SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
NATIONAL CITY BANCORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
NATIONAL CITY BANCORPORATION
651 NICOLLET MALL
MINNEAPOLIS, MINNESOTA 55402-1611
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 19, 2000
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TO THE STOCKHOLDERS OF NATIONAL CITY BANCORPORATION:
Please take notice that the Annual Meeting of Stockholders of National City
Bancorporation will be held, pursuant to due call by the Board of Directors of
the Company, at Gaviidae Common, 651 Nicollet Mall, Fifth Floor, Minneapolis,
Minnesota, on Wednesday, April 19, 2000 at 11:00 a.m., or at any adjournment or
postponements thereof, for the purpose of considering and taking appropriate
action with respect to the following:
1. To elect three persons to the Board of Directors for terms ending in
2003.
2. To transact any other business as may properly come before the meeting
or any adjournments or postponements thereof.
Pursuant to due action of the Board of Directors, stockholders of record on
February 21, 2000, will be entitled to vote at the meeting or any adjournments
or postponements thereof.
A PROXY FOR THE MEETING IS ENCLOSED HEREWITH. YOU ARE REQUESTED TO FILL IN
AND SIGN THE PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
NATIONAL CITY BANCORPORATION
/s/ Thomas J. Freed
Thomas J. Freed,
SECRETARY
March 22, 2000
<PAGE>
PROXY STATEMENT
OF
NATIONAL CITY BANCORPORATION
651 NICOLLET MALL
MINNEAPOLIS, MINNESOTA 55402-1611
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ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
APRIL 19, 2000
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PROXIES AND VOTING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of National City Bancorporation (the
"Company") to be used at the Annual Meeting of Stockholders of the Company to be
held Wednesday, April 19, 2000, at 11:00 a.m., at Gaviidae Common, 651 Nicollet
Mall, Fifth Floor, Minneapolis, Minnesota. The approximate date on which this
Proxy Statement and the accompanying proxy were first sent or given to
stockholders was March 22, 2000. Each stockholder who signs and returns a proxy
in the form enclosed with this Proxy Statement may revoke the same at any time
prior to its use by giving notice of such revocation to the Company in writing
or in open meeting. Unless so revoked, the shares represented by each such proxy
will be voted at the meeting and at any adjournments or postponements thereof.
Presence at the meeting of a stockholder who has signed a proxy does not alone
revoke that proxy. Only stockholders of record at the close of business on
February 21, 2000 will be entitled to vote at the meeting or any adjournments or
postponements thereof. It is the intention of the persons named as proxies in
the accompanying form of proxy, unless such authority is withheld, to vote for
the election of each nominee to the Board of Directors identified below. In
order to be elected a director of the Company, a nominee must receive a majority
of the votes cast by the shares entitled to vote in the election at an Annual
Meeting at which a quorum is present. The abstention or failure to vote shares
present at an Annual Meeting and broker nonvotes do not have the effect of a
vote "against" a nominee.
1
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Company has outstanding only one class of voting securities, common
stock, $1.25 par value, of which 8,721,712 shares were outstanding as of the
close of business on the record date, February 21, 2000. Each share of the
Company's common stock is entitled to one vote.
The following table sets forth, as of February 21, 2000, all persons known
by the Company to be the owner, of record or beneficially, of more than five
percent of the issued and outstanding common stock of the Company, for each of
the executive officers named in the Summary Compensation Table and for all
executive officers and directors as a group. David L. Andreas is a director of
the Company.
SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
OF BENEFICIAL OWNER OWNED OF CLASS
---------------------------------- ------------- --------
David L. Andreas 610,440(1) 7.0
P.O. Box E1919
Minneapolis, Minnesota 55480
Dorothy Inez Andreas 1,712,711(2) 19.6
P.O. Box 728
Mankato, Minnesota 56001
Dwayne O. Andreas 614,710(3) 7.0
P.O. Box 728
Mankato, Minnesota 56001
Lowell W. Andreas 851,858(4) 9.8
P.O. Box 728
Mankato, Minnesota 56001
Thomas J. Freed 12,223(5) *
Robert L. Olson 16,032(6) *
All executive officers and
directors as a group (17 persons) 1,069,135 12.3
- ---------------------
*Less than one percent.
(1) President and Chief Executive Officer of the Company. See footnote (5) to
the table under the heading "Election of Directors."
(2) Includes 29,842 shares held as sole or co-trustee of trusts for members of
Mrs. Andreas' family, in which Mrs. Andreas disclaims beneficial ownership.
Does not include 614,710 shares beneficially owned by spouse, Dwayne O.
Andreas, in which Mrs. Andreas disclaims beneficial ownership. See footnote
(3).
(3) Represents shares held as sole or co-trustee of trusts for members of Mr.
Andreas' family, in which Mr. Andreas disclaims beneficial ownership. Does
not include 1,712,711 shares beneficially owned by spouse, Dorothy Inez
Andreas, in which Mr. Andreas disclaims beneficial ownership. See footnote
(2).
(4) Included in the shares beneficially owned by Lowell W. Andreas are 499,090
shares reported as beneficially owned by David L. Andreas.
(5) Secretary and Chief Financial Officer of the Company and Senior Vice
President and Chief Financial Officer of National City Bank of Minneapolis.
(6) President and Chief Executive Officer of Diversified Business Credit, Inc.
and member of the Company's Board of Directors.
2
<PAGE>
ELECTION OF DIRECTORS
The Restated Articles of Incorporation of the Company provide for the
division of the Board of Directors into three classes, with the directors in
each class serving for a term of three years. At the 2000 Annual Meeting of
Stockholders, three directors are to be elected to serve until the 2003 Annual
Meeting or until their successors are elected and qualified. The three nominees
are currently serving as directors and have consented, if elected, to serve a
new term. Management proposes for election to the Board of Directors the
nominees listed below:
<TABLE>
<CAPTION>
SHARES
PRINCIPAL OCCUPATION, BUSINESS BENEFICIALLY
EXPERIENCE DURING PAST FIVE YEARS AND DIRECTOR OWNED AS OF PERCENT
NAME AND AGE DIRECTORSHIPS IN PUBLIC COMPANIES SINCE DECEMBER 31, 1999 OF CLASS
- ------------ ----------------------------------------- ---------- ------------------- ---------
<S> <C> <C> <C> <C>
NOMINEES
Terry L. Andreas (57) Chairman of the Board of the School for 1987 275,780(1) 3.2
Field Studies, Beverly, Massachusetts
Sharon N. Bredeson (58) President, Chief Executive Officer and 1998 321 (2)
director of Staff-Plus, Inc.
James B. Goetz, Sr. (63) President, Chief Executive Officer and 1998 3,339(3) (2)
director of Goetz Companies in Portage,
Wisconsin
CONTINUING DIRECTORS
John H. Daniels, Jr. (52) Partner in the law firm of Willeke & 1982** 3,846 (2)
Daniels, Minneapolis, Minnesota
Wendell R. Anderson (67) Of counsel to the law firm of Larkin, 1980** 100 (2)
Hoffman, Daly & Lindgren Ltd.,
Minneapolis, Minnesota. Mr. Anderson
is a director of Fingerhut Corporation,
Turbolyne Technologies, Inc. and Ecos
Group, Inc.
David C. Malmberg (57) Mr. Malmberg has served as the 1994** 5,843 (2)
Non-executive Chairman of the Board of
National City Bank of Minneapolis since
September 1994 and non-executive
Chairman of the Board of the Company
and Diversified Business Credit, Inc.
since 1998. Mr. Malmberg is the
Chairman of the Board of Directors and
former President and Chief Executive
Officer of Fieldworks, Inc. Since 1994,
Mr. Malmberg has been the President of
David C. Malmberg, Inc., a management
consulting and investment banking firm.
Mr. Malmberg is also the Non-executive
Chairman of the Board of Three five
Systems, Inc. and a director of PPT
Vision, Inc.
Walter E. Meadley, Jr. (67) Mr. Meadley retired as Vice Chairman of 1990** 18,739(4) (2)
the Board of National City Bank of
Minneapolis effective December 31, 1995.
Mr. Meadley was Vice Chairman from
September 1994 to December 1995. Prior
thereto, Mr. Meadley was President and
Chief Executive Officer of National City
Bank of Minneapolis.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SHARES
PRINCIPAL OCCUPATION, BUSINESS BENEFICIALLY
EXPERIENCE DURING PAST FIVE YEARS AND DIRECTOR OWNED AS OF PERCENT
NAME AND AGE DIRECTORSHIPS IN PUBLIC COMPANIES SINCE DECEMBER 31, 1999 OF CLASS
- ------------ ----------------------------------------- ---------- ------------------- ---------
<S> <C> <C> <C> <C>
David L. Andreas (51) President and Chief Executive Officer of 1980* 610,440(5) 7.0
the Company since 1998; Chairman of the
Board and Chief Executive Officer of the
Company from 1987 to 1998. President
and Chief Executive Officer of National
City Bank of Minneapolis since
September 1994. From 1991 through
September 1994, Mr. Andreas was
Chairman of the Board of National City
Bank of Minneapolis
C. Bernard Jacobs (80) Retired as President and Chief Executive 1974* 49,638(6) (2)
Officer of the Company and Chairman of the
Board of National City Bank of Minneapolis
in 1984.
Robert L. Olson (54) President and Chief Executive Officer of 1998* 16,032 (2)
Diversified Business Credit, Inc.
Roger H. Scherer (63) Chairman of the Board of Scherer 1990* 6,492 (2)
Brothers Lumber Co., former President
and Chief Executive Officer of Scherer
Brothers Lumber Co.
Michael J. Boris (53) Private investor and consultant since 1998* 946 (2)
August, 1997. From 1981 to 1997, Mr. Boris
served in various finance officer positions
with Medtronic, Inc.
Esperanza President, Chief Executive Officer and 1998* 256 (2)
Guerrero-Anderson (55) director of Milestone Growth Fund, Inc.,
and director of Leann Chin, Inc.
</TABLE>
- ------------------
(1) Includes 14,921 shares held as co-trustee of trust for a child in which she
disclaims beneficial ownership.
(2) Represents less than one percent of the outstanding shares of the Company's
common stock
(3) Includes 2,500 shares owned by Goetz Companies, a corporation owned and
managed by Mr. Goetz.
(4) Includes 9,852 shares held for Mr. Meadley by the Company's Incentive
Savings Plan.
(5) Includes 89,402 shares held as co-trustee of trusts for members of David
Andreas' family and in which he disclaims beneficial ownership.
(6) Includes 784 shares owned by his spouse in which he disclaims beneficial
ownership.
*Term as director expires in 2001.
**Term as director expires in 2002.
Terry L. Andreas is David L. Andreas' first cousin.
The information contained in the foregoing footnotes is for explanatory
purposes only and none of the persons named therein is the beneficial owner of
shares designated as beneficially owned by or held in trust for any other
person, including family members.
Marvin Borman, Kenneth H. Dahlberg and Thomas E. Holloran, directors whose
terms expire on the date of the annual meeting, will retire from the Board
rather than stand for reelection.
All shares represented by proxies will be voted FOR the election of the
foregoing nominees unless otherwise specified; PROVIDED, HOWEVER, that if any
such nominee should withdraw or otherwise become unavailable for reasons not
presently known, such shares may be voted for another person in place of such
nominee in accordance with the best judgment of the persons named in the proxy.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation earned for
each of the last three fiscal years by the Chief Executive Officer of the
Company and each of the executive officers of the Company and its subsidiaries
whose salary and bonus earned in 1999 exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION ($)
NAME AND ----------------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION(2)
- ---------------------------------------- ---- --------- -------- ---------------
<S> <C> <C> <C> <C>
David L. Andreas, 1999 271,656 80,736 20,450
President and Chief Executive 1998 263,000 -- 18,663
Officer of the Company and 1997 256,000 78,285 22,396
President and Chief Executive of
National City Bank of Minneapolis
Thomas J. Freed, 1999 127,450 25,133 3,823
Secretary and Chief Financial Officer 1998 122,500 -- 3,667
of the Company, and Senior Vice 1997 117,000 24,079 3,510
President and Chief Financial Officer
of National City Bank of Minneapolis
Robert L. Olson, 1999 310,000 606,811 4,800
President and Chief Executive 1998 310,000 572,755 4,800
Officer of Diversified Business 1997 280,000 558,179 4,750
Credit, Inc.
</TABLE>
- ------------------
(1) The amounts shown as Salary include amounts deferred by the executive
officer into the Company's Incentive Savings Plan, which permits investment
of such amounts in the Company's Common Stock.
(2) Other compensation amounts for 1999 included $4,800 for Mr. Andreas, $4,800
for Mr. Olson, and $3,823 for Mr. Freed as Company matching contributions
to its Incentive Savings Plan; $15,650 as the value of benefits for Mr.
Andreas, determined as prescribed by the Securities and Exchange Commission
for such valuations, under a "split-dollar" life insurance arrangement.
EMPLOYMENT AGREEMENT
Mr. Olson is employed as the President and Chief Executive Officer of
Diversified Business Credit, Inc. pursuant to a non-cancelable employment
agreement (the "Agreement") which expires on December 31, 2000. Under the
Agreement, Mr. Olson is entitled to a minimum annual salary of $280,000 and an
annual bonus equal to five percent of the "pre-tax profits" of Diversified
Business Credit, Inc. for the applicable fiscal year. The term "pre-tax profits"
is defined in the Agreement as income before income taxes determined in
accordance with generally acceptable accounting principles ("GAAP"), except that
in lieu of a provision for loan losses calculated under GAAP, earnings are
reduced by the aggregate amount of outstanding loan balances and accrued
interest receivable deemed specifically identified for charge-off by the Board
of Directors of Diversified Business Credit, Inc.
PENSION PLAN
Effective January 1, 1995, the Company's Pension Plan was amended to
provide a new type of defined benefit, commonly known as a "cash balance"
formula. Under the new formula, pension benefits are based on an employee's
hypothetical account balance, rather than final average compensation and years
of service. As of January 1, 1995, each employee's benefits accrued under the
previous formula were converted to an amount equal to their actuarial present
value. That amount became the employee's hypothetical account balance.
That balance (if any) is increased after January 1, 1995, by hypothetical
annual allocations at the end of each subsequent year of Company service equal
to a specified percentage of the employee's compensation. The annual allocation
percentage is between 1.5 percent and 6 percent, depending on the sum of the
employee's age and Company service. A similar percentage is
5
<PAGE>
allocated for any of the employee's compensation that exceeds the taxable wage
base for Social Security taxes. The hypothetical account is also increased by
hypothetical interest for each year until the benefit is paid, at the greater of
six percent annually or a variable index rate based on certain U.S. Treasury
securities. Generally, the "cash balance" benefit is payable in a lump sum equal
to the hypothetical account balance, or in the form of a life annuity selected
by the employee.
Under the Pension Plan's new formula, the estimated annual benefit payable
upon retirement at age 65 for Mr. Andreas, Mr. Freed and Mr. Olson is $81,919,
$55,818 and $48,388, respectively.
The Pension Plan also provides that certain employees will receive an
annual benefit under the old formula if that amount is larger than their
benefits under the new formula. The employees eligible for this treatment are
those who have either attained age 55 and completed ten years of Company
service, or attained age 45 and completed twenty years of Company service as of
January 1, 1995. Mr. Freed qualifies for this treatment. The projected annual
benefit payable to Mr. Freed upon retirement at age 65 is $73,485 under the
Pension Plan's old formula.
The following table shows the estimated annual benefit payable upon
retirement at age 65 to Mr. Freed, for various combinations of final average
salary and years of service under the Pension Plan's old formula.
QUALIFIED PENSION PLAN TABLE
ESTIMATED ANNUAL RETIREMENT BENEFIT
YEARS OF SERVICE
FINAL ---------------------------------------------------
AVERAGE
SALARY 15 20 25 30 35
-------- ------- ------- ------- ------- -------
$100,000 $26,777 $35,702 $44,628 $53,553 $58,553
130,000 35,777 49,702 59,628 71,553 78,053
160,000 44,777 59,702 74,628 89,553 97,553
For purposes of the old formula under the Company's Pension Plan, final
average salary is based on the "salary" and "bonus" amounts shown in the Summary
Compensation Table for the highest 5 consecutive years within the last ten
consecutive years which produce the highest average. However, beginning in 1994,
any of such combined "salary" and "bonus" amounts that exceed $160,000 in any
year is excluded from final average salary. The $160,000 limit will be adjusted
for inflation in $10,000 increments, to be added each time the cumulative
adjustment equals or exceeds $10,000. The table assumes the executive had
reached age 65 on January 1, 1999. Benefits under the old Pension Plan formula
are computed as an annuity for a single life, and are not subject to any
deduction for Social Security benefits or other offset amounts.
At December 31, 1999, Mr. Freed's amount of final average salary and number
of year's service was $141,696 and 31, respectively.
SALARY CONTINUATION PLAN
As a supplement to the Pension Plan, the Company has adopted a Salary
Continuation Plan pursuant to agreements with certain officers of the Company
and its subsidiaries. Under the Salary Continuation Plan, an officer will be
entitled to a stated annual benefit equal to 50 percent of the officer's current
salary for a period of 15 years (i) upon retirement from the Company after
attaining age 65, or (ii) upon attaining age 65 if his or her employment had
been previously terminated due to disability. In the event the executive dies
after age 65, but before receiving the full 15 years of annual benefits, the
remaining payments shall be paid to his or her beneficiaries
If an executive's employment is terminated voluntarily, or involuntarily
for cause, prior to attaining age 65, no salary continuation benefits shall be
owing to the executive unless the executive is eligible for early retirement,
because he or she has attained age 55 and has been employed for at least ten
years. In this event the executive shall be paid a reduced annual benefit
beginning at age 65, or an earlier benefit that is reduced further and payable
upon termination. In the event the executive's employment is terminated as a
result of a "change in control" of the Company as defined in the plan, the
executive will be entitled to a reduced annual benefit
6
<PAGE>
pursuant to the early retirement terms of the plan, notwithstanding that the
executive is under age 55 or has not been employed by the Company for 10 years.
David L. Andreas, Thomas J. Freed and Robert L. Olson have entered into
Salary Continuation Plan agreements with the Company that currently provide
annual benefits at age 65 of approximately $136,000, $64,000 and $155,000,
respectively.
CHANGE IN CONTROL AGREEMENTS
In October 1995, certain officers of the Company and its subsidiaries
(each, an "Officer"), including Mr. Freed, entered into agreements with the
Company that provide for the payment of specified benefits if, within two years
after a "change in control," the Company or its successor terminates the
employment of the Officer for a reason other than death, disability or "cause"
(as defined therein), or if the Officer elects to terminate his employment for
"good reason" (as defined therein). In general, these agreements provide that a
"change in control" will be deemed to have occurred if any person becomes the
beneficial owner of 30 percent or more of the combined voting power of the
outstanding securities of the Company or National City Bank of Minneapolis,
unless (a) the person owned at least 5 percent of that voting power on October
25, 1995, or (b) the Company is the surviving corporation in a merger and a
majority of the Company's Board of Directors remain in office after the merger.
The terms of Mr. Freed's agreement provide that he will receive an amount equal
to one and one-half times the sum of his base salary and the amount that he
would otherwise earn for the current fiscal year under any executive
compensation plan.
DIRECTORS' FEES
If a Director of the Company or its subsidiaries is an employee of one of
them, the Director receives no added compensation or fees for service as a
Director. Each Director of the Company who is not such an employee receives a
$6,000 annual retainer plus $500 for each board meeting attended. In addition,
each non-employee director receives fees of $500 for committee meetings
attended. David C. Malmberg also receives an additional $25,000 annual retainer
for service as Non-executive Chairman of the Board of the Company and its
subsidiaries. Non-employee directors receive no other forms of compensation from
the Company for service as Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Management Development and Compensation Committee consists of
Marvin Borman, C. Bernard Jacobs, Roger H. Scherer, Sharon N. Bredeson, John H.
Daniels, Jr., David C. Malmberg, James B. Goetz, Sr. and Thomas E. Holloran. Mr.
Borman is a partner in the law firm of Maslon Edelman Borman & Brand, LLP, which
rendered legal services to the Company and its subsidiaries during the past
fiscal year. Maslon Edelman Borman & Brand is also a customer of National City
Bank of Minneapolis. Mr. Scherer is the Chairman of the Board of Scherer
Brothers Lumber which is a customer of National City Bank of Minneapolis. Mr.
Scherer is also a customer of National City Bank of Minneapolis. All loans to
Maslon Edelman Borman & Brand, Scherer Brothers Lumber and Mr. Scherer were made
in the ordinary course of business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons and did not involve more than normal risk of
collectibility or present other unfavorable features.
BOARD MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Management Development and Compensation Committee (the "Committee") of
the Board of Directors, consisting solely of non-employee directors, has
provided the following report on executive compensation:
The Committee has responsibility for executive compensation programs
designed to attract, motivate, reward and retain the management talent required
to lead the Company, achieve its business objectives and increase stockholder
value. An executive's compensation consists of two elements: base salary and
annual incentive compensation -- which are determined separately based on
different sets of criteria. Each element of compensation is evaluated relative
to recent
7
<PAGE>
levels of compensation for positions of similar responsibility at comparable
financial institutions. The Committee believes that such institutions, in light
of their similarity to the Company, are potential competitors for the executive
talent National City Bancorporation and its subsidiaries seek to attract and
retain.
As described on page 5 of this Proxy Statement, Mr. Olson's entire annual
compensation is determined pursuant to the terms of his employment contract with
Diversified Business Credit, Inc.
BASE SALARIES. Base salaries for executives, including the chief executive
officer, typically approximate the salary for positions of similar
responsibility at comparable institutions. Generally, substantial increases in
base salary only occur in response to market changes or as a result of a major
change in job responsibilities. During 1999, both Mr. Andreas and Mr. Freed
received nominal increases in their base salaries.
ANNUAL INCENTIVE COMPENSATION. National City Bank has a management
incentive plan based on the subsidiary's net income performance relative to the
annual budget. The plan provides for incentive payouts beginning at 90% of
budget, with increased incentives beyond budget levels. Payouts are a
percentage of base salary, and participation levels vary by management
position. Mr. Andreas and Mr. Freed receive incentive payments of 30 percent
and 20 percent respectively when the subsidiary attains net income performance
equal to budget. During 1999, both Mr. Andreas and Mr. Freed received incentive
accruals awarded in 2000.
SUBMITTED BY THE MANAGEMENT DEVELOPMENT AND
COMPENSATION COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS:
Marvin Borman C. Bernard Jacobs Roger H. Scherer Sharon N. Bredeson
John H. Daniels, Jr. David C. Malmberg James B. Goetz Sr. Thomas E. Holloran
8
<PAGE>
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on
National City Bancorporation common stock over the last five fiscal years with
the cumulative total return on the Standard & Poors 500, the SNL $500M-$1B Bank
Index which includes approximately 80 institutions and the SNL $1B-$5B Bank
Index which includes approximately 121 institutions.
TOTAL RETURN PERFORMANCE
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
PERIOD ENDING
-------------------------------------------------------------------------
INDEX 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ----- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
National City Bancorporation 100.00 166.96 179.35 280.46 274.52 182.44
S&P 500 100.00 137.58 169.03 225.44 289.79 350.50
SNL $500M - $1B Bank Index 100.00 132.76 165.97 269.80 265.28 245.56
SNL $1B - $5B Bank Index 100.00 134.48 174.33 290.73 290.06 266.58
</TABLE>
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Certain directors of the Company are at present, as in the past, customers
of the Company's subsidiaries and have obtained and expect to obtain loans from
these subsidiaries in the ordinary course of business. In addition, some of the
directors of the Company are at present, as in the past, also officers,
directors, principal stockholders or affiliated with businesses that are
customers of these subsidiaries and that have had and expect to obtain loans
from these subsidiaries in the ordinary course of business. All such loans were
made in the ordinary course of business on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and did not involve more than normal
risk of collectibility or present other unfavorable features.
9
<PAGE>
PROPOSALS OF STOCKHOLDERS
All proposals of stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders of the Company must be received by the Secretary of the
Company at its executive offices on or before November 22, 2000. With respect to
a stockholder proposal which the stockholder has not sought to include in the
Company's proxy statement, notice of such proposal must be provided to the
Company by February 5, 2001 or management proxies will be allowed to use their
discretionary voting authority when the proposal is raised in the meeting.
OTHER MATTERS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held six meetings during the last fiscal year. The
Company has an Audit Committee and a Management Development and Compensation
Committee but does not have a Nominating Committee of the Board of Directors.
The Company's Audit Committee, which consists of Wendell R. Anderson,
Marvin Borman, John H. Daniels, Jr., Thomas E. Holloran, Roger H. Scherer,
Michael J. Boris and Esperanza Guerrero-Anderson, met eight times during the
past fiscal year. The Audit Committee recommends to the full Board the
engagement of the independent accountants, reviews the audit plan and results
of the audit engagements, reviews the independence of the auditors, and reviews
the adequacy of the Company's system of internal accounting controls.
The Company's Management Development and Compensation Committee, which
consists of David C. Malmberg, Marvin Borman, C. Bernard Jacobs, Roger H.
Scherer, Sharon N. Bredeson, John H. Daniels, Jr., James B. Goetz, Sr. and
Thomas E. Holloran, met one time during the last fiscal year. The Management
Development and Compensation Committee reviews the Company's remuneration
policies and practices, and makes recommendations to the Board in connection
with all compensation matters affecting the Company.
With the exception of Messrs. Dahlberg and Jacobs, each member of the Board
of Directors attended at least 75 percent of the meetings held by the Board and
committees on which such member served during the year.
AUDITORS
Ernst & Young LLP has been the independent accountants for the Company
since October 1993, and is expected to be retained for the year ending December
31, 2000. A representative of Ernst & Young LLP is expected to attend this
year's Annual Meeting of Stockholders and have an opportunity to make a
statement and/or respond to appropriate questions from stockholders.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the NASDAQ National Market System. Officers, directors and greater than ten
percent stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on review of the
copies of such forms furnished to the Company, or written representations that
no Forms 5 were required, the Company believes that during the fiscal year ended
December 31, 1999, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were
satisfied.
10
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SOLICITATION
The Company will bear the cost of preparing, assembling and mailing the
proxy, Proxy Statement, Annual Report and other material which may be sent to
the stockholders in connection with this solicitation. Solicitation other than
by mail may be made by officers or regular employees of the Company by personal
telephone solicitation, the cost of which is expected to be nominal. Georgeson
Shareholder Communications Inc. has been retained by the Company to assist in
solicitation of proxies at a fee not to exceed $5,000 plus out-of-pocket
expenses. Brokerage houses and other custodians, nominees and fiduciaries may be
requested to forward the soliciting material to the beneficial owners of stock,
in which case they will be reimbursed by the Company for their expenses in doing
so.
The Board of Directors does not intend to present to the meeting any other
matters not referred to above and does not presently know of any matters that
may be presented to the meeting by others. However, if other matters come before
the meeting, it is the intention of the persons named in the enclosed form of
proxy to vote the proxy in accordance with their best judgment.
By Order of the Board of Directors
NATIONAL CITY BANCORPORATION
/S/ Thomas J. Freed
Thomas J. Freed,
SECRETARY
11
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NATIONAL CITY BANCORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS -- APRIL 19, 2000
The undersigned, a stockholder of National City Bancorporation (the
"Company"), hereby appoints David L. Andreas and Thomas J. Freed, and each of
them as proxies, with full power of substitution, to vote on behalf of the
undersigned the number of shares which the undersigned is then entitled to vote,
at the Annual Meeting of the Stockholders of National City Bancorporation to be
held at Gaviidae Common, 651 Nicollet Mall, Fifth Floor, Minneapolis, Minnesota,
on Wednesday, April 19, 2000, at 11:00 a.m., and any adjournments or
postponements thereof, upon matters set forth below, with all the powers which
the undersigned would possess if personally present:
1. ELECTION OF [ ] FOR all nominees (except as [ ] WITHHOLD AUTHORITY
DIRECTORS: marked to the contrary below) to vote for all
nominees listed below
TERRY L. ANDREAS, SHARON N. BREDESON, JAMES B. GOETZ, SR.
(INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
2. Upon such other business as may properly come before the meeting and any
adjournments or postponements thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE
ELECTION OF EACH OF THE NOMINEES TO THE BOARD OF DIRECTORS.
(Continued, and TO BE DATED AND SIGNED on the reverse side)
<PAGE>
(continued from other side)
The undersigned hereby revokes all previous proxies relating to the shares
covered hereby and acknowledges receipt of the Notice and Proxy Statement
relating to the Annual Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. It will be
voted on the matters set forth on the reverse side of this form as directed by
the stockholder, but if no direction is made in the space provided, it will be
voted FOR the election of all nominees to the Board of Directors.
Dated ____________________________, 2000
________________________________________
________________________________________
(STOCKHOLDER MUST SIGN EXACTLY AS THE
NAME APPEARS AT LEFT. WHEN SIGNED AS A
CORPORATE OFFICER, EXECUTOR,
ADMINISTRATOR, TRUSTEE, GUARDIAN, ETC.,
PLEASE GIVE FULL TITLE AS SUCH. BOTH
JOINT TENANTS MUST SIGN.)
