10/20/04 166,038
3,968(3) .1% 37.2500 10/20/04 25,837
25,500(4) .8% 37.2500 10/20/04 162,429
8,501(6) .3% 37.2500 10/20/04 52,946
9,524(7) .3% 37.0833 10/22/02 63,714
10,470(7) .3% 37.0833 08/09/97 47,151
9,522(7) .3% 37.0833 10/22/02 56,243
3,192(7) .1% 36.2500 10/24/01 17,718
<FN>
- ---------
* Less than .1%
(1) Numbers have been adjusted pursuant to the terms of the Option Plan to
reflect the Common Stock split.
(2) Option becomes exercisable annually in thirds beginning on 10/21/95, except
for Mr. Cahouet whose grant becomes exercisable annually in thirds beginning
on 3/15/95. Reload option rights are attached to each option and reload
options will be automatically granted on exercise when the exercise price is
paid by delivering or withholding shares of Common Stock; provided the
closing price of the Common Stock on the New York Stock Exchange on the date
of exercise exceeds the exercise price by at least 25 percent. Reload
options have an exercise price equal to the closing price of the Common
Stock on their grant date and the same expiration date as the underlying
option.
(3) Option becomes exercisable annually in thirds beginning on 10/21/95.
</TABLE>
(footnotes continued on next page)
14
<PAGE> 17
<TABLE>
<C> <S>
(4) Option becomes exercisable in full on 8/22/04. Exercisability may be
accelerated to an earlier date at the discretion of the Human Resources
Committee based on the Committee's review of the option holder's individual
performance. In determining the number of options, if any, to be accelerated
in any year, each named executive officer's performance is reviewed by the
Human Resources Committee. In past years, such performance has been
evaluated on the basis of several factors, including the trends indicated by
financial performance and the progress made toward the achievement of the
longer term goals for the lines of business for which such executive is
responsible. Deferred cash incentive awards are granted with each of these
options in the amount of the option exercise price. In the event the
exercisability of the option is accelerated (except in the event of a change
of control), the deferred cash incentive award becomes operative and must be
used by the officer to pay the option's exercise price upon exercise;
provided however, that such awards will only be payable if the Corporation
achieves certain pre-established performance goals. Deferred cash incentive
awards are disclosed in the Long-Term Incentive Plans Table below.
(5) Option may not be exercised before 3/15/96 and becomes exercisable as
indicated when the closing price of the Common Stock on the New York Stock
Exchange has achieved or exceeded the following prices for 20 consecutive
trading days: 1/3 at $43.33; 2/3 at $53.33; 3/3 at $66.67.
(6) Option may not be exercised before 10/21/96 and becomes exercisable as
indicated when the closing price of the Common Stock on the New York Stock
Exchange has achieved or exceeded the following prices for 20 consecutive
trading days: 1/4 at 125% of the exercise price; 2/4 at 150% of the exercise
price; 3/4 at 175% of the exercise price; 4/4 at 200% of the exercise price.
Option becomes exercisable in full on 8/22/04 if the stock price targets are
not achieved before 10/21/98.
(7) Reload options granted in 1994 become exercisable three years after their
grant date; provided, however, that if the option holder sells any of the
shares acquired on exercise of the underlying option before such date, the
entire reload option will expire. The reload option grants shown above would
become exercisable as follows: Smith--4/28/97, 4/28/97, 4/28/97;
McGuinn--4/22/97, 10/31/97; Elliott--4/28/97, 4/28/97, 10/31/97, 10/25/97.
(8) Based on the Black-Scholes model adapted for use in valuing executive stock
options. THERE IS NO ASSURANCE THE VALUE REALIZED BY AN EXECUTIVE WILL BE AT
OR NEAR THE VALUE ESTIMATED BY THE BLACK-SCHOLES MODEL. The actual value, if
any, an executive may realize will depend on the excess of the stock price
over the exercise price on the date the option is exercised. In determining
the Black-Scholes value, the following underlying assumptions were used: (i)
stock price volatility represents the standard deviation of the Common Stock
over the three year period prior to grant of the option (i.e., from .1584 to
.1650); (ii) dividend yield represents the cumulative dividends per share
for the 12-month period prior to grant of the option, divided by the average
monthly price of the Common Stock over the same period (i.e., from 3.07% to
4.22%); (iii) the risk-free rate of return represents the average weekly
yield on 10-year Treasury Bills over the 52 week period prior to grant of
the option as derived from the Value-Line Investment Survey--Selection &
Opinion (i.e., from 5.78% to 6.78%); (iv) option term represents the period
from the date of grant of each option to the expiration of the term of the
option; (v) vesting restrictions are reflected by reducing the value of the
option determined by the Black-Scholes model by 4% for each full year of
vesting restrictions (i.e., by 12% for each of the options being valued).
</TABLE>
15
<PAGE> 18
AGGREGATED OPTION EXERCISES IN 1994 AND YEAR-END OPTION/SAR VALUES
The following table shows information with respect to the exercise of stock
options during 1994 by each of the named executive officers and the value of
unexercised options and stock appreciation rights ("SARs") on December 31, 1994.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options/SARs
Acquired Value Options/SARs at Year-End at Year-End ($)(3)
on Realized -------------------------- -------------------------
Name Exercise(1) ($)(2) Exercisable Unexercisable Exercisable Unexercisable
- ---- ---------- ---------- ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
FRANK V. CAHOUET............ -0- -0- 145,000 786,033 $138,954 $225,799
W. KEITH SMITH.............. 90,000 $1,337,000 19,500 266,364 18,687 139,295
THOMAS F. DONOVAN........... 9,450 163,800 24,000 108,999 22,999 135,577
MARTIN G. MCGUINN........... 25,002 204,106 6,000 147,352 -0- 112,822
STEVEN G. ELLIOTT........... 39,301 362,647 -0- 160,711 -0- 106,191
<FN>
- ---------
(1) Numbers have been adjusted to reflect the Common Stock split.
(2) The "Value Realized" is equal to the difference between the option exercise
price and the fair market value of the Common Stock on New York Stock
Exchange on the date of exercise. No SARs were exercised during 1994.
(3) The "Value of Unexercised In-The-Money Options/SARs at Year-End" is equal to
the difference between the option/SAR exercise price and the Common Stock's
December 30, 1994 closing price of $30.6250 per share on the New York Stock
Exchange.
</TABLE>
LONG-TERM INCENTIVE PLANS--AWARDS IN 1994
The following table shows the deferred cash incentive awards granted to the
named executive officers during the year ended December 31, 1994 under the
Option Plan. Deferred cash incentive awards are granted only in connection with
the grant of certain stock options and become payable only upon the Human
Resources Committee's acceleration of the exercisability of the related stock
option prior to a date 60 days before its expiration. (See footnote (4) on page
15.) The deferred cash, when paid to the executive, must be used by the
executive to pay the exercise price of the related option. Upon acceleration of
the option and actual payment of the deferred cash to the executive, such
payment is reported in the Summary Compensation Table under LTIP Payouts.
<TABLE>
<CAPTION>
Estimated
Maximum Future
Number of Performance Payouts
Shares, Units Period Until ----------
or Other Maturation Maximum
Name Rights(1) or Payout Payout(2)
- ---- --------------- ------------ ----------
<S> <C> <C> <C>
FRANK V. CAHOUET............................................. 37,500 8/22/04 $1,325,000
W. KEITH SMITH............................................... 37,500 8/22/04 1,396,875
THOMAS F. DONOVAN............................................ 25,500 8/22/04 949,875
MARTIN G. MCGUINN............................................ 25,500 8/22/04 949,875
STEVEN G. ELLIOTT............................................ 25,500 8/22/04 949,875
<FN>
- ---------
(1) Numbers have been adjusted to reflect the Common Stock split.
(2) The amount shown represents the aggregate exercise price of the related
options granted to each named executive officer. The Human Resources
Committee can choose in its discretion to accelerate all, part or none of
the stock options related to such award. If such option is not accelerated,
no payout of the award is made. On and after January 1, 1994, deferred cash
incentive awards become payable only if the Corporation achieves performance
goals which are established for a calendar year or longer period by the
Human Resources Committee. Performance goals are based on one or more
business criteria (including return on equity, return on assets, net income
and earnings per share) as defined by the Committee. The Committee retains
the discretion to reduce (but not to increase) the portion of any deferred
cash incentive award which would otherwise be payable for any calendar year
based on achieving such performance goals.
</TABLE>
16
<PAGE> 19
PENSION PLAN TABLE
The following table sets forth the estimated annual benefits payable on a
single-life annuity basis on retirement at age 65 pursuant to the retirement
plans of the Corporation and Mellon Bank to participating employees, including
officers, in specified compensation and years-of-service classifications. The
amounts shown reflect a reduction to recognize in part the cost of Social
Security benefits related to service for the Corporation. The credited years of
service for Messrs. Cahouet, Smith, Donovan, McGuinn and Elliott are 8, 8, 6, 14
and 8, respectively. Benefits are determined based upon average base salary for
the five years of highest compensation during the 10 years preceding retirement.
<TABLE>
<CAPTION>
Average Estimated Annual Pension for Representative Years of Credited Service
Annual -------------------------------------------------------------------------
Base Salary 10 15 20 25 30 35
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
$ 200,000 $ 28,500 $ 43,000 $ 57,500 $ 72,000 $ 86,000 $100,500
300,000 43,500 65,500 87,500 109,500 131,000 153,000
400,000 58,500 88,000 117,500 147,000 176,000 205,500
500,000 73,500 110,500 147,500 184,500 221,000 258,000
600,000 88,500 133,000 177,500 222,000 266,000 310,500
700,000 103,500 155,500 207,500 259,500 311,000 363,000
800,000 118,500 178,000 237,500 297,000 356,000 415,500
900,000 133,500 200,500 267,500 334,500 401,000 468,000
1,000,000 148,500 223,000 297,500 372,000 446,000 520,500
</TABLE>
Payment of the amounts shown in the table is subject to annual limitations
imposed by the Internal Revenue Code on tax-qualified plans. To the extent the
benefits set forth above exceed these limitations, benefits will be paid
pursuant to nonqualified supplemental plans maintained by the Corporation and
Mellon Bank.
SUPPLEMENTAL RETIREMENT AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
In order to attract and motivate senior executives and to encourage such
executives to remain with the Corporation and its affiliates, the Corporation
has provided certain of the named executive officers with retirement and/or
death benefits, as described below, supplementing those available under the
retirement plans described above.
Mr. Cahouet
Under the terms of his employment agreement with Mellon Bank (discussed below),
Mr. Cahouet will be entitled to receive an unfunded supplemental retirement
benefit if he retires from the Corporation on or after reaching the age of 62.
The supplemental benefit is calculated on an unreduced 50% joint and survivor
basis and would be a monthly amount equal to Mr. Cahouet's Final Average
Compensation (as defined below) multiplied by a Compensation Percentage (defined
below) and reduced by the total monthly amount of benefits provided to him under
all retirement plans maintained by the Corporation and Mellon Bank. "Final
Average Compensation" means the average monthly amount of Mr. Cahouet's base
salary and any bonus award for the 36 consecutive months within the term of his
employment agreements that produce the highest average amount. "Compensation
Percentage" means 50% plus 2.5% for each full year of employment which Mr.
Cahouet has completed under his current employment agreement (discussed below).
If Mr. Cahouet's termination of employment with the Corporation were due to his
death prior to the commencement of the payment of the supplemental benefits
under his employment agreement, his spouse would be entitled to a pre-retirement
death benefit, payable in the form of a lifetime annuity, equal to the benefit
that would have been payable had he retired immediately prior to death assuming
election of an unreduced 50% joint and survivor annuity. Based on his 1994
compensation, and assuming retirement at age 65, supplemental retirement
benefits payable to Mr. Cahouet under the agreement are estimated at
approximately $662,000 per year.
17
<PAGE> 20
Mr. Smith
Under the terms of his employment agreement with Mellon Bank (discussed below),
Mr. Smith is entitled to receive an unfunded supplemental retirement benefit
equal to the difference between the amounts to which he is entitled under the
retirement plans included in the above Pension Table (the "Corporation
Retirement Benefits") and the amount of Corporation Retirement Benefits he would
receive if he were credited with 8 years of additional service to the
Corporation and his final average compensation under the retirement plans were
to include base salary and any cash bonuses awarded to him by the Corporation in
the relevant years. Under this formula, Mr. Smith is deemed to have 16 years of
service for purposes of calculating his benefits under the retirement plans and
his supplemental retirement agreement. Mr. Smith's employment agreement was
amended in 1994 to provide that he may earn additional credit for up to five
years of service based on, and in addition to, his actual service with the
Corporation and its subsidiaries after August 1, 1994 through his retirement
date.
EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
Mr. Cahouet
In connection with Mr. Cahouet's appointment in June 1987 as the Chairman and
Chief Executive Officer and a director of the Corporation and Mellon Bank, Mr.
Cahouet entered into an employment agreement with Mellon Bank which had a term
lasting until July 25, 1993. In July of 1993, Mr. Cahouet entered into a new
employment agreement with Mellon Bank with a termination date of May 31, 1997.
The current employment agreement provides, among other things, for an annual
base salary of $760,000, subject to periodic increases which must take into
consideration the salaries of the chief executive officers of the 10 largest
bank holding companies in the United States, life insurance in the amount of
twice his annual salary, perquisites appropriate to his position, including club
memberships, physical examinations and personal financial planning services, and
the supplemental retirement benefits described above. The bank holding companies
against whose chief executive officers Mr. Cahouet's salary is measured are
included in both the Standard & Poor's 500 Stock Index and the KBW 50 Index used
to prepare the Corporation's Performance Graph shown on page 20. The agreement
also provides that, if Mr. Cahouet's employment is terminated other than for
cause, he will receive full salary and benefits until the expiration of its term
and a pro-rated portion of any bonuses for the year of termination. If Mr.
Cahouet's employment is terminated for cause or Mr. Cahouet terminates his
employment for reasons other than a constructive discharge, permanent disability
or retirement, he will receive any benefits that may have vested prior to such
termination under the supplemental retirement provisions of his employment
agreement or under the terms of the Corporation's generally applicable employee
benefit plans. The terms of the agreement prohibit "excess parachute payments"
by the Corporation, as defined under the Internal Revenue Code.
Mr. Smith
In connection with Mr. Smith's appointment in July 1987 as Vice Chairman and
Chief Financial Officer and a director of the Corporation and Mellon Bank, Mr.
Smith entered into an employment agreement with Mellon Bank which had a term
lasting until July 25, 1993. In July of 1993, Mr. Smith entered into a new
employment agreement with Mellon Bank with a termination date of July 31, 1996.
It provides, among other things, for an annual base salary of $400,000, subject
to periodic increases, perquisites appropriate to Mr. Smith's position,
including club memberships, physical examinations and personal financial
planning services, and the supplemental retirement benefits described above. The
agreement also provides that if Mr. Smith's employment is terminated other than
for cause, he will receive full salary and benefits until one year after the
expiration of its term and a pro-rated portion of any bonuses for the year of
termination. If Mr. Smith's employment is terminated for cause or Mr. Smith
terminates his employment for reasons other than a constructive discharge,
permanent disability or retirement, he will receive any benefits that may have
vested prior to such termination under the supplemental retirement provisions of
the agreement or under the terms of the Corporation's generally applicable
employee benefit plans. The terms of the agreement prohibit "excess parachute
payments" by the Corporation, as defined under the Internal Revenue Code.
18
<PAGE> 21
OTHER COMPENSATION
Displacement Policy and Changes in Control
Under the Corporation's Employee Displacement Program, employees of the
Corporation, including the named executive officers, may receive certain
benefits if their employment with the Corporation is terminated due to
technological changes or other business reasons not related to individual
performance. Such benefits may include temporary assignments, placement
assistance, benefits continuation and/or severance payments based upon years of
service. The program is subject to revision or termination at the Corporation's
discretion at any time.
In addition to any other benefits available to employees under other severance
policies, all employees, including the named executive officers, are entitled to
12 months of base salary and benefit continuation if they are terminated, other
than for good cause, within three years after a change in control of the
Corporation. Such benefits would offset amounts due to Mr. Cahouet and Mr. Smith
under the terms of their employment contracts upon termination after a change in
control. In addition, if a change in control of the Corporation occurs,
employees will have a nonforfeitable right to their accrued benefits under
Mellon Bank's tax-qualified retirement plan and will be entitled to certain
increased retirement benefits if the retirement plan's assets exceed its
liabilities at the time the change in control occurs. These rights to salary and
benefit continuation and increased retirement benefits may not be amended after
the occurrence of such a change in control.
19
<PAGE> 22
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return on the Corporation's Common Stock, based on the market price of the
Common Stock and assuming reinvestment of dividends, with the cumulative total
return of companies on the Standard & Poor's 500 Stock Index and the KBW 50
Index. The KBW 50 Index, available from Keefe, Bruyette & Woods, Inc., is a
market-capitalization-weighted bank-stock index made up of 50 of the nation's
most important banking companies including all money-center and most major
regional banks. The Corporation is included in the KBW 50 Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
Among S&P 500 Index, KBW 50 Index and Mellon Bank Corporation.
[GRAPH GOES HERE]
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Mellon Bank Corporation ................ 100 88 136 214 219 198
S&P 500 Index........................... 100 97 126 136 150 152
KBW 50 Index............................ 100 72 114 145 153 145
</TABLE>
* Assumes that the value of the investment in the Corporation's Common Stock and
each index was $100 on December 31, 1989 and that all dividends were
reinvested.
20
<PAGE> 23
COMPENSATION COMMITTEE REPORT
INTRODUCTION
The Corporation's Human Resources Committee (the "Committee") is composed
entirely of independent outside directors. The Committee has among its duties
the responsibility for establishing and reviewing the compensation and benefits
of the senior managers of the Corporation and its subsidiaries, including the
compensation of the Chairman and the other named executive officers. The
Committee actively advises and assists management in formulating and in
implementing policies designed to assure the selection, development and
retention of key personnel.
Under the guidance of the Committee, the Corporation's compensation policies
have been cast within the larger framework of managing the Corporation towards
overall enhanced profitability and increased shareholder value. Accordingly, two
principles underlying the Corporation's compensation policy for all senior
managers, including the Chairman and the other named executive officers, are (i)
aligning the financial interests of senior managers with those of the
Corporation's shareholders and (ii) paying for corporate and individual
performance. These principles are reflected in the structure of the
Corporation's compensation program for senior managers which consists of three
basic components: base salary, awards under the annual Profit Bonus Plan (the
"Bonus Plan") and awards under the Long-Term Profit Incentive Plan (1981) (the
"Option Plan"). In creating this structure, the Committee has consciously placed
an increasing emphasis on the "at risk" elements of compensation for senior
managers. As a result, base salaries are generally set somewhat below the market
with the senior managers and the Corporation both relying to a larger degree on
the incentive components of the Bonus Plan and the Option Plan. Other than for a
change in the Bonus Plan which provided that a portion of the bonuses for 1994
be paid with restricted stock (as opposed to the all cash bonus payments made
in previous years), there were no changes made during 1994 in either the
Corporation's overall compensation policy for senior managers or in the
implementation of that policy.
Awards under the Corporation's incentive plans are tied to corporate, business
unit and individual performance. While the accomplishment of the goals and
objectives woven throughout the Corporation's operating and strategic plans are
at the core of the basis for making awards under the Bonus Plan and the Option
Plan, there is no formal weighting of various factors, and neither incentive
plan has automatic, formula driven or rigid payout features. Rather, both of the
plans are consciously constructed with a degree of subjectivity and discretion
which provides the Committee with the flexibility to administer these incentive
plans in a manner that is believed by the Committee to encourage managers to
continually focus on building high quality profitability and long-term
shareholder value.
BASE SALARY
During 1994 the Committee reviewed and took action to increase the base salaries
for the Chairman and two of the named executive officers. In considering the
recommendations for increases in the base salary of the two named executive
officers, the Committee reviewed the performance of each officer against various
objectives, including performance against the business plans for 1993 and 1994
year-to-date for those lines of business for which he was responsible. The
Corporation's business plans and the elements thereof applicable to its various
lines of business include financial performance targets such as: income,
expense, asset quality, operating margin, return on assets and return on
capital, as well as strategic development imperatives. In addition to such
evaluations, the Committee considered the recommendations for increases in base
salary for those officers within the parameters established by compensation data
based on surveys of comparable executive officers of nine other financial
institutions similar to the Corporation in terms of size, and/or the mix of its
lines of business. These comparative financial institutions are included within
the KBW 50 Index used for the Performance Graph on page 20.
The Chairman's base salary is established pursuant to his employment contract.
(See "Employment Agreements with Named Executive Officers" on page 18.) The
contract requires that when setting the salary of the Chairman, the Committee
must take into consideration the salaries of the chief executive officers of the
ten largest bank holding companies in the United States. These institutions are
included within the KBW 50 Index. Accordingly, in reviewing the Chairman's
salary, the Committee considered the Corporation's performance against its
business plan for 1993 and 1994 year to date, the Corpo-
ration's achievement of strategic imperatives and the Corporation's total
returns to its shareholders in terms of share price appreciation and dividends.
The Committee then reviewed 1993 base salary and total compensation data for the
relevant chief executive officer peer group. Based upon the results of
21
<PAGE> 24
such evaluation and review, the Chairman's base salary was set at $860,000,
slightly below the seventy-fifth percentile of the base salaries of the relevant
peer group of chief executive officers.
OPTION PLAN AWARDS
During 1994 the Committee reviewed the performance of senior managers, including
the Chairman and the other named executive officers, in the context of making
option awards pursuant to the Option Plan. In 1994, the Committee continued the
Corporation's past practice of "front loading" option grants for a multiple year
period. By awarding senior managers with a larger block of options at the
beginning of a multiple year period, rather than awarding a smaller number of
options on an annual basis over the same number of years, the Corporation
increases the value of the options to the manager at a low relative cost to the
Corporation and its shareholders. Based on the comparative compensation data
reviewed by the Committee, the value of the "at risk" component of compensation
represented by "front loaded" options, when coupled with the Corporation's
somewhat below market annual cash compensation (measured in terms of base salary
and cash bonus), works well to achieve the needed competitive positioning of the
Corporation's senior manager compensation package while creating a significant
degree of incentive for the managers and aligning the managers' financial
interest with those of the Corporation's shareholders. The amount of options
awarded under the Option Plan to the senior managers, including the Chairman and
the other named executive officers, is determined by a matrix utilizing the
manager's office or position, base salary and performance rating.
The Committee did not take action during 1994 to accelerate the exercise date
for certain options previously granted to senior managers. In 1994 the Option
Plan was amended to provide that the deferred cash incentive awards otherwise
payable to such optionees in an amount equal to the exercise price of
accelerated options could be paid only if certain pre-established, corporate
level performance goals are achieved. The performance goals for 1994 were
achieved, and the actions taken by the Committee in January of 1995 to
accelerate the exercise date for certain previously granted options and to pay
the related deferred cash incentive awards will be discussed in the Committee's
report in next year's Proxy Statement.
In addition to the grants of options made to senior managers generally in
October of 1994, in which the Chairman and the other named executive officers
participated, the Committee also considered and took action in March of 1994 to
award options to the Chairman. An award of 37,500 options was made to the
Chairman in connection with establishing his base salary and was viewed by the
Committee as furthering the Corporation's compensation philosophy of setting a
lower base salary and relying to a larger degree upon the incentive components
of compensation when establishing the Chairman's compensation within the
parameters required by his employment contract. The Committee also made an award
of 150,000 contingent options (the exercisability of these options is contingent
upon the market price of the Common Stock achieving certain threshold prices) as
a special recognition of the Chairman's leadership during 1993 in completing the
acquisition of The Boston Company and undertaking the merger with The Dreyfus
Corporation--thereby repositioning the Corporation to achieve superior long term
shareholder value in the face of a rapidly changing and increasingly competitive
financial services industry. In making this award of options to the Chairman,
and thus providing the recognition for his achievements and the potential for a
meaningful reward, the Committee was guided by the principles underlying the
Corporation's compensation philosophy of paying for performance and closely
aligning the financial interests of its managers with those of its shareholders.
Based upon the price of the Common Stock at the time the option was granted
($38.25), for the Chairman to receive the full benefit of the contingent
options, the market price of the Corporation's Common Stock must increase during
the target period by approximately 74% (to $66.67). Based upon the current
number of outstanding shares (approximately 147 million) such an increase in the
market price of the Common Stock would result in the creation of an additional
$4.17 billion of market value for the Corporation's shareholders.
BONUS PLAN AWARDS
As a continuing refinement in the Corporation's compensation policies, and to
further align the financial interests of the Corporation's senior managers with
those of its shareholders, the Committee considered and approved bonus awards
for 1994 for its senior managers, including the Chairman and the other named
executive officers, which were payable 75% with cash and 25% with restricted
shares of the Corporation's Common Stock. Bonus awards in previous years were
paid entirely in cash. (See footnote (1) to the "Summary Compensation Table" on
page 13.)
In connection with making awards under the Corporation's Bonus Plan for 1994,
the Committee again examined the performance of its senior managers. This review
focused on the individual performance of
22
<PAGE> 25
each officer for full year 1994 and on the Corporation's overall performance in
achieving the objectives of its 1994 operating plan and taking significant steps
in the execution of its strategic plan. Each officer was evaluated based in
significant measure upon the performance against the 1994 business plan for the
lines of business for which he was responsible including the achievement of
financial targets such as income, expense, asset growth, operating margin and
return on capital. In determining the Chairman's Bonus Plan award for 1994, the
Committee evaluated the Chairman within the context of the year experienced by
the Corporation in terms of achieving the objectives of its 1994 operating plan,
as well as the Chairman's leadership in the planning and implementation of the
strategic and operating initiatives to position the Corporation to increase
further the long-term value of the Corporation's franchise. The results of each
officer's evaluation, was then applied to a matrix correlating the numerical
rating from his performance evaluation and his office or position to yield a
target Bonus Plan award ranging from zero percent to 70% of base salary. As a
result of the charge taken in the fourth quarter of 1994 in connection with the
Corporation's securities lending business, the Bonus Plan awards for the
Chairman, one of the other named executive officers, and several other senior
managers were reduced from the target award otherwise resulting from the bonus
matrix.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
As part of the Omnibus Budget Reconciliation Act of 1993 (the "Act"), certain
provisions regarding executive compensation for officers of public companies
were added to the Internal Revenue Code. Under the Act, the Internal Revenue
Service has issued proposed regulations setting forth exclusions from the Act's
general disallowance of ordinary business expense deduction for compensation in
excess of $1 million paid to a company's chief executive officer and each of the
next four most highly compensated executive officers.
In light of the Act and the proposed regulations, the Committee took action in
1994 to limit the payment of deferred cash incentive awards under the Option
Plan to those situations where certain pre-established, corporate level
performance goals have been achieved, so that amounts paid to executive officers
as deferred cash incentive awards would qualify for the exclusions set forth in
the proposed regulations.
The Corporation and the Committee will continue to examine the issue of
deductibility of executive compensation within the context of the overall
operation of the Corporation's compensation plans and will consider what
additional actions should be taken, if any, to operate the compensation plans in
a tax effective manner. Based upon the anticipated operation of the
Corporation's various compensation plans during 1995, and the level of income
deferrals elected by the relevant executive officers, the amount of deductions
anticipated to be lost by the Corporation for 1995 as a result of the provisions
of the Act and the proposed regulations, if any, will be de minimis.
The foregoing report is presented by the Human Resources Committee of the Board
of Directors.
Andrew W. Mathieson, Chairman Joab L. Thomas
J. W. Connolly, Vice Chairman Wesley W. von Schack
Charles A. Corry William J. Young
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS (PROXY ITEM 2)
The Board of Directors, at its February 21, 1995 meeting, appointed KPMG Peat
Marwick LLP as independent public accountants of the Corporation for the year
ending December 31, 1995. KPMG Peat Marwick LLP served as the Corporation's
independent public accountants for the year ended December 31, 1994. Although
the appointment of independent public accountants is not required to be approved
by shareholders, the Board of Directors believes shareholders should participate
in such selection through ratification. If the shareholders fail to ratify KPMG
Peat Marwick LLP as the independent public accountants, the Board of Directors
will reconsider its selection. Representatives of KPMG Peat Marwick LLP will be
present at the annual meeting with an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
ACTION BY SHAREHOLDERS
Adoption of the proposal requires the approval of a majority of the votes cast
at the annual meeting by all holders of Common Stock. The Pennsylvania Business
Corporation Law provides that an abstention is not a vote cast. Therefore, in a
case like this where the favorable vote of the holders of a majority of the
votes cast at the annual meeting is required, an abstention will not have the
effect of a vote for or
23
<PAGE> 26
against the proposal and will not be counted in determining the number of votes
required for approval, though it will be counted in determining the presence of
a quorum.
WITH RESPECT TO THE RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS (PROXY ITEM
2), THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF KPMG PEAT MARWICK LLP AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE CORPORATION
FOR THE YEAR ENDING DECEMBER 31, 1995.
ADDITIONAL INFORMATION; SHAREHOLDER PROPOSALS
No matters other than those set forth in the Notice of Annual Meeting
accompanying this Proxy Statement are expected to be presented to shareholders
for action at the annual meeting. However, if other matters are presented which
are proper subjects for action by shareholders, it is the intention of those
named in the accompanying Proxy to vote such Proxy in accordance with their
judgment upon such matters.
Proposals of shareholders intended to be presented at the Corporation's annual
meeting to be held in 1996 must be received by the Corporation no later than
November 7, 1995 to be considered for inclusion in the Proxy Statement and form
of Proxy relating to the 1996 annual meeting.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Corporation's executive officers and directors, and persons who own more than
10% of a registered class of the Corporation's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC") and the New York Stock Exchange. Executive officers,
directors and greater than 10% shareholders are required by SEC regulation to
furnish the Corporation with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by the Corporation, or
written representations from certain reporting persons that no Form 5's were
required for those persons, the Corporation believes that, since January 1,
1994, all filing requirements applicable to its executive officers and directors
were complied with, except for Mr. von Schack, a director, who did not report on
a Form 4 one purchase of Common Stock during the first quarter and Mr. Mathieson
and Mr. Mellon, each a director, who did not file a Form 4 in connection with
two sales of Common Stock in the fourth quarter by the limited partnership
identified in footnotes (5) and (6) on page 12. Each of these transactions was
reported by the directors on their Form 5 filings made in February 1995.
The cost of solicitation of proxies for the 1995 annual meeting will be borne by
the Corporation. In addition to solicitation by mail, regular employees of the
Corporation may solicit proxies by telephone, telegraph or personal interview.
Brokerage houses and other custodians, nominees and fiduciaries will be
requested to forward soliciting material to the beneficial owners of Common
Stock held of record by such persons and will be reimbursed by the Corporation
for their expenses. In addition, the Corporation has retained D. F. King & Co.,
Inc., 77 Water Street, New York, New York 10005 to aid in the solicitation of
proxies from brokers, banks, other nominees and institutional holders at an
estimated fee of $7,500 plus expenses.
By Order of the Board of Directors
James M. Gockley
Secretary
March 6, 1995
24
<PAGE> 27
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
RESERVATION FORM FOR MELLON BANK CORPORATION ANNUAL MEETING OF SHAREHOLDERS
Admission cards will be forwarded to shareholders whose reservation forms are
received
by April 4, 1995. All other admission cards will be provided at the check-in
desk at the meeting.
I expect to attend the Annual Meeting at 10:00 A.M. on April 18, 1995, in
Pittsburgh, PA.
Name .................................
(Please Print)
Address ................................
(Please Print)
...................................................
(PLEASE COMPLETE AND RETURN IN THE ENCLOSED ENVELOPE IF YOU PLAN
TO ATTEND THE ANNUAL MEETING)
<PAGE> 28
MELLON BANK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION.
The undersigned hereby appoints James M. Gockley and Ann M. Sawchuck, or either
of them, each with full power of substitution as attorneys and proxies of the
undersigned to vote all Mellon Bank Corporation Common Stock of the undersigned
at the Annual Meeting of Shareholders of the Corporation to be held on Tuesday,
April 18, 1995, at 10:00 A.M., on the 10th floor of the Union Trust Building,
501 Grant Street, Pittsburgh, Pennsylvania, and at any adjournment of such
meeting, as fully and effectually as the undersigned could do if personally
present, and hereby revokes all previous proxies for said meeting. WHERE A
VOTE IS NOT SPECIFIED, THE PROXIES WILL VOTE THE SHARES REPRESENTED BY THIS
PROXY FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR, FOR PROXY ITEM 2 AND WILL
VOTE IN THEIR DISCRETION ON SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE
THE MEETING.
This Proxy is solicited on behalf of the Board of Directors of the Corporation,
and may be revoked prior to its exercise. The Board of Directors recommends
votes FOR the election of all nominees for director and FOR Proxy Item 2.
(Continued, and to be signed and dated, on reverse side)
FOLD AND DETACH HERE
<PAGE> 29
WHERE A VOTE IS NOT SPECIFIED, THE PROXIES WILL VOTE SHARES REPRESENTED BY THIS
PROXY FOR THE ELECTION OF DIRECTORS, FOR PROXY ITEM 2 AND WILL VOTE IN THEIR
DISCRETION ON SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.
PROXY ITEM 1- Nominees: Ira J. Gumberg, Edward J.
The election of directors McAniff, David S. Shapira,
FOR WITHHOLD W. Keith Smith, Joab L. Thomas and
all nominees AUTHORITY William J. Young.
listed herein to vote for all
(except as withheld nominees (INSTRUCTIONS: TO WITHHOLD AUTHORITY
in space provided) listed herein TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.)
/ / / / _______________________________________
Note: A vote FOR the election of
directors includes discretionary
authority to vote for a substitute if
any nominee is unable to serve or for
good cause will not serve.
PROXY ITEM 2-Ratification of appointment
of KPMG Peat Marwick LLP as independent
public accountants.
FOR AGAINST ABSTAIN
/ / / / / /
Please date and sign exactly as name
appears hereon. When signing as
attorney, executor, administrator,
trustee, guardian, etc., full title as
such should be shown. For joint
accounts, each joint owner should sign.
If more than one trustee is listed, all
trustees should sign, unless one
trustee has power to sign for all.
________________________________________
(Signature of Shareholder)
_________________________________________
(Signature of Shareholder)
Dated:_____________________________, 1995
"PLEASE MARK INSIDE BLUE BOXES
SO THAT DATA PROCESSING EQUIPMENT
WILL RECORD YOUR VOTES"
FOLD AND DETACH HERE
