<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
NATIONAL CITY CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(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):
Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
(5) Total fee paid:
Not Applicable
/ / 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:
Not Applicable
(2) Form, Schedule or Registration Statement No.:
Not Applicable
(3) Filing Party:
Not Applicable
(4) Date Filed:
Not Applicable
<PAGE> 2
[National City Corporation Logo]
Notice of Annual Meeting
and
Proxy Statement
Annual Meeting of Stockholders
to be held on
April 24, 1995
NATIONAL CITY CORPORATION
1900 East Ninth Street
Cleveland, Ohio 44114-3484
<PAGE> 3
NATIONAL CITY CORPORATION
------------------
March 8, 1995
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of National
City Corporation, which will be held at the offices of the Corporation at 1900
East Ninth Street, Cleveland, Ohio 44114, on Monday, April 24, 1995, commencing
at 10:00 a.m., Eastern Daylight Time.
The primary business of the meeting will be the election of directors for
the coming year, the approval of the National City Corporation Annual Corporate
Performance Incentive Plan, the approval of the National City Corporation
Long-Term Incentive Compensation Plan for Senior Officers and the approval of
the selection of Ernst & Young LLP as independent auditors for 1995.
The formal Notice of meeting and Proxy Statement containing further
information pertinent to the business of the meeting are set forth on the
following pages. Our Annual Report for 1994 was delivered to you previously. We
shall report to you at the meeting on the business and affairs of the
Corporation.
Your vote is important no matter how many shares you own. We hope you will
be able to attend the meeting in person, but, in any event, please sign and date
the enclosed proxy and return it in the accompanying envelope. If you wish to
communicate directly with the Corporation, the mailing address of the executive
offices of the Corporation is: National City Corporation, 1900 East Ninth
Street, Cleveland, Ohio 44114.
Sincerely,
/s/ EDWARD B. BRANDON
EDWARD B. BRANDON
Chairman and Chief Executive Officer
1
<PAGE> 4
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Stockholders of
NATIONAL CITY CORPORATION
The Annual Meeting of Stockholders of National City Corporation will be
held at the offices of the Corporation, 1900 East Ninth Street, Cleveland, Ohio,
on Monday, April 24, 1995, at 10:00 a.m., Eastern Daylight Time, for the purpose
of considering and voting upon the following matters:
1. The election of directors;
2. The approval of the National City Corporation Annual Corporate
Performance Incentive Plan;
3. The approval of the National City Corporation Long-Term Incentive
Compensation Plan for Senior Officers;
4. The approval of the selection of independent auditors for 1995; and
5. The transaction of such other business as may properly come before
the meeting.
Stockholders of record at the close of business on February 28, 1995, are
entitled to receive notice of and to vote at the meeting. A list of the
Stockholders will be available at the meeting and for the 10 days preceding the
meeting at the office of the Corporation, 1900 East Ninth Street, Cleveland,
Ohio.
Please mark, date, and sign the enclosed proxy and return it in the
accompanying envelope.
By Order of the Board of Directors
DAVID L. ZOELLER
Secretary
March 8, 1995
3
<PAGE> 5
PROXY STATEMENT
MARCH 8, 1995
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of National City Corporation (the "Corporation") of the
accompanying proxy to be used at the Annual Meeting of Stockholders of the
Corporation and any adjournment thereof and is being sent on approximately the
date of this Proxy Statement to each of the holders of the Corporation's Common
Stock. The Annual Meeting will be held on Monday, April 24, 1995, at the time
and place and for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. Shares represented by properly executed proxies, if
such proxies are received in time and not revoked, will be voted at such meeting
in accordance with any specifications thereon or, if no specifications are made,
will be voted as set forth therein. Any proxy may be revoked by the person
giving it at any time before it is exercised by receipt of a later dated proxy,
or by receipt by the Secretary of the Corporation of a revocation, or by such
person appearing at the meeting and electing to vote in person.
INFORMATION AS TO VOTING SECURITIES
The Board of Directors has fixed the close of business on February 28, 1995,
as the record date for the determination of stockholders entitled to receive
notice of and to vote at the Annual Meeting. On the record date the Corporation
had 146,744,966 shares of Common Stock outstanding, each of which is entitled to
one vote on all matters to be acted upon at the meeting.
THE BOARD OF DIRECTORS
The Board of Directors has responsibility for establishing broad corporate
policies and overall performance of the Corporation. However, it is not involved
in the day to day operating details of the Corporation's business. Members of
the Board are kept informed of the Corporation's business through various
documents and reports provided by the Chairman and other Corporation officers,
and by participating in Board and committee meetings. Each director has access
to all books, records and reports of the Corporation, and members of management
are available at all times to answer their questions.
In 1994, the Board held five meetings. Average attendance by directors at
those meetings was 89%, and except for Mr. Weiss, all directors attended 75% or
more of the meetings of the Board and the Board Committees they were scheduled
to attend. Except for Mr. Weiss, all of the persons nominated and elected as
directors of the Corporation at the Corporation's 1994 Annual Meeting of
Stockholders attended that Annual Meeting.
The Board of Directors of the Corporation has established several permanent
committees comprising directors who are appointed to those committees annually.
The principal committees are the Audit Committee, the Compensation and
Organization Committee, the Executive Committee, the Nominating Committee and
the Public Policy Committee, each of which is described below. The members of
each of those Committees are identified in the biographical material of the
nominees for election of Directors beginning at page 8.
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<PAGE> 6
THE AUDIT COMMITTEE. The Audit Committee is required to meet at least
semiannually and met three times during 1994. The Audit Committee is composed of
directors who are independent of the management of the Corporation and are free
of any relationship that would interfere with their exercise of independent
judgment as committee members. The responsibility for effective auditing of the
Corporation and any subsidiary is carried out by the Audit Committee through the
general auditor and the independent auditors. The Audit Committee provides
assistance to the Board of Directors in fulfilling its responsibility to
stockholders, potential stockholders, and investment community relating to
corporate accounting, reporting practices of the Corporation, effectiveness of
its internal control structure and procedures for financial reporting, and
compliance with designated laws and regulations. In so doing, the Audit
Committee maintains free and open communications between the directors, the
independent auditors, the general auditor, and the management of the
Corporation.
THE COMPENSATION AND ORGANIZATION COMMITTEE. The Compensation and
Organization Committee meets on the call of the Chairman of the Board of
Directors and met three times during 1994. The Compensation and Organization
Committee considers all matters relating to compensation policy and compensation
of senior officers of the Corporation and its subsidiaries and makes
recommendations to the Board of Directors on matters relating to succession and
organization of senior executive management. Under the terms of each of the
Corporation's Amended and Restated 1973 Stock Option Plan, as amended, 1984
Stock Option Plan, as amended, the 1989 Stock Option Plan, and the 1993 Stock
Option Plan the Compensation and Organization Committee is authorized to grant
stock option rights and stock appreciation rights to officers and employees of
the Corporation and its subsidiaries. The Compensation and Organization
Committee also determines participants and establishes the peer group for the
Long Term Incentive Compensation Plan and sets the awards granted pursuant to
the Short Term Incentive Plan. The Compensation and Organization Committee also
determines those employees who are eligible to receive awards of restricted
stock under the National City Corporation Amended and Second Restated 1991
Restricted Stock Plan.
THE EXECUTIVE COMMITTEE. The Executive Committee meets on the call of the
Chairman of the Board of Directors and met once during 1994. The Executive
Committee is empowered to exercise all powers and perform all duties of the
Board of Directors as permitted by applicable law when the Board is not in
session.
THE NOMINATING COMMITTEE. The Nominating Committee meets on the call of the
Chairman of the Board of Directors and met twice during 1994. The Committee
confers, advises and recommends with respect to nominations to fill vacancies on
the Board of Directors. Stockholders may submit the name of a possible nominee
to the Chairman, and he will arrange for that person to be given consideration
by the Committee. Further, Stockholders may make nominations from the floor at
the Annual Meeting of Stockholders.
THE PUBLIC POLICY COMMITTEE. The Public Policy Committee meets on the call of
the Chairman of the Committee and met twice during 1994. The Public Policy
Committee has responsibility to oversee the various policies and programs of the
Corporation as they relate to its relationships with employees, regulatory
agencies, governments, charitable organizations and the general public.
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<PAGE> 7
COMPENSATION OF DIRECTORS
Members of the Board of Directors of the Corporation who are not officers of
the Corporation, or any of its subsidiaries, receive a yearly retainer, payable
in quarterly installments, and a fee for each meeting of the Board, and of each
committee thereof, which they attend. The yearly retainer is $20,000*. The fee
for attendance at any Board meeting or any committee meeting is $1,000. Each of
the non-officer Chairpersons of committees of the Board of Directors of the
Corporation receives an additional annual retainer of $2,500 paid in quarterly
installments. Under a plan for the deferred payment of director's fees, a
director may elect to have the payment of fees deferred until later years.
In addition, currently each non-officer incumbent member of the Board on the
date when the National City Corporation Amended and Second Restated 1991
Restricted Stock Plan became effective was, and each individual who is first
elected or appointed as a member of the Board thereafter will be, awarded 1,000
shares of Corporation Common Stock subject to transfer restrictions.
Furthermore, each year in which an individual is re-elected or re-appointed as a
member of the Board, such individual is to be awarded an additional 200 shares
of Corporation Common Stock the transfer of which also is restricted. The
restrictions on such shares of Corporation Common Stock do not expire until the
earlier of the individual director's death, disability or a date nine months
after the date of the award.
STOCKHOLDER ACTION
1. ELECTION OF DIRECTORS
Directors are to be elected to serve until the next Annual Meeting of
Stockholders and until their respective successors are duly elected and have
qualified. It is intended that shares represented by the proxies, unless
contrary instructions are given, will be voted for the election of the nominees
listed below as directors, whose number is equal to the total authorized number
of directors. Although management does not expect that any nominee will be
unavailable for election, in the event that vacancies occur unexpectedly, the
shares will be voted for substitute nominees, if any.
The fifteen nominees for election to the Board of Directors are identified on
pages 8 through 11. All of the nominees are presently directors of the
Corporation except Mr. Collins. All of the incumbent members of the Board of
Directors were elected at the last Annual Meeting. The following material
contains biographical information concerning each of the nominees, including
their recent employment, positions with the Corporation, other directorships,
age and the number of shares of Corporation Common Stock beneficially owned, all
as of December 31, 1994. Unless otherwise indicated, the nominee has sole voting
and investment power with respect to the Corporation's securities shown to be
owned by him. Options that are exercisable within 60 days of December 31, 1994
are separately noted (See, Beneficial Ownership at page 11.)
- - ---------------
* Each individual director who is not an officer of the Corporation or any of
its subsidiaries and is a member of the board of directors of a subsidiary
receives compensation from the subsidiary for his responsibilities at that
subsidiary.
7
<PAGE> 8
NOMINEES FOR ELECTION AS DIRECTORS
SANDRA HARDEN AUSTIN, President, Clinical Management Services
Division, Caremark International since 1994. Executive Vice
President and Chief Operating Officer of University of Chicago
Hospitals from 1990 to 1993. Senior Vice President and General
Manager, Medical/Surgical Psychiatric Management Centers,
University Hospital of Cleveland from 1988 to 1990. Director
of the Corporation since 1990; Chairman of the Public Policy
Committee and Member of the Nominating Committee. Age 47.
Shares of Corporation Common Stock owned: 2,144.760.
JAMES M. BIGGAR, Chairman of the Board and Chief Executive
Officer of Glencairn Corporation, a development company, since
1991; retired in June, 1991 as Chairman of the Board of Nestle
Enterprises, Inc., a producer of various food and beverage
products in the United States, which office he held since
1983. Director of The Sherwin-Williams Company. Director of
the Corporation since 1988; Chairman of the Audit Committee
and Member of the Executive Committee. Age 66. Shares of
Corporation Common Stock owned: 5,150.
CHARLES H. BOWMAN, Chairman and Chief Executive Officer of BP
America Inc., a diversified petroleum and natural resources
company, since 1994. Managing Director of BP Australia Limited
from 1990 to 1994. General Manager - Europe of BP Oil
International from 1988 to 1990. Director of Corporation since
1993. Member of the Public Policy Committee. Age 59. Shares of
Corporation Common Stock owned: 1,000.
EDWARD B. BRANDON, Chairman of the Board and Chief Executive
Officer of the Corporation since 1987. Director of Premier
Industrial Corp., RPM, Inc. and The Standard Products Company.
Director of the Corporation since 1986; Chairman of the
Executive Committee and Chairman of the Nominating Committee.
Age 63. Shares of Corporation Common Stock owned: 158,012.69;
options exercisable within 60 days: 270,928.
8
<PAGE> 9
JOHN G. BREEN, Chairman of the Board and Chief Executive
Officer of The Sherwin-Williams Company, a manufacturer of
coatings, since 1980. Director of The Sherwin-Williams
Company, The Mead Corporation, Parker-Hannifin Corporation and
Goodyear Tire & Rubber Co. Director of the Corporation since
1979; Chairman of the Compensation and Organization Committee
and Member of the Executive and Nominating Committees. Age 60.
Shares of Corporation Common Stock owned: 27,400.
DUANE COLLINS, President and Chief Executive Officer of Parker
Hannifin Corporation, a durable goods manufacturer, since
1993. Vice Chairman of Parker Hannifin Corporation for the
previous year. President -- International 1987 to 1992. Age:
58. Shares of Corporation Common Stock owned: 400.
DAVID A. DABERKO, President and Chief Operating Officer of the
Corporation since 1993 and Deputy Chairman of the Corporation
from 1987 to 1993. Director of the Student Loan Marketing
Association. Director of the Corporation since 1988. Age 49.
Shares of Preferred Stock owned: 600 depositary shares; shares
of Corporation Common Stock owned: 84,252; options exercisable
within 60 days: 173,869.
RICHARD E. DISBROW, Retired as Chairman and Chief Executive
Officer of American Electric Power Service Corporation and
American Electric Power Company, Inc., a public utility
company, in 1993 having served as Chairman from 1992.
President and Chief Executive Officer of American Electric
Power Service Corporation and American Electric Power Company,
Inc. during 1991. President and Chief Operating Officer of
American Electric Power Service Corporation and American
Electric Power Company from 1985 to 1991. Director of the
Corporation since 1990; Member of the Audit, Public Policy,
and Executive Committees. Age 64. Shares of Corporation Common
Stock owned: 2,300.
9
<PAGE> 10
DANIEL E. EVANS, Chairman of the Board and Chief Executive
Officer of Bob Evans Farms, Inc., a restaurant and food
products company, since 1971. Director of Bob Evans Farms,
Inc. and The Sherwin-Williams Company. Director of the
Corporation since 1992. Member of the Public Policy and Audit
Committees. Age 58. Shares of Corporation Common Stock owned:
5,916.
OTTO N. FRENZEL III, Chairman of National City Bank, Indiana
since 1992, Chairman and Chief Executive Officer of Merchants
National Corporation from 1979 to 1992. Director of American
United Life Insurance Company, Baldwin & Lyons, Inc., a
financial services corporation, and Indiana Energy, Inc.,
IPALCO Enterprises, Inc., and IWC Resources Corp., each a
public utility holding company. Director of the Corporation
since 1992. Age 64. Shares of Corporation Common Stock owned:
1,123,726; options exercisable within 60 days: 11,000. Mr.
Frenzel shares voting and investment powers as to an
additional 1,683,868 shares of Corporation Common Stock.
JOSEPH H. LEMIEUX, Chairman and Chief Executive Officer of
Owens-Illinois, Inc., a manufacturer of packaging products,
since 1990; President and Chief Operating Officer of
Owens-Illinois, Inc. from 1986 to 1990. Director of
Owens-Illinois, Inc., Health Care and Retirement Corporation,
Libbey Inc., and Consol Limited (Johannesburg Exchange).
Director of the Corporation since 1988; Member of the
Executive Committee and Compensation and Organization
Committee. Age 63. Shares of Corporation Common Stock owned:
2,658.70.
A. STEVENS MILES, Retired as President of the Corporation and
as Chairman of First Kentucky National Corporation, a wholly
owned subsidiary of the Corporation in 1989, having served as
President of National City Corporation since 1988 and as Chief
Executive Officer of the First Kentucky National Corporation
for 15 years. Director of the Corporation since 1988; Member
of the Nominating Committee. Age 65. Shares of Corporation
Common Stock owned: 152,632.
10
<PAGE> 11
WILLIAM R. ROBERTSON, Deputy Chairman of the Corporation since
1987. Director of Capitol American Financial Corporation.
Director of the Corporation since 1988. Age 53. Shares of
Corporation Common Stock owned: 92,253.292; Mr. Robertson
shares voting and investment powers as to an additional 10,000
shares; options exercisable within 60 days: 149,999.
STEPHEN A. STITLE, Vice President, Corporate Affairs of Eli
Lilly and Company, a pharmaceutical company, since 1993. Vice
President of Human Resources of Eli Lilly and Company from
1989 to 1993. Director of Eli Lilly and Company. Director of
the Corporation since 1992. Member of the Compensation and
Organization Committee, Nominating Committee and Executive
Committee. Age 49. Shares of Corporation Common Stock owned:
6,328.
MORRY WEISS, Chairman of the Board and Chief Executive Officer
of American Greetings Corporation, a greeting card
manufacturer, since 1993; President and Chief Executive
Officer of American Greetings Corporation from 1987 to 1993.
Director of American Greetings Corporation, Syratech
Corporation and Artistic Greetings Incorporated. Director of
the Corporation since 1992. Member of the Audit and the
Nominating Committee. Age 54. Shares of Corporation Common
Stock owned: 6,200.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS A VOTE FOR THE SLATE OF
DIRECTOR NOMINEES.
BENEFICIAL OWNERSHIP
As of December 31, 1994, the Corporation had two classes of equity securities
outstanding, (a) Common Stock, par value $4.00 and (b) 8% Cumulative Convertible
Preferred Stock, without par value.
Beneficial ownership of the Corporation's outstanding equity securities, for
purposes of the ownership disclosures, has been determined in accordance with
Rule 13d-3 of the General Rules and Regulations under the Securities Exchange
Act of 1934 ("Exchange Act"), under which Rule a person is deemed to be the
beneficial owner of securities if he or she has or shares voting power or
investment power in respect of such securities or has the right to acquire
beneficial ownership within
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<PAGE> 12
60 days. Accordingly, the amounts shown do not purport to represent beneficial
ownership for any purpose other than as set forth under such Rule. Further,
beneficial ownership as determined in this manner does not necessarily bear on
the economic incidence of ownership of the Corporation's equity securities.
As of December 31, 1994, to the knowledge of the Corporation, no person or
firm, except as noted below, beneficially owned more than 5% of the
Corporation's Common Stock outstanding on that date. As of December 31, 1994, no
individual director, nominee or officer beneficially owned more than 1.8% of the
Corporation's outstanding Common Stock. For purpose of this disclosure, the
amount of outstanding Corporation Common Stock is the aggregate number of shares
of the Corporation's Common Stock actually outstanding on such date plus an
amount equal to the aggregate amount of the Corporation's Common Stock which
could be issued upon the exercise of stock options by such person or firm at
that date. Beneficial ownership of the Corporation's Common Stock includes, as
of such date, those shares which could have been acquired by the exercise of
stock options and, for purposes of this disclosure, those shares held for the
benefit of such officers in the National City Corporation Savings and Investment
Trust.
As of December 31, 1994, the only person known to the Corporation to
beneficially own more than 5% of the outstanding Corporation's Common Stock is
the Corporation, and the amount so owned is 16,091,127 shares of Corporation's
Common Stock which constituted 10.9% of the outstanding Corporation's Common
Stock on that date. These shares are held in various fiduciary capacities
through the Corporation's wholly owned banking subsidiaries, primarily National
City Bank, National City Bank, Columbus, National City Bank, Kentucky, and
National City Bank, Indiana. Of the 12,924,083 shares of the Corporation's
Common Stock as to which the Corporation, through its subsidiaries, has voting
authority, it has sole voting authority as to 12,797,620 of those shares and
shared voting authority as to the remainder, and as to the 14,547,011 shares as
to which the Corporation, through its subsidiaries, has investment authority, it
has sole investment authority as to 8,848,227 of those shares, and shared
investment authority as to the remainder. Included in the aggregate number of
shares held as to which the Corporation has sole voting and investment
authorities are 539,904 shares that are held under the National City
Non-Contributory Retirement Trust.
Under federal securities law, the Corporation's directors, certain officers,
and persons holding more than 10% of any class of the Corporation's equity
securities are required to report, within specified monthly and annual due
dates, their initial ownership in any class of the Corporation's equity
securities and all subsequent acquisitions, dispositions or other transfers of
interest in such securities, if and to the extent reportable events occur that
require reporting by such due dates. The Corporation is required to describe in
this proxy statement whether it has knowledge that any person required to file
such a report may have failed to do so in a timely manner. In this regard, to
the Corporation's knowledge, based solely on the review of copies of reports
furnished to the Corporation by its directors and executive officers pursuant to
Rule 16a-3 promulgated pursuant to the Exchange Act, and on written
representations that no other reports were required during the period ending
December 31, 1994, all of the Corporation's directors and officers satisfied
such filing requirements in full, except that Messrs. Frenzel, Gorney and Weiss
made late filings. Mr. Frenzel filed two late
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<PAGE> 13
reports related to certain Trust accounts, Mr. Gorney filed one late report
related to a service stock award and Mr. Weiss filed one late report related to
a market purchase of common stock.
The following table sets forth the beneficial security ownership of (a) each
director and nominee of the Corporation, (b) the chief executive officer and the
four other most highly compensated executive officers of the Corporation and (c)
all directors and Executive Officers of the Corporation as a Group, as of
December 31, 1994 (including shares that such individuals could have acquired by
the exercise of options within 60 days):
<TABLE>
- - ---------------------------------------------------------------------------------------------
BENEFICIAL SECURITY OWNERSHIP OF MANAGEMENT
<CAPTION>
AMOUNT OF SHARES PERCENT OF
TITLE OF CLASS NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Sandra Harden Austin 2,144.760 *
Common Stock James M. Biggar 5,150.000 *
Common Stock Charles H. Bowman 1,000.000 *
Common Stock Morton Boyd 244,668.271 *
Common Stock Edward B. Brandon 428,940.692 *
Common Stock John G. Breen 27,400.000 *
Common Stock Duane Collins 400.000 *
Common Stock David A. Daberko 258,121.001 *
Common Stock Richard E. Disbrow 2,300.000 *
Common Stock Daniel E. Evans 5,916.000 *
Common Stock Otto N. Frenzel III 2,818,594.823 1.8%
Common Stock Gary A. Glaser 113,173.173 *
Common Stock Joseph H. Lemieux 2,658.700 *
Common Stock A. Stevens Miles 152,632.000 *
Common Stock Burnell R. Roberts 2,950.000 *
Common Stock William R. Robertson 252,252.292 *
Common Stock Stephen A. Stitle 6,328.000 *
Common Stock Morry Weiss 6,200.000 *
Common Stock Directors and Executive Officers
of the Corporation as a Group 5,021,499.541 3.3%
- - ---------------------------------------------------------------------------------------------
<FN>
* The percent of the Corporation Common Stock beneficially owned is less than 1%.
</TABLE>
2. PROPOSAL RESPECTING THE NATIONAL CITY CORPORATION ANNUAL CORPORATE
PERFORMANCE INCENTIVE PLAN.
At the Annual Meeting of Stockholders there will be presented for stockholder
approval the National City Corporation Annual Corporate Performance Incentive
Plan (the "Plan") which was adopted, effective January 1, 1995 by the Board of
Directors at its meeting of December 19, 1994,
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<PAGE> 14
subject to the approval of the Corporation's stockholders. The purpose of the
Plan is to maximize the Corporation's profitability and operating success by
providing an incentive to Senior Officers to achieve superior results. The plan
is designed to promote teamwork to achieve overall corporate success and to
motivate individual excellence.
Generally, the Plan provides for incentive compensation that shall be awarded
to a participant based upon the Corporation's attainment of certain threshold,
target or maximum results for a Plan Cycle ("Cycle"). The Plan will be
administered by the Compensation and Organization Committee (the "Committee") of
the Board of Directors of the Corporation.
The complete text of the Plan appears as Exhibit A to this Proxy Statement.
While the main features of the Plan are summarized below, such summaries are in
all respects subject to the complete text of the Plan set forth in Exhibit A.
The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to the
Internal Revenue Code ("Code"). Section 162(m) generally provides that certain
compensation in excess of $1 million per year paid to a publicly held company's
chief executive officer and any of its four other highest paid executive
officers is no longer deductible by the company beginning in the 1994 tax year
unless the compensation qualifies for an exception. Section 162(m) excludes from
the deductibility limit performance based compensation if certain procedural
requirements, including stockholder approval of the material terms of the
performance plan, are satisfied. The Corporation has had a short term incentive
plan based on annual corporate performance in place for a period of years. This
incentive plan has been designed to replace portions of the previous plan and to
qualify awards paid pursuant to the Plan for the exclusion from the Section
162(m) limits. The Plan is being presented for stockholder approval so as to
meet the qualification requirements for the exclusion from the Section 162(m)
deductibility limits and thus minimizing the cost of providing competitive
compensation to its key employees. Should the stockholders not approve the Plan
no further awards will be made under the Plan. In such case, however, the
Committee may have to review the overall compensation package being provided to
the Corporation's senior officers.
ELIGIBILITY AND PARTICIPATION
Eligibility for participation in the Plan will be limited to those officers of
the Corporation and its subsidiaries who play a key role in the management,
growth and success of the Corporation, as determined by the Committee.
Participation in the Plan shall be determined by the Committee prior to the
commencement of a Cycle.
PERFORMANCE MEASUREMENT
Performance will be measured by the Corporation's results as reflected by key
financial indices ("Indices") compared with those of the peer group established
by the Committee. The Indices that will be measured and their weights will be
chosen by the Committee. The Committee may choose from the following indices:
return on common equity; return on assets; overhead ratio; efficiency ratio; net
interest margin; total annual return on common stock; earnings per share; and
percent of change in earnings per share, as determined in accordance with
generally accepted accounting
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<PAGE> 15
principles. These are indices frequently used by financial corporations to
measure profitability and overall operating performance. Prior to the beginning
of each Cycle, the Committee shall establish the peer group, the Indices, the
weighting of the Indices chosen, and the levels of comparative performance at
which the established threshold, target and maximum awards will be provided
under the Plan.
AWARDS
The amount of incentive compensation that shall be awarded to a participant
shall be expressed as a percentage of base salary. Such percentage shall be
determined on the basis of the senior officer category and the level of
comparative threshold, target, or maximum performance the Corporation achieves
and can range from 0.0% to 76.5%. The amount of the award will be calculated as
of the December 31 on which the Cycle ends and no award for any one cycle may
exceed $1,000,000. Amounts awarded under the Plan may be in cash, in unfunded
future benefits or a combination thereof. With the exception of cash awards,
awards are not funded, but simply remain contractual liabilities of the
Corporation and are subject to payment upon the recipient's termination of
employment with the Corporation or its subsidiaries.
TERMINATION OF EMPLOYMENT DUE TO NORMAL RETIREMENT, DISABILITY OR DEATH
In the event of termination of employment due to normal retirement, disability
or death, the participant shall be eligible to receive a prorated award based on
the length of time the participant was employed during the Cycle provided that
the participant was a participant in the Plan for at least three months of the
Cycle. Such awards will be paid within 90 days following the end of the Cycle.
OTHER TERMINATION OF EMPLOYMENT
In the event a participant's employment during a Cycle is terminated prior to
vesting for any reason other than normal retirement, disability, or death, the
participant will not be entitled to any award.
DEFERRAL OF AWARDS
Prior to each Cycle, the Committee shall determine which participants if any,
shall be eligible to make deferral elections under the Plan. The Committee shall
make the decision on each request whether or not to defer any portion or all of
the participant's award with respect to each Cycle. For each participant who
defers compensation under this Plan, an unfunded account shall be established
and maintained by the Corporation in the name of the participant. As of the date
that cash awards are made, the amount of any deferred awards shall be credited
to each participant's account and to the fund or funds so selected by the
participant. The funds are designed to reflect investment yields of funds
maintained in the Savings and Investment Plan (see page 31) or in the equivalent
of a savings account. Unfunded future benefits shall be payable to the former
officer on an installment basis over a period of ten years commencing on the
retirement, death, or other termination of employment of the participant.
15
<PAGE> 16
The Committee may determine that a participant's unfunded future benefit which
equals $100,000.00 or less shall be paid out in a lump sum. The Committee may
also determine that a lump sum distribution should be made to a participant who
has terminated employment by means other than death, disability, or retirement.
FORFEITURES
In the event the Committee finds that an employee or former employee who has
an interest in the Plan has been discharged for reasonable belief of fraud or
has been convicted of a crime as a result of which it becomes illegal for his
employer to employ him or her, then any amounts held under this Plan for the
benefit of such employee or former employee or his or her beneficiaries shall be
forfeited and no longer payable.
CHANGE IN CONTROL
In the event of a change in control, the Plan provides that the Corporation
shall pay to each participant a lump sum cash payment equal to the maximum award
which could be paid under the Plan to each Participant.
AMENDMENT AND DISCONTINUANCE
The Corporation expects to continue this Plan indefinitely, but reserves the
right, by action of its shareholders, to amend it from time to time, or to
discontinue it. If the Corporation should amend or discontinue the Plan, the
Corporation shall remain obligated under the Plan with respect to awards (i)
made final by the decision of the Committee prior to the date of such amendment
or discontinuance, (ii) vested awards of participants and beneficiaries, and
(iii) amounts deferred prior to the date of such amendment or discontinuance.
FEDERAL TAX CONSEQUENCES
The award will result in taxable income to the participant upon receipt of
cash payment. If the award is deferred, the participant will not recognize
taxable income for Code purposes until the installment payments are paid. The
amount of the taxable income to the participant under the Code will measure the
amount of the deduction to which the Corporation is entitled.
PLAN BENEFITS
It is not possible to determine future awards that will be received by
participants in the Plan. Set forth in the table below are the benefits and
amounts that would have been paid under the Plan to the participants for the
last three completed fiscal years if the Plan had been in effect.
16
<PAGE> 17
<TABLE>
PLAN BENEFITS
- - --------------------------------------------------------------------------------
NATIONAL CITY CORPORATION
ANNUAL CORPORATE PERFORMANCE INCENTIVE PLAN
<CAPTION>
1992 1993 1994
DOLLAR DOLLAR DOLLAR
NAME AND POSITION VALUE ($) VALUE ($) VALUE ($)
- - --------------------------------------------------------------------------------
<S> <C> <C> <C>
E. B. Brandon, Chairman of the Board
and Chief Executive Officer 347,119 251,460 401,625
D. A. Daberko, President and Chief
Operating Officer 173,250 128,800 202,500
W. R. Robertson, Deputy Chairman 173,250 128,800 190,350
M. Boyd, Executive Vice President 81,396 58,320 88,200
G. A. Glaser, Executive Vice President 74,025 53,460 81,585
O. N. Frenzel III, Director 78,750 54,000 78,750
Executive Group 517,815 401,992 677,745
Non-Executive Director Group 0 0 0
Non-Executive Officer Employee Group 1,632,738 1,210,750 1,940,830
- - --------------------------------------------------------------------------------
</TABLE>
APPROVAL BY STOCKHOLDERS
The proposal requires for its adoption the favorable vote of the holders of
shares represented at the total amount of the issued and outstanding Common
Stock, voting as a whole.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS A VOTE FOR THIS PROPOSAL.
3. PROPOSAL RESPECTING THE NATIONAL CITY CORPORATION LONG-TERM INCENTIVE
COMPENSATION PLAN FOR SENIOR OFFICERS AS AMENDED AND RESTATED EFFECTIVE
JANUARY 1, 1995.
At the Annual Meeting of Stockholders there will be presented for stockholder
approval the National City Corporation Long Term Incentive Compensation Plan For
Senior Officers As Amended and Restated effective January 1, 1995 (the "Long
Term Plan") which was adopted by the Board of Directors at its meeting of
December 19, 1994 subject to the approval of the Corporation's stockholders. The
purpose of the Long Term Plan is to maximize the returns to stockholders and to
promote the long-term profitability and success of the Corporation by providing
an incentive to those key executives of the Corporation who are primarily
responsible for such profitability and success.
Generally, the Long Term Plan provides for incentive compensation that shall
be awarded to a participant based upon the total stockholder return of the
Corporation for the three year fiscal year plan cycle ("Plan Cycle") compared to
other members of the Corporation's peer group. The Long Term Plan will be
administered by the Compensation and Organization Committee of the Board of
Directors of the Corporation.
17
<PAGE> 18
The complete text of the Long Term Plan appears as Exhibit B to this Proxy
Statement. While the main features of the Long Term Plan are summarized below,
such summaries are in all respects subject to the complete text of the Long Term
Plan set forth in Exhibit B.
The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to the
Internal Revenue Code ("Code"). Section 162(m) generally provides that certain
compensation in excess of $1 million per year paid to a publicly held company's
chief executive officer and any of its four other highest paid executive
officers is no longer deductible by the company beginning in the 1994 tax year
unless the compensation qualifies for an exception. Section 162(m) excludes from
the deductibility limit performance based compensation if certain procedural
requirements, including stockholder approval of the material terms of the
performance plan, are satisfied. The Long Term Plan has been in place since
1987. The Long Term Plan has been amended to qualify awards paid pursuant to the
Long Term Plan for the exclusion from the Section 162(m) limits and the Long
Term Plan is being presented for stockholder approval so as to meet the
stockholder approval requirements for the exclusion from the Section 162(m)
deductibility limits and thus minimizing the cost of providing competitive
compensation to its key employees. Should the stockholders not approve the Long
Term Plan no further awards will be made under the Long Term Plan. In such case,
however the Committee may have to review the overall compensation package being
provided to the Corporation's senior officers.
ELIGIBILITY AND PARTICIPATION
Eligibility for participation in the Long Term Plan will be limited to those
senior officers of the Corporation and its subsidiaries who are materially
responsible for the management, growth, and overall success of the Corporation,
as determined by the Committee. Participation in the Long Term Plan shall be
determined by the Committee prior to the commencement of the Plan Cycle.
PERFORMANCE MEASUREMENT
Prior to the beginning of each Plan Cycle, the Committee shall establish
threshold, target, and maximum award performance levels for the Plan Cycle
against which the total stockholder return of the Corporation shall be compared
to other members of the peer group based upon the ranking of the Plan Cycle
results of the Corporation and members of the peer group. The Committee shall
determine the membership of the peer group for the Plan Cycle at such time.
AWARDS
The amount awarded under the Long Term Plan to a participant shall be
expressed as a percentage of base salary. Such percentage shall be determined on
the basis of the attainment, or lack of attainment, by the Corporation of the
threshold, target, or maximum performance and can range from 0% to 100% and no
award for any Plan Cycle may exceed $1,000,000. Amounts awarded under the Long
Term Plan may be in cash, in unfunded future benefits or a combination thereof.
With the exception of a cash award, awards are not funded, but simply remain
contractual liabilities of the Corporation and are subject to payment upon the
recipient's termination of employment with the Corporation or its subsidiaries.
The Corporation shall have the right to deduct any federal or state
18
<PAGE> 19
taxes required by law with respect to such payments. Amounts of awards made and
deferred and earnings and gains thereon, are always 100% vested.
TERMINATION OF EMPLOYMENT DUE TO NORMAL RETIREMENT, DISABILITY OR DEATH
In the event of termination of employment due to normal retirement,
disability, or death the participant shall be eligible to receive a prorated
award based upon the participants length of employment during the Plan Cycle,
which shall be payable as soon as practical following the end of the Plan Cycle.
DEFERRAL OF AWARDS
Each active participant shall be given the opportunity prior to the final year
of the Plan Cycle to request to defer a portion or all of his award for the Plan
Cycle. The Committee shall determine whether or not to defer any portion or all
of any participant's award with respect to the Plan Cycle. As of the date of the
payment of the cash awards, the amount of the award to be deferred shall be
credited to an unfunded account maintained by the Corporation in the name of the
participant. The amount of any deferred benefits shall be credited to the fund
or funds selected by the participant. The funds are designed to reflect
investment yields of funds maintained in the Savings and Investment Plan (see
page 31) or in the equivalent of a savings account. Payment of unfunded
deferrals shall be made on an installment basis over a period of ten years
commencing on the termination of the participants employment with the
Corporation or any of its subsidiaries.
The Committee may determine to pay out a participant's unfunded deferred
amounts in a lump sum when the participant's accounts has a balance of
$100,000.00 or less or when the participant has terminated employment by means
other than death, disability, or retirement.
FORFEITURES
In the event the Committee finds that an employee or former employee who has
an interest in the Long Term Plan has been discharged for reasonable belief of
fraud or has been convicted of a crime as a result of which it becomes illegal
for his employer to employ him or her, then any amounts held under the Long Term
Plan for the benefit of such employee or former employee or his or her
beneficiaries shall be forfeited and no longer payable.
CHANGE IN CONTROL
In the event of a change in control, the Long Term Plan provides that the
Corporation shall pay to each participant a lump sum cash payment equal to the
maximum award level for such Plan Cycle prorated based upon the number of months
that have passed since the commencement of each Plan Cycle.
AMENDMENT AND DISCONTINUANCE
The Corporation expects to continue this Long Term Plan indefinitely, but
reserves the right, by action of its shareholders, to amend it from time to
time, or to discontinue it. If the Corporation
19
<PAGE> 20
should amend or discontinue the Long Term Plan, the Corporation shall remain
obligated under the Long Term Plan with respect to (i) awards made final by the
decision of the Committee prior to the date of such amendment or discontinuance,
(ii) vested awards of participants and beneficiaries, and (iii) amounts deferred
prior to the date of such amendment or discontinuance.
FEDERAL TAX CONSEQUENCES
The award will result in taxable income to the participant upon receipt of
cash payment. If the award is deferred, the participant will not recognize
taxable income for Code purposes until the installment payments are paid. The
amount of the taxable income to the participant under the Code will measure the
amount of the deduction to which the Corporation is entitled.
LONG TERM PLAN BENEFITS
It is not possible to determine future awards that will be received by
participants in the Long Term Plan. Set forth in the table below are the
benefits and amounts that would have been paid under the Long Term Plan to the
participants for the last three completed fiscal years if the Long Term Plan had
been in effect.
<TABLE>
PLAN BENEFITS
- - --------------------------------------------------------------------------------
NATIONAL CITY CORPORATION
LONG-TERM INCENTIVE COMPENSATION PLAN FOR SENIOR OFFICERS
AS AMENDED & RESTATED EFFECTIVE JANUARY 1, 1995
<CAPTION>
1992 1993 1994
DOLLAR DOLLAR DOLLAR
NAME AND POSITION VALUE ($) VALUE ($) VALUE ($)
- - --------------------------------------------------------------------------------
<S> <C> <C> <C>
E. B. Brandon, Chairman of the Board
and Chief Executive Officer 202,456 0 608,264
D. A. Daberko, President and Chief
Operating Officer 103,888 0 310,333
W. R. Robertson, Deputy Chairman 103,888 0 304,633
M. Boyd, Executive Vice President 54,603 0 152,595
G. A. Glaser, Executive Vice President 46,883 0 139,808
Executive Group 206,542 0 741,802
Non-Executive Director Group 0 0 0
Non-Executive Officer Employee Group 175,880 0 605,812
- - --------------------------------------------------------------------------------
</TABLE>
APPROVAL BY STOCKHOLDERS
The proposal requires for its adoption the favorable vote of the holders of
shares representing at least a majority of the total amount of the issued and
outstanding Common Stock, voting as a whole.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS A VOTE FOR THIS PROPOSAL.
20
<PAGE> 21
4. SELECTION OF INDEPENDENT AUDITORS
The Board of Directors believes it appropriate to submit approval of the
selection of Ernst & Young LLP independent auditors, as auditors for the
Corporation for the year 1995 for action by the stockholders. This firm and its
predecessors have served as independent auditors for the Corporation since its
inception in 1972. In the opinion of the Board of Directors, the reputation,
qualifications, and experience of the firm make appropriate its reappointment
for 1995. A representative of the firm is expected to be present at the Annual
Meeting of Stockholders, to make a statement and to respond to appropriate
questions.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS A VOTE FOR THIS PROPOSAL.
21
<PAGE> 22
EXECUTIVE COMPENSATION
(a) COMPENSATION. The following table sets forth, together with certain other
information, the compensation earned during the fiscal year ended December 31,
1994 by (i) the chief executive officer and (ii) the four other most highly
compensated executive officers of the Corporation and its subsidiaries.
<TABLE>
- - -----------------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------- ----------------------------------------
AWARDS PAYOUTS
------------------------- ----------
RESTRICTED SECURITIES ALL
OTHER STOCK UNDERLYING OTHER
NAME AND PRINCIPAL BONUS ANNUAL AWARD(S) OPTIONS/ LTIP COMP
POSITION YEAR SALARY($) ($)(1) COMP($) ($)(2) SARS(#) PAYOUTS($) ($)(3)
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E. B. Brandon 1994 $689,167 $461,625 $0 $385,575 90,000 $608,264 $83,821
Chairman of the Board 1993 $630,000 $418,560 $0 $385,640 80,000 $ 0 $38,161
and Chief Executive Officer 1992 $601,667 $392,494 $0 $ 17,600 42,000 $202,455 $37,012
D. A. Daberko 1994 $442,083 $263,250 $0 $ 47,700 45,000 $310,333 $54,415
President and Chief 1993 $399,583 $259,616 $0 $ 42,296 36,000 $ 0 $24,880
Operating Officer 1992 $383,333 $227,535 $0 $ 8,800 26,000 $103,888 $24,369
W. R. Robertson 1994 $419,583 $243,352 $0 $ 71,550 32,000 $304,633 $51,241
Deputy Chairman 1993 $399,583 $231,868 $0 $ 72,152 36,000 $ 0 $24,880
1992 $383,333 $221,375 $0 $ 13,200 26,000 $103,888 $24,369
M. Boyd 1994 $278,333 $148,200 $0 $ 19,875 19,500 $152,595 $37,450
Executive Vice President 1993 $268,067 $145,420 $0 $ 12,440 18,000 $ 0 $17,263
1992 $256,733 $140,828 $0 $ 6,600 16,400 $ 54,603 $17,051
G. A. Glaser 1994 $257,083 $139,585 $0 $ 21,200 19,500 $139,808 $32,704
Executive Vice President 1993 $245,417 $104,445 $0 $ 17,416 19,000 $ 0 $13,857
1992 $233,333 $132,775 $0 $ 0 16,400 $ 46,882 $12,560
<FN>
- - --------------------------------------------------------------------------------
(1) Short-term plan award includes both cash and deferred awards. The objectives
used in determining awards and their relative weights under Short Term Plan
are set forth on page 33. Based on the objectives and their weights, the
payout for 1994 was 75% of the maximum.
(2) These grants of restricted stock were offsets to the Supplemental Executive
Retirement Plan, see page 36. E. B. Brandon has, in the aggregate, 95,850
shares of Restricted Stock having a total value as of 12/31/94 of
$2,480,119. D. A. Daberko has, in the aggregate, 9,700 shares of Restricted
Stock having a total value as of 12/31/94 of $250,988. W. R. Robertson has,
in the aggregate, 16,400 shares of Restricted Stock having a total value as
of 12/31/94 of $424,350. H. M. Boyd, in the aggregate, 2,250 shares of
Restricted Stock having a total value as of 12/31/94 of $58,219. G. A.
Glaser has in the aggregate 3,300 shares of Restricted Stock having a total
value as of 12/31/94 of $85,388. The named executive officers receive
dividends on their Restricted Stock at the same rate and frequency as all
stockholders.
(3) All Other Compensation includes Executive Savings Plan (see page 31) and
Savings and Investment Plan (see page 31) match, but does not include
retirement accruals as these are not calculable. For the year 1994 each of
the named executive officers received the maximum allowable contribution of
$9,240 under the Savings and Investment Plan. The named executive officers
accrued the following benefits under the Executive Savings Plan during the
year 1993: E. B. Brandon, $41,311; D. A. Daberko, $23,097; W. R. Robertson,
$22,034; M. Boyd, $11,675; and G. A. Glaser, $9,342. All other compensation
also includes the following amounts equal to the full dollar value of the
remainder of the premiums paid by the Corporation in connection with life
insurance policies issued pursuant to the Split Dollar Life Insurance
Agreements between the Corporation and the following Named Executive
Officers during 1994, respectively, as applicable: E. B. Brandon 33,614; D.
A. Daberko 22,422; W. R. Robertson 20,373; M. Boyd 16,832; and G. A. Glaser
14,742. The premiums paid by the Company in connection with the life
insurance policies issued pursuant to such Split Dollar Life Insurance
Agreements set forth in the preceding sentence generally will be recovered
in full by the Company upon the cancellation or purchase by a Named
Executive Officer of any such life insurance policy or the payment of any
death benefits under any such life insurance policy.
- - --------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 23
(b) OPTIONS. The following table provides information on option grants in
fiscal year 1994 to the named executive officers.
- - --------------------------------------------------------------------------------
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
<CAPTION> APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM(1)(4)
---------------------------------------------------------------- ---------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#)(2) FISCAL YEAR(3) ($/SH) DATE 5%($) 10%($)
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E. B. Brandon........ 90,000 5.3 % $26.50 7/6/04 $ 1,464,538 $ 3,711,428
D. A. Daberko........ 45,000 2.6 % $26.50 7/6/04 $ 732,269 $ 1,855,714
W. R. Robertson...... 32,000 1.9 % $26.50 7/6/04 $ 520,725 $ 1,319,619
M. Boyd.............. 19,500 1.1 % $26.50 7/6/04 $ 317,317 $ 804,143
G. A. Glaser......... 19,500 1.1 % $26.50 7/6/04 $ 317,317 $ 804,143
- - -------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates dictated by the Securities and Exchange Commission when the
"Potential Realizable Value" alternative is used and are not intended to be
a forecast of the Corporation's stock price.
(2) One half of each option grant becomes exercisable one year after the date of
the grant and the remainder becomes exercisable on the second anniversary of
the grant. For incentive stock options a further restriction is placed on
the exercise of options such that the maximum number of shares of the
Corporation's Common Stock which become initially available for purchase
under all post-1986 incentive stock option grants from the Corporation in
any calendar year shall be limited to that number of shares the aggregate
exercise price of which does not exceed $100,000.
(3) The Corporation granted options representing 1,698,800 shares to employees
during 1994.
(4) Value created for all Stockholders Gain of named executive officers as a
percentage of value created for all Stockholders
</TABLE>
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
APPRECIATION FOR OPTION TERM
---------------------------------
5% 10%
<S> <C> <C>
$2,401,120,929 $6,084,911,865
.14% .14%
</TABLE>
- - --------------------------------------------------------------------------------
23
<PAGE> 24
The following table sets forth the stock options exercised by each of the
named executive officers during the calendar year 1994 and the December 31, 1994
value of all unexercised options held by the named executive officers.
<TABLE>
- - --------------------------------------------------------------------------------
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT 12/31/94(1)
SHARES ------------- ---------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- - ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E. B. Brandon........ 17,338 $177,115 268,922 $1,751,871
132,006 $ 41,796
D. A. Daberko........ 11,440 $117,603 172,869 $1,212,635
64,001 $ 18,906
W. R. Robertson...... 0 $ 0 148,999 $ 990,064
51,001 $ 18,906
M. Boyd.............. 7,000 $ 70,875 84,400 $ 576,140
28,500 $ 8,955
G. A. Glaser......... 0 $ 0 95,002 $ 667,674
29,398 $ 9,849
- - ------------------------------------------------------------------------------------
<FN>
(1) The ultimate realization of profit on the sale of such options of the
Corporation's Common Stock is dependent upon the market price of such stock
at the time of the sale. The fiscal year ended December 31, 1994. The
Corporation's Common Stock had a closing price on that day on the New York
Stock Exchange of $25.875. The numbers shown reflect the value of
unexercised options accumulated over a ten-year period based on the 1994
year-end closing price.
- - ------------------------------------------------------------------------------------
</TABLE>
24
<PAGE> 25
The following table provides information on the awards of long term incentive
plan participation during the year 1994.
<TABLE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE NON-STOCK
NUMBER OF OR OTHER PRICE-BASED PLANS(3)
SHARES, UNITS PERIOD UNTIL -----------------------------------
OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS(#)(1) PAYOUT(2) ($) ($) ($)
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
E. B. Brandon N/A December 31, 1997 $ 0 $385,000 $770,000
D. A. Daberko N/A December 31, 1997 0 196,000 392,000
W. R. Robertson N/A December 31, 1997 0 178,000 356,000
M. Boyd N/A December 31, 1997 0 87,000 174,000
G. A. Glaser N/A December 31, 1997 0 81,000 162,000
- - ---------------------------------------------------------------------------------------------------------
<FN>
(1) The National City Long Term Incentive Plan for Senior Officers grants cash
awards based on a percentage of the individual's base pay. No shares or
other rights are granted. (See page 32)
(2) The LTIP is based on a three year cycle starting 1/1/95 and ending 12/31/97.
Messrs. Brandon, Daberko, Robertson, Boyd and Glaser were each awarded the
opportunity to participate in the next three year cycle. Payouts occur only
at the end of the cycle. (See page 32)
(3) The payout is based on the Corporation's total return to its stockholders
over a three year period as compared to the total return to stockholders of
a peer group of high performing banking companies. Payouts are made on a
basis of a percentage of the average base pay for the three year period for
each participant. (See page 32)
(4) The Corporation's current policy requires each executive officer to retire
no later than the month of such officer's 65th birthday. Consequently, Mr.
Brandon will be required to retire no later than September 30, 1996 and he
will pursuant to the provisions of the Plan, be entitled to receive a
maximum payout of 58.33%. (See Section 6.1 of the Plan on page B-6).
- - --------------------------------------------------------------------------------
</TABLE>
REPORT OF COMPENSATION AND ORGANIZATION COMMITTEE
The Corporation believes that its stockholders should be provided information
about executive compensation that is easily understood and consistent with the
Securities and Exchange Commission's proxy rules on executive compensation.
The information provided is intended to enable stockholders to fully
understand the cash, performance based and equity based compensation programs
for executives. The Corporation welcomes stockholder comments or suggestions on
whether the disclosure objectives have been met. Please send any comments to the
Corporate Secretary, National City Corporation, 1900 East Ninth Street,
Cleveland, Ohio 44114.
25
<PAGE> 26
COMPENSATION PHILOSOPHY
The Corporation is committed to aligning compensation strategy with overall
business objectives. The performance of the Corporation's employees in
delivering quality products and service will be what differentiates the
Corporation from its competitors. The Corporation is committed to the
development of its employees and to providing compensation which is competitive
with the mid-range of its peer group and local markets and which is commensurate
with individual contribution and performance.
The Corporation promotes equity ownership as reinforcement of corporate
success and attention to shareholder value. At the executive level, a
significant percent of total compensation is based on the achievement of both
corporate and individual performance goals. As the Corporation focuses its
compensation strategy toward variable pay, the total cost of compensation will
become more closely aligned with the success of the Corporation.
The Corporation offers a competitive benefit program that provides the
opportunity to plan for both short and long-term financial security.
EXECUTIVE COMPENSATION PRINCIPLES
The following principles provide the cornerstone for the executive
compensation programs of the Corporation:
- Focus on total compensation in determining total and individual
competitiveness.
- Provide rewards for long-term strategic management and promote the concept
of equity ownership as reinforcement of corporate success and attention to
stockholder value.
- Place significant compensation at risk based on the attainment of both
corporate and individual performance goals.
- Attract and retain key executives critical to the long-term success of the
Corporation.
The Corporation believes that it is in the best interest of shareholders to
retain as much flexibility as possible, now and in the future, with respect to
the design and payment of compensation to executive officers. The Corporation
does, however, recognize the constraints imposed on this flexibility by Section
162(m) of the Internal Revenue Code which disallows a tax deduction for
compensation it pays in excess of $1,000,000 to key executives. The
Corporation's compensation plans are currently structured in such a manner that
it is unlikely the cash compensation paid to any executive officer in any year
will exceed this $1,000,000 cap.
PEER GROUP AND INDIVIDUAL PERFORMANCE COMPARISONS
The Corporation's compensation package is designed to be competitive with
those levels of compensation offered by the Corporation's peer group companies
and to motivate and reward individual and corporate performance. The Corporation
believes that executive compensation should be driven by the attainment of
aggressive business goals. These goals are based on annual and three year plan
cycles. Appropriate peer group comparative measures are established to regularly
assess the
26
<PAGE> 27
Corporation's results against industry performance standards. As a result, above
average executive compensation levels can only be attained by meeting individual
goals and achieving a corporate goal with an above average ranking against the
peer group.
Total executive compensation is primarily based on four components: (1) base
pay, (2) short-term incentive pay, (3) long-term cash incentive pay and (4)
stock option grants.
The Corporation establishes a salary range for each executive officer by
assessing equivalent positions at peer group companies (60% weight) and by its
own internal equivalency test which reviews comparable positions across our
multi-bank organizational structure (40% weight). The Corporation targets its
executive officer's base pay at the mid-range of salaries paid for those
equivalent positions at peer group companies. An individual officers salary can
vary within the Corporations's established range based upon performance,
experience and long term potential. Performance and experience are of relative
equal weight and represent the primary basis for salary adjustment decisions.
The Corporation's Short-Term Incentive Compensation Plan for Senior Officers
focuses on both individual and corporate performance over a one year period.
Corporate performance is measured against the peer group of companies and takes
into consideration various financial indices. (See page 33 for more details on
the short-term plan). This year the financial indices used and the weighting
were: (1) return on equity (33%), (2) return on assets (17%), (3) overhead ratio
(17%) and (4) percentage of change in earnings per share (33%). Individual
performance is measured against pre-established goals which are set at the
beginning of each year. For participants in the Plan, the payouts under the
short-term plan range from 0% to 85% of base pay for the Chief Executive
Officer, 0% to 75% of base pay for the President or the Deputy Chairman, 0% to
70% of base pay for any executive officer of the Corporation or its major
subsidiaries and 0% to 55% of base pay for any senior officer of the Corporation
or its major subsidiaries. The Corporation ranked sixth out of 16 banks in the
peer group based on the four financial indices and their respective weights
listed above and the payment for the corporate performance portion of the short
term plan was equal to 75% of the maximum award.
The Corporation's Long-Term Incentive Compensation Plan for Senior Officers
provides compensation based on the total return to shareholders of the
Corporation over a three-year period as compared to the total return to
shareholders over the same period for a peer group of companies. For
participants in the Plan, awards can range from 0% to 100% of base pay for the
CEO of the Corporation, 0% to 80% of base pay for the President or the Deputy
Chairman of the Corporation, 0% to 60% of base pay for any executive officer of
the Corporation or any of its major subsidiaries, and 0% to 40% of base pay for
senior officers of the Corporation or any of its subsidiaries. (See pages 17 and
32 for more details on the long-term plan.) The Corporation ranked second out of
16 banks in the peer group in total return to shareholders for the 1992-1994
period and the payout was equal to 95% of the maximum award.
Stock options are viewed as an important long-term incentive component to
total Compensation. Each salary grade has a target and maximum number of shares
which may be subject to an option awarded to an individual in that salary grade.
The target and maximum for any salary grade is based
27
<PAGE> 28
on the midpoint of the range for that salary grade and the number of options
awarded may vary based on both the individuals performance and his long term
potential. Of the two, performance is more heavily weighted.
The peer group companies are all included in the KBW 50 index used in the
performance chart on page 30 and, as a group, have outperformed the KBW 50. The
Corporation believes it is important that the peer group it compares itself to
consists of the better performing banks.
REVIEW OF COMPANY PERFORMANCE
The Corporation's 1994 net income was a record $429 million, compared with
$404 million in 1993. Earnings per common share increased 12 percent to $2.70,
also a record. The higher earnings were a direct result of excellent asset
quality, loan growth, active capital management, proper management of interest
rate risk and tight control of overhead expenses.
Return on average assets, a key performance measure for the banking industry,
was 1.40 percent, unchanged from 1993. Return on average common equity rose to
17.06 percent, up from 16.12 percent in 1993.
The combination of a solid capital base and strong earnings has enabled the
Corporation to conduct a number of successful stock repurchase programs in 1993
and 1994. The quarterly dividend was increased in January 1995 to $.32 per
share, following two dividend increases each in 1993 and 1994. Total return of
the Corporation's common stock, assuming reinvestment of dividends, has
significantly outperformed the Standard & Poor's 500 Index over the past 20
years -- an average of 17.1% per year, versus 14.5% for the S&P 500.
THE COMPENSATION AND ORGANIZATION COMMITTEE'S REVIEW OF CEO COMPENSATION
The Corporation's executive compensation program is based on corporate and
individual performance and places a significant portion of an executive's
compensation at risk if these goals are not attained. In addition, the program
rewards long term strategic management by using compensation vehicles which
promote equity ownership and emphasize attention to stockholder value.
The Corporation's financial performance over the last 3 years has produced
fluctuations in Mr. Brandon's total compensation. In 1991 his total cash
compensation was 20% lower than his 1990 cash compensation. In 1992, his cash
compensation was approximately 31% higher than 1991. In 1993 his total cash
compensation was nearly 12% lower than 1992. In 1994 his total compensation is
approximately 68% higher than 1993. The higher level of his 1994 total
compensation can be attributed specifically to the award being paid from the NCC
Long-Term Incentive Plan which covered the three year period 1992-1994.
Long-Term Incentive Plan awards are based solely on total stockholder return as
compared to the total stockholder return of a selected peer group of financial
institutions.
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<PAGE> 29
The CEO's annual adjustment to salary is determined by comparison to CEO
salaries of other financial institutions in the peer group, by reviewing his
performance throughout the year and by assessing the level of experience he
brings to the position. Mr. Brandon's short-term goals were based upon the
growth of the Corporation, improved Corporate performance, total shareholder
return and establishment of a management structure suitable to both current and
future leadership needs. During 1994, all short-term goals were met or exceeded.
Mr. Brandon has been an employee of the Corporation for 38 years and has served
as its Chairman of the Board and Chief Executive Officer for the previous eight
years. After the 1994 adjustment, Mr. Brandon's annual salary was within the
mid-range of the CEO salaries paid by the peer group companies.
Short-Term Incentive Plan awards for executive officers are performance based
and are determined by comparing NCC's relative performance against a peer group
of financial institutions. The award is based on the combination of corporate
and individual performance. The components on which Mr. Brandon's award is based
on are 90% corporate and 10% individual. The 1994 corporate award for Mr.
Brandon was $401,625. The Committee reviewed Mr. Brandon's pre-established
individual performance goals and approved an award of $60,000.
Stock options are another key element of total compensation. Equity based
compensation produces a long-term link between the results achieved for
stockholders and the rewards provided to key executive officers. Each year, the
Committee reviews competitive peer group data and individual performance to
determine the level of equity-based awards to be granted to key executives. As
Mr. Brandon met or exceeded all of his 1994 short-term goals and, the
Corporation experienced record net income, earnings per common share increased,
and return on average common equity rose, he received options in 1994 to
purchase 90,000 shares of Common Stock with an exercise price of $26.50 per
share. This option award was within the mid-range of the option awards made to
Chief Executive Officers at the peer group companies. The Committee does not
consider the number of options held by Mr. Brandon in making this award except
for assuring the plans are not exceeded.
COMPENSATION AND ORGANIZATION COMMITTEE
John G. Breen, Chairman
Joseph H. Lemieux
Burnell R. Roberts
Stephen A. Stitle
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<PAGE> 30
STOCKHOLDER RETURN PERFORMANCE
Set forth below is a line graph comparing the five year cumulative total
return of the Corporation's common stock, assuming reinvestment of dividends,
with that of the Standard & Poor's 500 Index ("S&P 500") and the KBW 50 Total
Return Index ("KBW 50"). The KBW 50 is a market-capitalization-weighted bank
stock index developed and published by Keefe, Bruyette & Woods, Inc., a
nationally recognized brokerage and investment banking firm specializing in bank
stocks. The index is made up of 50 of the nation's most important banking
companies and is meant to be representative of the performance of the nation's
large banks.
<TABLE>
5 YEAR TOTAL RETURN
12/89 - 12/94
NCC VS. KBW 50 INDEX AND S&P 500
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) NCC S&P 500 KBW INDEX
- - ------------------------------------------------------------------------------
<S> <C> <C> <C>
1989 100.0 100.0 100.0
1990 84.8 96.7 71.8
1991 106.6 126.1 113.7
1992 148.3 135.6 144.8
1993 152.6 149.2 152.9
1994 168.5 151.1 144.8
</TABLE>
30
<PAGE> 31
DESCRIPTION OF CORPORATION'S BENEFIT PLANS
SAVINGS PLAN. The National City Savings and Investment Plan (the "Savings
Plan") is a qualified salary reduction profit-sharing plan within the meaning of
Section 401(k) of the Code. Under the Savings Plan as amended, all eligible
employees (generally, an eligible employee is one who has completed one year of
continuous service, is 21 years of age or older and has completed 1,000 hours of
service) of the Corporation and its adopting subsidiaries may participate in the
Savings Plan by directing their employers to make Salary Reduction Contributions
(as defined in the Savings Plan) to the Savings Plan Trust (the "Trust") for
their accounts and to reduce their compensation by an equal amount.
Contributions may be directed in any whole percentage between 1% and 10% of the
employee's base compensation. The employers also make contributions to the Trust
("Employer Matching Contributions") in an amount equal to the Employer Matching
Contribution Percentage then in effect (the Employer Matching Contribution
Percentage is currently an amount equal to 100% of the first 3% of the
employee's pay contributed as a Salary Reduction Contribution, plus 50% of the
next 4% of the employee's pay similarly contributed as a Salary Reduction
Contribution, with no further Employer Matching Contribution for any additional
pay contributed as a Salary Reduction Contribution). Amounts contributed
pursuant to the Savings Plan may be invested in certain investment choices.
Salary Reduction Contributions and Employer Matching Contributions are fully
vested at all times.
The Savings Plan has a profit-sharing feature based upon the Corporation's
profitability, as measured by the percentage return on common equity ("ROE")
from year to year. The profit-sharing contribution is in addition to the regular
Employer Matching Contributions described above. The additional amount of this
profit-sharing contribution in any year depends on the Corporation's ROE for
that year and ranges, in five cent increments from no additional contribution if
a minimum ROE of 12% is not attained to a maximum of 50 cents for each $1.00 of
an individual's Salary Reduction Contributions for the year if the Corporation's
ROE is equal to or greater than 18.5%. In 1994, the Corporation's ROE was 17.06%
which resulted in the Corporation contributing 35 cents for each $1.00 of an
individual's Salary Reduction Contribution as a profit-sharing contribution for
the year 1994.
EXECUTIVE PLAN. Effective January 1, 1989, the Corporation adopted the
National City Executive Savings Plan (the "Executive Plan"), in the form of a
non-qualified salary reduction profit-sharing plan, similar to the Savings Plan.
The Executive Plan is to supplement the Savings Plan with respect to employee
Salary Reduction Contributions and the attendant Employer Matching Contributions
which by reason of an individual's annual compensation would not be otherwise
allowed because of the annual maximum limit of the Internal Revenue Code or
because of the application, under the Internal Revenue Code, of actual deferral
percentage testing against prohibited excessive deferrals by highly compensated
employees. The Executive Plan is substantially similar to the Savings Plan as to
amounts of employee Salary Reduction Contributions and Employer Matching
Contributions.
Participants in the Executive Plan are limited to those key officers of the
Corporation or its subsidiaries who may be designated from time to time by the
Compensation and Organization Committee of the Board of Directors. The benefits
of the Executive Plan are without regard to any
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<PAGE> 32
limitation imposed by the Internal Revenue Code, or any other applicable law
limiting the amount payable under a qualified plan (such as the Savings Plan),
and represent unfunded general obligations of the Corporation. Portions of such
benefits are subject to certain provisions for forfeiture as set forth in the
Executive Plan.
Directors of the Corporation or its subsidiaries who are not also employees of
the Corporation or its subsidiaries are not eligible to participate in the
Savings Plan or the Executive Plan.
LONG TERM PLAN. The National City Long Term Incentive Compensation Plan for
Senior Officers focuses upon providing superior returns to stockholders of the
Corporation and measures the Corporation's total return to its stockholders
against the total returns to stockholders of a peer group of high performing
banking companies to their stockholders. The measurement of total return
includes dividends paid plus changes in the market value of the Corporation's
Common Stock. The measurement over a three-year period is intended to focus on
the long term performance of the Corporation linking senior management's
compensation to the total returns experienced by the stockholders during the
period.
Each year begins a new three-year cycle. The awards can range up to 100% of an
individual participant's average annual base salary during the cycle for the
Chief Executive Officer of the Corporation, and up to a lesser percentage for
other senior executive officers selected to participate under the Long Term
Plan. The amount of the award earned is dependent upon the total stockholder
return during the cycle in comparison with the total stockholder return of the
peer group. The peer group is established prior to the beginning of the cycle by
the Compensation and Organization Committee. The banking companies in the peer
group at this time are all included in the KBW 50 index used in the performance
chart on page 30 and, as a group, have outperformed the KBW 50. The Corporation
believes it is important that the peer group it compares itself to consists of
the better performing banking companies. No awards under the Long Term Plan were
paid prior to the end of the first cycle, December 31, 1990.
Amounts awarded under the Long Term Plan may be in cash, in unfunded future
benefits or a combination thereof. With the exception of a cash award, awards
are not funded, but simply remain contractual liabilities of the Corporation and
are subject to payment upon the recipient's termination of employment with the
Corporation or its subsidiaries. Generally, these unfunded benefits, together
with earnings thereon, are payable to the former officer, his beneficiary or his
estate on an installment basis over 10 years. Unfunded future benefits awards
are considered as invested in the funds described in the Savings Plan or as
directed by the recipient from time to time in the equivalent of a savings
account and are subject to the gains or losses on those investments.
In the event of a change in control of the Corporation, the Long Term Plan
provides that all the performance cycles shall terminate. The Long Term Plan
provides that if such change in control occurs, then each of the three-year
performance cycles then existing shall terminate as of the date of change in
control, the Corporation's stockholder total return during each of the
abbreviated performance cycles shall be deemed to have reached that level at
which the participant in the Long Term Plan would be entitled to be awarded his
or her maximum award, and the award for each cycle shall be apportioned based
upon the number of full months from the beginning of the performance
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<PAGE> 33
cycle to the premature cycle termination date divided by 36. In adopting this
plan, it was felt this termination was appropriate in that those individuals
previously charged with providing superior total returns to the stockholders of
the Corporation would no longer be in the same position to guide the affairs of
the Corporation as they were prior to the event constituting a change in control
and, furthermore, following such a change in control no further performance
comparisons could be made.
Directors of the Corporation or its subsidiaries who are not also employees of
the Corporation or its subsidiaries are not eligible to participate in the Long
Term Plan.
SHORT TERM COMPENSATION PLAN. The National City Short Term Incentive Plan for
Senior Officers, as amended (the "Short Term Plan") focuses on the short term
goals achieved by the individual participant. Under this plan, awards can be
granted to any senior officer of the Corporation, or to other officers of the
Corporation or its subsidiaries as may be designated from time to time by the
Compensation and Organization Committee. Each participant in the Short Term Plan
is evaluated annually with respect to performance on approved objectives. Awards
are based on individual results and can range from 0% to 33% of the recipient's
base salary in effect at the close of the year for which the evaluation is made.
Awards under this plan are paid or credited no later than the end of first
quarter of the following year.
Amounts awarded under the Short Term Plan may be in cash, in unfunded future
benefits or a combination thereof. With the exception of a cash award, awards
are not funded, but simply remain contractual liabilities of the Corporation and
are subject to payment upon the recipient's termination of employment with the
Corporation and its subsidiaries. Generally, these unfunded benefits, together
with earnings thereon, are payable to the former officer or his beneficiary or
his estate on an installment basis over 10 years. Unfunded future benefits
awards are considered as invested as directed by the recipient from time to
time, in funds described in the Savings Plan (See page 31) or in the equivalent
of a savings account and are subject to the gains or losses on those
investments.
In the event of a change in control, the Short Term Plan provides that each
participant will be paid at the effective time of the change in control the
maximum benefit the participant is entitled to receive under the Short Term
Plan.
Directors of the Corporation or its subsidiaries who are not also employees of
the Corporation or its subsidiaries are not eligible to receive benefits under
the Short Term Plan.
ANNUAL CORPORATE PERFORMANCE PLAN. The National City Annual Corporate
Performance Incentive Plan (the "Annual Performance Plan") focuses on the annual
operating results achieved by the Corporation. Under this plan, awards can be
granted to any senior officer of the Corporation, or to other officers of the
Corporation or its subsidiaries as may be designated from time to time by the
Compensation and Organization Committee. The Corporation's financial performance
is currently measured in comparison with the financial performance of other high
performing banking companies, weighted as follows: return on equity (33%),
return on assets (17%), overhead ratio (17%) and percentage change in earnings
per share (33%). The high performing banks in the peer group are all included in
the KBW 50 index used in the performance chart on page 30 and, as a group, have
outperformed the KBW 50. The Corporation believes it important that the peer
group it compares itself to consists of the better performing banks. Awards are
based on the corporate results and can
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<PAGE> 34
range from 0% to 76.5% of the recipient's base salary in effect at the close of
the year for which the evaluation is made. Awards under this plan are paid or
credited no later than the end of first quarter of the following year.
Amounts awarded under the Annual Performance Plan may be in cash, in unfunded
future benefits or a combination thereof. With the exception of a cash award,
awards are not funded, but simply remain contractual liabilities of the
Corporation and are subject to payment upon the recipient's termination of
employment with the Corporation and its subsidiaries. Generally, these unfunded
benefits, together with earnings thereon, are payable to the former officer or
his beneficiary or his estate on an installment basis over 10 years. Unfunded
future benefits awards are considered as invested as directed by the recipient
from time to time, in funds described in the Savings Plan or in the equivalent
of a savings account and are subject to the gains or losses on those
investments.
In the event of a change in control, the Annual Performance Plan provides that
each participant will be paid at the effective time of the change in control the
maximum benefit the participant is entitled to receive under the Annual
Performance Plan.
Directors of the Corporation or its subsidiaries who are not also employees of
the Corporation or its subsidiaries are not eligible to receive benefits.
STOCK OPTION PLANS. The Corporation has in effect the Amended and Restated
1973 Stock Option Plan, as amended, the 1984 Stock Option Plan, as amended, the
1989 Stock Option Plan and the 1993 Stock Option Plan. No options have been
granted since July, 1987 under the 1973 Plan and no further options will be
granted under the 1973 Plan. Each of the four stock option plans (hereinafter
referred to jointly as the "Stock Option Plans") have substantially similar
provisions and generally provide for the granting of options to purchase shares
of the Corporation's Common Stock, the options being either non-qualified
options or options which are intended to qualify as "Incentive Stock Options"
under Section 422 of the Internal Revenue Code. The Stock Option Plans also
provide for the granting of Appreciation Rights, but only in tandem with stock
options previously granted or contemporaneously being granted. Under the Stock
Option Plans, no options may be granted at less than 100% of the market value of
the Corporation Common on the date of the grant of the option. Stock option
awards are based on current individual performance. Previous awards are not
considered except for assuring the plan maximums are not exceeded.
Directors of the Corporation or its subsidiaries who are not also employees of
the Corporation or its subsidiaries are not eligible to receive options under
the Stock Option Plans.
RESTRICTED STOCK PLAN. The Corporation has in effect the National City
Corporation Amended and Second Restated 1991 Restricted Stock Plan (the
"Restricted Stock Plan"). The purpose of the Restricted Stock Plan is to provide
alternative means of compensation and to promote the long term profitability and
success of the Corporation by providing equity interests and equity based
incentives in the Corporation to key employees and members of the Board of
Directors of the Corporation.
The Restricted Stock Plan is administered by the Compensation and Organization
Committee of the Board of Directors of the Corporation.
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<PAGE> 35
Restricted Stock is granted to Executive Officers only as a method of
offsetting the liability of a portion of their Supplemental Retirement Benefits
with the restrictions being lifted at retirement. Grants are based on the
present value of accrued supplemental benefits.
Other employees, who do not receive stock option grants and who have been
identified by their managers as high potential employees have been awarded
restricted stock grants. The restrictions on grants to high potential employees
lapse on the fourth anniversary of the grant.
Generally, the Restricted Stock Plan provides for the granting of shares of
the Corporation Common Stock ("Restricted Stock") to a recipient and restricting
that recipient's rights to transfer the shares for a specific period of time.
During that restricted period, those shares are subject to substantial risk of
forfeiture. To the extent the recipient forfeits his interest in the Restricted
Stock, he or she will have no rights in the Restricted Stock forfeited.
The total amount of Restricted Stock which may be awarded under the Restricted
Stock Plan is 1,000,000 shares of which no more than 150,000 shares may be
awarded in the aggregate to any one individual. Under the Restricted Stock Plan,
awards of Restricted Stock may be made to any regular employee of the
Corporation (including employees who are members of the Board of Directors) or
any of its subsidiaries ("Employee Awards") and to the directors of the
Corporation who are not employees of the Corporation or its subsidiaries
("Director Awards").
The Restricted Stock Plan contemplates that the Compensation and Organization
Committee may award Restricted Stock to the employees of the Corporation and the
Corporation's subsidiaries subject to the following restrictions: (a) all awards
are to be made subject to transfer restrictions which are set by the
Compensation and Organization Committee, and such restrictions must last at
least six months from the date of the award, and (b) all awards of Restricted
Stock shall be subject to the award agreement entered into between the
Corporation and the employee receiving the award (such agreements may differ
from employee to employee and from award to award).
Other than directors who also are officers of the Corporation, each individual
who was elected to the Board of Directors of the Corporation on April 22, 1991,
the date when the Restricted Stock Plan became effective, was awarded 500 shares
of Restricted Stock, and each individual who is first elected or appointed to
the Board of Director will be, awarded 1000 (500 shares adjusted for the July
1993 100% stock dividend) shares of Restricted Stock subject to transfer
restrictions. In addition, each year in which an individual is re-elected or
re-appointed as a director of the Corporation, such individual is to be awarded
an additional 200 shares of Restricted Stock. The restrictions on the Director
Awards do not expire until the earlier of the individual director's death,
disability or nine months after the date of the award.
The Restricted Stock Plan provides that upon a change in control of the
Corporation (as defined in the Restricted Stock Plan), all Restricted Stock Plan
restrictions will lapse and be of no further force or effect and that the
Corporation shall cause all outstanding Restricted Stock held under the
Restricted Stock Plan to be exchanged for shares of the Corporation Common Stock
free of any Restricted Stock Plan legends or restrictions.
Various individuals who are participants in the Supplemental Plan (as defined
below) and agreed to waive certain rights to receive benefits under the
Supplemental Plan were granted various amounts of
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<PAGE> 36
Restricted Stock. The restrictions on the awards granted to these individuals do
not lapse until such time as they would qualify to receive retirement benefits
under the Supplemental Plan.
SEVERANCE AGREEMENTS. National City Corporation recognizes that, as is the
case at most companies, the possibility of a change in control exists.
Accordingly, the Corporation desires to assure itself of both present and future
continuity of management and wishes to ensure that its senior executive officers
and other key employees ("Executives") continue to remain in the employ of the
Corporation by entering into severance pay agreements with certain Executives of
the Corporation. The severance agreements were entered into upon the
recommendation of the Compensation and Organization Committee and the forms of
the agreement were approved by the Board of Directors at its December 19, 1994
meeting. The agreements become immediately operative upon a change in control.
The severance agreements provide that upon termination of employment with the
Corporation, a subsidiary, or a successor to the Corporation within three years
following a change in control, unless the termination is because of death,
permanent disability, or cause, the Executive will be entitled to severance
compensation. The severance agreements also provide that following a change in
control, the Executive may terminate his own employment with the Corporation or
a subsidiary with the right to severance compensation during the period
commencing with the occurrence of the change in control and continuing until the
earliest of (i) the third anniversary of the occurrence of the change in
control, (ii) death, or (iii) attainment of age sixty-five and upon the
occurrence of one or more certain additional events.
The severance compensation will be a lump sum payment in an amount equal to
three times the sum of (i) base pay at the highest rate in effect for any period
prior to the termination date plus (ii) incentive pay in an amount equal to not
less than the highest aggregate annual bonus, incentive or other payments of
cash compensation made or to be made in regard to services rendered in any
calendar year in which the change in control occurs. For thirty-six months
following the termination, the Corporation will arrange to provide the Executive
with employee benefits that are welfare benefits substantially similar to those
which the Executive was receiving or was entitled to receive immediately prior
to the termination date and such thirty-six month period will be considered
service with the Corporation for the purpose of determining service credits and
benefits due and payable under the Corporation's various retirement benefit
plans.
For sixteen Executives, the severance agreements also provide that in the
event of a change in control, the Executive may terminate his employment with
the Corporation or any subsidiary for any reason during the thirty-day period
immediately following the first anniversary of the first occurrence of a change
in control without cause with the right to severance compensation.
The Corporation has agreed to bear the expense of any and all legal fees
incurred by any Executive associated with the interpretation, enforcement, or
defense of his rights under the severance agreements.
RETIREMENT PLANS. The National City Non-Contributory Retirement Plan (the
"Retirement Plan") is a qualified, non-contributory defined benefit plan, and
the pension trust is tax exempt under the Internal Revenue Code. The Retirement
Plan presently covers all regular employees of the Corporation and those
subsidiaries of the Corporation that have adopted the Retirement Plan when
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<PAGE> 37
such employees have completed 1,000 hours of service in a 12-month period
(normally the first 12 months of employment), provided they have attained age
21.
Upon reaching the normal retirement age of 65, with five years of vesting
service, each participant in the Retirement Plan generally is entitled to
receive monthly for life a basic benefit (less certain deductions specified in
the Retirement Plan) based upon the participant's highest average annual base
compensation for any 60 consecutive months of active employment during the last
120 months preceding retirement ("Final Average Earnings"). The annual basic
benefit shall be equal to the sum of (a) 1 1/4% times the employee's Final
Average Earnings not in excess of "Covered Compensation" plus (b) 1 3/4% times
the employee's Final Average Earnings in excess of "Covered Compensation," and
such sum multiplied by the number of years of benefit service, but not more than
35 years. "Covered Compensation," which is computed pursuant to government
regulations, generally is based upon the average of the wage base covered by
Social Security, upon the employee's date of birth and upon an assumed 35-year
work experience. Participant's "base compensation" is defined by the Retirement
Plan to mean generally the salary and wages paid to such participant, excluding
overtime, bonuses, commissions and other similar forms of remuneration. The Code
places limits on the amount of annual benefits which may be paid to any
participant by the pension trust of the Retirement Plan.
The Retirement Plan also provides for optional early retirement at a reduced
benefit at any time after a participant attains age 55 with at least 10 years of
benefit service. The amount of the reduction of the benefit is determined by a
formula dependent upon the age at which the participant elects to begin to
receive benefits. If a participant has more than 20 years of vesting service,
the participant may elect to retire at 62 and start receiving unreduced pension
benefits.
The Corporation adopted a supplemental retirement plan ("Supplemental Plan")
to supplement the pension payments under the Retirement Plan for those certain
senior officers of the Corporation and its subsidiaries who may be designated
from time to time by the Compensation and Organization Committee. Payments under
the Supplemental Plan are paid from the general revenues of the Corporation and
have no effect on the existing pension trust fund.
The Supplemental Plan's purpose is to augment an individual's income from
Social Security and pension payments the individual is entitled to receive upon
retirement. The amount of the Supplemental Plan benefit for any covered
individual will be the amount of the individual's retirement benefit determined
under the Retirement Plan, but determined (a) without regard to the limitations
on such benefits contained in the Internal Revenue Code, and (b) by adding to
the individual's highest average base compensation the average of the amounts
(if any) of the individual's five largest (not necessarily consecutive) awards
under the Short Term Plan during the 10 calendar years completed prior to
retirement, less the sum of (i) amounts payable to the individual under the
Retirement Plan, plus (ii) amounts payable to the individual under any corporate
program which is deemed to be another offset program to the Supplemental Plan,
as determined by the Compensation and Organization Committee of the Board of
Directors. The amount of the Supplemental Plan benefit may, in the discretion of
such Committee, be paid to the individual in a lump sum.
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<PAGE> 38
The Supplemental Plan also provides supplemental disability benefits and
supplemental surviving spouse benefits. All benefits under the Supplemental Plan
are computed on the basis of the individual's retirement at age 65 (or age 62 if
he has 20 years of vesting service), and if an individual otherwise entitled to
receive benefits under the Supplemental Plan retires prior to attaining said
age, Supplemental Plan benefits will be payable only if the Compensation and
Organization Committee approves such early retirement, and any such benefit will
be reduced in the same manner as pension payments are reduced under the
Retirement Plan, subject however to such reduction being waived by that
Committee.
In the event of a change in control of the Corporation, the Supplemental Plan
provides for the vesting of all accrued benefits.
<TABLE>
- - ---------------------------------------------------------------------------------------------------------------------
PENSION PLAN TABLE
<CAPTION>
YEARS OF BENEFIT SERVICE
AVERAGE BASE -------------------------------------------------------------------------------------------------
COMPENSATION 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 25,000 3,125 4,687 6,250 7,812 9,375 10,937
50,000 7,455 11,182 14,909 18,636 22,363 26,090
100,000 16,205 24,307 32,410 40,512 48,614 56,717
200,000 33,704 50,557 67,409 84,261 101,113 117,965
400,000 68,705 103,057 137,410 171,762 206,114 240,467
600,000 103,705 155,558 207,410 259,263 311,116 362,968
800,000 138,704 208,057 277,409 346,761 416,113 485,465
1,000,000 173,705 260,557 347,410 434,262 521,114 607,967
1,200,000 208,705 313,058 417,410 521,763 626,116 730,468
- - ---------------------------------------------------------------------------------------------------------------------
<FN>
Retirement benefits above the defined benefit maximum of $150,000 in 1995 are
paid to those officers who are participating through a nonqualified Supplemental
Executive Retirement Plan.
- - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Assuming retirement at age 65 under the Retirement Plan, the number of years
of benefit service under both the Retirement Plan and the Supplemental Plan for
the five individuals named in the Cash Compensation Table would be: Edward B.
Brandon, 35 years; David A. Daberko, 35 years; William R. Robertson, 35 years;
Morton Boyd, 12 years; and Gary A. Glaser, 35 years.
First Kentucky National Corporation, acquired by the Corporation in 1988, had
a defined contribution retirement plan unlike the Corporation's Retirement Plan
which is a defined benefit plan. The years shown for Mr. Boyd only relate to
benefit service under the Retirement Plan and the Supplemental Plan. Mr. Boyd,
upon retirement, is entitled to receive benefits under the First Kentucky
National Corporation defined contribution retirement plan in addition to those
under the Retirement Plan and Supplemental Plan, subject to offsets as set forth
in the Plans. After First Kentucky National Corporation was acquired by the
Corporation, no further amounts have been
38
<PAGE> 39
accrued for any employee under the former First Kentucky National Corporation's
defined contribution retirement plan.
The tabulation above shows total estimated annual retirement benefits payable
to employees under the Retirement Plan (without regard to any provision
contained in the Retirement Plan pursuant to the Internal Revenue Code or other
applicable law limiting the annual amount payable under the Retirement Plan) and
under the Supplemental Plan.
TRANSACTIONS WITH MANAGEMENT
Certain of the Corporation's directors, executive officers and associates of
directors or executive officers were customers of or had various transactions
with the Corporation and its subsidiaries in the ordinary course of business in
1994. These transactions cover a wide range of banking and trust services, both
personal and corporate. Without exception, all services were provided to the
directors, executive officers and their associates at market rates consistent
with published fee schedules. Similar additional transactions may be expected to
take place in the ordinary course of business in the future. Although various
laws and regulations governing the Corporation and its subsidiaries allow the
Corporation and its subsidiaries to make loans to a limited extent to its
executive officers, all loans and loan commitments and sales of commercial paper
involving executive officers, directors or their affiliates were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at that time for comparable transactions with other persons and, did
not involve more than the normal risk of collectibility or other unfavorable
features.
STOCKHOLDER PROPOSALS
Holders of the Corporation's Common Stock who wish to make a proposal to be
included in the Corporation's Proxy Statement and Proxy for the Corporation's
1996 Annual Meeting of Stockholders which, unless changed, is scheduled to be
held on April 22, 1996, in Cleveland, Ohio must cause such proposal to be
received by the Corporation at its principal office not later than November 7,
1995. Each proposal submitted should be accompanied by the name and address of
the stockholder submitting the proposal, the number of shares of Common Stock
owned, and the dates those shares were acquired by the stockholder. If the
proponent is not a stockholder of record, proof of beneficial ownership should
also be submitted. The proponent should also state his intention to appear at
the 1996 Annual Meeting, either in person or by representative, to present the
proposal. The proxy rules of the Securities and Exchange Commission govern the
content and form of stockholder proposals and the minimum stockholding
requirement. All proposals must be a proper subject for action at the 1996
Annual Meeting.
VOTING
A quorum is required for the transaction of business by stockholders at the
meeting. The election of directors, the approval of the National City
Corporation Annual Corporate Performance Incentive Plan, the approval of the
National City Corporation Long-Term Incentive Compensation Plan for Senior
Officers and the approval of the selection of Ernst & Young LLP as independent
auditors for 1995, require the affirmative vote of the holders of a majority of
the shares which are present in
39
<PAGE> 40
person or represented by proxy and entitled to vote at the 1995 Annual Meeting.
Abstentions are counted for the purposes of determining the number of shares
which are present in person or represented by proxy at the meeting.
Consequently, an abstention has the same effect as a vote against a proposal, as
each abstention is one less vote in favor of a proposal. Shares not voted on
proxies returned by brokers are not counted for the purposes of determining the
number of shares present in person or represented by proxy at the meeting and
will have no impact on the election of directors, the approval of the National
City Corporation Annual Corporate Performance Incentive Plan, the approval of
the National City Corporation Long-Term Incentive Compensation Plan for Senior
Officers and the selection of independent auditors.
GENERAL
The costs of solicitation of proxies will be borne by the Corporation. In
addition to using the mails, proxies may be solicited by personal interview,
telephone, and wire; and it is anticipated that banks and brokerage houses, and
other institutions, nominees, or fiduciaries will be requested to forward their
proxy soliciting material to their principals and to obtain authorizations for
the executions of proxies. Officers and regular employees of the Corporation or
its subsidiaries, acting on its behalf, may solicit proxies personally or by
telephone or wire. The Corporation has retained Corporate Investor
Communications, Inc. ("CIC") to assist in such solicitation. The fee of CIC is
estimated not to exceed $6,500, plus reasonable out-of-pocket costs and
expenses. The Corporation does not expect to pay any other compensation for the
solicitation of proxies, but may, upon request, pay the standard charges and
expenses of banks, brokerage houses, and other institutions, nominees, and
fiduciaries for forwarding proxy materials to and obtaining proxies from their
principals. However, no such payment will be made to any of the Corporation's
subsidiaries acting through their nominees or acting as a fiduciary.
Management is not aware of any matter which may be presented for action at the
Annual Meeting other than the matters herein set forth. If any other matters
come before the meeting or any adjournment thereof, it is the intention of the
persons named in the enclosed proxy to vote the shares represented thereby in
accordance with their best judgment pursuant to the discretionary authority
granted in the proxy.
By Order of the Board of Directors
DAVID L. ZOELLER
Secretary
March 8, 1995
40
<PAGE> 41
EXHIBIT A
NATIONAL CITY CORPORATION
ANNUAL CORPORATE PERFORMANCE INCENTIVE PLAN
EFFECTIVE JANUARY 1, 1995
ARTICLE 1.
THE PLAN AND ITS PURPOSE
1.1 ADOPTION OF PLAN. This National City Corporation Annual Corporate
Performance Incentive Plan (herein referred to as the "Plan") is hereby adopted,
effective January 1, 1995, to provide for the operation of the Plan on and after
such date and to govern the treatment of deferrals made under this Plan.
1.2 PURPOSE. The purpose of the Plan is to maximize the Corporation's
profitability and operating success by providing an incentive to Senior Officers
to achieve superior results. The Plan is designed to promote teamwork to achieve
overall corporate success and to motivate individual excellence.
1.3 OPERATION OF THE PLAN. The Plan shall be administered by the
Compensation and Organization Committee of the Board of Directors of the
Corporation. The Plan operates on a calendar year basis and is subject to the
review, interpretation, and administration by such Committee. The Plan governs
the eligibility for and amounts of incentive compensation to be awarded under
the Plan. With respect to any award made under the Plan, the Plan shall serve as
a non-qualified plan providing for and governing the treatment of deferred
compensation at the election of the Participant and/or the Committee, as
provided herein.
ARTICLE 2.
DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms shall have the
meanings set forth below, unless otherwise expressly provided. When the defined
meaning is intended, the term is capitalized.
(a) "Award" shall mean the payment earned by a Participant based on the
Corporation's actual results measured against the performance of a peer group
of companies as set forth in Article 4.
(b) "Base Salary" shall mean the annual salary of each Active Participant
at the close of the Plan Cycle, exclusive of any bonuses, incentive pay,
special awards, or stock options.
(c) "Board" shall mean the Board of Directors of the Corporation.
(d) "Change in Control" see Section 11.3.
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<PAGE> 42
(e) "Committee" shall mean the Compensation and Organization Committee of
the Board, or another committee appointed by the Board to serve as the
administering committee of the Plan.
(f) "Corporation" shall mean National City Corporation, a Delaware
corporation.
(g) "Disability" shall mean permanent disability as defined in the
provisions of the National City Corporation Long Term Disability Plan at the
commencement of the Plan Cycle with respect to which such definition is
relevant.
(h) "Early Retirement" shall have the same meaning as in the National City
Non-Contributory Retirement Plan at the commencment of the Plan Cycle with
respect to which such definition is relevant.
(i) "Effective Date" see Section 11.4.
(j) "Eligible Employee" shall mean an Employee who is employed in a
position meeting the defined eligibility criteria for participation in the
Plan, as set forth in Article 3.
(k) "Employee" shall mean an individual employed by an Employer on a
regular, active and full-time salaried basis.
(l) "Employer" shall mean the Corporation or any corporation, organization
or entity controlled by the Corporation.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(n) "Funds" see Section 9.3.
(o) "Implementation Date" see Section 11.5.
(p) "Key Financial Indices" shall mean those indices frequently used by
financial corporations to measure profitability and overall operating
performance. These indices are: return on common equity; return on assets;
overhead ratio; efficiency ratio; net interest margin; total annual return on
common stock; earnings per share; and percent of change in earnings per share,
as determined in accordance with generally accepted accounting principles, and
as appropriately adjusted to take into account the use by different
corporations of different accounting principles. With respect to any Plan
Cycle the Committee shall determine, prior to the Plan Cycle, which indices
are the Key Financial Indices to be used and the weighting to be given each
index; thereafter, such Key Financial Indices and such weightings for such
Plan Cycle shall not be changed.
(q) "Normal Retirement" shall have the same meaning as in the National City
Non-Contributory Retirement Plan at the commencement of the Plan Cycle with
respect to which such definition is relevant.
(r) "Parallel Funds" see Section 9.5.
(s) "Participant" shall mean an Eligible Employee who is approved by the
Committee for participation in the Plan. Such approval shall be on a Plan
Cycle basis and shall be reviewed with respect to each new Plan Cycle.
A-2
<PAGE> 43
(t) "Peer Group" shall mean a group of comparable corporations used to
measure relative performance. Such Peer Group shall be established by the
Committee prior to the commencement of each Plan Cycle; thereafter, such Peer
Group for such Plan Cycle shall not be changed, provided however, that one or
more members of a Peer Group shall be dropped therefrom in the event of the
acquisition of the Peer Group member, the acquisition of sixty-five percent or
more of the gross assets of the Peer Group member or the merger of the Peer
Group member with another company(ies) where the Peer Group member is not the
surviving corporation.
(u) "Plan" see Section 1.1.
(v) "Plan Cycle" shall mean a period of a calendar year.
(w) "SIP" shall mean the National City Savings and Investment Plan.
(x) "Subsidiary" see paragraph 11.3(e).
(y) "Vesting Event" means the earliest to occur of the following dates:
(1) the date any Award is payable hereunder,
(2) the Effective Date of a Change in Control,
(3) the date a Participant is eligible to retire on a Normal Retirement,
(4) the date a Participant has a Disability.
Each Participant and Beneficiary with respect to whom a Vesting Event has
occurred shall be 100% vested in his or her benefits or Awards earned or accrued
hereunder as of the date of such Vesting Event, subject to the forfeiture
provisions of Article 10.
(5) the date of a Participant's death.
(z) "Voting Stock" see paragraph 11.3(e).
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context, any
masculine terminology used herein also shall include the feminine, and the
definition of any term in the singular shall include the plural.
ARTICLE 3.
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Eligibility for participation in the Plan will be limited
to those officers of the Corporation and its subsidiaries who, by the nature and
scope of their position, play a key role in the management, growth and success
of the Corporation, as determined by the Committee.
3.2 PARTICIPATION. Participation in the Plan (including a Participant's
Category) shall be determined by the Committee with respect to each Plan Cycle
prior to the commencement of the Plan Cycle, and shall not thereafter be changed
with respect to such Plan Cycle. The Committee may base
A-3
<PAGE> 44
its decision upon the recommendation of the Chief Executive Officer of National
City Corporation. The Committee shall classify Senior Officers for the purposes
of the Plan into the following categories:
<TABLE>
<CAPTION>
CATEGORY PERSONS INCLUDED
- - ------------------------- ------------------------------------------------------------------
<S> <C>
Category I Chief executive officer of the Corporation
Category II President and deputy chairmen of the Corporation, and similar
officers
Category III Executive vice presidents of the Corporation and the chief
executive officers of major subsidiaries of the Corporation, and
similar officers
Category IV Senior officers of the Corporation and executive officers of major
subsidiaries, and similar officers
Categories V & VI All other officers of the Corporation or its subsidiaries who are
approved for participation in the Plan by the Committee
</TABLE>
Each Eligible Employee approved for participation shall be notified of the
selection as soon after approval as is practicable and shall become a
Participant upon acceptance by him or her of such selection.
3.3 PARTICIPATION FOR PART OF A PLAN CYCLE; CATEGORY CHANGES DURING A PLAN
CYCLE. No Participant shall participate in this Plan for a portion of a Plan
Cycle and changes in a Participant's Category in mid-Plan Cycle shall not serve
to change his or her Category of participation in the Plan for any Plan Cycle
which shall have commenced.
3.4 NO RIGHT TO PARTICIPATE. No Participant or Employee shall have a right
at any time to be selected for current or future participation in the Plan.
ARTICLE 4.
PERFORMANCE MEASUREMENT
4.1 PERFORMANCE CRITERIA. Performance, for purposes of this Plan, will be
measured by corporate results. Corporate results will be measured by comparing
corporate performance with respect to Key Financial Indices to that of the Peer
Group. Prior to the beginning of each Plan Cycle, the Committee shall establish
the Peer Group, the Key Financial Indices, the weighting of the Key Financial
Indices chosen, and the levels of comparative performance at which the presumed
Threshhold, Target and Maximum Awards will be provided under the Plan.
A-4
<PAGE> 45
4.2 AWARD POTENTIAL. The amount of incentive compensation that shall be
awarded to a Participant under this Plan shall be expressed as a percentage of
Base Salary. Such percentage shall equal the percentage set forth below
depending upon the attainment of Target or Maximum results:
<TABLE>
PERCENT OF BASE COMPENSATION
<CAPTION>
CATEGORY THRESHOLD TARGET MAXIMUM
- - ------------- ------------- ------------- -------------
<S> <C> <C> <C>
I 0% 49.5% 76.5%
II 0% 40 % 60 %
III 0% 27 % 42 %
IV 0% 14 % 22 %
V 0% 5 % 8 %
VI 0% 2.5% 5 %
</TABLE>
4.3 AWARD CALCULATION AND APPROVAL. The amount of the Award for each
Participant for each Plan Cycle will be calculated as of the December 31 on
which the Plan Cycle ends by applying the foregoing provisions of this Article 4
to the Corporate Results for such Plan Cycle. All such Awards may, for
convenience purposes, be normally expressed as a percentage of Base Salary. Upon
the close of the Plan Cycle the amounts of Awards hereunder for such Plan Cycle
shall be final.
4.4 LIMITATION. Notwithstanding any provision in this Plan to the contrary,
no Award for any one Plan Cycle shall exceed $1,000,000.00.
ARTICLE 5.
PAYMENT OF AWARDS
5.1 FORM AND TIMING OF PAYMENT OF AWARDS. Within 90 days after the end of
the Plan Cycle, the Participant shall be entitled to receive a cash payment
equal to the entire amount of the Participant's Award. Except as otherwise
provided for in Section 5.2, to receive an Award a Participant must be an
Employee on the date on which the Plan Cycle ends. The Committee may terminate a
Participant's Award prior to any Vesting Event.
5.2 TERMINATION OF EMPLOYMENT DUE TO NORMAL RETIREMENT, DISABILITY OR
DEATH. In the event a Participant's employment is terminated during a Plan
Cycle by reason of Normal Retirement, Disability or Death, the Participant shall
be eligible to receive a prorated Award based on Corporate Results during the
Participant's employment, provided however, that the Participant must have been
a Participant in the Plan for at least three months of the Plan Cycle to be
eligible to receive any Award hereunder. Such Awards will be paid within ninety
(90) days following the end of the Plan Cycle. In the event of death, the Award
will be paid to the Participant's estate.
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<PAGE> 46
5.3 OTHER TERMINATIONS OF EMPLOYMENT. In the event a Participant's
employment is terminated during a Plan Cycle prior to a Vesting Event, the
Participant's participation in a Plan Cycle shall end and the Participant shall
not be entitled to any Award for such Plan Cycle.
5.4 REQUEST TO DEFER PAYMENT; DEFERRED PAYMENTS. A Participant may elect to
request to have a portion or all of his or her Award for such Plan Cycle
deferred and paid out at a future date. Such request shall be considered by the
Committee. The Committee may determine that some, all, or none of the Awards, or
parts thereof, shall be deferred, in its discretion. Deferred amounts are
subject to the provisions of Article 9.
ARTICLE 6.
RIGHTS OF PARTICIPANTS
6.1 EMPLOYMENT. Nothing in this Plan shall interfere with or limit in any
way the right of the Corporation to terminate a Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Employer.
6.2 RESTRICTIONS ON ASSIGNMENTS. The interest of a Participant or his or her
beneficiary under this Plan may not be sold, transferred, assigned, or
encumbered in any manner, either voluntarily or involuntarily, and any attempt
to so anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge
the same shall be null and void; neither shall the benefits hereunder be liable
for or subject to the debts, contracts, liabilities, engagements, or torts of
any person to whom such benefits or funds are payable, nor shall they be subject
to garnishment, attachment, or other legal or equitable process, nor shall they
be an asset in bankruptcy.
ARTICLE 7.
ADMINISTRATION
ADMINISTRATION. The Plan shall be administered by the Committee in accordance
with any administrative guidelines and any rules that may be established from
time to time by the Committee.
The Committee shall have full power and authority to interpret, construe and
administer the Plan and its interpretations and construction hereof, and actions
hereunder, including the timing, form, amount or recipient of any payment to be
made hereunder, and its decisions shall be binding and conclusive on all persons
for all purposes.
The Committee may name assistants who may be, but need not be, members of the
Committee. Such assistants shall serve at the pleasure of the Committee, and
shall perform such functions as may be assigned by the Committee.
No member of the Committee or any assistant shall be liable to any person for
any action taken or omitted in connection with the interpretation and
administration of this Plan unless attributable to his or her own willful
misconduct or lack of good faith.
A-6
<PAGE> 47
ARTICLE 8.
REQUIREMENTS OF LAW
8.1 LAWS GOVERNING. This Plan shall be construed in accordance with and
governed by the laws of the State of Ohio.
8.2 WITHHOLDING TAXES. The Corporation shall have the right to deduct from
all payments under this Plan any federal or state taxes required by the law to
be withheld with respect to such payments.
8.3 PLAN BINDING ON CORPORATION, EMPLOYEES AND THEIR SUCCESSORS. This Plan
shall be binding upon and inure to the benefit of the Corporation, its
successors and assigns and each Participant and his or her beneficiaries, heirs,
executors, administrators and legal representatives.
ARTICLE 9.
DEFERRAL OF AWARDS
9.1 ELECTION TO REQUEST DEFERRAL OF AWARD; DEFERRAL PERCENTAGE. Prior to
each Plan Cycle, the Committee shall determine which Participants, if any, shall
be eligible to make deferral elections under this Plan. Each Participant who is
therefore eligible to elect to request deferral of a portion or all of his or
her Award for such Plan Cycle shall be given the opportunity prior to such Plan
Cycle to make such request. Such election and the percentage of Award requested
to be deferred shall be irrevocable and fixed with respect to such Participant
and such Plan Cycle from and after the December 31 of the year prior to the Plan
Cycle.
The request and determination of the portion of the Award to be deferred shall
be made in terms of 10% increments of the Award.
Promotion or demotion during a Plan Cycle shall not affect the fixed and
irrevocable nature of a deferral request made prior to such Plan Cycle for such
Plan Cycle.
9.2 DEFERRAL OF AWARDS; COMMITTEE'S DECISION. Notwithstanding any request to
defer none, a portion, or all of an Award hereunder submitted by a Participant
pursuant to Section 9.1 above, and notwithstanding the Committee's prior
determination as to the eligibility of any Participant to defer a portion or all
of any Award hereunder, the Committee shall make the decision, in the case of
each Participant, whether or not to defer any portion or all of any
Participant's Award with respect to any Plan Cycle. Such decision shall be made
in the discretion of the Committee. The Committee's discretion extends to the
percentage of any Award to be deferred.
The Committee's decision shall be final and binding on all parties. Any amount
to be deferred shall not be paid to the Participant but shall be deferred as
provided in this Article 9.
9.3 ACCOUNTS. An account shall be established and maintained by the
Corporation in the name of each Participant who has deferred compensation
hereunder. Such accounts shall remain a part of
A-7
<PAGE> 48
the general liabilities of the Corporation and nothing in this Plan shall be
deemed to create a trust or fund of any kind or any fiduciary relationship. Each
Account shall be comprised of ten sub-accounts: (a) the "Savings Account Fund";
(b) the "NCC Stock Fund"; (c) the "Equity Fund"; (d) the "Fixed Income Fund";
(e) the "Money Market Fund"; (f) the "Capital Preservation Fund"; (g) the "Mid
Cap Regional Equity Fund"; (h) the "Equity Income Fund"; (i) the "Equity Index
Fund"; and (j) the "Foreign Equity Fund"; such sub-accounts jointly are herein
called the "Funds".
9.4 CREDITING TO ACCOUNTS. As of the dates of payment of cash Awards made
under this Plan the amount of the Award to be deferred for each Participant
under this Section 9 shall be credited to such Participant's Account, and shall
correspondingly be credited to the Fund or Funds selected by the Participant.
9.5 FUNDS. The nine Funds hereunder other than the Savings Account Fund
(such nine Funds being herein called "Parallel Funds") are designed to reflect
investment funds maintained in the SIP. Accordingly, each such Parallel Fund and
each Participant's Account therein shall be adjusted hereunder as of the end of
each month to reflect the income, gain or loss of the corresponding SIP
investment fund for such month, as calculated and published on a monthly basis
by the Trustee of the SIP.
In the event the SIP no longer offers a fund corresponding to one of the
Parallel Funds, the amounts which would have been deemed invested in such
Parallel Fund except for this provision shall be deemed to be invested in the
Savings Account Fund.
9.6 SAVINGS ACCOUNT FUND. Amounts deferred to the Savings Account Fund shall
be credited to the Participant's Account in such Fund as of the date that other
Awards for such Plan Cycle are paid or would be paid, and interest shall be
credited on amounts in the Participant's Account in such Fund at the end of each
calendar quarter in an amount equal to interest on the average credit balance in
such Account during such calendar quarter, at the highest published rate being
paid by National City Bank on savings or time deposits of less than $100,000 on
the last day of such quarter, regardless of maturity.
9.7 SELECTION OF FUNDS. Each Participant (and each Beneficiary of a deceased
Participant) may select the Investment Fund or Funds he or she wishes to be used
hereunder for his or her account. The selection of Funds shall be made in
portions of the amount deferred equal to 5% of the total of such amounts. In the
event no election is made by a Participant (or Beneficiary) his or her account
shall be deemed invested in and credited to the Savings Account Fund.
Selection of Funds by Participants shall be made no later than the December 1
of the Plan Cycle for which the Award is to be made in advance of the deferral
or payment of the Award; provided however, that in the event a Participant who
has not requested a deferral of any part of his or her Award nevertheless has a
portion thereof deferred by decision of the Committee, or otherwise, then in
such event, such Participant shall immediately be given an election period of 10
days to determine appropriate investments, such period running from the date of
his or her notification of his or her right to make such selection.
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<PAGE> 49
9.8 NO CHANGE OF INVESTMENT FUND SELECTION PERMITTED EXCEPT WITH COMMITTEE
APPROVAL. Each selection of a Fund hereunder shall be final and shall not
thereafter be revised or changed, provided, however, that each Participant (or
Beneficiary if the Participant is deceased) may request a change in his or her
Investment Fund choice by filing such request with the Committee.
Notwithstanding the foregoing, the consent of the Committee shall be necessary
for any such change in investment fund choices; such consent is discretionary in
the Committee and the Committee shall act upon such requests as are filed with
it at the Committee's next regularly scheduled meeting.
9.9 VESTING OF DEFERRED AMOUNTS. Amounts of Awards made and deferred under
the Plan, and earnings and gains thereon, are always 100% vested.
9.10 MANNER OF DISTRIBUTION. Except as otherwise provided herein,
distributions hereunder shall take place over a period of ten years commencing
on the retirement, death or other termination of employment of the Participant.
The first distribution shall take place on the February 1 of the calendar year
following the calendar year in which such retirement, death or other termination
occurs. Succeeding payments shall be made on succeeding February 1sts.
The amount to be distributed shall be determined by multiplying (i) the dollar
value of the Participant's entire interest hereunder on the date of such
installment, by (ii) a fraction, the numerator of which is one, and the
denominator of which is the number of distributions remaining unpaid at such
time, or by such other method as may be adopted by the Committee. The balances
of each Account and each Investment Fund shall be appropriately reduced to
reflect the distribution payments made. Amounts held pending distribution
pursuant to this Section 9.10 shall continue to be credited with appropriate
income, gains and losses as herein otherwise provided and shall be subject to
investment changes as herein provided. Balances in more than one Fund shall be
reduced pro-rata to reflect distributions on a pro-rata basis from each Fund.
9.11 ACCELERATED PAYMENTS; REVISED DISTRIBUTIONS. Notwithstanding the
foregoing or any Participant's request to receive a lump sum distribution, the
Committee, in its sole discretion, may determine that a Participant's interest
hereunder or any portion thereof shall be paid out in a lump sum. A Participant
may elect, not less than twelve months prior to the date of such Participant's
termination by reason of Early Retirement or Normal Retirement, to request that
amounts deferred be paid out in lump sum. Such election shall be irrevocable and
fixed with respect to such Participant from and after twelve months prior to the
such retirement date of the Participant. The Committee's decision with respect
to a lump sum distribution shall be final and binding on all parties.
In the event the Committee determines to make a lump sum distribution, such
lump sum distribution shall be paid on the next succeeding February 1st based on
the Participant's Account balances as of the December 31st immediately preceding
such lump sum distribution payment, or at such other times as may be determined
by the Committee.
In the case of the first distribution after the death of a Participant, the
Committee may, in its discretion, provide for payment of a portion or all of the
distribution prior to the February 1 after such death.
A-9
<PAGE> 50
Notwithstanding any other provision hereof, the Committee, in its discretion,
may provide that distributions may be made in a lesser number of installments,
but not less than 5.
9.12 BENEFICIARY DESIGNATIONS. Each Participant, and each Beneficiary of a
deceased Participant or Beneficiary hereunder, may designate, on a Beneficiary
Designation form supplied by the Committee, any person or persons to whom
payments are to be made if the Participant (or Beneficiary) dies before
receiving payment of all amounts due hereunder. A beneficiary designation will
be effective only after the signed Beneficiary Designation form is filed with an
officer of the Corporation designated by the Committee for such purpose while
the Participant (or Beneficiary) is alive, and will cancel all beneficiary
designations signed and filed earlier. If the Participant (or Beneficiary) fails
to designate a beneficiary as provided above, or if all designated beneficiaries
die before the Participant or before complete payment of all amounts due
hereunder, remaining unpaid distribution amounts shall be paid to the then
surviving spouse of the Participant, if any, or, if there be none, in one lump
sum to the estate of the last to die of the Participant or his or her designated
beneficiaries, if any.
In the event a Participant (or a Beneficiary of a deceased Participant)
designates as a Beneficiary any so called "marital deduction trust" or any so
called "qualified income trust", the Participant (or Beneficiary) may
additionally indicate whether the dollar equivalent of the current income,
during the distribution of an interest hereunder, should be distributed yearly
to such Beneficiary. In the event of such an indication, such income shall be
distributed at least annually.
9.13 PARTICIPANTS RIGHTS; BENEFICIARIES RIGHTS. Except as otherwise
specifically provided, neither a Participant nor any of his or her Beneficiaries
has rights under this Plan. The payment of deferred compensation shall be a
general, unsecured obligation of the Corporation to be paid by the Corporation
from its own funds, and such payments shall not impose any obligation upon any
trust fund for any tax qualified plan, be paid from any such trust fund, or have
any effect whatsoever upon the SIP or the payment of benefits from the Trust
Fund under the SIP. No Participant or beneficiary shall have any title to or
beneficial ownership in any assets which the Corporation may earmark to pay
benefits hereunder.
9.14 NATURE OF DEFERRED COMPENSATION. The election of deferred compensation
under this Plan and any setting aside by the Corporation of amounts with which
to discharge its deferred obligations hereunder in a trust fund, an insurance
policy, or otherwise, shall not be deemed to create a right in any person;
equitable title to any funds so set aside in a trust, an insurance policy, or
otherwise shall remain in the Corporation, and any recipient of benefits
hereunder shall have no security or other interest in such trust, policies or
funds. Any and all funds so set aside in a trust, an insurance policy or
otherwise shall remain subject to the claims of the general creditors of the
Corporation, present and future. This provision shall not require the
Corporation to set aside any funds, but the Corporation may set aside such funds
if it chooses to do so. Any amount so set aside for this Plan shall be accounted
for separately and apart from any other plan of the Corporation. This Plan is
intended to constitute an unfunded plan of deferred compensation described in
Section 201(2) of the Employee Retirement Income Security Act of 1974.
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9.15 DISTRIBUTIONS IN CASH. Notwithstanding any other provision of this
Plan, distributions hereunder shall be made only in cash and shall be subject to
withholding of applicable taxes.
9.16 NATURE OF DEFERRED COMPENSATION PLAN. The provisions of the Plan
relating to deferred compensation are fixed and final unless and until amended,
revised or terminated as herein provided.
ARTICLE 10.
FORFEITURES
Notwithstanding any provision in this Plan to the contrary, excepting only the
provisions of Article 11, in the event the Committee finds:
(a) that an Employee or former Employee who has an interest under this Plan
has been discharged by his or her Employer in the reasonable belief (and such
reasonable belief is the reason or one of the reasons for such discharge) that
the Employee or former Employee did engage in fraud against the Employer or
anyone else, or
(b) that an Employee or former Employee who has an interest under this Plan
has been convicted of a crime as a result of which it becomes illegal for his
Employer to employ him or her,
then any amounts held under this Plan for the benefit of such Employee or former
Employee or his or her beneficiaries shall be forfeited and no longer payable to
such Employee or former Employee or to any person claiming by or through such
Employee or former Employee.
ARTICLE 11.
CHANGE IN CONTROL
11.1 TREATMENT OF AWARDS. In the event of a Change in Control the
Corporation shall pay to each Participant who is participating in a Plan Cycle
on the Effective Date of such Change in Control, a lump sum cash payment equal
to the amount hereinafter determined. Such payment shall be paid in cash to the
Participant within five business days after the Implementation Date of such
Change in Control and shall be payment in full to each Participant for the Plan
Cycle, and such Plan Cycle shall be deemed terminated by operation of this
Article 11. No further Plan Cycles shall commence thereafter under this Plan.
Such cash payment shall be made without regard to any request to defer made
with respect to any such Plan Cycle (which shall be inoperative) and without
regard to any deferral action by the Committee.
Amounts deferred under this Plan prior to the Effective Date (by request, as
required, or as decided by the Committee) shall continue to be payable from time
to time under this Plan as deferred payments hereunder.
11.2 AMOUNT OF PAYMENT. The Amount of the payment to be made as a
consequence of a Change in Control shall, with respect to each Plan Cycle, be
equal to the maximum Award which could be paid hereunder to each Participant.
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11.3 DEFINITION OF CHANGE IN CONTROL. "Change in Control" shall mean the
occurrence of any of the following events:
(a) The Corporation is merged, consolidated or reorganized into or with
another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than sixty-five percent of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
Voting Stock immediately prior to such transaction;
(b) The Corporation sells or otherwise transfers all or substantially all
of its assets to another corporation or other legal person, and as a result of
such sale or transfer less than sixty-five percent of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such sale or transfer is held in the aggregate by the
holders of Voting Stock immediately prior to such sale or transfer;
(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Exchange Act, disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3
or any successor rule or regulation promulgated under the Exchange Act) of
securities representing 15% or more of the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors of the Corporation ("Voting Stock");
(d) The Corporation files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in response to
Form 8-K or Schedule 14A (or any successor schedule, form or report or item
therein) that a change in control of the Corporation has occurred or will
occur in the future pursuant to any then-existing contract or transaction; or
(e) If, during any period of two consecutive years, individuals who at the
beginning of any such period constitute the Directors of the Corporation cease
for any reason to constitute at least a majority thereof; PROVIDED, HOWEVER,
that for purposes of this clause (e) each Director who is first elected, or
first nominated for election by the Corporation's stockholders, by a vote of
at least two-thirds of the Directors of the Corporation (or a committee
thereof) then still in office who were Directors of the Corporation at the
beginning of any such period will be deemed to have been a Director of the
Corporation at the beginning of such period.
Notwithstanding the foregoing provision of paragraphs (c) or (d) above unless
otherwise determined in a specific case by majority vote of the Board, a "Change
in Control" shall not be deemed to have occurred for purposes of paragraphs (c)
or (d) above, solely because (1) the Corporation, (2) an entity in which the
Corporation directly or indirectly beneficially owns 50% or more of the voting
equity securities (a "Subsidiary"), or (3) any employee stock ownership plan or
any other employee benefit plan of the Corporation or any Subsidiary either
files or becomes obligated to file a report or proxy statement under or in
response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) under the Exchange Act
disclosing beneficial ownership by it of shares of Voting Stock, whether in
excess of 15% or otherwise,
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or because the Corporation reports that a change in control of the Corporation
has occurred or will occur in the future by reason of such beneficial ownership.
11.4 EFFECTIVE DATE OF CHANGE IN CONTROL. Notwithstanding the foregoing, in
the event a Change in Control ultimately results from discussions or
negotiations involving the Corporation or any of its officers or directors, the
"Effective Date" of such Change in Control shall be the date such discussions or
negotiations commenced; otherwise, such Effective Date of a Change in Control
shall be the Implementation Date of such Change in Control.
11.5 IMPLEMENTATION DATE OF CHANGE IN CONTROL. The "Implementation Date"
shall be the earliest to occur of the events specified in paragraphs (a), (b),
(c), (d) or (e) of Section 11.3. As used herein, the Implementation Date of
Change in Control shall be the last date of the then current Plan Cycle.
11.6 EFFECT OF CHANGE IN CONTROL. In addition to other vesting under the
Plan, the opportunity of a Participant to participate to the end of the current
Plan Cycle is vested in such Participant in the event of a Change in Control, as
of the Effective Date of such Change in Control.
ARTICLE 12.
MISCELLANEOUS
In the event of the liquidation of the Corporation the Committee may make any
provisions for holding, handling and distributing the amounts standing to the
credit of the Participants or beneficiaries hereunder which, in the discretion
of the Committee, are appropriate and equitable under all circumstances and
which are consistent with the spirit and purposes of these provisions.
ARTICLE 13.
AMENDMENT AND DISCONTINUANCE
The Corporation expects to continue this Plan indefinitely, but reserves the
right, by action of its shareholders, to amend it from time to time, or to
discontinue it. However, if the Corporation should amend or discontinue this
Plan, the Corporation shall remain obligated under the Plan with respect to (1)
Awards made final (and thus payable) by decision by the Committee prior to the
date of such amendment or discontinuance, (2) Awards and rights of any
Participant or beneficiary with respect to whom a Vesting Event has occurred,
and (3) with respect to amounts deferred prior to the date of such amendment or
discontinuance.
Executed this day of , 1994 at Cleveland, Ohio.
NATIONAL CITY CORPORATION
By:
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<PAGE> 54
EXHIBIT B
NATIONAL CITY CORPORATION
LONG-TERM INCENTIVE COMPENSATION PLAN
FOR SENIOR OFFICERS
AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1995
ARTICLE 1.
ESTABLISHMENT AND PURPOSE OF PLAN
1.1 ESTABLISHMENT OF THE PLAN. The following are the provisions of the
National City Corporation Long-Term Incentive Compensation Plan for Senior
Officers (herein referred to as the "Plan"), effective as of January 1, 1995,
which is an amendment and restatement of the National City Corporation Long-Term
Incentive Compensation Plan for Senior Officers effective January 1, 1994
("Predecessor Plan"). The Predecessor Plan was, in turn, an amendment,
restatement and continuation of prior plans entitled "National City Corporation
Long-Term Incentive Compensation Plan for Senior Officers" in effect prior to
January 1, 1994 ("Prior Plans").
The Plan shall be effective for all purposes with respect to Plan Cycles
commencing on or after January 1, 1995, and with respect to all determinations
to be made (without regard to the date a Plan Cycle commenced) on or after such
date (including but not limited to determinations of eligibility to participate,
amounts of Awards, and entitlement to Awards).
1.2 PURPOSE. The purpose of the Plan is to maximize the returns to
stockholders and to promote the long-term profitability and success of the
Corporation by providing an incentive to those key executives of the Corporation
who are primarily responsible for such profitability and success.
1.3 OPERATION OF THE PLAN. The Plan shall be administered by the
Compensation and Organization Committee of the Board of Directors of the
Corporation. A Plan Cycle of three years will be established each year that the
Plan is in operation. Once an Award is made under the Plan the Plan shall serve
as a non-qualified plan providing for deferred compensation at the election of
the Participant and/or the Committee, as provided hereunder.
ARTICLE 2.
DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms shall have the
meanings set forth below, unless otherwise expressly provided. When the defined
meaning is intended, the term is capitalized.
(a) "Active Participant" shall mean an Eligible Employee who is approved by
the Committee for participation in a Plan Cycle of the Plan. Such approval
shall be determined with respect to each
B-1
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Plan Cycle prior to March 31 of the first year of that Plan Cycle, and shall
be redetermined with respect to each new Plan Cycle.
(b) "Average Stock Price" shall be determined with respect to each Plan
Cycle for the month of December prior to such Plan Cycle (the Average Stock
Price at the beginning of the Plan Cycle) and for the last full calendar month
of the Plan Cycle (the Average Stock Price at the end of the Plan Cycle) and
shall mean the arithmetic mean (the average) of the closing prices of a share
of common stock of a company as reported on any national securities exchange
(or by any national quotation system accepted by the Committee for this
purpose) for each of the trading days (on which such shares were traded) in
such calendar month. If the shares of common stock are not then so traded or
regularly reported, the stock price shall be determined by such means as the
Committee shall determine. Notwithstanding the foregoing, the Committee may
determine prior to the start of a Plan Cycle that a different set of time
periods are appropriate for measuring performance under the Plan, and such
different time periods may be used to determine Average Stock Prices at the
beginning and the end of such Plan Cycle.
(c) "Award" shall mean the payment earned by a Participant based on
comparison of the Corporation's actual results with the performance of a peer
group of companies.
(d) "Base Salary" shall mean the average annual salary of an employee
during that portion, or all of the Plan Cycle for which he or she is an Active
Participant, exclusive of any bonuses, incentive pay, special awards, or stock
options.
(e) "Board" shall mean the Board of Directors of the Corporation.
(f) "Committee" shall mean the Compensation and Organization Committee of
the Board, or another committee appointed by the Board to serve as the
administering committee of the Plan.
(g) "Corporation" shall mean National City Corporation, a Delaware
corporation.
(h) "Early Retirement" shall have the same meaning as in the National City
Corporation Non-Contributory Retirement Plan as in existence at the
commencement of the Plan Cycle with respect to which such definition is
relevant.
(i) "Disability" shall have the same meaning as the term "Long Term
Disability" has in the National City Corporation Long-Term Disability Plan as
in existence at the commencement of the Plan Cycle with respect to which such
definition is relevant.
(j) "Effective Date" see Section 12.4.
(k) "Eligible Employee" shall mean an Employee who is employed in a
position meeting the defined eligibility criteria for participation in the
Plan, as set forth in Article 3.
(l) "Employee" shall mean an individual employed by an Employer on a
regular active and full-time salaried basis.
(m) "Employer" shall mean the Corporation or any corporation, organization
or entity controlled by the Corporation.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(o) "Funds" shall mean the Funds provided for in Article 10 hereof.
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<PAGE> 56
(p) "Implementation Date" see Section 12.4.
(q) "Inactive Participant" shall mean an individual who was an Active
Participant in the Plan for a Plan Cycle who is not currently an Active
Participant for a Plan Cycle but who continues to have an interest under the
Plan.
(r) "Mandatory Deferrals" shall mean those deferrals required to be
deferred pursuant to Section 10.3 of the Predecessor Plan.
(s) "Normal Retirement" shall have the same meaning as in the National City
Corporation Non-Contributory Retirement Plan as in existence at the
commencement of the Plan Cycle with respect to which such definition is
relevant.
(t) "Parallel Funds" see Section 10.5.
(u) "Participant" shall mean and include all Active Participants and all
Inactive Participants.
(v) "Peer Group" shall mean a group of comparable corporations used to
measure relative performance. Such Peer Group shall be established by the
Committee for each Plan Cycle prior to the commencement of the Plan Cycle, and
shall not thereafter be changed with respect to such Plan Cycle, provided,
however, that one or more members of a Peer Group shall be dropped therefrom
in the event of the acquisition of the Peer Group Member, the acquisition of
sixty-five percent or more of the gross assets of the Peer Group Member or the
merger of the Peer Group Member with another company(ies) where the Peer Group
Member is not the surviving corporation.
(w) "Plan" shall mean this National City Corporation Long-Term Incentive
Compensation Plan for Senior Officers Effective January 1, 1995, which is an
amendment and restatement of the Predecessor Plan.
(x) "Plan Cycle" shall mean a period of three consecutive fiscal years of
the Corporation and shall be referred to by the fiscal year in which a
particular Plan Cycle commences.
(y) "Predecessor Plan" see Section 1.1.
(z) "Prior Plan" see Section 1.1.
(aa) "SIP" shall mean the National City Savings and Investment Plan.
(bb) "Subsidiary" see paragraph 12.3(e)
(cc) "Total Stockholder Return" with respect to a stock shall be calculated
in the following manner:
(i) Add the Average Stock Price at the end of the Plan Cycle for such
stock to the dividends paid on the stock during the Plan Cycle, and then
subtract the Average Stock Price at the beginning of the Plan Cycle for
such stock.
(ii) Divide the resulting sum of (i) above by the Average Stock Price at
the beginning of the Plan Cycle for such stock.
(iii) The result equals Total Stockholder Return with respect to such
stock for the Plan Cycle.
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<PAGE> 57
(dd) "Vesting Event" shall mean the earliest to occur of the following
events:
(1) the date any Award is payable hereunder,
(2) the Effective Date of a Change in Control,
(3) the date a Participant is eligible to retire on a Normal
Retirement,
(4) the date a Participant incurs a Disability,
(5) the date of a Participant's death.
Each Participant and Beneficiary with respect to whom a Vesting Event has
occurred shall be 100% vested in his or her benefits or Awards earned or
accrued hereunder as of the date of such Vesting Event, subject to the
forfeiture provisions of Article 12.
(ee) "Voting Stock" see paragraph 12.3(e).
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context, any
masculine terminology used herein also shall include the feminine, and the
definition of any term in the singular shall include the plural.
ARTICLE 3.
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Eligibility for participation in the Plan will be limited
to those senior officers of the Corporation and its subsidiaries who, by the
nature and scope of their positions, are materially responsible for the
management, growth, and overall success of the Corporation, as determined by the
Committee.
<TABLE>
3.2 PARTICIPATION. Participation in the Plan shall be determined by the
Committee with respect to each Plan Cycle prior to the commencement of the Plan
Cycle. The Committee may base its approval upon the recommendation of the Chief
Executive Officer of National City Corporation. The Committee shall classify
senior officers for the purposes of the Plan into the following categories:
<CAPTION>
CATEGORY PERSONS INCLUDED
- - -------------- -------------------------------------------------------------------
<S> <C>
Category I Chief executive officer of the corporation
Category II President and deputy chairmen of the Corporation and similar
officers
Category III Executive officers of the Corporation and Executive officers of
major subsidiaries of the Corporation and similar officers
Category IV Senior officers of the Corporation and senior officers of
subsidiaries of the Corporation and similar officers
</TABLE>
Each Eligible Employee approved for participation shall be notified of the
selection as soon after approval as is practicable and shall become a
Participant upon acceptance by him or her of such
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<PAGE> 58
selection; provided however, that after December 31, 1994, no Eligible Employee
shall become a Participant in the Plan with respect to any Plan Cycle after the
commencement of such Plan Cycle.
3.3 PARTIAL PLAN CYCLE PARTICIPATION; CATEGORY CHANGES DURING A PLAN
CYCLE. After December 31, 1994 there shall be no participation in partial Plan
Cycles and a Participant's change in Categories during a Plan Cycle shall not
result in any change in participation in the Plan with respect to such Plan
Cycle.
3.4 NO RIGHT TO PARTICIPATE. No Participant or Employee shall have a right
at any time to be selected for current or future participation in the Plan.
ARTICLE 4.
AWARD DETERMINATION
4.1 PEER GROUP AND THRESHOLD, TARGET AND MAXIMUM AWARDS FOR EACH PLAN CYCLE.
Prior to the beginning of the Plan Cycle the Committee shall establish Threshold
Award, Target Award and Maximum Award performance levels for the Plan Cycle,
against which the Total Stockholder Return of the Corporation for the Plan Cycle
shall be compared to other members of the Peer Group based on ranking of Plan
Cycle results of the Corporation and members of the Peer Group. The Committee
shall also determine the membership of the Peer Group for the Plan Cycle at such
time.
<TABLE>
4.2 AWARD. The amount of incentive compensation that shall be awarded to a
Participant under this Plan shall be expressed as a percentage of Base Salary.
Such percentage shall be determined on the basis of the attainment, or lack of
attainment, by the Corporation of the Threshold, Target or Maximum performance,
as follows:
<CAPTION>
PERCENT OF BASE COMPENSATION
- - -----------------------------------------------------------
BELOW
CATEGORY THRESHOLD THRESHOLD TARGET MAXIMUM
- - --------- --------- --------- ------ -------
<S> <C> <C> <C> <C>
I 0% 30% 50% 100%
II 0% 24% 40% 80%
III 0% 18% 30% 60%
IV 0% 12% 20% 40%
</TABLE>
4.3 LIMITATION. Notwithstanding any provision in this Plan to the contrary,
no Award for any one Plan Cycle shall exceed $1,000,000.00.
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ARTICLE 5.
PAYMENT OF AWARDS
5.1 FORM AND TIMING OF PAYMENT OF AWARDS. Within 90 days after the end of
the Plan Cycle, the Participants shall be entitled to receive a cash payment
equal to the entire amount of each Participant's Award. Except as otherwise
provided for in Section 6.1, to receive an Award a Participant must be an
Employee on the date on which the Plan Cycle ends. The Committee may terminate a
Participant's Award prior to any Vesting Event.
5.2 REQUEST TO DEFER PAYMENT; DEFERRED PAYMENTS. A Participant may elect to
request to have a portion or all of his or her Award for a Plan Cycle deferred
and paid out at a future date. Such request shall be considered by the
Committee. The Committee may determine that some, all, or none of the Awards, or
parts thereof, shall be deferred in its discretion. Deferred amounts are subject
to the provisions of Article 10.
ARTICLE 6.
TERMINATION OF EMPLOYMENT
6.1 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR NORMAL
RETIREMENT. In the event a Participant's employment is terminated during a Plan
Cycle at or after the occurrence of a Vesting Event other than a Change in
Control the Participant shall be eligible to receive a pro-rated Award
reflecting his or her partial participation. This pro-ration shall be determined
by multiplying the Award by a fraction the numerator of which is the number of
full months of participation to the date participation ends, and the denominator
of which is 36. The Award thus determined shall be payable as soon as
practicable following the end of the Plan Cycle.
6.2 OTHER TERMINATIONS OF EMPLOYMENT. In the event a Participant's
employment is terminated during a Plan Cycle prior to a Vesting Event, the
Participant's participation in such Plan Cycle shall end and the Participant
shall not be entitled to any Award for such Plan Cycle.
ARTICLE 7.
RIGHTS OF PARTICIPANTS
7.1 EMPLOYMENT. Nothing in this Plan shall interfere with or limit in any
way the right of the Corporation to terminate a Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Corporation.
7.2 RESTRICTIONS ON ASSIGNMENTS. The interest of a Participant or his or her
beneficiary under this Plan may not be sold, transferred, assigned, or
encumbered in any manner, either voluntarily or involuntarily, and any attempt
to so anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge
the same shall be null and void; neither shall the benefits hereunder be liable
for or subject to the debts, contracts, liabilities, engagements, or torts of
any person to whom such benefits or funds
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<PAGE> 60
are payable, nor shall they be subject to garnishment, attachment, or other
legal or equitable process, nor shall they be an asset in bankruptcy.
ARTICLE 8.
ADMINISTRATION
ADMINISTRATION. The Plan shall be administered by the Committee in accordance
with any administrative guidelines and any rules that may be established from
time to time by the Committee. The procedures, standards and provisions of this
Plan for determining eligibility for and amounts of Awards in themselves confer
no rights, duties or privileges upon Participants nor place obligations upon
either the Board or the Corporation. Accordingly, the Committee may, in making
such determinations hereunder, deviate from such procedures and standards in
whatever manner that it, in its judgment, deems appropriate.
The Committee shall have full power and authority to interpret, construe and
administer the Plan and its interpretations and construction hereof, and actions
hereunder, including the timing, form, amount or recipient of any payment to be
made hereunder, and its decisions shall be binding and conclusive on all persons
for all purposes.
The Committee may name assistants who may be, but need not be, members of the
Committee. Such assistants shall serve at the pleasure of the Committee, and
shall perform such functions as are provided for herein and such other functions
as may be assigned by the Committee.
No member of the Committee or any assistant shall be liable to any person for
any action taken or omitted in connection with the interpretation and
administration of this Plan unless attributable to his or her own willful
misconduct or lack of good faith.
ARTICLE 9.
REQUIREMENTS OF LAW
9.1 LAWS GOVERNING. This Plan shall be construed in accordance with and
governed by the laws of the State of Ohio.
9.2 WITHHOLDING TAXES. The Corporation shall have the right to deduct from
all payments under this Plan any federal or state taxes required by the law to
be withheld with respect to such payments.
9.3 PLAN BINDING ON CORPORATION, EMPLOYEES AND THEIR SUCCESSORS. This Plan
shall be binding upon and inure to the benefit of the Corporation, its
successors and assigns and each Participant and his or her beneficiaries, heirs,
executors, administrators and legal representatives.
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ARTICLE 10.
DEFERRAL OF AWARDS
10.1 ELECTION TO REQUEST DEFERRAL OF AWARD; DEFERRAL PERCENTAGE. Each Active
Participant shall be given the opportunity, prior to the final year of each Plan
Cycle, to elect to request deferral of a portion or all of his or her Award for
each Plan Cycle. The Participant may not change his election with respect to a
Plan Cycle from and after the December 31 of the year prior to the final year of
the Plan Cycle.
10.2 DEFERRAL OF AWARDS; COMMITTEE'S DECISION. Notwithstanding any request
to defer none, a portion, or all of an Award hereunder submitted by a
Participant pursuant to Section 10.1 above, the Committee shall make the
decision, in each case, whether or not to defer any portion or all of any
Participant's Award with respect to any Plan Cycle. Such decision shall be made
in the discretion of the Committee. The Committee's discretion extends to the
percentage of any Award to be deferred.
The Committee's decision shall be final and binding on all parties. Any amount
to be deferred shall not be paid to the Participant but shall be deferred as
provided in this Article 10.
10.3 REQUIRED DEFERRAL. If any Mandatory Deferrals were made, the amount
deferred shall yield such return as the Funds to which the deferral is credited
in accordance with this Section 10. Any Mandatory Deferrals as adjusted pursuant
to Section 9.6 of this Plan shall be paid at the earliest possible time and to
the maximum extent possible such that a deduction for such payment would not be
disallowed pursuant to the Internal Revenue Code Section 162(m)(1).
10.4 ACCOUNTS. An account shall be established and maintained by the
Corporation in the name of each Participant who has deferred compensation
hereunder. Such accounts shall remain a part of the general liabilities of the
Corporation and nothing in this Plan shall be deemed to create a trust or fund
of any kind or any fiduciary relationship. Each Account shall be comprised of
ten sub-accounts: (a) the "Savings Account Fund"; (b) the "NCC Stock Fund"; (c)
the "Equity Fund"; (d) the "Fixed Income Fund"; (e) the "Money Market Fund"; (f)
the "Capital Preservation Fund"; (g) the "Mid Cap Regional Equity Fund"; (h) the
"Equity Income Fund"; (i) the "Equity Index Fund;" and (j) the "Foreign Equity
Fund"; such sub-accounts jointly are herein called the "Funds".
10.5 CREDITING TO ACCOUNTS. As of the dates of payment of cash Awards made
under this Plan the amount of the Award to be deferred for each Participant
under this Section 10 shall be credited to such Participant's Account, and shall
correspondingly be credited to the Fund or Funds selected by the Participant.
10.6 FUNDS. The nine Funds hereunder other than the Savings Account Fund
(such nine Funds being herein called "Parallel Funds") are designed to reflect
investment funds maintained in the SIP. Accordingly, each such Parallel Fund and
each Participant's Account therein shall be adjusted hereunder as of the end of
each month to reflect the income, gain or loss of the corresponding SIP
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investment fund for such month, as calculated and published on a monthly basis
by the Trustee of the SIP.
In the event the SIP no longer offers a fund corresponding to one of the
Parallel Funds, the amounts which would have been deemed invested in such
Parallel Fund except for this provision shall be deemed to be invested in the
Savings Account Fund.
10.7 SAVINGS ACCOUNT FUND. Amounts deferred to the Savings Account Fund
shall be credited to the Participant's Account in such Fund as of the date that
other Awards for such Plan Cycle are paid or would be paid, and interest shall
be credited on amounts in the Participant's Account in such Fund at the end of
each calendar quarter in amount equal to interest on the average credit balance
in such Account during such calendar quarter, at the highest published rate
being paid by National City Bank on savings or time deposits of less than
$100,000 on the last day of such quarter, regardless of maturity.
10.8 SELECTION OF FUNDS. Each Participant (and each Beneficiary of a
deceased Participant) may select the Investment Fund or Funds he or she wishes
to be used hereunder for his or her account. The selection of Funds shall be
made in portions of the amount deferred equal to 5% of the total of such
amounts. In the event no election is made by a Participant (or Beneficiary) his
or her account shall be deemed invested in and credited to the Savings Account
Fund.
Selection of Funds by Participants shall be made no later than the earlier of
December 1 of the final year of a Plan Cycle or the deferral or payment of the
Award; provided however, that in the event a Participant who has not requested a
deferral of any part of his or her Award nevertheless has a portion thereof
deferred by decision of the Committee, then in such event, such Participant
shall be given an election period of 10 days to determine appropriate
investments, such period running from the date of his or her notification of the
Committee's action.
10.9 NO CHANGE OF INVESTMENT FUND SELECTION PERMITTED EXCEPT WITH COMMITTEE
APPROVAL. Each selection of a Fund hereunder shall be final and shall not
thereafter be revised or changed, provided, however, that each Participant (or
Beneficiary if the Participant is deceased) may request a change in his or her
Investment Fund choice by filing such request with the Committee.
Notwithstanding the foregoing, the consent of the Committee shall be necessary
for any such change in investment fund choices; such consent is discretionary in
the Committee and the Committee shall act upon such requests as are filed with
it at the Committee's next regularly scheduled meeting.
10.10 VESTING OF DEFERRED AMOUNTS. Amounts of Awards made and deferred under
the Plan, and earnings and gains thereon, are always 100% vested.
10.11 MANNER OF DISTRIBUTION. Except as otherwise provided herein,
distributions hereunder shall take place over a period of ten years commencing
on the retirement, death or other termination of employment of the Participant.
The first distribution shall take place on the February 1 of the calendar year
following the calendar year in which such retirement, death or other termination
occurs. Succeeding payments shall be made on succeeding February 1sts.
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The amount to be distributed shall be determined by multiplying (i) the dollar
value of the Participant's entire interest hereunder on the date of such
installment, by (ii) a fraction, the numerator of which is one, and the
denominator of which is the number of distributions remaining unpaid at such
time, or by such other method as may be adopted by the Committee.
The balances of each Account and each Investment Fund shall be appropriately
reduced to reflect the distribution payments made. Amounts held pending
distribution pursuant to this Paragraph 10.10 shall continue to be credited with
appropriate income, gains and losses as herein otherwise provided and shall be
subject to investment changes as herein provided. Balances in more than one Fund
shall be reduced pro-rata to reflect distributions on a pro-rata basis from each
Fund.
10.12 ACCELERATED PAYMENTS; REVISED DISTRIBUTIONS. Notwithstanding the
foregoing or any Participant's request to receive a lump sum distribution, the
Committee, in its sole discretion, may determine that a Participant's interest
hereunder or any portion thereof shall be paid out in a lump sum. A Participant
may elect, not less than twelve months prior to the date of such Participant's
termination by reason of Early Retirement or Normal Retirement, to request that
amounts deferred be paid out in lump sum. Such election shall be irrevocable and
fixed with respect to such Participant from and after twelve months prior to the
such retirement date of the Participant. The Committee's decision with respect
to a lump sum distribution shall be final and binding on all parties.
In the event the Committee determines to make a lump sum distribution, such
lump sum distribution shall be paid on the next succeeding February 1st based on
the Participant's Account balances as of the December 31st immediately preceding
such lump sum distribution payment, or at such other times as may be determined
by the Committee.
In the case of the first distribution after the death of a Participant, the
Committee may, in its discretion, provide for payment of a portion or all of the
distribution prior to the February 1 of the calendar year following the calendar
year of such death, or at such other time as may be determined by the Committee.
Notwithstanding any other provision hereof, the Committee, in its discretion,
may provide that distributions may be made in a lesser number of installments,
but not less than 5.
10.13 BENEFICIARY DESIGNATIONS. Each Participant, and each Beneficiary of a
deceased Participant or Beneficiary hereunder, may designate, on a Beneficiary
Designation form supplied by the Committee, any person or persons to whom
payments are to be made if the Participant (or Beneficiary) dies before
receiving payment of all amounts due hereunder. A beneficiary designation will
be effective only after the signed Beneficiary Designation form is filed with an
officer of the Corporation designated by the Committee for such purpose while
the Participant (or Beneficiary) is alive, and will cancel all beneficiary
designations signed and filed earlier. If the Participant (or Beneficiary) fails
to designate a beneficiary as provided above, or if all designated beneficiaries
die before the Participant or before complete payment of all amounts due
hereunder, remaining unpaid distribution amounts shall be paid to the then
surviving spouse of the Participant, if any, or, if there be none, in one lump
sum to the estate of the last to die of the Participant or his or her designated
beneficiaries, if any.
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In the event a Participant (or a Beneficiary of a deceased Participant)
designates as a Beneficiary any so called "marital deduction trust" or any so
called "qualified income trust", the Participant (or Beneficiary) may
additionally indicate whether the dollar equivalent of the current income,
during the distribution of an interest hereunder, should be distributed yearly
to such Beneficiary. In the event of such an indication, such income shall be
distributed at least annually.
10.14 PARTICIPANTS RIGHTS; BENEFICIARIES RIGHTS. Except as otherwise
specifically provided, neither a Participant nor any of his or her Beneficiaries
has rights under this Plan. The payment of deferred compensation shall be a
general, unsecured obligation of the Corporation to be paid by the Corporation
from its own funds, and such payments shall not impose any obligation upon any
trust fund for any tax qualified plan, be paid from any such trust fund, or have
any effect whatsoever upon the SIP or the payment of benefits from the Trust
Fund under the SIP. No Participant or beneficiary shall have any title to or
beneficial ownership in any assets which the Corporation may earmark to pay
benefits hereunder.
10.15 NATURE OF DEFERRED COMPENSATION. The election of deferred compensation
under this Plan and any setting aside by the Corporation of amounts with which
to discharge its deferred obligations hereunder in a trust fund, an insurance
policy, or otherwise, shall not be deemed to create a right in any person;
equitable title to any funds so set aside in a trust, an insurance policy, or
otherwise shall remain in the Corporation, and any recipient of benefits
hereunder shall have no security or other interest in such trust, policies or
funds. Any and all funds so set aside in a trust, an insurance policy or
otherwise shall remain subject to the claims of the general creditors of the
Corporation, present and future. This provision shall not require the
Corporation to set aside any funds, but the Corporation may set aside such funds
if it chooses to do so. Any amount so set aside for this Plan shall be accounted
for separately and apart from any other plan of the Corporation. This Plan is
intended to constitute an unfunded plan of deferred compensation described in
Section 201(2) of the Employee Retirement Income Security Act of 1974.
10.16 DISTRIBUTIONS IN CASH. Notwithstanding any other provision of this
Plan, distributions hereunder shall be made only in cash and shall be subject to
withholding of applicable taxes.
10.17 NATURE OF DEFERRED COMPENSATION PLAN. The provisions of the Plan
relating to deferred compensation are fixed and final unless and until amended,
revised or terminated as herein provided.
ARTICLE 11.
FORFEITURES
Notwithstanding any provision in this Plan to the contrary excepting only the
provisions of Article 12, in the event the Committee finds
(a) that an Employee or former Employee who has an interest under this Plan
has been discharged by his or her Employer in the reasonable belief (and such
reasonable belief is the reason
B-11
<PAGE> 65
or one of the reasons for such discharge) that the Employee or former Employee
did engage in fraud against the Employer or anyone else, or
(b) that an Employee or former Employee who has an interest under this Plan
has been convicted of a crime as a result of which it becomes illegal for his
Employer to employ him or her,
then any amounts held under this Plan for the benefit of such Employee or former
Employee or his or her beneficiaries shall be forfeited and no longer payable to
such Employee or former Employee or to any person claiming by or through such
Employee or former Employee.
ARTICLE 12.
CHANGE IN CONTROL
12.1 TREATMENT OF AWARDS. In the event of a Change in Control the
Corporation shall pay to each Active Participant on the Implementation Date of
such Change in Control a lump sum cash payment equal to the amount hereinafter
determined. Such payment shall be payable in cash to the Participant within five
business days after the Implementation Date of such Change in Control and shall
be payment in full to each such Participant for such Plan Cycle, each of which
shall be deemed terminated by operation of this Article 12. No further Plan
Cycles shall commence thereafter under this Plan.
Such cash payment shall be made without regard to any request to defer made
with respect to any such Plan Cycle (which shall be inoperative) and without
regard to any deferral action by the Committee.
Amounts deferred under this Plan prior to the Effective Date (by request, as
required, or as decided by the Committee) shall continue to be payable from time
to time under this Plan as deferred payments hereunder.
12.2 AMOUNT OF PAYMENT. The amount of the payment to be made as a
consequence of a Change in Control shall, with respect to each Plan Cycle, be
equal to the Maximum Award level (without regard to stockholder return during
such abbreviated Plan Cycle) for the Participant for such Plan Cycle multiplied
by a fraction the numerator of which is the number of full months completed from
the commencement of the Plan Cycle to the Implementation Date of the Change in
Control, and the denominator of which is 36.
12.3 DEFINITION OF CHANGE IN CONTROL. Change in Control shall mean the
occurrence of any of the following events:
(a) The Corporation is merged, consolidated or reorganized into or with
another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than sixty-five percent of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
Voting Stock immediately prior to such transaction;
B-12
<PAGE> 66
(b) The Corporation sells or otherwise transfers all or substantially all
of its assets to another corporation or other legal person, and as a result of
such sale or transfer less than sixty-five percent of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such sale or transfer is held in the aggregate by the
holders of Voting Stock immediately prior to such sale or transfer;
(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Exchange Act disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3
or any successor rule or regulation promulgated under the Exchange Act) of
securities representing 15% or more of the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors of the Corporation ("Voting Stock");
(d) The Corporation files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in response to
Form 8-K or Schedule 14A (or any successor schedule, form or report or item
therein) that a change in control of the Corporation has occurred or will
occur in the future pursuant to any then-existing contract or transaction; or
(e) If, during any period of two consecutive years, individuals who at the
beginning of any such period constitute the Directors of the Corporation cease
for any reason to constitute at least a majority thereof; provided, however,
that for purposes of this clause (e) each Director who is first elected, or
first nominated for election by the Corporation's stockholders, by a vote of
at least two-thirds of the Directors of the Corporation (or a committee
thereof) then still in office who were Directors of the Corporation at the
beginning of any such period will be deemed to have been a Director of the
Corporation at the beginning of such period.
Notwithstanding the foregoing provision of paragraphs (c) or (d) above unless
otherwise determined in a specific case by majority vote of the Board, a "Change
in Control" shall not be deemed to have occurred for purposes of paragraphs (c)
or (d) above, solely because (1) the Corporation, (2) an entity in which the
Corporation directly or indirectly beneficially owns 50% or more of the voting
equity securities (a "Subsidiary"), or (3) any employee stock ownership plan or
any other employee benefit plan of the Corporation or any Subsidiary either
files or becomes obligated to file a report or proxy statement under or in
response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) under the Exchange Act
disclosing beneficial ownership by it of shares of Voting Stock, whether in
excess of 15% or otherwise, or because the Corporation reports that a change in
control of the Corporation has occurred or will occur in the future by reason of
such beneficial ownership.
12.4 EFFECTIVE DATE OF CHANGE IN CONTROL. Notwithstanding the foregoing, in
the event a Change in Control ultimately results from discussions or
negotiations involving the Corporation or any of its officers or directors, the
"Effective Date" of such Change in Control shall be the date such discussions or
negotiations commenced; otherwise, such Effective Date of Change in Control
shall be the Implementation Date of such Change in Control.
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<PAGE> 67
12.5 IMPLEMENTATION DATE OF CHANGE IN CONTROL. The "Implementation Date"
shall be the earliest to occur of the events specified in subsections (a), (b),
(c), (d) or (e) of Section 12.3. As used herein, the Implementation Date of
Change in Control shall be the last date of all current Plan Cycles.
12.6 EFFECT OF CHANGE IN CONTROL, In addition to other vesting under the
Plan, the opportunity of a Participant to participate to the end of all current
Plan Cycles is vested in such Participant in the event of a Change in Control,
as of the Effective Date of such Change in Control.
ARTICLE 13.
MISCELLANEOUS
In the event of the liquidation of the Corporation the Committee may make any
provisions for holding, handling and distributing the amounts standing to the
credit of the Participants or beneficiaries hereunder which in the discretion of
the Committee are appropriate and equitable under all circumstances and which
are consistent with the spirit and purposes of these provisions.
ARTICLE 14.
AMENDMENT AND DISCONTINUANCE
The Corporation expects to continue this Plan indefinitely, but reserves the
right, by action of its shareholders, to amend it from time to time or to
discontinue it. However, if the Corporation should amend or discontinue this
Plan, the Corporation shall remain obligated under the Plan with respect to (1)
Awards made final (and thus payable) by decision by the Committee prior to the
date of such amendment or discontinuance, (2) Awards and rights of any
Participant or beneficiary with respect to whom a Vesting Event has occurred,
and (3) with respect to amounts deferred prior to the date of such amendment or
discontinuation.
Executed as of this day of , 1994 at Cleveland,
Ohio.
NATIONAL CITY CORPORATION
By:
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<PAGE> 68
NATIONAL CITY PROXY SOLICITED ON BEHALF OF THE
CORPORATION BOARD OF DIRECTORS FOR APRIL 24, 1995
ANNUAL MEETING
P
The undersigned stockholder of National City Corporation hereby
appoints Thomas A. Richlovsky and David L. Zoeller and each of them,
with power of substitution, proxies for the undersigned to vote all
the shares of COMMON STOCK of the Corporation which the undersigned is
R entitled to vote at the Annual Meeting of Stockholders of the
Corporation to be held on April 24, 1995 and any adjournment thereof
as follows and in their discretion to vote and act upon such other
business as may properly come before the meeting. The Board of
Directors recommends a vote FOR the following:
O
1. THE ELECTION OF DIRECTORS
FOR all nominees listed below / / WITHHOLD AUTHORITY / /
(except as otherwise marked below) to vote for all nominees
X listed below
S. H. Austin, J. M. Biggar, C. H. Bowman, E. B. Brandon, J. G.
Breen, D. Collins, D. A. Daberko, R. E. Disbrow, D. E. Evans, O.
N. Frenzel, J. H. Lemieux, A. S. Miles, W. R. Robertson, S. A.
Y Stitle and M. Weiss.
(Instructions: to withhold authority to vote for any individual
nominee, strike a line through that nominee's name.)
2. APPROVE THE NATIONAL CITY CORPORATION ANNUAL CORPORATE PERFORMANCE
INCENTIVE PLAN
/ / FOR / / AGAINST / / ABSTAIN
3. APPROVE THE NATIONAL CITY CORPORATION LONG-TERM INCENTIVE
COMPENSATION PLAN FOR SENIOR OFFICERS AS AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 1995.
/ / FOR / / AGAINST / / ABSTAIN
(Continued, and to be signed, on the reverse side.)
------------
Proxy No. (Continued from reverse side.) Shares
4. APPROVE THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
/ / FOR / / AGAINST / / ABSTAIN
UNLESS OTHERWISE INDICATED, THE PROXIES ARE INSTRUCTED TO VOTE FOR THE
ELECTION OF DIRECTORS, FOR THE APPROVAL OF THE NATIONAL CITY
CORPORATION ANNUAL CORPORATE PERFORMANCE INCENTIVE PLAN, FOR THE
APPROVAL OF THE NATIONAL CITY CORPORATION LONG TERM INCENTIVE
COMPENSATION PLAN FOR SENIOR OFFICERS AS AMENDED AND RESTATED EFFECTIVE
JANUARY 1, 1995 AND FOR THE SELECTION OF ERNST & YOUNG LLP.
Dated , 1995
----------------
----------------------------
----------------------------
(Sign here)
INSTRUCTIONS: Please sign
exactly as shown hereon.
When signing as a fiduciary
or on behalf of a
corporation, bank, trust
company, or other similar
entity, your title or
capacity should be shown.
PLEASE SIGN, DATE, AND RETURN YOUR PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE TO STOCK TRANSFER DEPT., (NCC),
NATIONAL CITY BANK, P.O. BOX 92301, CLEVELAND, OHIO 44193-0900.
